London has extra greenback millionaires than New York enterprise
London has overtaken New York as home to the highest concentration of dollar millionaires in the world. This comes from a report that shows how much money the world’s richest people made during the coronavirus pandemic.
Nearly 875,000 Londoners are dollar millionaires (the equivalent of more than £ 720,000 in net worth), according to an annual study by real estate consultant Knight Frank of the fate of the richest people in the world.
This means that one in ten people living in London are dollar millionaires. The data prove the yawning inequality gap in the capital. More than 2.5 million (or 28%) of the people living in London are classified as “living in poverty”, according to the government.
The report shows that 874,354 people in London have assets, including real estate, valued at more than $ 1 million, making them high net worth individuals (HNWIs). Second compared to 820,000 in New York.
Liam Bailey, Knight Frank’s global research director, said the high cost of housing in the capital had put many people in the HNWI category. “Most importantly, our HNWI threshold is $ 1 million, which is £ 720,000. With average London house prices of £ 514,000, many households fall into the HNWI category,” he said. “Ironically, the high cost of housing in London is the main reason why so many households are considered wealthy.”
Bailey turned down other reports suggesting an exodus from London to the countryside, as remote working during the lockdown allows people to settle anywhere for work.
The investigation found that London had the so-called “prime” homes of every city in the world, with more than 68,000 units valued at more than £ 2 million each. There was a spate of super-rich real estate sales during the pandemic as wealthy overseas investors took advantage of the pound’s depreciation and the tax benefits that Brexit would bring.
According to Knight Frank’s survey of what wealthy people ask of cities like Michelin-starred restaurants, opera houses and theaters, universities, sports and shopping, London was also named the city of choice for the wealthy for their lifestyle.
London is also said to have benefited from an influx of wealthy Hong Kongers, many of whom left the former British colony fearing China’s authoritarian fallout.
The number of so-called Golden Visas issued last year to people from Hong Kong who pledged to invest at least £ 2m in the UK rose by 68%, according to separate research by law firm Bates Wells.
According to the Department of Labor and Pensions, London has the highest proportion of people living in low-income households in any part of the UK. Across the capital, 28% of people are said to be “living in poverty”, compared to the national average of 22%. That number rises to 32% for those who live in central London.
The data shows that 800,000 – or 39% – of the capital’s children live in poverty. This is the highest child poverty rate since data collection began in 1994.
Knight Frank’s wealth report shows that despite the economic devastation from the pandemic, among millions of people on modest incomes, those who were already very rich have grown their wealth.
More than 6,000 people joined the ranks of the ultra-rich last year as those in the top 0.1% grew their already vast fortunes despite the coronavirus pandemic.
The number of high net worth individuals (UHNWIs) with net worth more than $ 30 million (£ 21.3 million) rose 2.4% over the past year to $ 520,000.
The UHNWI population is projected to grow another 27% to 663,483 by 2025, the report estimates, as huge fortunes are made in China, Indonesia and India. The number of dollar millionaires is expected to increase by 41% over the same period.
“Asia is the most important wealth story. The US is and will remain the world’s dominant center of wealth over the forecast period, but Asia will see the fastest growth in UHNWIs over the next five years, ”said Bailey. “China is the key to this phenomenon. For the decade to 2025, growth of 246% is forecast for very wealthy residents.”
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The report found that a person living in the UK would need a fortune of $ 1.8 million (£ 1.3 million) to join what is known as the 1% club of the richest people in the country.
In Monaco, where many of the richest people in the world live to avoid income taxes, it takes a $ 7.9 million fortune to be in the top 1%. In Switzerland it is 5.1 million USD. While it is $ 4.4 million in the US, it is $ 20,000 in Kenya.
The world’s richest people fear that increasing inequality could lead governments to impose property taxes, with the prospect of such a levy being listed in the report as their greatest fear after the coronavirus. Such taxes were introduced in Argentina, Bolivia and Morocco.
In the UK, three prominent economists, including an advisor to the Treasury Department, have recommended the introduction of a one-off tax for those with assets over £ 500,000, including real estate. The Wealth Tax Commission suggests that a 1% tax on these individuals could raise £ 260 billion over five years – enough to cover the full cost of funding the NHS for one year.