The rich are feeling the pinch after it was reported that wealthy London-based families experience an inflation rate that is almost twice as high as that measured by the Consumer Price Index (CPI).
According to the latest Stonehage Affluent London Living Index (SALLI), which tracks the prices of 50 goods and services on a “per use” basis, the cost of luxury living has shot up by six percent in the last five years.
Since 2002, SALLI has climbed 13.79%, compared to the CPI which has risen by 7.23% forcing goods such as caviar, fine art and a day out shooting grouse to climb considerably making them now three times as expensive as in previous years. For example, the cost per term for two pupils at Westminster School rose to more than £17,300 in 2007, up 7 per cent on last year.
The super-rich will also have to come to terms with an increase in the price of Beluga Caviar which is up 18 per cent on the price of 1kg and for horse lovers, the cost of keeping polo ponies has soared by 8.7 per cent.
What’s more, those Chelsea fans that fancy watching Frank Lampard, John Terry and Didier Drogba play the beautiful game from the comfort of their own executive box will have to find an extra 25 per cent, knocking the price up to an extortionate £117,500. However, good news for nautical fans as the price of a week’s yacht hire has dipped by 5.2 per cent.
However, it appears that despite the rich having to fork out extra to fund their luxurious lifestyles, the recent credit crunch is barely denting their investments.
Only last week, upmarket wealth manager, St James's Place, announced a 20 percent increase in property sales for the third quarter, in spite of the global turmoil in financial markets.
Sales rose from 85.1 million pounds to 101.9 million in the three months to September 30 and St James's expects sales growth for the whole of 2007 to be reach its target of15 to 20 percent.
While commenting on his clients’ reaction to the recent market turbulence, Chairman Mike Wilson said: "It does not throw them, plus our clients are more sophisticated than the average client they keep sufficient emergency money, rather than going into their investments at the wrong time."
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