I used to live in London, was paying £1050 a month for a shitty one bedroom apartment miles away from the center - had no spare money and took just as long to commute!
Rush hour public transport takes about an hour. Unless you have a serious podcast addiction or an enormous reading list, it's not worth it. Two wheels - motorized or not - are the way to go in London.
Edit: Oh for actually getting the contracts? I usually find them via ruby friends, or LRUG - the London Ruby User Group - a healthy supply of companies & contractors scour it to quench a never ending demand, it seems.
Edit: Wrote this before coffee. Thought we were talking hourly rates. Nevermind.
Ruby is quite commoditised now. Take a look at, say, Scala on jobserve.com and you'll see rates are double Ruby. The only way you'll make big money as a Ruby consultant is by differentiating yourself somehow. Better go write a book. All that said, I would be very hesitant about accepting work below £400 a day. A good rule of thumb for consulting is you'll work 100 days a year. At that rate you are making about the same as a mid-level FT employee.
Also note the OP said he was a contractor. There is a fuzzy but real distinction between contractors and consultants. A contractor is typically treated like a FT employee, without the permanent job. This means working from the client's office, longer jobs (usually 6 months - 1 year), and no simultaneous engagements. Contractors typically get paid less than consultants, but there is more work going.
Yeah bang on - I'm treated as a full-time employee, just no sick pay, national insurance (state pension), redundancy, paternity leave, etc. Sacrificing these benefits pays around 50% more, but you have to file your own tax.
The biggest problem I had was last year when I caught a bug and was out for a week, cost me £2000 - something you often take for granted in a permanent job.
I have American friends that have come and worked in the UK, but all for companies, none have setup themselves, so not sure if it's possible.
The question is how to reach the market?