A startling trend is gripping the nation as UK millionaires pack their bags and bid farewell to London’s fading charm. The spotlight has shifted to Dubai, where a wave of high net worth individuals, both British and global – are finding their new haven.
For decades, the UK has held a prestigious status as a prime destination for migrating millionaires from all over the world. From 1980 to 2010, it boasted an impressive record of attracting affluent individuals from the Middle East, Asia, Africa, Europe and CIS.
However, the tides began to turn roughly six years ago, as the country witnessed a reversal of fortune—more millionaires bidding farewell while fewer arrived at its shores.
A strikingly novel trend is now capturing attention: Dubai’s meteoric rise as a premier migration hub for high net worth individuals, particularly the youth among the UK’s affluent earners.
This seismic shift towards the Middle East transcends the confines of nationality, embracing both British elites and wealthy foreign nationals. This paradigm shift underscores London’s waning allure in the face of Dubai’s magnetic pull.
Remarkably, the UK’s migration data from 2017 to 2022 paints a somber picture, shedding light on a loss of over 10 thousand high-net-worth individuals—a deficit that shows no sign of abating, with an anticipated outflow of another 3,200 millionaires projected for 2023.
In stark contrast, the UAE is poised to welcome an influx of around 4,500 millionaires this year—a staggering figure that ranks among the highest on record. Prior to the pandemic, the UAE typically witnessed an annual net influx of about 1,000 high-net-worth individuals.
The key players in this shift are projected to originate largely from India, with significant numbers also hailing from Russia, the UK, Lebanon, Pakistan, Turkey, Nigeria and China.
Brexit Fallout: Millionaires Turn Away from Post-Brexit Britain
Many experts blame the UK’s decision to leave the EU as a trigger for the “exodus” of wealthy business people.
This migration was primarily from the financial and professional sectors, including financiers, hedge fund managers, investment bankers, lawyers, and wealth managers.
A recent study by Housearch.com, a prominent property online hub, compared living costs in Dubai and London. The outcome is evident: Dubai emerges as the more favorable choice.
The research showed a 27.5% disparity in housing costs and a 17.3% gap in grocery expenses. According to the study, maintaining a comfortable lifestyle in Dubai would require a minimum monthly budget of $5,500, while London would demand $7,200.
Renting a residence within central London’s sought-after districts— Westminster, Chelsea, and Kensington—initiates at a minimum of $3,000 per month. Conversely, in central Dubai’s prime localities such as Dubai Marina, Downtown, and Business Bay, the entry point for studio apartment rentals stands at a relatively more affordable $1,900 per month.
According to Housearch.com, when it comes to buying property the divergence becomes more pronounced. Central London commands a staggering $16,800 per square meter, juxtaposed with Dubai’s $3,900. This trend extends to peripheral areas as well, where the figures read $9,800 against $2,300 respectively.
For dining out at a mid-range establishment, a meal in Dubai costs approximately $11—a stark contrast to London’s $25 price point.
Public transportation in Dubai is also cheaper. The fare calculation hinges on the number of zones traversed, culminating in a maximum charge of $2.50. Meanwhile, London’s fare system factors in variables like distance and time, with costs potentially escalating. Travelers opting for credit card payments or the Oyster transportation card could incur daily expenses reaching up to $6.67.
Yet, the decision to choose a city for residence involves more than just financial considerations. The contrast between London and Dubai extends beyond cost and encompasses customs, traditions, gastronomic experiences, and recreational pursuits. An often-overlooked yet significant distinction is the climate.
London Property Prices Set to Decline?
As the exodus of millionaires from London to Dubai gains momentum, experts are speculating that London’s real estate market might witness a significant price drop.
Concerns are rising as more landlords are reportedly listing their properties for sale, potentially triggering a downward push on prices. With a surplus of rental properties and landlords leaving the market, London’s property landscape could face a notable downturn. According to one of them, decline of 8 to 10 percent in 2023 seems plausible, and a comparable dip is anticipated in 2024.
A more assertive perspective emerges from Capital Economics. The forecasters have boldly outlined the potential for a 25 percent plummet if elevated interest rates persist over an extended period.
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