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Invest in antique furniture

Antique furniture – chair

The mother of a girl I was once vaguely involved with saw me lustfully admiring her… antique furniture.

(You were worried for a moment there, weren’t you? She was a handsome woman, but I only had eyes for her daughter.)

Back then, I couldn’t really tell art deco from Art Garfunkel. The nearest I got to owning furniture was a Habitat mattress that I threw onto the honey-colored floorboards of the decaying Georgian townhouse I rented with friends.

“No matter darling!” she said. “We can’t all be so lucky. One day you’ll be very rich, and when you are you must promise me you’ll buy only antique furniture so your children will be rich, too!”

I’m still waiting to be very rich, and I’m afraid the only furniture I’ve bought in the 10 years or more since then was from Ikea (mainly because after a five-year standoff with the UK property market, I’m still renting).

Yet her advice has influenced me in thought if not action, especially as I’ve heard (and seen) it repeated elsewhere.

And when I finally do buy my own property, I’ll certainly choose antique furniture or classic design pieces whenever I possibly can.

Why you should buy antique furniture

There are several reasons to buy iconic or antique furniture:

  • Better quality
  • Uniqueness
  • Your furniture tells a story
  • It holds or increases in value

This being Monevator, it’s that last factor we’re most interested in here. For all her refinement, it’s the reason why my ex-girlfriend’s mother was so keen on the old stuff, too.

Of course, I suspect she didn’t buy much of her own furniture, as is the tradition amongst old money. Who can forget the aristocratic MP Alan Clarke’s snobby put down of self-made Swansea-born millionaire Michael Heseltine:

“He had to buy his own furniture”.

I’ve no truck with that sort of elitism (not least because my roots are humble too!) but I think it’s a good idea to do what the rich do, from investing with the Rothchilds to keeping an eye on how they spend their money.

And they buy antique furniture, art, and collectibles because they have tended to at least hold their value in line with inflation, if not outperform.

Compare that to a table or bed from IKEA. While I think IKEA’s design know-how is underrated, the fact is you’ll be lucky to give away your flat-packed furniture after a couple of years.

Modern furniture is a consumable good, not an asset.

How well has antique furniture kept its value?

One source I’ve read about a few times is the Antique Furniture Index (AFI), which tracks the price of 1,400 typical (rather than exceptional) pieces of furniture.

According to this antique blog entry from 2008:

Standing at an initial value of 100 in 1968, the index peaked at 3492 in 2003, and today stands at 2942 [after] a ‘dramatic’ fall of 1% on 2007.

Historically, the AFI has tended to track, and sometimes even better, the fortunes of the stock market or house prices in the South of England. But since 2002, when the AFI registered the first of four consecutive years of correction, it did not keep pace with house prices in the South East.

The source includes the graph pictured right at this same low-resolution, which I presume has been scanned in from the AFI original.

If your eyes are good, you can see it shows the AFI tracking the FTSE 250 until 2007, then holding flat while the latter plummets. House price inflation (the green line) continues to do its gravity defying thing.

According to the Antiques Trade Gazette, since then things have got worse:

Hopes of a recovery in the value of antique furniture have been dealt a blow after the Antiques Collectors’ Club’s Annual Furniture Index (AFI) saw prices fall by seven per cent during 2009.

The biggest ever 12-month drop in the index, it reflects lukewarm bidding at auction and thin trading at retail outlets.

The AFI, which stood at 100 at its inception in 1968 and reached a historic high of 3492 points in 2003, moved downwards from 2942 to 2736, due to falls in all seven of its constituent indices.

It was last at this level in 1998.

A bear market for antique furniture?

It’s probably not surprising that antique furniture prices have fallen.

If I recall correctly, 2008 was the first time on record that the Sunday Times Rich List got notably poorer. The worldwide recession hit everyone, though the rich have since bounced back.

Some people believe that antique furniture is going out of fashion, but I think that’s unlikely. It’s true the masses of ‘dark wood’ furniture that used to clog up old English houses had to be shipped abroad to find bigger homes in the US, or was even chopped down to size.

But in a world where there’s ever more rich people and a finite supply of old stuff, I think antique furniture will prevail in the long term.

The blog I cited above gives an illustration of what’s possible:

We have a piece of furniture at the moment that was made in about 1760 and for all intents and purpose is a chest of drawers. This piece was sold to its previous owner in 1963 at the Grosvenor House Fair in London for £2,250.

It has been used every day for the last 40 odd years and we have just sold it on for 2,600% more than it was bought for in 1963. Try that with something contemporary!

I think the same will be true over the next 40 years, albeit with a few wobbles along the way.

Where to start with antique furniture

A big perk of living in West London is the plethora of antique furniture dealers, as well as the famous Portabello Road market in Notting Hill. As a result of such fantasy shopping, I’ve grown frustrated I’m still renting my home!

I could start buying antique furniture now, but I’d rather wait until I’m finally in my own place. Renting and moving is cheap and fairly carefree. It won’t be the same when I need a truck and specialists to transport my beloved chairs, mirrors and wardrobes.

The enforced delay has also enabled me to develop an eye for what I like, and to get over the ‘sticker shock’ of some of the nicest pieces, which are invariably the ones that will best appreciate in value over time.

Everyone says that as with art you should buy furniture you like, as well as what will hold its value. Buying antique furniture isn’t like investing in shares or bonds – you actually have to live with this stuff!

