Low savings rates boost art and antiquesSavers move cash to alternative investments

10 October 2009

Low rates on savings and cheap borrowing are driving up prices in the arts and antiques market, according to a new survey from the Royal Institution of Chartered Surveyors (RICS).
Woman in gallery

Pieces of art should be held for at least 5 years for a decent profit

The new research shows that an increasing number of chartered surveyors believe that the price of arts and antiques is rising rather than falling, with the traditional 'safe havens’ of jewellery and silverware showing strong readings amongst surveyors.

When asked if they thought prices were rising or falling, 44% more surveyors felt that jewellery prices were still rising, and 37% more felt that silverware prices were on the up as well.

Contemporary art market 'a lame duck'

The new statistics raised, however, a note of caution, as RICS described the contemporary art market as 'starting to look like the lame duck of the arts and antiques sector, as more surveyors report that prices are falling'.

RICS spokesperson Chris Ewbank commented: 'Cheap money, and downwards price adjustments in the last five years or so, are helping to drive up prices in nearly every part of the market. However, the contemporary market has suffered quite a turn around in fortunes over the last year, as those turning to the arts and antiques market are concentrating on the more stable and traditional markets, which tend to hold their value, or at least pose less risk.'

Pros and cons of alternative investments

Which? senior researcher Martyn Saville commented: 'At a time when conventional savings rates remain low, it's not surprising that savers are considering all the options. As with any investment, there are pros and cons when investing in arts and antiques. While the returns on some items will be spectacular, the risk of losing most or all of your investment should always be borne in mind.

Dior dress

A 1950s’ Dior gown could cost up to £5,000

'Such investments also come with extra costs, including insurance while you own the item and potential capital gains tax and selling costs when you come to dispose of it. It's vital to do your homework, take advice and consider the alternatives before diving in.

'It's also important for consumers to have a financial safety net in an easily-accessible, FSCS-covered savings account or Isa before even considering alternative investments such as arts and antiques. Once your safety net is in place, however, antiques are a potentially thrilling way to invest your spare cash - while you wouldn't want to hang a corporate bond on your living room wall, a carefully selected piece of art could give you aesthetic pleasure at the same time as offering the potential for future capital growth.'

To find the best home for your savings, check out our cash Isa recommendations and Best Buy savings accounts.

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