Wealthy Londoners are leaving the city as new taxes make it expensive to inherit and invest, and as Brexit prompts rich Europeans living in the U.K. capital to return home.
This puts the British financial hub in the same category as Lagos and Istanbul, which are also seeing net outflows of rich people, according to the Global Wealth Migration Review published this month, reports Bloomberg.
About 5,000 high net-worth individuals left the U.K. during 2017 and only about 1,000 arrived, the report shows.
“Over the past 30 years, the United Kingdom has been one of the biggest recipients of migrating HNWIs,” the report said. “However, this trend changed in 2017 when the country experienced its first major HNWI net outflow.”
Losing wealthy individuals is normally a sign of trouble in the political economy of a country. Rich people are often the first people to leave, because they can — unlike the middle class or the poor.
Cities that saw large inflows of HNWIs include Auckland, Dubai, Montreal, New York, Tel Aviv and Toronto, the report showed.
New World Wealth says it focuses only on HNWIs who have truly moved — that is, those who stay in their new country for more than half the year. China and India continue to dominate countries that the rich are moving out of, but once the standard of living improves several wealthy people will probably return, according to the report.
Mumbai — India’s financial hub — is expected to be the fastest-growing city in terms of increase in wealth over the next decade. Wealth in the entire country is predicted to triple in the period to about $25 trillion followed by China’s 180 percent increase to $69 trillion, according to the report. The U.S. will expand 20 percent but still tops the holdings list with $75 trillion of wealth.
Total private wealth held worldwide amounts to about $215 trillion, according to the report. While the average person has net assets of $28,400, there are some 15.2 million HNWIs in the world, defined as those with net assets of $1 million or more.
Russia is the most “unequal” country, where 24 percent of total wealth is held by billionaires. Japan is the most equal, with only 3 percent controlled by billionaires.