There’s realms of information out there on choosing antique furniture, much of it pretty elitist. But this Telegraph article is packed full of useful tips on where and what furniture to buy.

I’ll keep looking for more information on antique furniture as an investment, such as this antique furniture market data from what seems to be a fund manager. But I’m not interested in investing in antique furniture as an asset class – rather as an alternative to throwing away money on modern stuff.

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{ 17 comments… add one and remember nothing here is personal advice }
  • 1 Damien May 27, 2010, 10:35 am

    While I agree your point of view, I think that the real title should have been “Invest in handcraft”.

    Because I think we are still able to make great product today, that are unique. Of course, you can’t buy them from IKEA but from artisans and artists.

    Just take a look at some japanese swords maker that are still working with traditional techniques. All hand made from beginning to end (but the price start at 10 000€).

  • 2 The Investor May 27, 2010, 8:37 pm

    @Damien – I agree with you up to a point (which is why I mentioned ‘design classics’, or at least I did in an earlier draft, I’m answering in this in the comment editor so not sure now!)

    The difference I’d say is antiques are a proven market that has been pretty robust for several decades. Buying crafted and limited run modern pieces has similarities with the more speculative buying of a piece of art from an emerging artists, as opposed to buying an Old Master.

    You make a good point though that you’re still getting the uniqueness and potentially superior quality though, and at least the potential for some retaining of their value or even appreciation, if you choose well/luckily.

  • 3 Damien May 29, 2010, 1:21 pm

    I agree with you, but I think there is also a good thing when you buy ‘new’ stuffs from artisans and artists today: you keep the ‘skills’ alive, which is not the case with antique furniture.

  • 4 Andrew Hallam June 2, 2010, 7:21 am

    Monevator:

    Have you or any of your readers been to Bali and seen the furniture they make there out of old growth teak? It looks amazing to my untrained eye, and its prices (although a lot higher than IKEA’s) would likely be a lot better than what you might pay in the UK, even when you add shipping in. Am I right to assume this, or completely out to lunch. Any furniture experts out there who can vouch for 3rd world crafted handiwork?
    .-= Andrew Hallam on: Mariusz Skonieczny — Why Are We So Clueless About the Stockmarket? =-.

  • 5 James June 3, 2010, 6:28 pm

    to me its not about owning only antique furniture but possibly owning a great piece of antique furniture and celebrating it as a focal point within a specific living room.

  • 6 The Investor June 4, 2010, 12:36 pm

    @James – Very true. There’s not many sound investments that you can also enjoy every day!

  • 7 steph July 21, 2010, 8:33 pm

    I have a few hundred pound to spend on a chair, I want something that will still look good in 10 years and still be worth somthing.
    Any ideas?

  • 8 The Investor July 22, 2010, 6:33 pm

    Steph, where would we even start? I’d probably look at something iconic from the 20th Century in that sort of range, but you’ll have to consider your house, your tastes et cetera. Remember to focus on quality!

  • 9 Richard August 10, 2010, 4:04 pm

    I completely agree with this (in no small part because I am clearly biased) but buying antique furniture is a great investment. The furniture is already decades or centuries old, so you know that it’s of great quality, meaning it will last – unlike much of the disposable furniture you can buy from shops today, which will fall apart within a few years and be thrown away.
    .-= Richard on: Arts and Crafts- Rennie Mackintosh and the Art Nouveau =-.

  • 10 The Investor August 12, 2010, 10:04 am

    @Richard – Thanks for stopping by. Do please let us know if you as a professional in the business have any ideas for where we more investment-minded folk can go for hard data on the price performance of antiques.

  • 11 David Carrier October 27, 2010, 12:13 pm

    I know it’s a few months on but I only just came across this page – a recent report about the green credentials of antiques also touch them retaining their value: http://www.antiquestradegazette.com/pdf/ATG-Product-Footprint-Analysis-Final-1Sept-2010.pdf

  • 12 Mark February 9, 2011, 4:55 pm

    @David – that’s an interesting article. A well made piece, such as an antique cabinet or armoire, will be around long after its owner will be. How environmentally friendly is that ? 🙂

  • 13 Pegasus Antiques June 19, 2011, 1:30 am

    In my shop I do get asked about the return\investment of antiques on a daily basis. I agree with the Investor that there are not many investments that you can enjoy every day! Try to tell me a mass produced piece they make today that will last for a life time and will be at the very worst worth the same money when you go to sell it after its use.

  • 14 antique shops September 6, 2011, 8:00 am

    I agree with you. Buying antique furniture isn’t like investing in shares or bonds – you actually have to live with this stuff! That’s an interesting article. A well made piece, such as an antique cabinet or armoire, will be around long after its owner will be. How environmentally friendly is that ?

  • 15 Mark January 11, 2013, 2:26 pm

    Even if you buy an antique that hasn’t been looked after and it has a few scratches, the build quality is likely to be much higher than a mass-produced modern piece. And, you can always restore the furniture you’ve bought.

  • 16 Greg September 12, 2013, 3:07 pm

    Pfft, why haven’t you deleted the post two above that consists of a link to a website and lines copied from the article and the other comments?

    I totally agree with the sentiment here, it’s the “Vimes theory of boots”. 🙂

  • 17 The Investor September 13, 2013, 12:13 pm

    @Greg — Because I’m in a part of the world with ropey Net access for a few days. 🙂 Dealing with offenders now.

    Update: Actually can’t do this from here. Will look next week.

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