London to remain a major draw to world's super-rich despite Brexit uncertainty

The super-rich will continue to come to London despite the uncertainty created by the Brexit vote, according to a new report by a leading firm of property consultants.

Knight Frank believes that the numbers of the world’s wealthiest people based here will grow over the next decade by as much as 30%.

By 2026, it predicts, those ultra high net worth individuals – people with assets of more than $30 million (£24 million) – will rise to 12,310, “despite high levels of economic and political uncertainty as the country negotiates its exit from the EU”.

“The global economic powerhouses of London and New York dominate the rankings due to their well-established lead over other cities,” said Liam Bailey, Head of Global Research at Knight Frank.

“However looking ahead, future wealth concentrations and investment firepower look set to be dominated by a tussle for supremacy between Asian and North American cities.”

The global population of UHNWIs increased by 6,340 last year to 193,490, following a slight decrease in 2015. Another 60 people were added to the global tally of billionaires last year, taking the total number of dollar billionaires to 2,024 – up 45% over the past decade.

However, London slid to 92nd place in Knight Frank’s ranking of luxury residential market performance.

Prices fell by 6.3% in 2016, mainly because of stamp duty tax changes, although sales volumes increased and sentiment improved at the end of the year, Knight Frank said in its annual Wealth Report.

Prime residential prices will remain unchanged in 2017, while the cost of properties in cities such as Shanghai and Sydney will advance, according to the report.

Meanwhile, Europe continues to send out mixed messages. Of those locations recording a fall in prices in 2016, 50% were located in Europe.

A year earlier, this figure was 65%, suggesting that the continent’s recovery is gaining traction. Amsterdam, Gstaad, Munich, Berlin and Barcelona were Europe’s top performers in 2016, but second home markets such as Ibiza, Mallorca, the Western Algarve and Lake Como also rose up the rankings.

“There are several outstanding performers that will raise an eyebrow among even the most experienced investors,” said Knight Frank.

“China’s cities have catapulted themselves up our rankings with Shanghai, Beijing and Guangzhou claiming the top three slots, all exceeding 26% year-on-year growth.

“London, where many of the world’s super-rich have a home, slipped down the rankings with prime prices declining by 6.3% year-on-year,” it added.

“Our data shows it was the 3% hike in stamp duty for additional homes, introduced in April 2016, rather than the UK’s decision to leave the EU that helped to rein in demand.”