London will remain the world’s leading ‘wealth center’ in 2019, defying Brexit and pushing its only serious rival, New York, into second place.
“The results show that London has shrugged off concerns regarding Brexit to retake the top spot from New York,” says the Knight Frank Wealth Report, which is published today.
In ranking global cities, Knight Frank, a global real estate consultancy, looks at a variety of metrics including the number of UHNWIs (individuals worth over $30 million), the volume of property investments and lifestyle. London beat New York in all of these metrics except for one – investment – where London comes second.
When it comes to lifestyle, which counts tallies such as the number of five-star hotels (London has 76), universities and luxury dining, New York ranks third.
London has now held Knight Frank’s top spot for over five years, fending off other rivals, which include the Asian powerhouses of Tokyo, Hong Kong, and Singapore. No other European city comes close.
How London Does It
Brexit, it would appear, has not diminished London’s appeal abroad, which is where much of its wealth originates.
Last week, data from the Office of National Statistics (ONS) showed Britain had the largest number of Tier 1 Investor Visa applications since the threshold was raised to £2 million ($2.6 million) in 2014.
These visas – which allow indefinite leave to remain in the U.K. after five years – appeal to wealthy individuals from outside the U.K. and E.U. who want to live in Britain.
Their popularity is unlikely to fade soon according to Knight Frank. “Data from our Attitudes Survey indicates that 36 percent of UHNWIs already hold a second passport, up from 34 percent last year, with 26 percent planning to emigrate permanently, up from 21 percent.” Many of those looking to emigrate would choose the U.K. over any other country, the data shows.
Will New York Fight Back?
Matthew Hudson, founder and chief executive of asset management consultancy MJ Hudson, believes London is where it is thanks to America: “The U.S. made London the biggest in the world because they set up here.”
It was the Big Bang, when the U.K. radically overhauled its financial markets in 1986, when American money started flowing across the pond. Similarly, after Brexit, “if the Americans back us then London will be strong otherwise we’re back to the 1970s,” says Hudson.
One American already has. In January, hedge fund billionaire Ken Griffin paid £95 million ($122 million) for one of the most expensive homes ever sold in London.
Much of American wealth, therefore, favors London over its own financial capital, New York, turning the former into the world’s leading wealth center at the expense of the latter.
Immigration law experts at Irwin Mitchell Private Wealth believe that despite the challenges posed by Brexit, London will remain a world-class city for many years to come partly because the global elite continue to invest in the city. Philip Barth, head of immigration, says that “London is still going to be a world-class city for the foreseeable future.”