Luxury Assets Are a Brexit Hedge

Borro is predicting a move towards hard assets, including luxury assets such as art and classic cars, as Britain reacts to the referendum result. The morning the UK’s referendum results were published, gold rose by 6% – 20% if sterling fluctuations were taken into account – an indicator that investors are seeking protection against market changes.

‘Economic uncertainty often leads to increased activity in different markets, including luxury assets,’ Samantha Lilley, Director of Valuations commented, ‘buyers are looking for a tangible store of wealth to protect themselves against volatile financial markets. Additionally, savvy collectors will be watching auctions, looking for opportunities to generate long term returns.’

At Bonham’s Goodwood Festival of Speed auction last Friday, the first major auction after the result was announced, a 1938 Jaguar Roadster estimated at £180,000 – £260,000 sold for £337,500. In 2008, while the FTSE fell by 31% over the year, the fine art market only fell by 4.5%. More significantly, by 2011 the market had recovered to the record levels of 2007 and grew every year up until 2015.

‘Luxury assets benefit from an international market,’ stated Paul Aitken, Borro’s CEO and Founder, ‘although Brexit may be affecting confidence in the UK, that doesn’t have a dramatic effect on Patek Phillipe sales at Christie’s Hong Kong.’

‘The global nature of these markets has always been beneficial to us as a company,’ Paul Aitken continued, ‘we have always taken into consideration not only local market prices, but international markets which may have higher demand for certain assets.’

‘Our 7 year track record combined with our experienced staff makes me confident that we will be able to continue lending as expected.’

Borro has valued over 50,000 luxury assets, while its property lending team has over 90 years of underwriting experience. The company has made no changes to its growth forecasts for luxury asset or property lending on the basis of the Brexit vote.

Related Posts

Brexit: How will the UK art and antiques trade vote?

Luxury Assets Key for Portfolio Management

The Art of Valuing Collectible Assets

About the Author:

Anthony writes about luxury asset trends for Borro Private Finance.