Probate Yearbook Feature Article by Simon Chorley
Most people are becoming aware of the downturn sustained by the general antiques market. It is perhaps news to some that this process has been ongoing for some years. We have experienced such trends in the past but they have never been so prolonged. The reasons behind this downturn are manifold and the current market values reflect a complex combination of the following issues.
House prices
At the end of the 1990s, the property market was experiencing rapid growth. The result was that an increasing number of properties were priced out of reach of the first time buyer. Many of those that could get their foot on the ladder were forced to go without many of the traditional furnishings and make do with the bare minimum. Art and antiques were luxuries that had to be foregone for the time being. Many sought modern, cheap and cheerful to fit in with rapidly changing fashions.
American market
In the 1990s, the American market was the be-all-and-end-all to the British antique trade. However the export of items to America was hit very hard in the late 1990’s by foot-and-mouth disease and then further exacerbated by the terrorist attacks on the Twin Towers. A glimmer of light shone six months later with the suggestion that the Americans were returning, however the strength of the dollar weakened against the pound extinguishing any hope that this trade was recovering. Exporters of commercial antique furniture are still finding little interest from the States and are shipping a fraction of the goods across the ocean than they were three years ago.
Minimalism
The fashion of having nothing has been marketed very successfully and many people are finding that this fashion suits their increasingly hectic lifestyle. The revival of interest in the modernist styles of the 1920s to 1960s first half of the 20th Century, exemplified by Charles and& Ray Eames, Le Corbusier, Marcel Breuer and the like, has encouraged furniture retailers such as Habitat and Ikea to launch ranges of similar minimalist furniture. This style trend has been taken up with great enthusiasm by the current generation of new home buyers, spurred on by the plethora of design programmes on television. The fashion is currently very much for decluttering and for lighter wood furniture, such as the pale oak or ash used in pieces by Scandinavian designers. The traditional ornate mahogany of Victorian furniture is considered gloomy and heavy-looking against the ubiquitous white walls of the modern day home. Although there are signs that there is something of a backlash rebelling against Ikea-ism, resulting in a partial recovery in the antiques trade, designer fashion and minimalism has had an influence on the 30-somethings that may well last several generations. This present generation of home buyers has witnessed a sea-change in fashion, and what may have been desirable to their parents and grandparents is now deemed unfashionable. Peer pressure and the influence of television and other 21st Century technology have had a great effect on the way many model themselves. The designer fashion has not only put paidy to the popularity of antique furniture, many pieces of Victorian jewellery have sucommed to been overlooked in preference to B brand names such as Cartier, Garrard, and Tiffany.
Television
Another reason factor behind the paucity of fresh goods coming onto the antiques market is, ironically, the recent spate of television programmes on the subject of auctions. It is now rare to turn on your television without being told how you can make a fortune from the contents of your attic. This has proved to be a double-edged sword for the auction business.
On the one hand, the wide coverage given to the salerooms has broken down the mystery and apparent exclusivity of the auction process. People have been made aware that anyone can attend an auction, whether they are likely to buy or not, and that bargains can often be had in comparison with the prices one would have to pay in an antique shop.
However the calibre of items brought in for auction as a result of television coverage has a tendency to be at the lower end of the market. Any auctioneer will have experienced the Monday morning rush! When something of great value appears on the Sunday Antiques Roadshow or in the national press, viewers often believe that they have the identical thing in their kitchen cupboard. Our phone lines will ring and numerous varieties of inferior quality items will appear through our doors. The recent sale of a blue and white double-gourd shaped vase for £2.62 million produced several 20th Century copies, selling for between £50 and £200. Imagine what the attic produces! A biscuit tin sells for £80 on one of the antiques programmes screened during the week. The viewing audience has time to ferret through drawers, cupboards and stores and produce several hundred biscuit tins, all of which have novelty appeal but little value at all. The purist collector and many auctioneers and valuers feel that the commercialism of highlighting the monetary values of objects rather than the objects themselves, is also a contributing factor to the downturn in the market place. Although there are a greater number of people from the private sector attending auctions, they are often seeking a bargain rather than for the love of the items, they are there not with a discerning eye and any such bargain there may be will be spotted by the discerning eye of the professional rather than the amateur. Prowess at car boot sales is a skill and the marketing of this type of retail outlet through the television brings an increasing number of people to such weekend meetings, hoping to make a penny or two out of (in some cases) other people's total rubbish. It would be interesting to do a time and motion study on such events.
Trade troubles
Most auction houses have a high percentage of trade buyers who form the backbone of purchasers at their sales. However, the trade are finding it increasingly hard to make a mark-up when they come to sell their purchases in their shops. This is the result of a combination of the minimalist trend and the public’s increased awareness that they can potentially buy more cheaply at auction and the minimalism effect. When the quite substantial overheads for their high street showrooms is taken into account, they are obliged to try and achieve a certain minimum for each item. As they find it harder to sell on their stock at their usual retail prices, they are left with a considerable backlog of items and therefore do not have the room to buy any more at auction. The trade do also sell items at auction, however they are reluctant to do so at the moment as they know that they would get a fraction of what they originally paid for them. The Antique dealer is also competing against an increase in online activity and, unless IT literate, a dealer will find the Ebay interest a direct threat to their trading activity. Despite the overall downturn in auction values, it would be considerably greater without the dramatic increase in online activity. With the ability to promote auction catalogues through international websites, the number of hits online catalogues are getting is increasing dramatically. The auction houses are increasingly providing digital images and condition reports on most lots catalogued for sale. The onus of ascertaining the condition of an item is falling more and more to the auctioneer and, should unspotted restoration or damage not be noticed while providing such reports, the armchair buyer will not hesitate to throw the item back at the unsuspecting auctioneer. In a move to counter the problem of conveying the condition of a lot to an absent client, my firm has in fact recently pioneered a (quite literal) revolution in digital photography. Just as the larger estate agents provide a visual tour of the property they are selling, the birth of 'revolving digital images' will help both auctioneer and intending purchaser to examine individual lots more thoroughly. Many websites will soon be cluttered with thousands of revolving images and it is hoped with this increased greater exposure, private buyers will come to the armchair auction in greater numbers, potentially boosting prices across the antique spectrum.
