The Fine Art Market Under the New Labour Government: What Collectors Need to Know

At Johan Nélson Fine Art advisory we recognise the importance of staying informed about political shifts and their potential impact on the art market. With Labour’s recent election victory, collectors and investors are wondering how new policies will shape the landscape. From economic adjustments to cultural initiatives, staying informed is essential for navigating these changes. 

 

Here are some insights into recent political shifts and their potential impact on the art market for collectors -

 

As the UK transitions into a new era under the Labour Government, the fine art market is poised for notable shifts. Following the recent election, collectors should be aware of a few key factors and trends that may shape the landscape in the coming years.

25 Jul 2024

  • Economic Climate and Market Adjustments

    The art market has faced several challenges recently, including rising operational costs for galleries and a contraction in high-end sales.

     

    In 2023, fine art auction sales totalled close to $14 billion, reflecting a 12.7% decline from the previous year. This dip was attributed to higher interest rates, geopolitical uncertainties, and a less robust stock market. However, the volume of lots hit a 10-year high, suggesting a resilient underlying demand - albeit at lower price points - which is a positive for new collectors. 

     

    Labour Policies and Market Impact

    The third largest in the London economy, the art sector has potential that could not only be further realised here, but also elsewhere. Keir Starmer’s vision for the sector under a Labour government, does appeal to the significance of the arts on not only economic growth, but also national identity. 

     

    Investment in the arts is seen by Labour as an economic necessity, not a subsidy and this could have significant payoffs for not only the Labour Government, but also the entire arts sector. 

     

    Labours plans to end the ‘non-dom’ tax regime, which on one hand may introduce challenges for established collectors, would not likely affect emerging collectors. On the other hand, increased support for the creative industries, public services and infrastructure could boost investments in the sector and public art projects.

    The new chairman of the British Art Market Federation, Martin Wilson, remains optimistic about the governments impact on the art trade. He emphasises the potential for growth and the importance of making business easier for art imports and exports, making collecting easier for galleries and their collectors.

  • Pledge from Lisa Nandy - The New Culture Secretary Despite her experience with the role, in her first speech as...

    Lisa Nandy (Peter Byrne/PA) (PA Archive)

    Pledge from Lisa Nandy - The New Culture Secretary

    Despite her experience with the role, in her first speech as culture secretary, Lisa Nandy pledged that the "era of culture wars is over", committing to a more positive and inclusive vision for the UK.

     

    With emphasis on a country that values all its people, Nandy aims to celebrate British culture and stories, moving away from conflicts with institutions. This shift from the previous 14 years of conservative rule, marked by frequent clashes with entities like the BBC, signals a significant change in approach. 

     

    Enhanced support for community projects can increase public engagement with the arts, driving demand for contemporary and local artworks. 

     

    These initiatives will not only nurture emerging artists but also stimulate broader cultural and economic benefits, making the UK a more vibrant and attractive destination for art collectors and investors. 

  • Shifts in Collector Preferences - Recent data indicates a growing interest in ultra-contemporary art, particularly from artists born after 1975....

     The New Prime Minister, Keir Starmer. Image via Gettyimages

    Shifts in Collector Preferences - 

    Recent data indicates a growing interest in ultra-contemporary art, particularly from artists born after 1975. These works often attract younger, more dynamic collectors and tend to sell at lower price points, making them more accessible amid economic fluctuations.  

     

    Galleries have been increasingly co-representing artists to share resources and maximise exposure, a trend likely to continue under the new economic conditions. 

     

    Since the pandemic, the adoption of acquiring artworks from those who operate without physical spaces has accelerated. This has shifted how collectors connect with their artworks, enabling them to leverage personalised services. This model reduces overhead costs and allows for greater flexibility in curating collections, making art advisories an attractive option for both emerging and established collectors and artists. 

  • The art market can expect changes over the next 4 years with the new Labour government. Increased support for public services and potential tax reforms could impact art collectors. Lisa Nandy, the new Culture Secretary pledges to boost funding for arts education, and collectors are showing an interest in contemporary art and digital tools. 

     

    Given these evolving dynamics, collectors may want to consider the following:

     

    1. Diversify Collections – Consider emerging and mid-career artists, particularly the ultra-contemporaries. 

     

    2. Engage with an advisor – Build relationships with advisories that demonstrate adaptive strategies, such as collection curation, joint-representations or hybrid models. 

     

    3. Monitor Policy Changes – Stay informed about policy regulatory and tax reforms under the labour government to navigate new investment landscapes effectively

     

    To stay ahead in this evolving market, diversify your portfolio, engage in adaptive advisories, and keep abreast of policy changes, explore our services to navigate these exciting times with confidence. Contact us today to learn more!


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