2016 has been a whirlwind year for a number of reasons and with Brexit and the falling pound coupled with a massive multi-million pound art scandal, the art market has had many ups and downs.
Looking at the bigger picture, the UK has reclaimed the number 2 spot in the world rankings by overtaking China in value of art sales.
The UK accounted for 21% of the global market but still lacks some way behind the US who held on to the top spot with a 43% market share. China’s share fell by a mammoth 23%, opening the door for the UK to retake second place despite a 9% drop themselves.
The total sales of the global art market fell by 7%, representing the first year on year decline since 2011, however, this is believed to be a result of a cooling off after an extended period of rapid expansion.
As sales of certain sectors began to reach much higher levels in the last decade, their growth has become harder to maintain in a supply limited market, leading to their inevitable slowdown.
These findings from the TEFAF 2016 Art Market Report provide a valuable insight into the art market and where it is headed. Online sales, through auction houses (such as us at William George and Co), represent a fast-growing section of the art market. Among the key findings regarding online sales, in 2015, sales of art online were estimated to have reached $4.7 billion globally, a 7% yearly increase.
In regards to Brexit, the UK art market has taken it in its stride and it’s easy to see why when 85 per cent of the £4 billion worth of art imported to the UK last year came from non-EU countries, and only 2 percent of all art exports went to EU destinations.
For the UK to continue hold onto its world ranking, it must adapt to capitalise on the opportunities presented by Brexit, the EU single market may have allowed the general free movement of good across borders, the same could not be said in regards to art with a number of restrictions being in place.
The UK accounts for two-thirds of the whole EU art market and in 2012 when it came fully in line with the EU directive to impose what is known as droit de suite, a levy on modern art lasting until seventy years after the death of the artist.
Of course the droit de suite, which allows artists and their heirs to collect royalties from resales of their works, does hold some merit but it comes at the price of added business costs and although often talked about there is no such regulation or directive in place outside of the EU.
This obviously presents a barrier to the UK art market and the evidence is in the figures, from 2008 to 2013, the UK’s share of the global auction market in the sectors affected by the levy more than halved. It is not yet known what the UK’s standpoint will be or whether they will mirror the EU legislation but a more immediate effect of Brexit has been the weakening of the pound which has brought a welcome influx of overseas buyers.
Brexit is now a reality and can provide an opportunity worth capitalising on to reverse declining sales and help to maintain the UK’s presence as a superpower, in the art market at least.