Booming property market creates more millionaires.

 

Another 36,000 millionaires were created in the UK last year, driven by a soaring housing market.

 

According to the latest Capgemini annual study of the global rich, the UK is now home to 609,000 high-net-worth individuals, up 6.3% from a year earlier.

 

Joining this elite group requires a net wealth of at least £820,000 of investable assets, excluding their primary residence.

 

During the last year, the combined wealth of UK millionaires rose by 7.4%, reversing a slight decline in 2020 during the pandemic.

 

Rising wealth in 2021 was mainly due to a robust property market, where average house prices rose 13% last June.

 

While house price growth cooled slightly by the end of the year, when the stamp duty holiday ended, the UK property market finished up 9.5%.

 

Since then, the average house price has continued to rise, reaching a new record high of £278,000 in March, up by an average of £24,000 in a year, according to the Office for National Statistics.

 

According to the survey, the UK has the sixth-highest number of millionaire investors, with the US in first place with almost 7.5 million high-net-worth individuals.

 

Japan is in second place with 3.7 million millionaires, and Germany comes in third place with 1.6 million high-net-worth individuals.

 

Also in the top five are China, with 1.5 million, and France, which rose 8.5% to pull ahead of Britain, with a total of 775,000 millionaires.

 

France benefited from a 29% increase in its domestic stock market capitalisation last year, its most robust performance in almost two decades.

 

By contrast, the UK stock market rose by 15% last year.

 

On a global scale, the number of ultra-high-net-worth individuals with more than $30 million of investable assets rose by 10% last year.

 

The number of global millionaires next door’, with between $1 million and $5 million of assets, increased by 8.5%.

 

However, rising price inflation and a global economic slowdown threaten house prices and stock market valuations.

 

Early estimates suggest the wealthiest people in the world have already lost around 4% of their assets this year as “high inflation since the start of 2022 and talk about interest rate hikes from central banks have spurred stock market corrections that are accelerating.”

 

“Due to high exposure to equity, HNWI wealth in North America is expected to be most impacted followed by Europe which also copes with the ongoing geopolitical crises.”

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