Cost of Living in the US vs UK – Compare Housing, Taxes, and More (2025)​

Thinking about relocating from the UK to the US? Whether you’re chasing career opportunities, more space, or a lifestyle change, it’s crucial to understand how the cost of living in the US vs UK stacks up.

From housing and healthcare to salaries and taxes, the differences can be significant. The US often offers higher pay and bigger homes, while the UK has more comprehensive public services, but what does that mean for your wallet?

In this guide, we break down everything you need to know to compare living costs between the UK and the USA, so you can make an informed decision before making the move.

American House Prices vs UK

Many movers will be wondering is it cheaper to live in the UK or the U.S., so we’ve weighed up the costs for you.

The average house price is more affordable in the UK than in the U.S., with Britain’s average at £268,548 ($335,685). In the USA, the average house price is $361,263 (£289,010), about 8% more expensive. Housing is much more expensive in large cities in both the UK and the U.S., like L.A., New York, and London. 

More House for Your Money in the U.S.

Compared to the UK, you’ll get much more property and land for your money, as homes tend to be larger in the States. In fact, it’s 40% less expensive per square metre on average in the US than in the UK, providing residents with spacious detached properties with large garden space. 

Category	UK	USA
Avg. Home Price	£268,548 ($335,685)	$361,263 (£289,010)
Price per m² (City)	£4,500+ ($5,670)	$4,200+ (£3,318)
Price per m² (Suburbs)	£3,000–£3,500 ($3,780-$4,410)	$2,500–$3,000 (£1,975-£2,370)

London vs New York House Prices

The average house price in London is £675,000 ($850,000) and $768,957 (£610,000) in New York, making it 10% cheaper to buy in New York than in London. These two cities represent the pinnacle of house prices in their countries, being among the most desirable areas in the world.

If we explore the price per square meter, we can see that Central London is more expensive than Manhattan, while New York’s outer boroughs are pricier than London’s suburbs. ​

Price per Square Meter in London vs New York:

• City Centre:
  • London: £15,875 ($20,407)​
  • New York: £13,967 ($17,954)
    
    
• Outside City Centre:
  • London: £8,432 ($10,839)​
  • New York: £10,025 ($12,887)​

Comparing House Prices in Other Large Cities

What about other large cities? Manchester and Chicago are useful points of comparison as both are former industrial hubs with more reasonable living costs compared to their respective countries’ capitals. The average house price in Manchester is now £280,000, while in Chicago, it stands at $310,452 (around £238,000). This means Manchester is approximately £42,000 more expensive than Chicago when comparing the two in GBP.

Comparing House Prices in Rural Areas

The South of the USA is known for its rural character and more affordable living costs. For those who prefer country living to the hustle and bustle, a house in Mississippi, the most rural state in the USA, will cost on average $253,400 (£202,720).

By comparison, many rural areas in the UK, like Surrey and Hampshire, are viewed as desirable and often come with higher house prices. One notable exception is Lincolnshire, which maintains relatively affordable average house prices in a rural environment, at £230,768. This is still almost £30,000 more than the average price in Mississippi after conversion.

Renting in the UK vs the USA: Which is Cheaper?

Monthly rent costs are 10% cheaper in the UK than in the U.S. In 2025, the average rent in the UK is £1,326 ($1,657.50) per month and $1,820 (£1,456) in the USA. London and New York have sky-high rent prices, but if you look at other cities like Bristol in the UK or Texas in the U.S., you can find affordable deals.

If you’re renting in the UK, you will often get a small space for your money, but the flat often comes furnished. In the U.S., you’ll typically get larger apartments with walk-in closets, but you have to furnish them yourself. On average, rent can take up 30-50% of a tenant’s income in both countries, but salaries tend to be higher in the U.S. to help with this. 

