KEY POINTS:
"It's a hard life if you don't weaken," lamented Arthur Seaton, the hero of the 1960 film Saturday Night and Sunday Morning, summing up the lot of the working class as he looked forward to another week "sweating his guts out" over his lathe in a Nottingham factory. How times have changed.
Now, it seems, it is the rich who have it hard. A survey shows the wealthiest members of society are now engaged in a rearguard effort to maintain their gilded lifestyles, bedevilled with runaway inflation in the luxury goods sector.
Those of us not in the market for an executive box at Stamford Bridge or a case of Chateau Lafite Rothschild may struggle to feel sorry for the super-rich, but for them it is no laughing matter. The conclusion of the latest Stonehage Affluent London Living Index (Salli) was surprise at "how expensive it is being rich", with luxury goods rising in price three times faster than their more mundane consumer counterparts.
There are two reasons for the present Salli inflation rate of 6 per cent, said Robby Hilkowitz, executive director of the Stonehage Group which helps the world's super-wealthy manage their incomes. "Global wealth is growing at an unprecedented rate and as it increases they want more luxury goods to meet their lifestyle needs. With status items, the more expensive they become the more desirable they become.
"The second reason is that the supply of many of these items, from fine wines to Chelsea tickets, are finite but the amount of money chasing them is going up."
There are some 800 US dollar billionaires in the world, a figure that rose by 15 per cent last year. They are among the class of ultra-high net worth individuals with a personal fortune in excess of £25 million of net investable assets. The second tier covered by the survey, so-called high worth individuals with more than £5 million to spare, grew by 20 per cent.
Hilkowitz believes the growth in the luxury market remains sustainable despite mounting fears that the credit crunch will lead to a recession. He said many of his clients had already made their money and were living off the proceeds of their fortunes although the rate of luxury inflation was likely to reduce to twice that of the normal index compared to the current level of threefold.
"The reason we did this study was not to make people think 'oh, those poor people'.
"We kept coming up against this figure showing how much growth was needed to help our clients get the most out of their assets," he said.
Inflation was even higher when the cost of buying a property in central London was factored in. House prices in areas such as Kensington and Chelsea have soared more than 150 per cent in the past five years n easily outstripping Manhattan where prices have risen by 74 per cent.
- Independent
