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How do the wealthy residents of London support the local economy?
Release Date:
2016-12-20
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The exclusive neighbourhood of Mayfair is a top global destination and one of the best premier residential addresses in prime central London. Despite this consistent expectation from the district, the typical profile of a resident in this area has evolved over the years, with town dwellers gradually getting younger. There are currently 43 percent of properties housing young, affluent, educated couples and singles, according to a new report from Wetherell. The local real estate market has a large choice of flats available, designed to suit the younger profile and call them to the area.

Mayfair also attracts a global community, with people from over 42 different nationalities calling the town home and 60 percent of residents having been born overseas. Forbes Rich List states that the US is home to 540 billionaires, China to 251, and German to 120, but billionaires in the Middle East are dwindling due to falling oil prices, and the number of Russian-speaking billionaires has also declined. With the continuous global economy change, it's only natural that the mix of Mayfair residents will change in line.

SUPPORTING THE LOCAL PROPERTY MARKET

A rare occurrence of property developments is in the pipeline for Mayfair, spanning over the next five years. These premium expansions will spread the high prices of W1K, which has been the long-reigning most expensive postcode in the area, to include W1S and W1J - and will also increase sales rates in these zones. These evolutionary additions to the market can bring a 100 percent premium over the current average prices in the area, so are a valuable growth.

Despite the Global Financial Crisis, the gains in house prices growth in prime central London have been high, growing at a 45 percent higher rate than in 2007, before the crisis. The last decade has seen a total growth of 188 percent in Mayfair, far greater than the growth seen in the rest of prime central London. New build properties, in particular, have helped to attract sales by offering the desired international designs, latest technology and overall luxury lifestyle. New builds can set new price limits in the market.

The residents of Mayfair reside in 1,305 privately owned homes, 870 social houses, and 2,173 privately rented apartments, totalling 4,348 properties. Of the private residences, 45 percent are estimated to be valued at £10 million or over, 50 percent between £2 million and £10 million, and only 5 percent are predicted to be worth below £1 million. Residing at a premium Mayfair address will support the growing rate of 42 percent, which is only a small drop from the 45 percent last year. With the typical monthly rent set at £1,387 per week, the average flat costs £1 million, and the typical house price is £4.8 million.

SUPPORTING THE LOCAL ECONOMY

The 2,000 millionaires of the number one residential spot in London, 200 of which earn a nine-figure amount and 20 who are billionaires, boost their local economy by contributing a substantial £2.5 million a year. Findings from the report revealed that the wealthy residents support many sectors of the affluent neighbourhood by spending on home improvements, luxury shopping, employment, and leisure, according to data from Westminster City Council, Dataloft, and EGI.

The affluent dwellers are commonly thought not to contribute to the local economy. However, an average home expenditure for households living in property priced at £15 million or over shows that they typically spend £644,000 on clothing, £137,000 on food and dining, and £2,700,000 on interior design. So the findings from the report reveal that this misconception is untrue and, in fact, the residents of Mayfair support local business substantially.
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