Although art is not a traditional investment asset class, UHNWIs typically invest for both personal enjoyment and financial return. We have undertaken some bespoke research analysing the relationships between the performance of art, other chattels and property.

While the long term debate continues 
as to whether art should be classed as an investment asset, the fact remains that if you invest wisely in art, the returns can be very rewarding.

The Art 100 index has recorded 
growth of 200% over the past 25 years (Dec 88 to Dec 13), which compares with the average UK house price increase of 205%.

Over this 25 year period, prime central London (PCL) house prices recorded the biggest increase, with values rising by 523.1%. Growth has been strong since the credit crunch, resulting in the capital outperforming all other areas of the UK.

Since the peak of the housing market in September 2007, when PCL rose by 40.2%, the real winner has been classic cars, recording a staggering growth of 134.9%. Prices have not fallen since March 2006 and increasing numbers of investors have chosen classic cars over more conventional investments.

Farmland has always been considered a safe asset. Prices have historically performed well during economic downturns and this recession was no exception – average values have not fallen since 2003 and have increased on average by 105.2% since September 2007.

As the search for safe stores of wealth continues, a variety of asset classes 
will benefit. Investment credentials are only part of the picture; the amenity enjoyed by the owners of art and property is far less tangible but potentially more valuable.

Taken from
Spotlight: Prime London Residential Market - Autumn 2014