Unsurprisingly because of the lockdowns, the pandemic has hit the export of fine art and other collectables from the UK this year - such as classic cars and jewellery - coming after a year when a soft value of sterling had boosted the sector.
The global pandemic has hammered the UK’s art and collectables
export market because galleries and auction rooms were forced to
shut their doors, according to data cited by private client law
Exports of art, antiques and collectables fell to just £698 million ($917.6 million) in three months to the end of May 2020 compared with £3 billion in the same period last year – sliding by about 74 per cent. In April, just £60 million was exported from the UK compared with approximately £843 million in April last year.
“With many investors in art taking a financial hit from the coronavirus crisis and the art market all but closed, sales collapsed and supply to the market dropped dramatically,” Fred Clark, associate at Boodle Hatfield said. “Some of the bigger auction houses have managed to hold successful online sales but that hasn’t made up for the lost sales elsewhere, especially amongst smaller galleries who lack a significant internet presence.”
“As the UK art market is so dependent on foreign buyers it needs international travel to oil the wheels of commerce - seeing artwork with your own eyes is an essential part of buying art,” Clark said.
The art export data adds to a story of how COVID-19 has hit the market in a variety of ways, such as prompting organisers of the Art Basel annual fair in Hong Kong to move to a virtual format, to give one example. While small compared with the US equity market, for instance - estimated at more than $30 trillion - the art market’s size at around $64 billion (source: UBS, Art Basel, report on 2019, issued here) is considerable, and is attracting financial players. (See article here.) In fact, the UK art market is the second largest in the world by value.
This year’s slump in sales comes after record breaking figures for last year where exports from the UK jumped by 55 per cent to £8.9 billion, up from £5.7 billion the previous year, the law firm said, citing HMRC figures. What is noteworthy is that such figures happened during a year supposedly weighed down by uncertainties caused by Brexit. However, there is a paradox – Brexit uncertainties pushed down the sterling exchange rate, making art exports from the UK cheaper.
The risk that the UK could fail to achieve a free trade deal with the European Union has possibly encouraged some investors to send fine art outside the country, Boodle Hatfield said.
“London is still one of the world’s centres for exciting contemporary art and there is a thriving contemporary art gallery scene growing outside London in places like Margate and Harrogate,” Simon Fitzpatrick, partner at Boodle Hatfield, said.