Or how losing money on a once-treasured painting can seriously hurt
What’s it worth? asks Anthony Smith
In the last few months I’ve had a few interesting discussions which have just stayed with me. One was a conversation had with a friend who told me a relative had spent many thousands of pounds on a painting back in the 1980s, in fact much more than a year’s salary at the time and wanted to know how much it would be worth if they sold it?
I did some research and told them the amount, approximately 10% of what was paid for it, a figure that was confirmed by a local auction house. After getting up from the floor (not literally) my friend was simply staggered at the loss. Paintings shouldn’t go down in value, certainly not that much!
But it wasn’t just the capital loss that concerned or intrigued me, it was the initial purchase price, £12,000. But then I thought of other factors that may have caused even further financial loss and also the reaction of the owner to the work itself due to its diminished value.
The artist, a late 19th century/ early 20th century landscape painter, was popular in the 1980s. His prices varied considerably, often depending on the county or town in which they were purchased. It was a boom time, especially for Victorian paintings and landscapes. Everywhere prices in the 1980s took off.
I discovered that in the mid-80s, the artist’s works were selling at auction between £200 – £4,000. Considering that, a purchase price over £12,000 did seem high, approximately £35,000 in today’s money. His works did have a following and were quite desirable in certain circles. He still has a loyal following and commands similar prices (£200 – £4,000) at auction today, so in nominal terms his art has remained stable, but in real terms, it’s declined substantially.
But there were other factors that came to mind apart from the painful financial loss. The owner must have believed that the work would have at least been worth the initial purchase price and would, no doubt, have insured it for this amount, likely as a specified item, over the decades: a not inconsiderable cost and a further loss.
Also, there was obviously a belief that if needed, the sale of the painting would recoup an amount at least near the buying price. But I also wondered what feeling or reaction the owner now had towards the work? Did they still love it, admire it or even want it any longer? Did it lose its intrinsic value due to its diminished financial value?
My guess was “yes”. We are programmed to see worth associated with cost.
This discussion also raised a further question in my mind: why didn’t the owner get the work valued every two or three years? Obviously, a competent valuer would have made the owner aware that the work was declining in value and may have suggested that if not ‘wedded’ to the work, that it could have been sold many years ago and perhaps avoided the worst of the loss.
It seemed a high price to pay for not having a regular valuation.