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22 March 2021

Contemporary art proves a sound investment - but are you adequately insured?

2017 saw a seismic change in the UK’s artistic tastes. A national poll showed that Constable’s Hay Wain is no longer the UK’s favourite art work and has been supplanted by Banksy’s Girl with a Balloon.

With prices of Banksy prints and originals soaring to unprecedented levels despite the global pandemic, were you savvy enough to buy early and are now reaping the rewards? And, if so, are you adequately insured? Paul Huntley, our Head of Private Clients, catches up with Contemporary Art specialist, Ben Hanly, to find out more.
 
Q. When did Banksy start to be so popular?

A. The change in taste away from traditional art towards Urban and Street art has been developing for the past ten years and has resulted in a very significant strengthening of the commercial Urban market. In particular that of Banksy which is now one of the most buoyant and bullish markets of any contemporary artist.
 
Q. Which is growing more - prints or original works?

A. Both Banksy’s prints and original works on canvas have seen phenomenal growth in prices over the last ten years, and specifically in the past five years. It is way beyond that seen by almost any other UK artist.
 
Q. Is this because he produces in limited numbers?

A. One of the main factors influencing growth is normally a limited supply of work. With Banksy this is not the case as he is hugely prolific and the size of his editions in both his print and canvas productions are high. It is not uncommon for his prints to be produced in editions as large as 350 or even 500. The prints are also often produced as both a signed and unsigned edition. Even his canvases are often produced in editions of 25, alongside unique pieces.
 
Q. What’s been happening during the pandemic?

A. With the world in the grip of a global pandemic, it would be reasonable to assume the art market would flat line. But how wrong could one be? Auction sales worldwide are showing steady performance, even at the lower to mid-level, and Private Treaty sales are also buoyant. The most surprising development is the unparalleled and seemingly inexplicable surge in interest and demand for works by Banksy.
 
Q. Is Banksy’s work readily available?

A. Banksy has been very clever in managing his market. He has resisted the urge to release new print editions on the market and whatever canvases he does release tend to go to his little black book of preferred collectors. Nothing new seems to appear on the open market. The last few months have seen feverish trading behind the scenes amongst collectors fighting for a small supply of prints and canvases.
 
Q. How has this affected prices?

A. Prices have been rising on an almost weekly basis. The prints in particular are being traded like an art-based stock market. This upward surge in prices has stimulated trading, whilst simultaneously encouraging collectors to hang onto their works in the hope of even greater profits in the future, thus further reducing the available supply. It has got to the stage that a price index (Banksy Print Index) has been launched to keep track of rising prices – that’s a first in the history of art!
 
Q. What sort of price did his works initially sell for?

A. Many of Banksy’s early prints were sold for £20-£50 and originals for a couple of hundred pounds. The fact that Banksy’s works were so affordable created a large and disparate collector base from the start, spread over all backgrounds. Due to this high volume of early trading, steady and continued increases in value were seen almost immediately. Prints bought in 2002 for £50 were being sold three years later for low thousands, fanning a frenzy to collect the artist’s work which has never abated.
 
Q. How much is the Girl With a Balloon print now selling for?

A. This print was produced in 2004 in both a signed and unsigned edition - the unsigned for under £100 and the signed for around £275. In September 2020, Sotheby’s sold a signed print from the limited edition of 150 for £438,500, that’s 1,600 times its original purchase price. It is easy to see why collectors are drawn to Banksy like bees to honey.
 
Q. What about other works?

A. In September 2020, an unsigned print of Love is in the Air from a massive edition for 500 sold for £214,000. In October 2019, Banksy’s Devolved Parliament made a record-breaking £9.9m in an auction at Sotheby’s, while Show Me the Money realised £7.5m in a Sotheby’s auction on October 21st 2020.
 
Q. With values soaring to these levels, does it mean some collectors may not be adequately insured?

A. The average collector who perhaps bought a print five years ago might not have an idea of the huge appreciation that has occurred in the value of Banksy’s work in recent years and will, as a result, find themselves in the position of being significantly under insured.
 
Q. How regularly do you recommend having an insurance valuation?

A. As a general rule, insurance valuations are recommended every 5 years. In the case of Banksy this is totally inadequate as many of his iconic works are increasing by 10% a year. It is strongly recommended that under current circumstances collectors reassess their collections every 18 months to ensure they are fully covered. How long this growth can continue is unknown, but collectors should react to it if it does.
 
To discuss insurance for your fine art collection, to advise us of any changes in valuation, or to arrange any other aspect of your high net worth insurance, please contact Erskine Murray today on 0116 265 4300 or email [email protected]
 
Rachel Doerr – Managing Director, Doerr Dallas Valuations Ltd

A bespoke, independent specialist Valuation company. Rachel’s team of experienced specialists cover nearly every category from jewellery and watches to manuscripts, fine art, wine and more. They value items for many purposes including Insurance, Probate, Tax Planning, Sale, Loaning to ensure clients understand the true value of their assets.

T: 01883 722736 / M: 07876653602
E: [email protected] or [email protected]
www.doerrvaluations.co.uk