The fine art of investing | Alternative investments

If you don’t know that much about modern art, but you know what you like – or, better still, feel you could spot the next Damien Hirst – now could be the time to put some money into one of the few alternative investments you get to enjoy as it appreciates: contemporary art.

In the next few weeks most of this year’s MA shows are set to kick off at art colleges around the country. These annual exhibitions not only feature some of the most interesting artwork being produced in the UK, it is mostly for sale at prices that can look very good value if the student becomes hot property.

Alternatively, if you don’t have the time, or inclination, to trail around dusty art rooms, you can now do it all from your home computer using websites dedicated to selling and promoting young artists.

As investments go, putting a few hundred or thousand pounds into contemporary art is pretty risk free – assuming that you like what you buy. It is also surprisingly affordable.

Prices for the paintings and photographs that form the majority of work exhibited typically start at around £150, and there are usually plenty of significant pieces for a few hundred pounds. Even the larger works mostly fall in the £1,000-£2,000 price bracket.

However, choose well, and you could see the value of the work jump in just a few years. Just hope you don’t become so attached to the piece that you would never consider selling it. According to Sarah Ryan, who runs the online gallery newbloodart.com, those who had the foresight to invest in several of her exhibiting artists have enjoyed returns that have put the best minds in the City of London to shame.

A number of painters on her books have seen the value of their work double in recent years. Some have enjoyed returns of more than 400%. Ryan, who spends her time constantly on the lookout for artists to represent, says MA students, who have typically been honing their art for several years, tend to make a better investment than recent graduates.

“There is a fair expectation that they will continue to work in their medium for the next decade – thereby improving, and hopefully becoming commercially successful,” she says. Artists on her online books who have done well in recent years include 31-year-old Emily Gregory-Smith, who produces Turner-esque semi-abstract paintings of the area around Aberystwyth where she studied, and still lives.

Her larger (1 square metre) works used to sell for £600 – now they would set a collector back around £1,800. Canadian artist Nathan James, who combines silk-screen printing and stencilling with traditional painting to achieve his distinctive works, has seen one of the biggest valuation leaps.

At his first solo show in London in early 2007, a 1.2m x 1.8m painting was listed at £2,200. Today that size would sell for £12,000, representing an increase of 445% in just over two years – a stellar investment by any standards.

Ryan says the patronage of a well-known figure can quickly send prices rising fast, as happened to Keren Luchtenstein. The painter and illustrator, who began her career as an artist in the 1970s at Middlesex Poly and then the Royal College of Art (RCA), came to the attention of the mainstream audience when fashion designer Sir Paul Smith bought a number of paintings of shoes to hang in his stores. The result, says Ryan, was a 260% increase in the value over a three-year period.

In reality, of course, most of the artists won’t go stratospheric – but if you enjoy looking at their work every day, that won’t bother you.

One of the advantages of using a website such as Ryan’s is that there is an implied guarantee that the work is of a good standard.

“I spend a lot of time visiting the best art colleges, talking to lecturers and looking at students’ work to find artists who will appeal to a bigger audience. We now have around 220 artists on the website.

“Work that it is not up to standard is not allowed to be marketed,” says the former art teacher, who has been running the site since 2004.

“This is a way of investing your money in something that will not only aid young and aspiring artists, but has the potential to deliver a good return. The prices are affordable, because the artists are at the beginning of their careers and potential purchasers are offered privileged access – they don’t have to go looking for it, and would, in any case, be unlikely to find it through commercial galleries.”

Certainly a trawl around her website shows there is something for almost every taste and budget. Painting and photography dominate, and most amateur collectors will find something. Sculpture is not hugely represented, in part due to storage and delivery problems. Anyone interested in art will spend a happy hour or two looking at the work on display, even if they ultimately choose not to buy anything.

For those who do, this is the deal. The artist gets 65% of the sale price, compared with more traditional galleries which will keep 50%-60%. In general, most work comes unframed or with a plain frame, and there are delivery charges which will generally add between £10 and £50 to the advertised price.

The website shows the pictures in good detail, with their dimensions; however, if once you receive your work you feel it was not as described, you can return it for a full refund.

Alternatively, you can visit Newbloodart’s Chiswick HQ in west London to view or collect the piece in person. The site gets remarkably few returns, she says.

Asked to name some of the current crop of new blood, Ryan is expecting great things from Rebecca Parkin, who is about to leave the RCA with an MA. Her work, described as investigating “the ideal mythological dream hero” through images inspired by magazines, cinema and advertising, won’t appeal to everyone, but Ryan is predicting big things. Her cheapest piece is £155.

Another artist she’s tipping is the photographer Michael Hall, who has also just left the RCA with an MA. He has experimented with ways of imprinting language upon landscape “in an effort to evoke meaning through an emotional response”. His work will set you back £530.

Meanwhile, if you prefer to do the hard work yourself, or you want to see the pictures in the flesh from the start, the up-and-coming MA shows are starting in the next few weeks.

The pick of the shows are, arguably, Chelsea (3-6 September), Wimbledon (4-9 September), Central Saint Martins, London (1-7 September) and Aberystwyth (21 September–9 October), or check with your local university’s art department.

Just don’t forget to take your chequebook along.