LONDON, August 12, 2013 – A dramatic rise in the value of the UK’s art exports suggests that new rules to give artists some of the proceeds of an artwork’s resale price may not have impacted growth of the UK’s booming art market, says Sweet & Maxwell, the leading legal information provider.
Sweet & Maxwell, a Thomson Reuters business, says that the value of artwork and cultural items* leaving the UK rose by 32% to £1.97 billion in the last twelve months to May 1st 2012** up from £1.49 billion in the previous year.
The Artist’s Resale Rights Directive came into effect in the UK on January 1st 2012, ensuring that artists or heirs of artists who have died within the last 70 years are now entitled to a share of up to 4% in the resale of that artist’s work.
“Many art experts and dealers were concerned that London’s position in the art world could suffer compared to New York or Hong Kong which haven’t introduced any such levy on the resale of modern and contemporary art,” says Massimo Sterpi, co-editor of “The Art Collecting Legal Handbook”, a new book published by Sweet & Maxwell. “The early indications are that this hasn’t slowed down the London market.”
The most likely identifiable category of art to be affected by the Artist’s Resale Rights levy – modern art- saw its licensed export sales grow even faster than the broader art market – jumping 105% to £687million in the year to May 2012 up from £335 million in the previous year says Sweet & Maxwell.
“Art is an increasingly important trophy asset for international High Net Worth individuals and some argue that the concept of art as an investment received a big push from the credit crunch – which saw the value of many other assets slump. London has the second largest global art market in the world but it needs to ensure that conditions are favourable for art collectors, art dealers and auction houses to keep its place at the top,” says Bruno Boesch, co-editor of “The Art Collecting Legal Handbook”.
“While the export figures suggest that the UK’s art market has almost completely recovered from the impact of the financial crisis, it is still early days for the new legislation. But the existing long-term concern that the Artist’s Resale Rights Regulation could diminish London’s standing, damaging London’s galleries, auction houses and dealers, is probably exaggerated,” says Bruno Boesch.
London’s position as a second home for High Net Worths from the Gulf, Russia and other CIS states, Hong Kong and Singapore means that wealth created from those countries often flows into the UK’s art market. Such is the importance of these buyers, whose wealth frequently stems from natural resources, that trends in the art market are often driven by changes in China’s growth rate and its impact on global commodity prices.
London and New York account for the majority of art trade with 64% of world imports and 62% of exports.
The Artist’s Resale Rights Directive was introduced in order to remove what was perceived as a distortion of the EU’s market for the sale of art. Art was frequently being sold in London rather than in the rest of the EU as the UK, unlike many other EU member states, did not impose a resale levy.
VALUE OF ART EXPORTS LEAVING THE UK ROSE BY 32% NEARING PRE-CREDIT CRUNCH HIGH
*Based on data from the Department for Culture, Media & Sport
**Number of items licensed after reference to expert advisers on the question of national importance.
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