Independent research project · Economics · UK open data
Is a degree worth more in London, once you pay the rent?
London graduates earn more. But a salary is not what you live on. This study follows
the median graduate's pay 1, 3, 5 and 10 years after university, takes off income tax, National
Insurance, the student loan and rent, and compares what is left in London with the rest of England.
Sasha · data: DfE Longitudinal Education Outcomes, ONS, HM Land Registry · tax year 2023-24 ·
What the data shows
Pay rises in London. What is left rises much less.
Gross pay, median graduateLeft after tax, NI, student loan and rent
Data table
Where the money goes
One year of pay split into deductions, rent and what is left.
The London break-even year, subject by subject
Each bar adds up the yearly difference in money left over the first ten years after graduation
(linear between the published years 1, 3, 5 and 10). The tooltip shows the year from which London stays ahead.
Subjects with fewer than 100 graduates in the comparison region are marked ° and should be read with care.
Subject decides your salary. Place decides what you keep.
How much of the difference between graduates is explained by what they studied and how much by
the region they live in. Shapley decomposition of R² from a weighted regression on subject and region,
subject × region cells.
Rent rises twice as fast as pay
Each dot is a local authority in England or Wales. Pay: median full-time annual pay of residents (ONS ASHE 2025).
Rent: average one-bed rent, April 2025 – March 2026 (ONS Price Index of Private Rents). Both axes are logarithmic, so the slope
of the fitted line is the elasticity: the percentage change in rent for a 1% change in local pay.
The map of what is left
Has the London starting premium shrunk?
Median graduate one year after graduating, in 2023-24 prices (CPI). Tax years 2017-18 to 2023-24.
Gross pay, real termsLeft after tax, loan and rent, real terms
A first home: years to save a deposit
Average first-time-buyer price (HM Land Registry UK HPI, 2023-24). Saving a share of what is left each year,
starting the year after graduation.
Do graduates stay?
Where graduates from each home region live five years after graduating (English universities, tax year 2023-24).
Method and limitations
Method
Pay: median annualised earnings of first-degree graduates of English universities, by subject (35 groups) and region of residence,
1, 3, 5 and 10 years after graduation, tax year 2023-24 (DfE LEO, from HMRC tax records).
Deductions: 2023-24 income tax and employee National Insurance (blended 11.5%, as the rate fell in January 2024),
student loan repayments at 9% above the threshold of the chosen plan.
Rent: ONS Price Index of Private Rents, average of April 2023 – March 2024. "Share a 2-bed" is half the average two-bed rent.
For a city, the city's own rent is used with its region's graduate pay.
Break-even: the year from which London's yearly money left stays above the comparison, interpolated linearly between published years.
Subject vs region: weighted least squares (weights = number of graduates) of the outcome on subject and region dummies; the joint R² is split
between the two factors with the Shapley value.
Elasticity: ordinary least squares of log rent on log pay across local authorities, with a 95% confidence interval.
Limitations
The years after graduation are different cohorts measured in the same tax year, not one group followed for ten years.
Graduates choose where to live. Those who move to London may differ from those who don't, so the gap is not a causal effect of London.
LEO earnings are annualised and include part-time work; the region is where the graduate lives, not where they work.
Rent is the only living cost included. London transport, and Scottish and Welsh tax rules, are left out.
Regional rent is an average across all lettings, not new lettings, which tend to be more expensive.