London is the city where the most super-rich people have left, aside from Moscow.
Over the last year, the capital has lost 11300 millionaires in dollars, 18 centimillionaires, and even two billionaires. This is a worrying trend, as the city was once considered a global magnet of wealth.
New World Wealth, a migration consultancy, compiled a report for Henley & Partners that defines wealth as liquid assets, such as bonds and stocks.
Property values are not taken into account. London has seen a decline of 12% in the number of wealthy residents since 2014. Meanwhile, Moscow is reeling under Western sanctions and political unrest, which have led to a 25% drop.
London, however, has seen the largest exodus in terms of sheer numbers. Over the last decade, around 30,000 millionaires have fled the city, which is triple the amount who left Moscow.
Property prices in London, where there are still 215,700 millionaires and a slew of other wealthy cities like New York or Hong Kong, remain among the most expensive.
Millionaires are prompted to migrate by tax hikes and new policies
Analysts blame the loss of wealthy residents in London on a combination rising taxes, economic uncertainty and reforms that target the rich.
Recent crackdowns on non-domiciled tax payers led by Rachel Reeves, the Chancellor of England and Wales has increased capital flight.
Adam Smith Institute estimates that these policies could result in a loss of growth worth PS111 billion over the next 10 years.
Andrew Amoils is the Head of Research for New World Wealth. He said that UK capital gains taxes and inheritance tax are high enough to discourage business owners as well as retirees.
Amoils remarked, “It is worth noting most companies listed on the FTSE 100 are owned by centimillionaires.”
The loss of such individuals can have a huge impact on the economy.
Moreover, Britain’s declining appeal is exacerbated by the growing global dominance in tech of American and Asian sectors. This has led wealthy entrepreneurs to move to cities with greater growth potential and less tax burdens.
These mobile fortunes are drawn to cities like Paris and Dubai by their more favorable regulatory environments and attractive migration programs.
Brexit and London’s declining financial influence deepen crisis
London’s decline is largely due to the fallout of Brexit.
Lisa Nandy, Culture Secretary at Sky News confirmed this. She said that the report highlights the need for better deals with the European Union in order to support British businesses.
She said that the report pointed to several factors including Brexit. We are dedicated to getting a better deal from the EU in order to help British business.
The London Stock Exchange has fallen to the 11th position globally, despite being the biggest in the world by capitalisation.
London has lost its position as Europe’s leading financial centre in the past 20 years due to a deluge of company delistings.
Henley & Partners’ chief executive Juerg Steffen emphasized a broader trend. He noted that traditional financial centers are being outpaced by cities that combine “investment flexibility with lifestyle dividends”.
Steffen noted that “These cities share a common DNA – robust legal frameworks and sophisticated financial infrastructure, and perhaps, most importantly, programmes for investment migration which welcome global talent, capital and talent.”
London is still a top city in the world. However, its economic future remains uncertain due to the departure of many of its richest residents.
London is facing a daunting challenge in reclaiming its position as the global hub for the wealthy. Rival hubs like Dubai, Paris and Geneva are on the rise.
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