I deal with many US and UK based clients and ideally I do tell them that you can host on US based servers which is cheaper than UK based servers. However for search engines it is sometimes considered good to have server located within your locality but this is not a big issue if you are properly doing optimization for website.
I charge £1.99/month for windows or linux hosting on my own server which is shared with others thats why its cheaper. This is a budget solution however I suggest clients with huge traffic and bandwidth requirements to get an appropriate solution from my list of solutions.