THE surging cost of property in the UK and the strength of the pound have helped to catapult Aberdeen and Glasgow up the rankings in an annual survey of the most expensive cities in the world for expatriates to live.

London is now the 12th most expensive city worldwide for ­expatriates, having been ranked at number 25 in 2013, according to the survey by Mercer, which weighs up the cost of living in 211 cities across the globe.

Birmingham is the UK's second most expensive city and is ranked this year in 90th place, having leapt from number 135 in 2013 .

Loading article content

The research is designed to help multinational companies and governments set the size of compensation allowances for their expatriate employees.

Aberdeen follows closely behind as the 94th most expensive city, while Glasgow is at number 108. The cities have jumped 34 and 49 places up the rankings respectively since last year.

Placed at number 120, Belfast is the least expensive for expats out of the UK cities examined, although it has jumped 38 places up the rankings since 2013.

The survey compares the cost of housing, transport, food, clothing, household goods and entertainment around the world, and currency movements are measured against the US dollar.

"This year, UK cities have surged in the ranking, mainly as a result of a strengthening of the British pound against the US dollar," said Ellyn Karetnick, UK head of Mercer's International Mobility Practice.

"The UK's soaring housing market has also had an impact, with added pressure on the rental market as many buyers face difficulties in obtaining a mortgage.

"Glasgow and Birmingham have experienced the greatest jumps as they have had significant cost increases on goods and services and rentals."

According to the latest house-price survey from building society Nationwide, house prices in London have leapt by nearly 26 per cent over the last year, and across the UK prices are now at an all-time average high of £188,903.

Mercer found that an expatriate living in London typically faced paying £3,000 a month to rent a two-bedroom apartment "of ­international standards in an appropriate neighbourhood".

In Birmingham, this cost was about £850, while in Paris it was about £2,102, in Sydney it was £1,730 and in Madrid about £1,195.

An expat renting a two-bedroom apartment in New York faced a similar cost to a tenant in London, at around £3,203

Simon Rettie, managing director of Rettie & Co estate agents, said he was not surprised by the Aberdeen figures where house prices have increased substantially. He added: "It's attracting people from all over the world and there are a lot of short term contracts.

"I am more surprised that Glasgow has increased so much. There may have been an influx of expats moving to the city and they probably rent, and rents increase because supply is finite." He cited a recovery in the West End, Bearsden and Newton Mearns.