Foreigners flummoxed by the cost of living in London

When David Frame left his $1,500-a-month (£1,030) rent-controlled apartment on New York's Upper West side for a job in London with a US investment bank, he was appalled by the high rents and cramped housing. He finally found a furnished garden apartment for £2,200 a month. But the "garden" is at eye level; Mr Frame is in the basement.

When David Frame left his $1,500-a-month (£1,030) rent-controlled apartment on New York's Upper West side for a job in London with a US investment bank, he was appalled by the high rents and cramped housing. He finally found a furnished garden apartment for £2,200 a month. But the "garden" is at eye level; Mr Frame is in the basement.

Thousands of foreigners are coming to London to work in the finance sector, and many are learning that accommodation here is nothing like home. People from Manhattan - of all places - complain that London rental property is expensive. Mid-westerners miss their garages, continental Europeans balk at sharing flats, and Australians miss short commuting times.

"I looked for a couple of weeks and this was the best I could find,'' says Mr Frame. "It was expensive considering that one of the two bathrooms didn't work and there was no furniture in the living room.''

London has the highest cost of living of any city in the European Union and beats New York as well, according to a study by London-based consultancy William M Mercer. But still foreigners flock to London, whether for career opportunity or personal development. Brian Murphy, 27, moved from "a roomy pad'' in New York's Lower East side to London's Chelsea, where his rent doubled to £690 a month "for a place where we had to rig up our own shower".

Kamal Naqvi, 29, an analyst in London at Australia's Macquarie Bank, came from Tasmania and first found a room in a house in Shepherd's Bush, 40 minutes by Tube from the City. He shared with two others and paid £430 a month.

"It was a shock because I'd lived in a huge three-bedroom place in Hobart, with a large front and back yard, where I was paying about $150 a month and could drive to work in the city in five minutes,'' he says.

Rent is not the only thing that's more expensive. Compact discs can cost as much as $20 in London compared with about $15 in the US and $13 in Germany. British consumers pay up to $2 for a two-litre bottle of Coca-Cola compared with about $1.20 in the US.

In Chelsea, a popular address for expatriate professionals, prices vary from £1,300 a month for a ground-floor studio flat to £5,500 a month for three bedrooms, two bathrooms and a private garden. Notting Hill is similarly priced.

Schools can be important for families moving to London. The American School is in St John's Wood, where rents can be up to £17,000 a month for a six-bedroom house. A three-bedroom flat within walking distance of the Lycée Français school in South Kensington costs about £5,200 a month.

For all expatriates, an estate agent translator would help. Few foreigners know that an airing cupboard is a closet with a hot water tank, or that the "garden" with your garden apartment might be across the street, accessed by a key and shared with other residents.

Continental Europeans may arrive in London from neighbouring countries, but that gives them no house-hunting advantages. Catherine Da Silva, 27, works in high-yield sales at Lehman Brothers and gave up a view of the beach and a swimming pool in Cannes, France, for a tiny flat in High Holborn. Her next residence was a three-bedroom, two-bathroom mews house near Queensway. The £1,240 rent was affordable only because she had two flatmates.

"The French don't usually live in shared accommodation,'' says Ms Da Silva, but the arrangement is necessary because London prices are twice what she would pay for equivalent living quarters in Paris.

Despite the expense and the lack of space, Ms Da Silva is one expatriate who's not going home just yet. After looking at about 90 flats, she's bought a place of her own.

Elise Shaw is a reporter for Bloomberg.