The annual index tracks the cost of living across 27 European cities, accounting for housing, transport, utilities, groceries, and coworking spaces. In 2025, London recorded the largest coworking price drop in Europe (-28.7%), followed by Helsinki (-27.3%), Paris (-24.5%) and Dublin (-24.4%), signalling a major correction in flexible workspace prices across Western capitals. While these cities remain generally expensive, the drop marks a potential turning point in London’s cost landscape, improving its appeal as a more accessible hub for digital nomads, startups, and international talent.

London’s living costs ease as Europe’s shows early signs of stabilisation

Digital nomads are beginning to see slower increases in everyday expenses across Western Europe, marking the first signs of price stabilisation. Average living costs across European capitals rose 3.6% year-on-year, the smallest increase since before the pandemic and down from 5% in 2024.

In London, overall living costs fell slightly compared to 2024, reaching £2,830 (€3,215 −0.3%). The city also recorded one of the largest drops in utility prices in Western Europe, down 13.9%, while grocery costs fell by 6.7%. Although average rent rose by 2.6%, from £1,985 (€2,255) in 2024 to £2,036 (€2,314) in 2025, this represents a slower rate of increase than in 2024. These changes indicate a possible sign of relative stability in London’s cost landscape, with easing expenses in areas like energy and food helping to balance persistently high rent and transport prices.

Helsinki experienced the largest overall decrease in living costs among European capitals, down 2.2% year-on-year, while Dublin saw smaller shifts in overall living costs but recorded some of the most significant drops in utilities (−12%) and transport costs (−9.7%).

A narrowing East-West cost divide creates a potential new paradigm

Although London remains one of Europe’s most expensive capitals, early signs suggest a narrowing of the East–West cost divide. While London is now showing signs of stabilisation, several Central and Eastern European cities are seeing increases in everyday expenses.

Living costs have jumped 12.5% in Sofia, 9.5% in Zagreb, and 8.9% in Budapest. Coinciding with this trend is an even steeper increase in rent costs: 20.9% in Sofia, 11.8% in Zagreb, and 11.2% in Budapest. Despite these increases, the affordability gap remains significant: a central one-bedroom apartment in Sofia  (£547/€622) still costs less than a quarter of London’s average (£2,316/€2,632).

Emerging mid-tier cities gaining ground

Meanwhile, Southern and Baltic cities are consolidating their position as attractive bases for long-stay professionals and remote workers. Athens (£964/€1,095) remains among the most affordable capitals in Europe, recording a slight -0.9% decrease in average living costs since 2024. Vilnius (£1,013/€1,151; +0.3%), Riga (£918/€1,044; +4%), Tallinn (£1,116/€1,268; +6.3%), and Nicosia (£1,037/€1,179; +5.6%) all recorded modest year-on-year increases while remaining below the Western European average. Strong connectivity and quality of life in these mid-size cities can continue to attract long-stay professionals and remote workers.

Joe Wilson, Chief Evangelist at bunq: “Living abroad should fit your life, not the other way around. Our research shows where your money goes, so expats can make choices that match their lifestyle: spend smarter, enjoy more, and focus on the experiences that matter.”

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