Bedroom/Location	UK	USA	Difference in GDP
1-bed in city centre	£1,035.24 ($1,340.04)	$1,739.64 (£1,320.51)	USA is 27.55% More Expensive
1-bed outside city centre	£840.69 ($1,088.01)	$1,436.84 (£1,089.94)	USA is 0.17% More Expensive
3-bed in city centre	£1,737.92 ($2,250.10)	$2,899.34 (£2,199.99)	USA is 26.56% More Expensive
3-bed outside city centre	£1,358.14 ($1,758.74)	$2,402.98 (£1,822.76)	USA is 34.21% More Expensive

Winner for Housing: USA

The USA can provide better value for money than many UK properties, at least outside of particularly in-demand urban centres like New York.

Cost of Utilities in the UK vs the USA

This is where you find the big difference in the cost of living in the UK vs the USA, especially in housing. Utility costs are generally much more expensive in the UK than in the USA. Many UK homes also require energy efficiency improvements, whereas the USA has a lot more modern builds. On average, the cost of basic utilities such as electricity, heating, cooling, and water in the U.S. is $208.37 (£157.89) per month. This rises to £238.39 in the UK, over a 50% increase.

The UK is forced to import gas too, which puts costs at the mercy of global energy prices. The USA, on the other hand, has the natural resources to extract a lot of its own gas and has greater energy self-sufficiency. It is an ambition of many politicians in the USA to reach total energy independence. Such a policy in the UK is likely impossible. So, don’t expect the difference in utility costs to change anytime soon.

Winner for Utilities: USA

It’s important to note that utility costs can vary depending on the state or region you are in, and that the actual cost of utilities will also depend on your consumption. It’s a good idea to research specific utility providers and compare prices when making your move to the USA, but on average, it is cheaper in the U.S.

Transportation Costs: UK vs USA

In the UK, public transport is far more accessible than in many parts of the USA, with nearly 30% of Americans living in areas that are not covered by public transport. As of 2025, it’s estimated that 45% of Americans still have no access to public transport at all, with only around 1% of the population using rail services regularly. This is a stark contrast to the UK, where 31% of the population lacks access to a car and therefore relies on public transport to get around.

Public transport in the UK can be expensive, especially in London. A monthly London Tube travel card for Zones 1-3 now costs £201.60, with prices rising to £447 if you need to access zones 1-9. By comparison, in New York City, the monthly MetroCard for unlimited subway and bus rides costs $132 (£105), almost half the price of London’s. However, London’s system is more expansive, offering greater coverage than most American cities, and buses remain a popular and affordable option across the UK for long-distance travel.

Winner for Public Transport: USA

The U.S. wins when it comes to comparing the cost of transport in the UK and the U.S, with a monthly travel card almost half the price. Ultimately, it’s important to consider the specific location and your individual transportation needs when deciding which country has the better public transport system.

Cost of Owning a Car in the USA vs UK

Annual Costs to Own a Car in the UK – £3,350 

• Fuel: Around £1,000 annually.​
• Insurance: Approximately £600–£700 per year.
• Repairs and Servicing: Nearly £500 each year.​
• Additional Expenses: Costs such as road tax, parking fees, and permits add about £264 annually.

Annual Costs to Own a Car in the USA – $12,182 (£9,628) 

• Fuel: $2,448 on average per year
• Insurance: Varies widely by state and driver profile.​
• Maintenance and Repairs: Regular servicing and unexpected repairs contribute to annual expenses.​
• Licensing, Registration, and Taxes: Varies by state.

Winner for Owning a Car: UK

Car ownership and usage are generally more expensive in the USA than in the UK, but owning a car can also offer more flexibility and convenience in many parts of the USA where public transport is less accessible.

US and UK Grocery and Food Prices

Next up in our cost of living comparison: food and groceries. While this category isn’t as major an investment as housing or transportation, it’s a consistent, recurring expense that adds up over time. Understanding the differences in grocery costs between the UK and the US can help you budget more accurately and plan for day-to-day living.

It’s estimated that a British household spends £291 on food shopping per month for two adults, rising to £400 for a family of three. According to the USDA’s food plans, a moderate plan for a family should cost around $650–$750 (£503-£582) per month, which is up to double the amount the UK spend. 

