Total wealth in the UK is expected to reach $10trn by 2027, making the UK the fifth largest wealth market in the world after the US, China, Japan and India, says a new report.
This is according to the AfrAsia Bank United Kingdom 2018 Wealth Report which was done in conjunction with New World Wealth. It says growth in wealth in the UK is expected to be moderate over the next 10 years.
Total wealth held by people living in the UK declined over the past 10 years, from $10.1trn in 2007 to $9.9trn in 2017.
For the purposes of the report, wealth is defined as the net assets of a person. It includes all their assets - property, cash, equities, business interests - less any liabilities.
Currently it is estimated that the UK locals hold $9.9trn in wealth (net assets). About $3.6trn (36%) of this is held by so-called high net-worth individuals (HNWIs) - basically the super rich.
While the report found that the average UK individual has net assets of approximately $153 000, in other words the wealth per capita, there are about 827 000 super-rich individuals living in the UK, each with net assets of $1m (about R15m) or more.
Of these super-rich people about 26 000 have wealth of $10m (about R150m) or more each; 1 167 have $100m or more each and 103 have $1bn (about R15bn) or more each.
The number of super-rich in the UK have, however, declined from around 845 000 in 2007 to around 827 000 in 2017.
According to the report, growth in the UK was negatively impacted by business and economic uncertainty created after the Brexit vote; a significant depreciation of the British pound against the dollar; and poor performing property market. Based on AfrAsia Bank's in-house indices, prime residential prices in the UK are down by over 30% over the past 10 years in dollar terms. There has also been a significant decline in local gross domestic product (GDP) per capita in dollar terms.
At the same time, London is regarded as the second wealthiest city in the world after New York with total wealth held in the city of $2.7trn. Major sectors in the city include financial services (banks, wealth managers); professional services (law firms, consultancies); media (TV, entertainment, news, publishing); IT and real estate.
The most expensive towns and cities for prime residential property in the UK include London, Bray and Henley. London is one of the most expensive cities in the world to buy prime residential property. The most expensive parts of London are Knightsbridge and Belgravia.
The most affluent small towns (fewer than 30 000 inhabitants) in the UK were found to be Bray, Windsor and Ascot in Berkshire; Virginia Water in Surrey (which includes the Wentworth Golf Estate); Leatherhead and Weybridge in Surrey; and Henley in Oxfordshire.
The report points out that over the past few years, many wealthy Londoners have moved out of the city to nearby small affluent commuter towns such as Bray, Taplow and Marlow.
"This is a notable trend that is gaining momentum. A large number of wealthy Londoners have also left the UK altogether – many of these individuals have gone to the US and Australia," states the report.
At the end of 2017, real estate was the largest asset class for the average super-rich person living in the UK (accounting for around 30% of their assets); followed by equities (23%); business interests (21%); cash and bonds (20%); and alternatives like commodities, private equity products, structured products and collectables (6%).
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER