Demand for six-figure sports cars, high-end art and watches that cost more than a down payment on most homes is making it more expensive to be a member of London’s upper crust.
According to the affluent living index compiled by Stonehenge Wealth Management Group, the cost of a basket of ultra-luxury goods and services consumed by Britain’s 1 percent of the 1 percent – stuff like Bugatti cars, Patek Philippe gold watches, season tickets to the opera and membership to elite sports clubs – increased 4.9 percent over the 12 months ending in April – compared to the overall U.K. inflation index of 2.4 percent in the same period of time.
So why is this happening?
“This rise was fuelled predominantly by a 14.8 percent increase in the price of ‘investments of passion,’ including high-end cars, watches and jewelry, which has been attributed to the falling value of the pound relative to the Euro and the Swiss franc combined with an increase in demand for sports cars and fashion items, particularly among consumers from the Middle and Far East. Improving stock market conditions have also left wealthy investors with more disposable income to spend on these luxury items.”
Prices of high-end champagne and caviar, as well as prices at London’s toniest restaurants, such as Le Caprice, have risen 5.3 percent, while membership costs at exclusive hunting and health clubs increased 4.4 percent. The cost of first-class travel and five-star accommodations rose between 4 percent and 5 percent.
Pricey rental properties saw only a slight 0.6 percent rise as local demand has been flagged by declining wage growth, which means wealthy foreigners have had an easier time finding temporary lodging for their British shopping vacations.
Read the full report here.