Mayfair homes contribute £2.5bn to London economy
There are now over 2,000 millionaires living in Mayfair who help to protect property values and contribute almost GBP2.5 billion to the local Mayfair and West End economy through employing staff, luxury shopping, spending on consultants and other expenditure.
That’s according to Mayfair’s Golden Decade, a new report by Wetherall, which reveals that of the 4,348 residential properties in Mayfair, 1,305 are end user, privately owned homes, 870 are social housing (shared ownership and rented), and 2,173 consist of privately rented dwelling owned by landlords/investors and occupied by affluent tenants.
Wetherell estimates that out of the privately owned properties in Mayfair 5 per cent are worth less than GBP1 million pounds; 50 per cent are worth between £2 million to £10 million; whilst 45 per cent are valued at over £10 million; with the most expensive homes in Mayfair being worth up to £200 million.
Based on these figures Wetherell calculate that there are at least 2,000 millionaires living in Mayfair on a full or part time basis; and of these an estimated 200 are 9-figure multi-millionaires and around 20 are full billionaires – one of the greatest concentrations of household super-rich wealth anywhere in the world.
Wetherell reveals that Mayfair’s residents are from over 42 nationalities, with over 60 per cent of Mayfair’s residents now born overseas, up from 49 per cent back in 2001. Over the last 15 years the biggest rise has been residents born in Europe and the Middle East with Mayfair now the “London address of choice” for wealthy residents from Qatar, Saudi Arabia, Kuwait, Abu Dhabi, France, Germany, Italy, India Nigeria and Russia.
Wetherell adds that the number of millionaire residents in Mayfair can double during the Summer and Winter months as high-net-worth visitors from the Middle East, Asia and Africa occupy Mayfair’s finest hotels and short-term lets so that they can enjoy socialising, leisure and luxury shopping.
The new Mayfair’s Golden Decade report reveals that owners of homes priced above £5 million contribute £2.3 billion per annum to the London and wider UK economy. Mayfair households in the £5 million to £15 million price band each spend £2.75 million per annum on employing domestic staff, security needs and luxury shopping.
For Mayfair homes valued over £15 million, the report highlights that the average household in this top price bracket will spend £4.5 million in Mayfair for the typical 90 day periods they spend in the capital. Even a stay of just one day in the capital creates expenditure of £50,000 into the local London economy.
Of the £4.5 million spent during a typical stay, £325,000 is spent on domestic staff salaries consisting of typically six staff consisting of butler, chef, chauffeur, nanny, housekeeper and maid. Another £300,000 is spent each year on lawyer, publicist/PR and other professional consultancy fees. The £15 million-plus households spend £100,000 per annum on medical and cosmetic treatments; £2.7 million per year on interiors, of which £750,000 is on artwork alone; and £4,500 on flowers. Some £150,000 is spent on security.
Over £644,000 per year is spend on shopping of which £144,000 is clothing and shoes and £500,000 is jewellery and watches; £19,500 is spent on personal grooming; £137,000 on food and entertaining including £72,000 just on fine wines and champagne; £117,500 on leisure and sports, including personal trainers; £100,000 on school fees and education; and £125,000 on electronic gadgets and other “rich-boys toys”.
Wetherell highlights that all this expenditure has a massive “trickle-down” economic benefit for the local Mayfair housing market and economy. The concentration and housing demand from millionaires and billionaires helps keep an upward pressure on property values and luxury housing supply.
Wetherell says an entry level flat in Mayfair now costs over £1 million whilst the average home costs £4.8 million and rents average £1,387 per week. Between 2006 and 2016 property values have risen 188 per cent.
As a result of rising values and millionaire buyer demand there are 11 new luxury residential developments (providing 160 new homes) currently under construction in Mayfair with another 21 schemes (providing a further 410 new homes) in the planning pipeline. In addition, these new homes have the largest average floorplates in London – 2,700 sq ft, compared to a London wide average of just 500 sq ft.
Currently the typical new luxury homes costs £2,400 per sq ft, with the most expensive exceeding £5,000 per sq ft, and Wetherell forecasts that property values will double over the next 10 years if demand continues at its current rate.
Wetherell reveals that the huge concentration of millionaire and billionaire households in Mayfair means that local residents spend twice as much money on Bond Street compared to visitors from outside of Mayfair. Over two-thirds of Mayfair residents typically eat out three to five times per week and Middle East residents spend on average £1,900 per shop, US £550 per shop, Chinese £1,688 per shop and Nigerians £500 per shop.
Peter Wetherell, chief executive of Wetherell says:
“A key misapprehension is that Mayfair’s ultra-wealthy residents don’t contribute to the local economy. Our new Mayfair’s Golden Decade Report shows very clearly that in fact they do make a huge contribution and that the wider shopping, leisure and employment sectors benefit from a massive trickle-down economic benefit.
“Some commentators also incorrectly believe that foreign property owners leads to a ‘lights out’ situation in the housing market. Again this is another misapprehension. In fact, 40 per cent of Mayfair’s overseas residents are ‘resident Anglophiles’ who choose to make London their main home, recording that they have lived in London as their main home now for over 10 years.”