Art­smith:

Or how los­ing money on a once-trea­sured paint­ing can se­ri­ously hurt

EDP Norfolk - - INSIDE -

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.

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