I'm in London right now. I've been here for about a week leading a study-abroad trip. It's been great overall, although unfortunately one student has been quite ill. (She is getting better, thankfully.)
Some thoughts about London (and beyond London):
* Differences in the exchange rate makes a big difference to London's affordability. The rate now is about 1.45 dollars/pound vs. 1.60 when I spent four months here in 2012. But that means everything is about 10% cheaper. Mentally it seems like London is much more affordable.
* London is expensive, but it only seems more expensive than central Pennsylvania for three reasons: housing is expensive, food at restaurants is expensive, and drinks at restaurants are expensive. Entertainment, tours, clothing, etc. seem no more expensive than the states.
* West End theatre tickets are less expensive than Broadway. And it isn't close. For the cheapest ticket to Funny Girl - I paid 25 pounds. That converts to about $36. To compare - I bought a cheap ticket to a musical for June in New York called Waitress - that ticket was about $70.
* The tube is fantastic. Public transportation only makes sense with a critical mass of people - but it is awesome when you have that. It is just so convenient. I recall hearing that the London transportation system (buses, tube, etc.) loses money. But that's actually OK, as they would have spent some money on roads anyway without this system.
* Cambridge is a lovely city, and punting is fun!