Millionaires leaving the UK as London loses its appeal

The UK has traditionally been seen as one of the world’s top destinations for migrating millionaires.

Indeed, for many years (from 1980 to 2010) it consistently attracted large numbers of wealthy people from Africa, Asia, CIS, Europe, and the Middle East.

However, this trend began to reverse around six years ago as more millionaires left the country and fewer came in.

A very new trend has now emerged which has seen Dubai becoming a major migration destination for high net worth individuals and especially young high earners from the UK.

This shift to the Middle East applies both to wealthy Britons and rich foreigners with London increasingly losing its appeal.

Notably, during the period from 2017 to 2022 the UK lost approximately 12,500 more high-net-worth individuals than it has gained through migration, and it is expected to lose another 3,200 millionaires to migration in 2023.

Conversely,a net inflow of approximately 4,500 millionaires is expected in the UAE this year — one of the highest on record. Pre-pandemic, the UAE traditionally saw net inflows of around 1,000 high-net-worths per year.

Most incoming millionaires in 2023 are expected to come from India, with large numbers also coming from the UK, Russia, Lebanon, Pakistan, Turkey, Egypt, South Africa, Nigeria, Hong Kong, and China.

Millionaires shun post-Brexit Britain

In the UK, meanwhile, the impact of Brexit is seen as one of the reasons for the current and worrying “exodus”.

Numerous wealthy businesspeople have rebased to Europe over the past five years, possibly as a result of the decision in 2016 to take the UK out of the EU.

The bulk of those moving to the European Union work in the financial and professional services sector (namely, wealthy financiers, hedge fund managers, investment bankers, lawyers, and wealth managers).

The leading online property hub Housearch.com compared the cost of rent, groceries, transportation, and entertainment to find out whether the cost of living in Dubai is lower than in the British capital.

Overall, if comparing the cost of living in Dubai and London, Dubai is the clear winner, it found:

Housing is cheaper by 27.5%, groceries by 17.3%. According to its findings to rent an apartment and maintain a comfortable life in Dubai an expat needs a minimum of $5,500 a month. In London, the amount is $7,200.

However, when choosing a city to live in, considering lifestyle London and Dubai are different not only in prices, but in customs, traditions, food and activities.

One other big difference that perhaps should not be underestimated is, of course, climate.

Commenting on the findings, Andrew Horbury, Cavenwell Group Managing Director, told Business Matters magazine, “Dubai has historically attracted high-net-worth individuals but heavy investment in infrastructure and connectivity, and very favourable business and tax rules mean that’s all changing. We’ve seen a significant increase in the number of start-up founders, small business owners, and even freelancers who are looking to relocate.”

Samuel Mather-Holgate, an adviser at Mather and Murray Financial, told the London Evening Standard: “The scale of the price decline in the London market all depends on how far [Governor] Andrew Bailey and the MPC go with their shambolic policy of unnecessary rate rises.

“The effect of the most recent series of hikes hasn’t yet been felt and they will push down prices by up to 10 per cent. If he goes further, the ramifications for those in the capital could be catastrophic. If that base rate is pushed up another half a per cent then prices could end the year a fifth lower than their highs.”

Graham Cox, of specialist brokers SelfEmployedMortgageHub.com, said the growing number of landlords putting their properties on the market could also force prices down sharply.

“With so many rental properties in London, and so many landlords exiting the sector, property prices could fall significantly. A drop of eight per cent to 10 per cent in the 2023 calendar year wouldn’t surprise me, with a similar size fall in 2024.”

Forecasters Capital Economics have gone even further, flagging up the possibility of a 25 per cent fall if rates stay elevated for “several years”.

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