Beluga caviar, cigars and fine dining are among the luxury goods and services that became more affordable for wealthy Londoners over the last year, according to new research, marking a significant fall in price inflation.
Conducted by multi family office Stonehage, the research found the decrease was primarily fuelled by a 9.7% fall in the price of luxury consumables.
Based on the year ending April, the Affluent Luxury Living Index showed goods and services had dropped 1.1%. This is in contrast to last year’s survey, which revealed a 4.9% increase in the price of luxury goods and services.
Ronnie Armist, chairman of Stonehage, said the inflation decrease was partially caused by an appreciating pound, which has improved the purchasing power of London’s wealthy.
“Despite this, a price premium still applies to certain aspects of British life, as reflected in the increased price of sport and club memberships and private schooling,” Armist said.
The index measures inflation by looking at a self-selected basket of goods and services that it believes are relevant to ultra-high net worth families.
Traditionally, wealth managers use the UK Consumer Price Index (CPI), which measures goods across all demographics – they recorded a 1.8% increase in inflation this year.
According to the study, there were a number of sectors that also saw a decrease in price inflation, including culture and entertainment, which dropped 4.7%, and investments of passion fell by 0.2%, as high-end British-manufactured cars saw a slight decline.
Executive seats at major tennis events, on the other hand, increased by 44%, which Stonehage believes was fuelled by Andy Murray’s 2013 Wimbledon win.
“While the cost of living for the super-rich in London has fallen in the last year, we expect prices to rebound as global economic conditions improve over the coming year,” Amhirst said.