Europe – and UK – Remain Magnets for HNWIs

Europe – and UK – Remain Magnets for HNWIs

There are just over 500,000 multi-millionaires in the world now; and more than 20% of them live in Europe. This is just one of the findings of a 2015 Europe Wealth Report published by New World Wealth, a Johannesburg-based wealth consultancy which provides information on the global wealth sector, with a special focus on high growth markets.

“Multi-millionaires” were defined as those with net assets of $10m or more. “Europe”, from the point of view of this report, excludes Russia, other countries of the Commonwealth of Independent States and Turkey. And New World Wealth defines “Net assets” or “wealth” as the net value of assets (assets less liabilities). The only major asset it excludes from its valuation is primary residences.

A measure of the overall standard of living in Europe can be seen by the median wealth of the population, where net assets per capita stand at $86,000. This is compared to a global median of $27,000. And whilst Switzerland, at $285,000, has the highest median wealth in Europe, that is based on a population of a little over eight million people: smaller than the population of London. Total wealth in the United Kingdom is among the highest in Europe; and a major reason for this is the cost of real estate.

In the UK home ownership is greatly encouraged; one of the reasons why wealth per capita in the UK is higher than, for example, Germany, where many people prefer to rent their homes. And it is not just the British who choose to buy property in the UK. There are more multi-millionaires in the UK than in any other country in Europe, and the favourite place for buying real estate is London. Belgravia, Hampstead, Knightsbridge and Richmond are among the capital’s favourite locations for High Net Worth Individuals (HNWIs) from abroad. In the past ten years many of these have come from India, China, Russia and the Gulf States.

Another trend in recent years, though, has been for HNWIs to buy substantial properties in parts of Britain outside London. The university cities of Oxford, Cambridge and Durham have proved popular, as have towns such as Henley and Warwick. Other smaller towns in the London commuter belt have also seen an influx of foreign HNWIs; and projections suggest that Manchester (considered by some as England’s northern capital) will be the country’s fastest-growing city in the coming decade.

According to the report, Europe’s 3.9m HNWIs have combined wealth holdings of $19.6 trillion. That represents a significant proportion of the world’s 13m HNWIs, whose wealth amounts to $67 trillion. This means that these people account for over one-third of the world’s wealth held by individuals, which stands at around $190 trillion.

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