More people will join the swelling ranks of the “ultra-rich” – with fortunes of more than $30m (£22.7m) – in the next five years than complete the London Marathon next month.
Very wealthy individuals are increasing their fortunes at such a rate that about 42,700 will become ultra-high net worth individuals by 2023, according to a report by the property consultants Knight Frank. Slightly more than 40,000 runners are expected to finish the marathon.
The projected 22% increase in the number of UHNWIs will take their total number to 241,000, up from 198,000 in 2018.
London will retain its title as the world’s number one city for UHNWI residents despite concerns about Brexit, because the fall in the value of the pound against global currencies has made luxury UK property appear “a bargain” to wealthy foreign buyers, according to Knight Frank’s annual wealth report.
London is home to 4,944 UHNWIs, more than Singapore with 3,598 and New York’s 3,378. The number in the UK capital is expected to rise to 6,015 by 2023.
Liam Bailey, Knight Frank’s global head of research, said: “Hard Brexit, no Brexit, Brexit-lite – whatever the outcome, London will remain the leading global wealth centre in 2019.”
Bailey said London’s geographic position between the east and the US made it attractive to the super-rich. Overseas billionaires are also attracted by the UK’s legal system and the ease with which they can buy property. “The fall in the pound has also made UK luxury property cheaper than other centres like New York or Miami,” he added.
The fall in the pound from $1.46 before the Brexit vote to $1.26 on Wednesday is said to have more than compensated for the government’s 2016 stamp duty increase designed to deter overseas wealthy people from buying UK property. Stamp duty on properties sold for more than £1.5m is 12%, rising to 15% for second homes.
The US hedge fund billionaire Ken Griffin recently bought three of the most expensive homes in the world. Two of the properties are in London, including a £100m penthouse currently under construction that will overlook Buckingham Palace at Hyde Park Corner.
Another is a townhouse across the park at Carlton Gardens, costing £95m. The third is a penthouse atop a “pencil tower” at 220 Central Park South in New York, costing $238m.
Bailey said the average UHNWI owns 3.6 homes across the world, up from 2.9 homes previously.
Rebecca Gowland, the head of inequality at Oxfam, said: “This is the latest piece of a growing body of evidence that the global economy is malfunctioning – allowing a few extremely wealthy individuals to race ahead as their fortunes swell, while millions of people living in poverty never get off the start line.
“If we’re to have any hope of meeting global goals to beat poverty by 2030, governments need to tackle inequality now. Leaders should act to ensure people are paid a decent wage for a day’s work and that fair taxes raised from wealth and businesses are invested in free, good-quality public services that can save and transform people’s lives.”
