Nouveauriche boost for London's fine art market

FINE ART is fashionable. Auction houses are today celebrating the best fortnight of their history, thanks to a new raft of wealthy young buyers who have helped to cast off their fusty image.

This summer, Sotheby's has staged a series of sales of contemporary art. At one preview party it showed off a new breed of art collectors, including Mick Jagger and Mel G of The Spice Girls. A few weeks earlier, Christie's threw a bash for its sale of dresses worn by celebrities at the Oscars ceremony. Hugh Grant, Liz Hurley, Natasha Richardson and Harry Enfield were among the guests.

The concept of the headline-catching party is a common one among the New York auction houses. Now London's art market is starting to use the same idea and, more significantly, to turn to selling contemporary art, something previously confined to the galleries themselves. Christie's emphasised the break with tradition not long ago, taking over an old warehouse by Smithfield Market to sell items from the Charles Saatchi collection.

It is all part of the way Christie's and Sotheby's are successfully adapting in an international art market that is more competitive than at any time this century. But despite years of predictions that London was about to lose out to New York, Paris and Frankfurt, the London art market is enjoying a boom.

The latest figures show that the past two weeks have been the best for Christie's in its 233- year history. Sales have totalled nearly pounds 158m. Sotheby's achieved sales of pounds 103m in the same period and can claim the highest single price paid - pounds 17.6m for a Degas pastel of a dancer. That sale achieved an overall total of pounds 49.8m, which is Sotheby's highest total for a mixed-owner sale of Impressionist and 20th-century art.

Christie's record-breaking fortnight was largely due to one blockbuster event, the 218 lots assembled in the 19th century by the barons Nathaniel and Albert von Rothschild in Austria. They fetched pounds 57.7m last Thursday night, a record for any sale held in Europe.

That the Rothschild family decided to sell through Christie's in London is significant. "We have maintained good relations with the Rothschild family," said Frederick Coetzen, Christie's head of public affairs in Europe. "We could have put this sale on in New York, but we made a definite decision to have it in London. And we were right. Some 73 per cent of the buyers were European."

One of the reasons is the British economy, says Robert Holden, the director of the oldest fine art agency in London, the Robert Holden agency, which has been advising people where to sell for 22 years. "There is a lot of money in New York but there is a lot in England too. In this country it is the Old Money selling and the New Money buying from them.

"The last two weeks have been a great vote of confidence for the London market and I do not think it will be a blip.

"It is a strong market and a lot of people who are selling at a high level are not just trying to pay off an overdraft but are making long- term decisions about their future and the running of their houses so they want to sell when the market is doing well."

Tradition also has a part to play, he adds. "London has been the centre of the European art market since 1750 and historically people still like to come here to sell. Just as provenance is very important in the art market so is continuity and people like the fact that they can come and buy something in London which was first sold here 200 years ago and that counts for something.

"We will advise people to sell in London sometimes because they can get a greater focus in the smaller arena rather than the vast sales that happen in New York."

A spokesman for Sotheby's said: "It does seem that people are more comfortable about spending their money on fine art. In the late Eighties and the boom the market was full of speculators and investors who just wanted to make money but now the people spending money are collectors who are buying for the love of it."

But for all the records being broken, there are real fears in the London art market that forces beyond their control could quickly shatter the current success.

The European Union wants to double to 5 per cent the value-added tax on imported works of art from non-EU countries. This could deter dealers from bringing works of art from other countries on to the London market.

The other problem is the Droit de Suite, which is being argued over in Brussels. The Droit de Suite, currently in force in 11 out of 15 EU countries, is a levy that would be payable by the seller on any work of art either by an artist that is still living or one that died less than 70 years ago. It is between 2 and 4 per cent of the sale price. It does not exist in New York and is a serious disincentive to the seller to come to London.

"The last two weeks have been very good but there are big black clouds on the horizon, which could be a serious disadvantage in the future," said Anthony Brown, the chairman of the British Art Market Foundation, which represents all the auction houses.

"The new VAT rules did not affect the Rothschild sale because it all came from Austria, which is, of course, in the EU, but if you look at the sales figures for the 20th-century and Impressionist sales during the last fortnight then they would have been greatly affected by the Droit de Suite."

Traditionally, London is the centre of the art market for fine art, and New York for Impressionists. The recent forays into contemporary art by Sotheby's and Christie's are cementing London's reputation for contemporary art as well.

Last Thursday, in addition to the Rothschild sale, Christie's set a world record for an auction of English furniture of pounds 9.6m, with a set of 17 dining chairs making pounds 1.2m, while, on Monday, Old Master pictures added another pounds 15.5m, with two views of 18th-century London by Canaletto selling for pounds 3.5m.

Top Prices Under the Hammer

Old Master Drawings, London, 7 July 1999

Hendrick Goltzius (1558-1617), Rebecca, Wife of Isaac

Estimate: pounds 80,000-120,000

Sold for pounds 342,500

Christies, London, July 1999:

Works by Julio Gonzalez from the Fondation Hartung

Homme Gothique

Sold for pounds 1,871,500

Contemporary African Art Sale, June 1999

Seydou Keita

Untitled,signed and dated 1956/57

Estimate: pounds 2,500-pounds 3,500

Sold for pounds 8,970

Christie's, sale of the Rothschild Art Collection, July 1999:

Prayer book,

Estimate: pounds 2,000,000- pounds 3,000,000

Sold for: pounds 8.5m

Christie's, London, end of July 1999:

Damien Hirst "spin" painting "Beatiful Big Issue What's got a Bottom on the Top Chris Callaghan Surely Pink Swirly Painting (With Smoked Fag)" (won as a prize in a Big Issue competition)