UK supermarkets continue to see strong sales from their own-brand (private label) products, which typically offer affordable yet high-quality alternatives to big-name brands. As of recent years, these supermarket brands still make up a significant portion of grocery sales in the UK, often exceeding 50%. In contrast, own-brand products in the US account for a smaller market share, though private labels have been growing steadily. This suggests that, in general, groceries in the UK remain more budget-friendly, though evolving consumer habits and inflation trends could shift this balance over time.

Winner for Food Shopping: UK

While shopping trends may shift in the future, as of now, UK groceries are generally cheaper compared to the USA.

Dining Out: Which Country is More Expensive?

The USA has a great variety of options to save money when it comes to dining out, from all-you-can-eat buffet restaurants to free unlimited refills for non-alcoholic drinks in most fast-food establishments.

Portion sizes are generally larger in the US, meaning you get more for your money. You can expect a good meal at a more upscale restaurant to set you back around $75 (£58) and £80 in the UK. On average, Americans spend $253 on food outside of the family home per month. The average British couple spends £99 per month on meals out, which is much lower than Americans that typically spend $166 per person.

Winner: USA

When it comes to dining out, the USA is the winner in terms of overall affordability. While they tend to eat out more often than in the UK, they are met with a variety of options to save money when dining out, such as buffet restaurants and free unlimited refills for non-alcoholic drinks. 

UK vs USA Taxes

Let’s examine taxes in the USA vs the UK. The UK tax year starts on April 6 and continues until April 5 of the next year. In the US, the tax year is different, beginning on January 1 and lasting until December 31.

As with a lot of other factors affecting the cost of living, the size of the USA makes a crucial difference here. The USA has different rules by state and at the federal level, meaning that there are many variations for what you could pay depending on where you live.

Income Tax: How Do UK and USA Rates Compare?

There are significant differences already between taxes in the UK and the US. Income tax is worked out similarly, but has very different income brackets. In the US, your income tax is taken as a percentage of your income. In the most recent tax year, you could have anywhere between 10%-37% of your income spent on income tax. It all depends on how much you earn, and the highest rate only applies if you’re earning more than $539,900 as a single filer or head of a household.

In the UK, there are four income tax bands. There is ‘personal allowance’, where you don’t pay income tax up to a certain amount. Then there is ‘basic rate’, a 20% rate of tax up to £50,270. After that, there is a ‘higher rate’, a 40% rate of tax up to £150,000, and then ‘additional rate’, which is 45% on any income over £150,000.

So if you are a high-income earner, you will pay significantly less tax in the USA. However, let’s not forget the additional state tax. This isn’t a tax in many US states, but can be surprisingly substantial where it does apply, for example, in New York, where state taxes can reach 10.9%

Overall, in the UK, you will probably pay more tax, but there are other associated costs of living that are exceptional to the USA.

Winner For Income Tax: It Depends…

When it comes to income tax, the USA can be the winner for high-income earners, as they may pay less tax in the USA compared to the UK. However, it’s important to note that the tax system in the USA is more complex and depends on the individual’s income. Some states may also have additional state taxes that can significantly impact the overall tax burden. In the UK, the income tax system is simpler, with four income tax bands and a personal allowance. Ultimately, the winner may depend on personal circumstances and income levels.

Sales Tax: Which Country Has Lower Rates?

This is where the size and scale of the USA is tricky. Each state sets its own rules on sales tax (a tax on products and services), which means that it varies across the entire country from typically 4%-7%. 

In the UK, sales tax, which you might know as VAT, is fixed at 20%, so whichever state you choose, you’ll be paying significantly less tax on goods and services.

Winner For Sales Tax: USA

When it comes to sales tax, the USA is the winner in terms of having a lower overall rate compared to the UK. This means that regardless of which state you choose to live in, you will likely pay less tax on goods and services in the USA compared to the UK.

Property Tax Rates

Stamp Duty Land Tax or Land and Buildings Transaction Tax varies by country in the UK, but looking at England as an example, property buyers pay 5% against the value of the property between £250,001 to £925,000. This rises if the value is higher than this, and then again over £1.5 million. Council tax is set by local councils depending on house value, but the national average for England is £1,668 per year. This rises to around £2,171 annually for Band D properties. 

