Rising art sector easily outperforms the stock market

Watercolours, once the poor relation of oil paintings, have become the hot topic for collectors who want art that will both grace their walls and maintain its value.

Watercolours, once the poor relation of oil paintings, have become the hot topic for collectors who want art that will both grace their walls and maintain its value.

According to the Zurich Art and Antiques Index, which measures the movements of a sample basket of UK fine art and collectables, the English watercolour sector has grown in value by a third during the past year. This means it has superseded contemporary art, which grew by only a fifth, as the fastest rising art market sector. And even that comfortably outpaced the stock market in 2003. One of the main reasons for the surge of interest has been a series of recent exhibitions and auctions in London and the provinces featuring key watercolour painters. The latest is the Watercolours and Drawings Fair, which opens this Thursday at the Park Lane Hotel in London's Piccadilly. More are scheduled in February and March.

Another factor pushing up prices is that European buyers have woken up to the watercolours produced by such artists as Turner, Bonington and Callow during their Continental tours. Collectors - particularly from France, Germany and Greece - are eager to buy images of their home countries.

For those intending to visit the annual fair, which remains open until 1 February, the message from fine art experts remains the same as ever. The priority should be to buy something you like enough to want to have living with you on your wall; if it happens to prove a good investment, that is a welcome bonus.

Caroline Gee, a dealer in early English and 20th century watercolours and drawings, is particularly excited by the potential of watercolours from the first half of the 19th century by John Varley and David Cox. Both were among the earliest members of the Old Watercolour Society, the founding of which in 1804 saw watercolours starting to be considered an art form in their own right. She says: "In the late 19th century, Cox was considered to be on a par with Constable and was only marginally less expensive than Turner. Now you can buy a Cox watercolour for under £10,000, whereas, in those days, it would have cost at least 10 times as much in relative terms. I don't think his work is ever likely to catch up in value with that of his more famous English colleagues, but both he and Varley are coming back strongly into vogue. By investing in the work of such established artists, you would, in my opinion, be very unlucky if your painting's value did not at least keep up with inflation and there is a real chance that it could rise quite significantly in value. Even drawings and watercolours by lesser-known artists available for only a few hundred pounds should keep their value as well."

One of the great attractions of watercolours and drawings is that they can bring the work of eminent artists within the scope of relatively modest budgets. A pencil drawing by Sir Stanley Spencer can be bought for under £5,000, whereas his oil paintings tend to cost between £300,000 and £1m.

All the items on sale at the fair are original work drawn by hand in charcoal, chalk, ink, pencil, pastel or watercolour and relate to every period, from 17th century drawings masters to contemporary work by living artists.

As with all fine art and collectables, condition is of paramount importance and it is essential to safeguard against deterioration by ensuring that paintings are hung in a suitable place. Christina Sanderson, watercolours and drawings expert at the auctioneer Bonhams, says: "The main thing with watercolours is never to put them opposite a window or in a room with direct exposure to sunlight. Otherwise the colours will fade and will not be restorable, and this will have a serious effect on value. It is also vital to ensure that watercolours are on an acid-free mount, because the paper can turn a brownish colour if it is in contact with acidity over a long period of time."

Anything exhibited at the Watercolours and Drawings Fair, which showcases 60 leading watercolours dealers from around the UK, can be bought in the knowledge that it has been vetted by a panel of experts. Nevertheless, buying from a dealer is not always the most cost-effective method of purchase because you are having to pay their mark-up, which can often mean paying double the price the dealer paid themselves. Buying at auction can, therefore, often produce a keener price - although it is, of course, also possible to pay a much higher price if the bidding is fiercely contested.

But buying via a dealer provides you with more opportunity to have an in-depth conversation about the drawing or picture concerned and you can go back to them several times for advice on a single purchase. At auction houses, pictures are normally only displayed for a week before the sale and, although experts are on hand to answer questions, they must be consulted during this period.

Henry Wemyss, the director of British drawings and watercolours at Sotheby's, says: "At auction you are more likely to get pictures straight out of private collections and this means they are not going to be over-restored, which occasionally happens with watercolours. But, in my opinion, the main reason for buying at auction is neither this nor the probability of achieving a better price. It is simply the thrill of the live bidding process. The auction route, however, does require more time than buying through a dealer because you must do your own preliminary research and this involves putting aside time to attend viewings. Dealers, on the other hand, have already conducted their own refinement processes and this is largely what you are paying them for."

All three major London auction houses are holding sales relevant to watercolours in the near future.

Key dates are 5 February for Impressionist and Modern Works on Paper at Christie's (King Street), 9 March for Fine British and Continental Watercolours and Drawings at Bonhams (New Bond Street) and 26 March for 20th century British Paintings and Watercolours at Sotheby's (New Bond Street).

CONTACTS

The Watercolours and Drawings Fair, Park Lane Hotel, London, 07000 785613 www.watercoloursfair.com; Christie's, 020 7839 9060 www.christies.com;

Sotheby's, 020 7293 5000 www.sothebys.com;

Bonhams, 020 7393 3900 www.bonhams.com