UK is increasingly losing favour with HNWIs
London’s status as a global financial hub is on the decline
The allure of the United Kingdom, particularly London, as a haven for migrating millionaires is waning, marking a stark departure from its historical status.
Over the past decade, a reversal in this trend has seen the UK losing more high-net-worth individuals (HNWIs) than it gains, with an anticipated further outflow of 3,200 HNWIs to other countries worldwide in 2023, according to New World Wealth, the Johannesburg, South Africa headquartered global wealth intelligence company.
HNWIs are individuals with an investable wealth of AED3.68 million ($1 million) or more.
According to New World Wealth, the decline in London’s prominence as a global financial hub is attributed to various factors.
Notably, the London Stock Exchange (LSE), once the world’s largest by market capitalisation before World War One, now stands at 11th globally. Many delistings in the past decade have contributed to this decline.
Brexit repercussions
Brexit repercussions are also evident, with many British HNWIs relocating to Europe, particularly those in financial services or retirees.
The deterioration of the UK’s healthcare system and escalating safety concerns, particularly in major cities, explain this exodus.
Tax burdens, including high capital gains tax and estate duty rates, pose another deterrent to wealthy retirees considering the UK as their residence.
Meanwhile, the global dominance of the US and Asia in the hi-tech sector is prompting UK tech entrepreneurs to reconsider their base locations.
Top destinations for departing HNWIs from the UK over the past decade include Paris, Monaco, Amsterdam, Dubai, Sydney, Singapore, New York City, Frankfurt, Silicon Valley, Toronto, Marbella, Geneva, Miami, Palm Beach, Tel Aviv, Lisbon, and Cape Town.
Regions like the Algarve in Portugal and the French Riviera also witness an influx.
In the UK alone, a phenomenon known as ‘semigration’ is observed, with thousands of wealthy Brits relocating from major cities to affluent small towns like Weybridge, Virginia Water, Marlow, Ascot, Taplow, Harrogate, and Bray. The Cotswolds region is gaining popularity among the super-wealthy centi-millionaires, with some opting to make it their permanent residence.
Once the wealthiest city in the world for centi-millionaires, London now ranks fourth behind New York City, the Bay Area, and Los Angeles. London also faces competition from rising financial hubs like Beijing, Shanghai, and Singapore.
As of June 2023, London has approximately 254,000 HNWIs, 388 centi-millionaires, and 36 billionaires.
These figures represent a 12% decline in HNWIs and over a 20% decrease in centi-millionaire and billionaire numbers over the past decade, making London one of the worst-performing cities globally in this regard.
Looking ahead, rising concerns such as anti-Semitism in major UK cities and the growing influence of financial hubs like Amsterdam, Dubai, Paris, and Frankfurt could further accelerate the outward migration of wealth, potentially undermining London’s position as Europe’s premier financial centre.
Featured image: Dubai is one of the top global destinations for departing HNWIs from the UK. Image: Arnold Pinto
