In addition to the very reasonable property prices in Spain, there are many other considerations as to the cost of living. In the UK, think of the high rates bills. You can pay over £1000 for a four bedroom house, even in Scotland. The rates will be even higher in London. In Spain, again depending on where you live, the equivalent IBI (Impuesto sobre bienes inmuebles urbana / rustica) is payable on all property, regardless of residential status. If you own a property in Spain, whether you live there or not, the IBI is due. It is much less than in the UK. For example on a townhouse with four bedrooms in Competa, the IBI was 85 euros per year.
Taking into account motoring costs, the MOT and tax are much cheaper in Spain. Car insurance is about the same. Fuel is about 20% cheaper than in the UK. If you hail from Scotland, fuel is about 30% cheaper. Fuel of all types is more expensive in Scotland due mainly to transportation costs.
Electricity and water is much cheaper in Spain. There are many opportunities for cutting your fuel bills through utilisation of renewable energy, just as there are in the UK. Of course, the more temperate climate keeps the heating bills down, but using air conditioning in the summer months can wipe out any savings.
Food bills are about the same as they are in the UK, but the range of fresh produce is much higher. If you buy from local shops, fish markets and the many market gardens in Spain, you can save a lot of money, and of course you eat healthier. Fresh vegetables and fish in particular are very reasonable, especially if you live in a rural or semi rural area. They are not packaged as they are in the UK, so you will of course need to take care to clean thoroughly. In the supermarkets you will find packaged vegetables and fish, but purchasing from the many local shops is much more economical.
Wine and alcohol in general do not attract the high taxation that they do in the UK, so are much cheaper. Most importantly, there is a wider range of wines!
On average it is said that you can live comfortably in Spain for about 1000 euros per month, if you own your property outright. Rental properties are much more reasonably priced. Apartments in the south of Spain can be as little as 350 euros per month, including services. There are no TV licences to pay for and, depending on where you live, broadband connections are just as readily available as they are in the UK, and at very reasonable monthly rates.
All in all, the cost of living is far cheaper in Spain than the UK.