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London still considered a safe haven for custody assets

24 September 2026

A decade ago, there was a great deal of press coverage about London enjoying its safe-haven status among global investors. Much of the benefit flowed through in the form of wealthy individuals from both “first world” and emerging countries investing in prime central London residential property. In addition to the American, Asian, Russian and Middle Eastern buyers, the political and economic upheaval in the Eurozone at the time saw a rising tide of Italian, Greek and French purchases of London homes. In addition to real estate investment, nervous international investors were also typically seeking shelter in foreign currencies and gold, held away from their own shores.

How times have changed. Just one minute’s walk from our Knightsbridge office sits Montpelier Square. As reported in a recent article by the Financial Times, seven of the 47 Georgian mansions have been on the market for an average of 15 months. A five-bedroom home, which sold in January for £1,932 per sq ft, would have fetched around £3,000 per sq ft in 2014. The much-touted primary drivers have been the end of the “non-dom” tax regime, Brexit and stamp duty.

What is less visible to the public has been the impact of falling residential prices on the demand for safe custody services in London. When the overseas individual buys an apartment, there is potential demand for safe custody, with a non-resident home resulting in the need to safeguard original deeds, jewellery etc. Whilst most of the demand for safe deposit boxes in London is domestic, overseas clients still make up a significant proportion.

What is surprising is that current demand from overseas has been remarkably resilient. Whilst estate agents in central London are suffering, demand for safe custody has held up well. We know that currency plays an important part in the decision making of equity and bond investors. Curiously, the same case can be made for safe custody. Most international investors treat the British pound as a relatively weak currency (certainly highly cyclical and risk-sensitive). A house in Montpelier Square is a sterling asset. Gold and silver bars or coins are not. Neither, necessarily, are many other items that are stored in safe deposit boxes, such as jewellery, stamps, antiquities and naturally foreign cash.

Another emerging (and connected) trend has been the rising number of customers of London-based overseas banks who require independent safe deposit box services. These private banks are generally reluctant to recommend competing banks’ safe custody facilities that, in any case, have largely disappeared from the high street. They are naturally demanding (quite rightly) in terms of their requirements for both high security and regulatory adherence. Similarly, demand has emanated from insurance brokers who advise their international customers wishing to keep their valuables in London (often having sold their home).

A further recent trend, sometimes attributed to President Trump’s deteriorating relationship with other countries, has been the recent transfer of gold from North America to London. At the institutional end of the market, an example has been the recent transfer of 86 metric tonnes of gold bullion by the Dutch central bank to the Bank of England. London is the largest global hub for wholesale gold and silver trading. Similarly, individuals have been transferring gold and silver from domestic US banks to offshore independent vaults, notably London.

Conspiracy and Armageddon theorists have argued that gold reserves should not be stored in the United States. The rationale is steeped in history; indeed, it goes back to Franklin Roosevelt’s seizure of individual investors' physical gold during the Great Depression. Some investors believe that the current economic and geopolitical climate resembles that of 1933 (with a ballooning national deficit) and that US politicians may seek again to justify the confiscation of gold as a means to stabilise the country's monetary system. Highly unlikely, but who are we to argue with such theories?!

Demand is, of course, just one side of the equation. In a market with rising demand for safe custody, there is increasing pressure on the need for additional supply. To the frustration of banking customers across the country, retail banks have largely exited the safe custody business. Our October 2022 editorial growing concerns about bank closures explains the reasons and the extent to which UK banks have closed their secure storage operations. It has increasingly fallen upon the independent safe custody industry to provide a greater share of the service in the UK.

However, the UK independent sector remains very small and has also been under considerable pressure to invest heavily in systems required to maintain high standards of regulatory compliance. Whilst this has constrained the growth of the independent sector, we still believe that this is a positive requirement. Our May 2022 editorial benefits of complying with money laundering explains why such procedures instil confidence in the eyes of both regulators and customers. Another issue is the extremely high barrier to entry, given the many years it takes for a professional vault to achieve breakeven due to the high initial capital costs and ongoing operating expenses.

The greatest constraint, as already indicated, is the scale of our industry and the inability of the independent sector to take up the slack from the shrinking banking sector. In order to accommodate the rising demand, we have been looking at different ways to increase our capacity within our long-established vaults (in Knightsbridge and St John’s Wood), and by opening a purpose built vault in Chiswick.

Returning to our original theme, the definition of “safe haven” in one dictionary is “a place where you are protected from harm or danger”. In a sense, this is an apt description for London, which offers good protection to investment assets through its robust legal system and relatively stable economic & political environment (despite the recent chaotic changes of leadership). “Safe haven” can also refer to specific investments, such as gold or US Treasury Bills or the Swiss franc, which are expected to retain or increase their value in times of market turbulence. These days, US Treasuries may be considered default risk-free assets, but even they now face growing market and inflation risks.

Whatever the definition, London’s safe-haven status naturally does not provide total protection. It does however remain a principal destination for capital investment and safe custody. Wealthy individuals from highly volatile regions or emerging markets, and even first-world countries, still actively move capital and high-value physical assets to the UK to seek the protection of the British legal system and personal property rights. What a well-regulated safe deposit vault in London offers is a “safe haven within a safe haven”. That is why demand from overseas clients has remained extraordinarily resilient despite much talk of wealthy individuals selling their homes and leaving the UK for tax reasons.