Outlined above are the principal reasons for the current depression in the antiques market, but the fact remains that this is a significant trend which has had a considerable effect on the businesses involved in valuing assets. When instructed to carry out a Probate valuation by either professional referrers or private individuals, the monetary values have a devastating effect on what the residual beneficiaries do with the chattels within an estate. In the heady days when antiques were selling well, instructions were often received to sell many of the items included in Probate valuations and the results were always appreciated. In commercial terms in the current trend, beneficiaries retain items from an estate, hoping their commercial values will increase. The disappointing returns have in fact got worse and market values have now dropped in some cases to the values of those in the early 1970s. An auction room today might be able to boast fantastic prices on certain items - we all do - but the majority of 19th Century antiques can be bought for very little in relative terms.
The current fashion trend dictates that modern houses no longer have dining rooms; almost all developers build kitchen/diners and the dining room is a room of the past. When houses are sold with a separate dining room, these are often used as a games or computer room for the family. The effect this has had on dining room furniture is quite catastrophic. A set of 19th/20th Century dining chairs can be bought for as little as £10 a chair, dining tables have lost the demand they once had and again can be purchased for little compared to the prices that they were achieving ten years ago. Over the past four years there has been a steady decline in the demand for other antiques. The once marvelled at bureau, the doyen of any saleroom, has now reached an all-time low. An auctioneer reported not so long ago that he had sold a George III mahogany bureau for £500 - this value may well now have declined to less than £200! The bureau is seen as unfashionable for many reasons - a PC cannot be placed on the flap, the Americans are no longer interested, but are either of these the real reason? Antique items relating to the written word have all declined in value and the truth is that writing letters is no longer fashionable. Lifestyles have changed so much that there is no time to spend seeking and adding antiques to a collection. Interests have changed and the lethargic lifestyle of a true collector no longer exists, the pace is too fast.
The Capital Tax Office now requires greater detail in Capital Tax valuations than it used to. The block figure is no longer accepted in larger or more complex estates. Clients have experienced disappointment in sale returns when, once Probate is granted, they have decided to sell. The return to the home-made Probate valuation is not advisable. Illustrations of such can show that not seeking professional advice on values can prove costly.
An insurance valuation was undertaken by this firm in 1993 and, owing to family bereavement, a Probate valuation was required in 1998. This was done by the family, reducing various categories by a percentage they thought acceptable. Figures were submitted for Probate and we were then instructed to carry out a further valuation for Deed of Gift purposes. Needless to say, the trouble that followed created a colossal amount of unnecessary work which would have been avoided had a proper Probate valuation been done at date of death. Sale and lease-back valuation work has also proved a little difficult in the present marketplace. Whilst the values at the top end of the market have increased dramatically, the general antique values with such valuations have reduced substantially. Great care and research is needed on every valuation occasion.
In the early 1990s, this firm was instructed to undertake a Probate valuation of the chattels within a large country house in South Gloucestershire. The values of the furnishings of the property were not great and the quality was not what one would have expected to find in such a house. Puzzled by the lack of historic items relating to the family, we enquired whether there were any buildings that might house the family history. Taken to a schoolroom in the middle of a field, we soon found what had been removed from the house many years earlier. Included in this find was a folio of extremely important watercolour drawings including Australian birds exquisitely painted in jewel-like colours but and, perhaps even more importantly, some drawings of the interior of Osterley Park, West London. An initial valuation was placed on the folio of £20,000 and we stressed to the family that more research must be done to save an embarrassment in later years. We further suggested that the pictures should be placed in secure storage, as the damp conditions in the schoolroom would lead to rapid deterioration. After several weeks, the family agreed to the storage terms and the drawings werewe housed them in our strong room. We again stressed the importance of research into the folio’s contents, but instructions to proceed with this were never received. Some fifteen years later, after frequent reminders from us of the folio's existence, the family decided to remove the pictures and the collection of bird drawings has recently been sold by private treaty to the National Library of Australia for an undisclosed sum, believed to be in excess of £1 million. It doesn’t need take much imagination to realise the taxation implications here.
In conclusion, the valuation market is perhaps more difficult now than it was in the heady days when the demand for antiques was so great. How can we advise clients in a market that was thought to be so strong? All in this profession have had to break the news that "brown" furniture has taken a colossal hammering in the high street and the auction room, and items such as the 18th Century walnut tallboy will not produce the returns once expected. Should we look at this in a different way? The craftsmanship in making antique furniture was an art in itself; the cabinet-maker took considerable pride in what he produced and what he made not only looked good and but was made to be used for many years. If we relish their beauty and use them practically, these wonderful antiques will give years of pleasure – isn’t this more important than financial return? In the words of the great English craftsman William Morris, "have nothing in your house that you do not know to be useful, or believe to be beautiful". Antiques are not a safer bet than the stock market, or investment in property, and perhaps should never have become seen as a commodity.
I am sure we will soon see a return in demand for furniture of the 18th and 19th Century, but for a while this may be only because it is so cheap when compared with modern equivalents. Will the impressionist Contemporary and Modern Art market be the next bubble to burst? We saw what happened to the Impressionist market when the Japanese stopped buying in the early 1990’s. Will an investment in an unmade bed really produce a profit when resold? - PROBATE YEARBOOK 2006 published by THE LAW SOCIETY