Safe as the Banksy of England?, by Daniel Silk on Jun 16, 2008 0:05:42 GMT 1, www.independent.co.uk/money/invest-save/is-this-as-safe-as-the-banksy-of-england-847314.html

Is this as safe as the Banksy of England?
Street art has made it to Tate Modern and the big names fetch big prices. But Laura Harding asks whether buyers can really be sure of spraying on a profit
Sunday, 15 June 2008

Street art conjures up images of graffiti-sprayed billboards, satirical road signs and subverted traditions. However, it is now entering the more lucrative world of art investment. Banksy's controversial creations in London and Bristol are now fetching hundreds of thousands of pounds, and there is also a thriving scene below him as collectors and speculators look for more unusual and dramatic pieces to snap up.

But is it really a sound investment? Is there a place for expensive tongue-in-cheek pictures and satirical slogans during the dark days of the credit crunch?

Street art is a diverse field and includes the more traditional graffiti involving spray paints, stencils, stickers, posters, video projection and street installation. Much of it has a subversive or protest theme and the artists often use the space to communicate a political message.

Tate Modern currently has giant works from six global street artists on its exterior walls. This is the first big public museum to display such artwork in London.

The largest-ever UK auction of street art is happening on Tuesday at the Village Underground gallery in Shoreditch, London, where some pre-sale estimates stand at tens of thousands. Adam Neate's Red lips and Turquoise portrait with green both have estimates of £30,000 to £40,000. Nick Walker's Mood board from 2005-2007 is expected to fetch £60,000 at the sale.

There are also cheaper pieces available. The estimate for Dr D's self-portrait is set at around £300, as is Kev Munday's I'm in the mood for a peace riot. Estimates for several pieces by Inkie and D*face are set at under £2,000.

But you should bear in mind that after the hammer falls in the auction room, there is commission to pay. The "buyer's premium", as it is known, can add up to 20 per cent to the artwork's cost.

If a piece you buy then rockets in value, you've bagged a bargain. Banksy's Riot Green, bought from his first official exhibition eight years ago with a student loan, is valued at £150,000. But such stellar returns are the exception rather than the rule. Acoris Andipa of Mayfair's Andipa Gallery, which is staging a sale and exhibition from 26 June, warns against believing the hype surrounding street art and urges seeking advice from an art dealer before taking the plunge.

"Some not so good artists are getting huge amounts of publicity. I'm not talking about Banksy but many others, and people are buying their work for the wrong reasons ... If a work is truly iconic and offers a good social commentary it should stand the test of time," he says. Overall, though, buying street art is a high-risk investment.

In fact, it can't even be categorised with other "alternative" investments such as more standard artwork, classic cars or wine, because there is no history of buying or selling from which to judge a price accurately.

Mike Pendergast, an independent financial adviser from Pi Financial Dixon Sutcliffe, sets out the health warnings: "It is incredibly risky because it's so subjective. The piece might go down just as much as it may go up and only an expert should try to make money out of it. It's so dependent on sentiment that it is an unreliable investment. However, it is probably more recession-proof than other things because it is a top-end investment. While people may be less likely to buy, those who do will still be able to fork out high prices."

If you do take the plunge, you must contact your insurer. It is likely your premium will go up – particularly if the work is expensive – and you may be required to add extra security to your property. It is also crucial not to allow the value to depreciate by storing it badly. Auctioneer Bonhams says you should always keep artwork out of direct sunlight.