Western Europe is showing early signs of stabilization and even cost declines, but parts of Central and Eastern Europe are seeing living expenses rise sharply — creating a more uneven picture of affordability across the continent, according to a new analysis from bunq’s Working Abroad Index 2025.Â
London Leads Europe’s Coworking Cost Correction
London has seen a major reversal in workspace costs, recording the largest coworking price drop in Europe at −28.7%. Similar declines were seen in Helsinki (−27.3%), Paris (−24.5%), and Dublin (−24.4%), signaling a broad correction in flexible office pricing across key Western capitals, according to Fintech Finance News.
Although London remains among Europe’s pricier destinations, the fall in coworking rates may improve its competitiveness as a hub for startups, freelancers, and international professionals seeking hybrid or remote setups.
Signs of Stability in Western Europe
Across Europe’s major cities, the pace of cost increases has eased considerably. The index shows that average living expenses rose just 3.6% year-on-year, marking the smallest uptick since before the pandemic and down from 5% in 2024.
In London, overall living costs dipped slightly to £2,830 (€3,215), a 0.3% decline compared to the previous year. Utility prices fell by nearly 14%, and grocery costs dropped 6.7%, helping offset modest rent increases of 2.6%.
Helsinki recorded the most pronounced overall decline in living costs across Europe (−2.2%), while Dublin saw smaller overall changes but notable drops in both utilities (−12%) and transport (−9.7%). These trends suggest Western European cities may be entering a period of relative cost stabilization after years of steep inflation.
Rising Expenses in Eastern Europe
While Western capitals cool, parts of Eastern and Central Europe are heating up. Sofia (+12.5%), Zagreb (+9.5%), and Budapest (+8.9%) have all experienced sharp increases in general living costs, driven in large part by soaring rents — up 20.9%, 11.8%, and 11.2%, respectively.
Even with these surges, affordability gaps remain stark. A central one-bedroom apartment in Sofia (£547/€622) still costs less than a quarter of the average London equivalent (£2,316/€2,632).
Mid-Tier Capitals Strengthen Their Appeal
Southern and Baltic capitals continue to carve out a niche as cost-effective yet well-connected destinations for remote professionals. Athens (£964/€1,095) remains one of the most affordable capitals, with a slight −0.9% dip in living costs. Meanwhile, Vilnius (+0.3%), Riga (+4%), Tallinn (+6.3%), and Nicosia (+5.6%) recorded modest annual increases while remaining comfortably below Western European averages.
Their combination of reliable digital infrastructure, manageable costs, and strong quality of life keeps these cities in demand among remote workers and long-stay expats looking for balance between affordability and convenience.
A New Era for Borderless Living
With more than 40 million digital nomads worldwide, the data shows a maturing ecosystem of global mobility. Europe’s evolving cost map may redefine where professionals choose to live and work, as Western hubs become more accessible and Eastern cities begin to feel the growing pressures of global demand.
