Wealthy Europeans call in the movers as Brexit cliff edge looms

The timing suggests a reaction not so much to Brexit itself but the handling of negotiations, said Mr Anthony Ward Thomas, founder of a firm of the same name that specialises in overseas relocation.
The timing suggests a reaction not so much to Brexit itself but the handling of negotiations, said Mr Anthony Ward Thomas, founder of a firm of the same name that specialises in overseas relocation.PHOTO: EPA-EFE

LONDON (BLOOMBERG) - With the Brexit deadline less than 75 days away, the increasing likelihood of a no-deal split is pushing wealthy Europeans who have made their homes in Britain to call it a day and get the movers in.

Mr Anthony Ward Thomas, founder of a firm of the same name that specialises in overseas relocation, dealt with 296 moves away from Britain in 2018, an increase of 82 per cent.

Favoured destinations include Paris, Brussels, Zurich and Geneva, as well as southern France and Spanish locations such as Majorca.

The timing suggests a reaction not so much to Brexit itself but the handling of negotiations, said Mr Ward Thomas, who counts Mr Boris Johnson, one of the leading campaigners for the split, as a former client.

Customers are typically wealthy, having at least £5 million (S$8.7 million) at their disposal, and mostly European Union citizens moving with their families, including retirees seeking warmer weather but also favouring "more stable" political systems.

"I wouldn't say it is because of Brexit with a capital 'b,' but the fact that we find ourselves in such a mess," Mr Ward Thomas said in a phone interview. "People are leaving the ship because the ship itself is foundering."

The exodus may accelerate after the rejection of Prime Minister Theresa May's Brexit deal. With no end to the saga in sight, people "who have been sitting on their hands" may now be moved to make some life-changing decisions, Mr Ward Thomas said.

 
 

Popular destinations also include United Kingdom crown dependencies in the Channel Islands, which don't apply capital gains or inheritance tax.

Relocation inquiries increased more than 50 per cent in the second half last year compared to the first six months, according to Mr Jo Stoddart, director of Locate Guernsey.

Italy has also emerged as a magnet for moves, spurred by Brexit and the introduction of a new tax regime two years ago, said Mr Francesco Tesi, senior associate adviser at Lionard Luxury Real Estate. The country was previously a focus mainly for second-home owners.

"Now it's a hedge-fund manager or an entrepreneur," Mr Tesi said. "They buy the home, move their family from the UK and work a few days a week when they need to in London, with the rest of it done remotely."

Mr Ward Thomas, who also handled moves for Ms Pippa Middleton, sister of the Duchess of Cambridge, and former Archbishop of Canterbury Rowan Williams, hasn't yet seen an uptick in corporate relocations. Though with many firms saying a non-negotiated exit would be disastrous for their British operations, he says some are laying the groundwork for moves.

"We've been approached confidentially by a number of institutions to see whether it would be something we'd be interested in doing," said the entrepreneur, whose firm has 110 trucks, annual sales of £35 million and charges about £3,000 for the average move.

A continued flight of EU nationals would bring a boost for the industry after three years of lacklustre growth, which the British Association of Removers says has been a consequence of people awaiting the outcome of Brexit.

"The uncertainty has created inertia in the moving marketplace," Mr Ian Studd, its director general, said in an interview. "The number of people moving house for whatever reason, corporate, private or otherwise, has stagnated."

 
 
 

To be sure, the most recent official figures, for the quarter through June, still show a net inflow of migrants to Britain from the EU, though the gap has shrunk to the narrowest in six years.

Brexit has also been blamed for a downturn in London property values, though that could dissuade some home owners from leaving, with people who put their houses on the market facing the lowest chances of securing a sale in 10 years.

Mr Ward Thomas, though, said continuing uncertainty around Brexit could further boost demand by increasing the chances of Mr Jeremy Corbyn's Labour Party coming to power, with its pledges to redistribute wealth.

"The prospect of a Corbyn government is at the forefront of many people's minds," he said, fuelling "a desire to realise the value of assets in the UK and move to a new tax domain".