Don't developers in London get paid crap though? I've heard horror stories about ridiculously low London salaries here on Hackernews. Are the low salaries just because their is a surplus developer talent in the UK?
It really depends on your definition of crap. London dev salaries range from £24k for absolute juniors to £120k+ for the top 2%. Contractors fare substantially better. In my recruiter days I placed a Python developer who had experience with a particular trading system on a contract with a large trading firm. His contract was £1,100 per day for 6 months.
Keep in mind the other notable differences between here and the US such as free health care, a larger number of paid holidays etc.
How much you pay in London really depends on how/where you want to live. It's far cheaper if you're happy to spend an hour or more commuting each way.
I need to earn £50k to cover just childcare costs and the mortgage (looking forward to both of those going down soon). I could sell up and buy a similar property 5 miles away and those costs would both halve. I could sell up and buy a similar property 10 miles away and have no mortgage at all. Neither of those would make us happier as a family (no matter how much I'd love to have no mortgage); we want to live where we're living now, so I just get on with it.
I disagree. We have a handful of senior devs being paid in excess of £70k. There are plenty of non-finance companies paying similar salaries. £80k-£90k is relatively common for a senior developer in London.
Another way to see things is that the US, and especially Silicon Valley, have ridiculously high salaries. I'd say that compared to the rest of Europe, developer salaries in London are probably on the high side.
The service prices (health, education, banking, communications, etc) are generally much lower than in the US, though, so it's hard to get an accurate comparison of cost-of-life.