Introducing The State of London Luxury 2024 report

According to the report, London is now home to over 227,000 high-net-worth individuals (HNWI) – making it the wealthiest city in Europe – and driving significant demand for luxury goods, property, and services. Notably, the wealth within this customer group is projected to grow faster in London than in key European markets or the US.

Reflecting this growing affluence, sales of high-end properties in London priced at £15 million and above have surged by 25% between 2023 to 2024 and luxury apartment sales, particularly in branded residences, have increased by 137% during the same period. Two-thirds of UK high-net-worth individuals expect an increase in disposable income in 2024, with more than 80% planning to maintain or increase their luxury spending . Walpole’s London Luxury Survey further underscores the importance of affluent locals, with 78% of luxury retailers in London now ranking wealthy residents a top three success factor for their stores – a significant increase from 61% in the previous year.

London’s mix of village-like neighbourhoods, each with unique character, draws both residents and luxury brands to create multiple distinct shopping, residential and leisure opportunities. Strategic investment in infrastructure, such as the extension of the Northern Line and the opening of the Elizabeth Line, has enhanced connectivity and boosted new luxury developments like Battersea Power Station and King’s Cross, and created the scope for more of such developments. 

The city also remains one of the world’s top destinations for luxury tourists with its mix of history, cultural vibrancy and unique retail experiences drawing visitors in. In 2023, the UK welcomed 38 million overseas visitors, a 22% increase from the previous year, with Heathrow Airport reporting a 29% rise in international passengers, signalling a recovery to pre-pandemic levels.

London’s luxury hotel scene is flourishing to cater to this demand, with 20 new luxury hotels set to open by 2028. The increase in super-luxe hotel rooms across the city is a multi-billion-pound investment and a sign of confidence in London’s ability to attract high-spending visitors. Some of these hotels rival the world’s most exclusive properties, with staff-to-guest ratios in some cases as high as three-to-one, placing them on par with the self-proclaimed ‘seven-star’ hotels in destinations like Dubai.

Attracting high-spending tourists creates significant economic value for the UK as they outspend their mass-market counterparts by 14 times per trip. Crucially, for every £1 spent by high-value tourists, an additional £8 of value is generated across the UK, supporting a wide variety of industries, skills and employment. 

One key deterrent for international visitors is the loss of tax-free shopping, following the UK’s departure from the EU. This is a drag on London’s and the UK’s economic performance at a time when growth is a governmental priority. The introduction of a holistic high-value tourist strategy as seen in countries like Italy and New Zealand would be an ideal opportunity to address the loss of this scheme.

London’s luxury retail landscape, with its blend of iconic department stores, luxury shopping streets, and affluent urban villages, is unmatched globally. While retail markets worldwide have been volatile post-pandemic, London has seen significant investment. Central London retail investment volumes rose by 71% year-on-year in the second quarter of 2024, totalling £424 million, with predictions that full-year investment volumes will exceed those of 2023 .

Luxury brands have continued to invest in their physical presence and there is a shift towards increasing retail footprints by those already in prime locations.  Since the start of 2023, all the retailers that have moved within Bond Street have upsized their spaces by an average of 195%. Elsewhere, Cadogan’s £50 million investment in Sloane Street is already yielding results, with luxury brands including Valentino and Jessica McCormack opening flagship stores, alongside significant upsizes by Bottega Venetta, Brunello Cucinelli and Saint Laurent. 

In parallel, luxury brands purchasing rather than leasing prime London properties is increasing; LVMH’s £165 million acquisition of a New Bond Street property further underscores confidence in London’s long-term status as a luxury capital.

London’s luxury retailers report a resurgence in physical shopping as consumers seek unique, in-person experiences. Personal shopping services, exclusive in-store offerings, and immersive experiences are drawing customers back to brick-and-mortar stores. Many luxury brands are investing in their staff’s expertise, local curation and place making, and proximity to high-end hotels and restaurants to draw customers to stores.

Despite these positive indicators, retailer sentiment has dipped somewhat. The London Luxury Survey found that the percentage of retailers feeling positive about their business prospects dropped from 71% in 2023 to 53% in 2024. A backdrop of macroeconomic uncertainty, global rebalancing of luxury markets and the loss of tax-free shopping for international visitors have contributed to this lack of confidence. However, looking ahead to the next two to three years, 66% of respondents still remain optimistic.

A major focus of the latest edition of the State of London Luxury report is the growing relationship between luxury brands and the arts. 95% of luxury brands now consider their association with art and culture as important to their brand identity. This connection has led to the creation of new departments and the hiring of specialist talent to strengthen ties between the two sectors.

This is driven by a shared customer across art and luxury (both high-net worth and aspirational) particularly in a city like London, where the cultural offer is especially broad.

Among HNWIs, art now leads ‘passion’ investments as these buyers are motivated by a blend of ‘joy of ownership and ‘intellectual interest’, in addition to its investment potential.

Luxury brands are increasingly creating immersive cultural experiences alongside their core product or service appeal and while growth in some luxury categories has rebalanced, demand for authentic, cultural experiences, particularly among younger consumer, continues to rise. 

Brands are evolving to create multi-experience environment that blend retail, hospitality and culture, and some now boast art collections that rival those of national museums on display to the public in their flagship stores. Initiatives like Claridge’s Royal Schools Art Prize demonstrate deepening ties between luxury and the arts including nurturing the next generation of artistic talent.

Luxury brands are now key players in shaping the cultural landscape, collaborating with artists, creators, and cultural organisations to redefine creative expression. A deep commitment to inspiration and innovation, evident in both their products and services, has cemented their cultural influence. Just one example of this is the blockbuster fashion exhibitions at the V&A, which showcases the powerful intersection of art and luxury to new audiences.  Digital technology is also expanding these partnerships, transforming sponsorships into dynamic, creative storytelling opportunities.

Supporting creative talent is key to maintaining London’s edge in the global luxury market and London is home to world-renowned creative education institutions that have nurtured designers such as Alexander McQueen, John Galliano, Jimmy Choo, Stella McCartney, Christopher Kane and Phoebe Philo. However, the decline in arts education participation is concerning. Continued government investment in creative education, from art schools to skill-based training, is crucial for London’s luxury sector to thrive long into the future.