The London art market has maintained its reputation as one of the leaders in the global art marketplace.
Despite economic uncertainties due to events like Brexit and the COVID pandemic, the industry has primarily shown resilience and thrived, but of course, this hasn’t been without its share of nuances.
By and large, London, as one of the world’s most diverse cities in the world, and with an art market assisted by the communicability of the English language, has continued at the top of the European art market, sitting behind the US on the global stage.
London’s Art Market Under Pressure
The London art market, particularly in the contemporary art segment, has experienced a mix of challenges and resilience in recent times.
The UK’s departure from the European Union in January 2020 significantly impacted the London economy, with the art market facing particular uncertainty, especially with the launch of Paris+ by Art Basel.
Some galleries have shifted their primary operations from London to Paris, and events like Masterpiece and Art and Antiques Fair Olympia were canceled, citing Brexit-related reasons.
The devaluation of the pound sterling and import VAT also shifted the selling of significant works towards New York rather than London. This shift has especially affected smaller dealers who have seen their costs rise substantially post-Brexit.
Some industry members see Brexit as an opportunity to strengthen Britain’s competitive position by potentially removing import VAT, which impedes the post-Brexit London art market. However, the perception that the UK is a more complicated place to do business remains for now.
Of course, London’s art market has not been immune to external forces. The 2021/2022 period saw a slight contraction in global contemporary art auction turnover by -1.1%, mainly due to China’s zero-covid policy.
However, while London’s art market slumped slightly post-Brexit, the gallery scene is still roaring. London has witnessed a surge in new gallery openings and expansions, indicating a dynamic and resilient gallery scene.
Thomas Stauffer, co-founder of the Zurich-based Gerber & Stauffer Fine Arts, said, “I believe London will remain Europe’s most important city for the art trade.”
Competition From the US
The US art market, specifically New York, has seen huge growth in the last couple of years, with New York accounting for 38% of the global auction turnover in this segment.
The UK still had a considerable turnover of $486 million in contemporary art auctions, representing an 18% global share, sitting behind the US and China only. The UK’s contemporary art-related turnover is higher than the entire EU combined.
In the past year, auctions showcased notable sales, indicating a healthy high-end market. The broader market saw over 1 million artworks auctioned, with a significant influx of new collectors driven by affordable art.
In the broader art market, data from Statista indicates that the US dominates the world art market, with the UK sitting in second place in front of China.
Contemporary Fine Art Dominates
Fine art galleries continues to dominate the art market, accounting for 98% of the market value, while NFTs have declined since their early explosion onto the digital art scene.
Although a smaller fraction of the total art market, ultra-contemporary art (often defined as contemporary art created by artists under 40) drives market trends and is at the forefront of the competitive dynamics between key art market cities, according to Art Price.
Additionally, more than 1 million artworks were auctioned in 2022, with a 65% sale success rate. Notably, a significant portion of these sales comprised works priced below $1,000, attracting a new generation of collectors.
Furthermore, artists such as Chagall have seen an increase in auction turnover, indicating a sustained interest in established modern artists.
Chagall’s auction revenue jumped from $79.2 million in 2021 to $124.6 million in 2022, suggesting that classic works remain a solid investment.
This points to a diversifying market with increased accessibility for new and younger buyers and the market’s expansion beyond traditional high-value art sales.
New Galleries and Expansions
The wave of new and expanded galleries across London, especially during Frieze week, underscores confidence in the market.
The influx of younger gallerists and international players, from East London’s avant-garde spaces to the latest expansions by established names, speaks to a vibrant and resilient ecosystem that continues to evolve and attract talent from across the globe.
Globally renowned contemporary artists are still choosing London to host their works, as indicated by the works at galleries such as Eden Mayfair Gallery at Bond Street London.
Moreover, vibrant activity at Cromwell Place, a hub for galleries and art businesses, reflects a bustling market. With a substantial portion of its members being international galleries, it’s clear that London remains a nexus for global art trade, defying the naysayers with its dynamic and adaptive art scene.
Elizabeth Dellert, the chief business development officer at Cromwell Place, highlights a “perception problem” that masks the true vitality of London’s market, hinting at an art scene that’s as robust as ever.
Asian gallerists, in particular, find London an appealing global market entry point, suggesting that the city’s art world is far from diminishing. It continues to be a melting pot for diverse cultures and a beacon for the international art community, with the English language being a key facilitator of this global dialogue.
“London is still a top city for the arts and a center for the European art market,” Seol–based artist Jason Haam said.
“The English-language media is also much more impactful than other languages, and London is a media hub, so it’s not all just London’s art market.”
London’s art market is indomitable, but that’s no reason for contentment.
The influence of young collectors should continue to grow, with their preference for contemporary and digital art driving the market. London’s attractiveness to younger individuals is synergistic with its thriving creative scene, though this hasn’t come at the expense of higher-value sales.
Economic factors will continue to influence the market. The pound’s value, tax policies, and London’s trade agreements will be instrumental in determining the flow of art and the participation of international collectors and investors.
Overall, the London art market is set to maintain its global significance, adapting to changing tastes, technological advancements, and economic landscapes while attracting diverse artists and collectors.