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Mar 08

How To Calculate if You Can Afford To Live in Residence Outside the City

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Living in a city, you’re no stranger to the perpetual street noise or being stuck in a traffic jam that turns your journey back home into a nerve-racking experience. Despite that, people swarm the urban space as it offers better job opportunities and access to education and culture. Unfortunately, the outbreak of Covid-19 has reduced the appeal of urban living with the restrictions limiting public behavior. Moreover, with companies implementing a remote work model, people no longer see the need to pay horrendously high rent for a flat near their workplace.

With the urban lifestyle being a costly and space-constrained affair, many people are ready to flee into the calm area outside the city. Far from the hustle and bustle, they see it as a better environment to raise a family, retire, or live in a simple manner. What’s more, there is a preconception that life outside the city is considerably cheaper.

While this fact is true, the rise in real estate prices and inflation has increased the cost of living across the country. If you’ve been dreaming about painting the door to your charming cottage a chartreuse color, you might have to wait a little bit with your plans. Before you make any life-changing decisions, you’ll have to calculate whether you can afford a residence outside the city.


What Is the Cost of Living?

Cost of living is the money someone spends to maintain a certain standard of living. It includes necessities such as housing, food, or transport. That being said, it can be treated as a measurement to compare expenses in different areas and points of time.

What’s more, a cost-of-living index is tied to your salary. With the implementation of cost-of-living adjustment (COLA), people living in a more expensive area will receive higher wages so they can afford the necessities.

There are various indexes and calculators on the Web to help you determine and compare the cost of living in different locations. Say you’d want to live in Ki Residences in Singapore you know nothing about. According to Expatistan, Singapore is 15% cheaper than London. The calculator will also show you a full price comparison.

However, you should remember that indexes are estimations, and depending on your personal needs, you can spend an amount different than the average. That’s why you need to carefully assess your spending so you can figure out what costs you the most each month.


Can You Afford a House Outside the City?

The equation is seemingly simple – after deducting your monthly living expenses, you should have enough money left for additional spending like entertainment or eating out, and also have something extra for savings. It’s usually recommended that you stick to the 50/30/20 budget rule, where 50% is spent on needs, 30% on wants, and 20% on savings.

To determine whether you can afford your dreams of leaving the city life behind, you need to analyze your past expenditure and figure out how much you would pay in the new place. While calculating, you should be meticulous so you aren’t surprised by unexpected costs you have forgotten to account for.

You’ll quickly realize that while the overall prices decrease with the distance from the city, there are “hidden” costs that might be a substantial burden on your wallet. With a few of them compiling, you might find that your earnings aren’t enough to lead a comfortable life. To illustrate, here are some of the expenses:



The most common rule of housing expenditure is that it should amount to no more than 30% of your gross monthly income. Of course, it’s not always possible to stick to the rule, as the prices of real estate and rent vary across the country. Still, they should be lower outside the city, which is the reason why people want to move.

Yet, the Guardian reports that rural house prices are rising twice as fast as in cities. In the countryside locations, they are increasing 14.2% on average, whereas in urban areas it amounts to less than 7%. As the newspaper further notes, the average rural house price in the borough has reached £303,780 in May 2021 compared to £234,150 from the year before.

Though property outside the city remains the cheaper option, the prices aren’t as low as they were in the past. However, if you’re a city dweller, it probably won’t discourage you when the average cost of a house in London amounts to £516,285.


Other Housing Costs

Aside from your mortgage, housing costs also include your utility bills and maintenance. If you want to exchange your urban flat for a house outside the city, you have to be prepared for the surge in your utility consumption. A bigger property requires much more electricity to illuminate the space and power numerous appliances. Moreover, your heating bill will increase because of the building’s size.

Moving to a new home is connected with an initial increase in maintenance costs as inspections don’t always reveal the hidden faults, which should be fixed before they cause further damage. An ill-fated burst of an old pipe can seriously wreak havoc on both your house and wallet, that’s why you’ll also need an emergency fund for any unforeseen expenses.

Despite the additional things to finance, the overall housing costs are lower outside of the city. Usually, the bulk of your money for necessities will cover rent or mortgage. With the cheaper house, you will generate extra savings that you may later invest.



Urban living is incredibly convenient in the matter of transport. Though the city streets are often paralyzed by heavy traffic, the residents may choose public transportation as an alternative for cars. With an extended system consisting of trams, buses, trains, and the tube in London, they can easily travel across the city. In addition, many destinations such as shops, restaurants, or libraries are within walking distance.

However, people from smaller towns don’t have such comfort as they usually only have bus or train connections to other cities. Depending on your current commute, you might find that local buses won’t suffice, and you’ll have to get a car to move around. What is more, in some remote areas even a daily trip to the grocery store could require a trip by vehicle.

If you don’t have a car, you’d have to purchase one before relocating. That entails further spending as you’ll have to factor in car maintenance and fuel. At the moment, the global fuel prices are up and they hit a new record high of 148.02p per liter in the UK. The amount of driving you’ll have to do will considerably influence your cost of living.


What To Do Next?

As you’re calculating the potential cost of living, you need to build a spreadsheet so you can have a clear visual of your finances. You should have headers for current and new living expenses where you include everything that you could potentially spend money on – housing, utilities, phone, transport, insurance, entertainment, and more. If a category can be further divided, mark it in the spreadsheet, so you’ll know exactly where your money goes.

On the basis of a detailed analysis of your current spending, you’ll be able to a certain degree predict your cost at the new place. When you finally know what percent of your earnings has to be dedicated to necessities, you’ll have enough information to make an informed decision you won’t regret in the future.


Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.


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