A slowdown in cost increases across Western Europe, along with increasing prices in parts of Eastern Europe, is resulting in a more varied picture of affordability for expats as well as remote workers, according to European digital bank bunq’s research findings from the Working Abroad Index 2025. With the global digital nomad community surpassing the 40 million mark, so-called borderless living has become an “established part of modern work life.”
bunq noted in a blog post that the annual index tracks the cost of living across 27 European cities, “accounting for housing, transport, utilities, groceries, and coworking spaces.”
This year, London recorded the largest “coworking price drop in Europe (-28.7%), followed by Helsinki (-27.3%), Paris (-24.5%) and Dublin (-24.4%), signaling a correction in flexible workspace prices across Western capitals.”
bunq pointed that although these cities remain 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.”
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, 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%.”
While 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%).”
While 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).”
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.”
For the research study, the average costs for rent, groceries (monthly shopping), and utilities (electricity, heating, air conditioning, water, garbage, mobile internet, and home internet) were determined from “the Numbeo database for the years 2024 and 2025.”
In total, prices for 27 EU capitals and London “were taken into account.”
Other research methodology related details can be accessed here.