Central London Residential Property and the Global Rich

Friday, November 18, 2011 by Douglas And Gordon

There is a strong correlation between the rise in value of the assets of the global rich and Central London residential property prices.

 

The above chart shows you that since 1996, the value of assets held by “high net worth individuals” has increased approximately two and a half times from $16.6 US trillion to $42.7 US trillion. Over the same period, Central London property prices have increased approximately three and a half times. Anecdotally, anyone dealing in Central London property knows the influence of foreign buyers and it is clear that the growth in the number of millionaires and billionaires worldwide is fuelling London prices. The vast majority of this wealth is “new money”. In 1982, inherited wealth made up over 21% of the Forbes 100 Richest list.  By 2006, inherited wealth made up fewer than 2% of the list. Owning a London property is de rigueur for the world’s rich and it is hard to see demand falling away when one takes into account that the two power houses in the world economy – China and India – both currently impose exchange controls which restricts the ability of their nationalities to buy in London. 

Michael Hodgson - Chairman