Property tax in the USA can again vary a lot depending on which state you plan to relocate to. Taking the USA as a whole into account, the property tax rate is 1.1% of the average home value. This will be something you need to explore further before your move, depending on where you want to live.

Some states have very high rates of property tax, for example, New Jersey, where a mid-sized property will cost more than $10,000 per year. Hawaii has the lowest rate of property tax at 0.27%.

Winner For Property Taxes: UK

On average, the US tends to have higher property tax rates compared to the UK, but this varies significantly based on location. The UK relies on Council Tax, which tends to be lower overall, while the US has more variability depending on state and local tax policies.

Healthcare Costs: UK vs USA

The costs of private healthcare in the USA are often publicised. Health insurance is essential. Unlike in the UK, healthcare is not free at the point of care. However, many workplaces in the U.S. offer health insurance coverage as a benefit, even extending to your family to ease the financial burden.

You can expect to pay a monthly fee for healthcare insurance (known as a ‘premium’). Most health plans expect you to pay a certain amount of care until the insurance kicks in. This is known as a ‘deductible’, the amount that you must personally pay. Fortunately, health insurance can usually cover 100% of all preventative visits like annual check-ups and vaccinations.

It’s important to shop around and explore as many different plans as you can before committing to one. Health insurance premiums can vary a lot depending on age, location, family size, and the type of plan you have. The average annual premium paid for employer-sponsored family health isureace is $25,572, a 7% increase from the previous year. Employees typically pay around $6,296 towards this, making it $524 per month for a family plan.

Winner For Healthcare: UK

The UK is the clear winner when it comes to healthcare costs. The NHS provides free healthcare to those living in the UK so residents rarely have to pay for private healthcare.In general, healthcare in the USA is 7.5 times more expensive than in the UK. US healthcare is actually more expensive than any other country in the world, with an average of 40% more spent on patient care. This is a really important factor to consider when making a cost-of-living comparison between the USA and the UK.

Childcare Costs in the UK and USA

In 2025, US childcare costs are generally more expensive than in the UK, especially in large cities like New York and Los Angeles. The UK also offers more substantial government help such as 30 free hours of childcare per week to help ease the costs. There is no nationwide free childcare program in the US like in the UK, but there are some state-level subsidies and tax credits such as the Child and Dependent Care Tax Credit.

Childcare	UK (per month)	US (per month)
Infant Care	£1,000–£1,200	$1,000–$2,500
Toddler/Preschool Care	£800–£1,000	$1,000–$1,500
After-School Care	£40–£80 per session (assuming 1-2 sessions a week)	$200–$500
Part-Time Care	£400–£600	$500–$1,000
Government Support	30 hours free (for 3-4 years old)	Limited state/federal credits

Winner for Childcare: UK

The UK offers much more affordable childcare costs compared to the U.S. and the government provide 30 hours of free childcare per week for 3 and 4 years old to help working families.

Which Country Offers a Better Cost of Living – The UK or the USA?

Your financial outgoings in the USA will depend a lot on where you plan to make your big move. There are so many financial commitments that are dependent on a state or federal level – like US health insurance, taxes, public transportation, and house prices – that the cost of living in the USA could be very variable.

If the cost of your relocation seems intimidating, remember that there are always options and opportunities in such a big country. There are many states with a cheaper cost of living and amazing pull factors, like Kansas, Mississippi, Oklahoma, and Indiana. In the long run, you may well end up saving more money than if you’d continued residing in the UK.

Our advice would be to create a budget that takes all of the factors we’ve discussed into account and the cost of living comparisons between the USA and UK. Maybe some of them are more important to you than others. Families with children will have a different set of priorities than young single people, and with that comes different financial commitments.

Removals to the USA

One thing is for sure, you can start your move the right way with the best value moving company. 1st Move International offers faster international removals services to the USA with the UK’s premier shipping lines. Whether shipping to New York or any other destination in America, we can help.

We’ve been helping people move their treasured possessions overseas for 25 years, fully insured and professionally packed. You can get a quote or contact 1st Move International to find out more.