London falls out of top five wealthiest cities after millionaire exodus in latest blow for Rachel Reeves

An annual global wealth report revealed that London's wealth has decreased by 11,300 millionaires over the past year, including 18 centimillionaires and two billionaires, with the number of millionaires in the city at 215,700.

A centimillionaire is defined as someone with at least £100million, while a billionaire possesses more than £1,000m.

The study, carried out by New World Wealth for the advisory firm Henley & Partners, classifies wealth as “liquid investable” assets, such as cash, bonds, and stocks, while excluding property holdings.

The analysis was completed before the recent stock market crash triggered by Donald Trump’s tariff announcement.

New World Wealth said that London is one of only two cities in the top 50 that has seen a decrease in the number of millionaires. The other city is Moscow.

Since 2014, London has seen a 12 per cent reduction in its wealthiest residents, a decline attributed to tax hikes, Brexit, and the drop in the pound's value.

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In contrast, Moscow has experienced a 25 per cent decrease, largely due to Russian President Vladimir Putin's invasion of Ukraine in 2022.

However, in total, London has lost more millionaires than any other city, with approximately 30,000 leaving over the past decade, compared to 10,000 from Moscow.

The Times reported last week that the outflow of wealth from the UK surged sharply in the first quarter of the year, particularly before the Labour government's decision to abolish the non-domiciled tax regime.

Starting Monday, this long-standing status, which allowed wealthy foreigners in the UK to shield their global assets from British taxes for an annual fee beginning at £30,000, was replaced by a much less favorable residence-based tax system.

Under the new system, any wealthy foreigner who has lived in the UK for over four years must now pay UK income and capital gains taxes on their worldwide income.

If they remain in the country long enough, their global assets will also be subject to the UK's 40 per cent inheritance tax (IHT), one of the highest in the world.

Tax advisors report that non-doms are relocating to countries like Portugal, St Kitts and Nevis, Spain, Greece, the UAE, and Italy, where taxes are lower, or where they can pay a fixed annual fee to avoid taxation.

For instance, Italy charges €200,000 annually to foreigners wishing to protect their global assets from local taxes.

The head of research at New World Wealth, Andrew Amoils, said high British taxes had led many rich investors to leave the city.

He said: “Capital gains tax and estate duty rates [IHT] in the UK are amongst the highest in the world, which deters wealthy business owners and retirees from living there.”

He added: “It’s worth noting that most of the companies on the Ftse 100 were started by centimillionaires, so the loss of these individuals has a massive impact on an economy.”

However, he noted that there were additional factors contributing to London's underperformance, including its inability to recover fully from the 2008 financial crisis, its failure to foster enough new technology businesses and the “dwindling importance” of the London Stock Exchange”.

He said: “The LSE was once the largest stock market in the world by market capitalisation but it now ranks 11th globally.

"The past two decades has been particularly poor, with a large number of companies de-listings and relatively few new IPOs [initial public offerings].”

Currently, the richest city in the world is New York City, with 384,500 millionaires, followed by the San Francisco Bay Area where many technology businesses are based, due to it being home to Silicon Valley.

Tokyo ranks as the third wealthiest city, home to 292,300 millionaires, with Singapore following closely behind.

Manchester is the only other UK city to make the top 50, coming in at 46th place with 23,400 millionaires.

Australia has four cities in the top 50, China has five, and Germany boasts three.

However, even with the significant loss of millionaires, London remains the fourth most expensive city to live in, with its property prices per square meter surpassing all cities except Hong Kong, New York, and Monaco, which has the priciest homes.