Savers turn to alternative investments as interest rates dwindle
21 April 2009 / by Rachael Stiles
RICS’ Arts and Antiques Survey has found that the number of people visiting auction houses rose 19 per cent in the first quarter of 2009.
This is a vast improvement on the previous quarter, which saw a fall of 32 per cent in number of buyers in the market, with preceding quarters revealing that savers were content to invest their money in traditional savings products.
But as interest rates continued to fall in the last quarter of 2008 and the start of 2009 – seeing the base rate cut six times in as many months to 0.5 per cent – savers have started to seek an alternative haven for their money.
The survey also revealed that investing in art and antiques is not something confined to the wealthy, reporting a significant increase from in the £1 – £1,000 purchase bracket, and a less significant rise in the £50,000 and over bracket.
RICS explains that the increase in demand for arts and antiques has been pushed up by the fall in house sales, which has reduced the number of goods available for auction.
But despite the depressed property market, investment in furniture has increased, with 12 per cent more Chartered Surveyors reporting a rise than a fall in sales, compared to 40 per cent more reporting a fall than a rise in the last quarter of 2008.
Surveyors believe this can be explained by house owners expecting and preparing for a turnaround in the market, or, alternatively, that they have decided to wait out the storm and nest, improving their current properties until the market picks up again.
“The start of the year has seen a renewed interest in traditional fine arts and antiques as buyers continue to seek tangible investments away from traditional saving avenues,” said RICS spokesperson Jeremy Lamond. “Lack of supply is not deterring the public from bidding at auction and we expect this to continue in coming months as buyers see the value in investing in arts and antiques.”
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