Sales soar as investors play toy market

The dedication of collectable toy enthusiasts for building collections safe in the knowledge that their pursuit can double up as a recession-proof investment is ensuring business remains robust for UK toy auctioneers.

A gloomier post-2008 economic environment has done nothing to dent the market for die-cast cars and model trains as auctioneers register rising selling prices amid increased demand.

"The question [after the recession] was would spending hold up?" says Leigh Gotch, head of the toy department at Bonhams, the auction house. "The answer is yes, and for very good items prices have increased."

Aston's Auctioneers and Valuers, a specialist in toys, dolls and model railways based in the West Midlands, has seen the total of auction sales treble from about £350,000 in 2008 to just over £1m last year. Vectis Auctions, a large specialist toy auctioneer, saw sales dip temporarily between 2009 and 2010 as people held back from selling their collections, but last year they were back to their pre-recession level of about £6m.

These numbers reflect more items being sold at higher prices as the commitment of dedicated collectors - some of whom will spend decades amassing a collection - supports increases in value with enthusiasts chasing fewer items. However, auctioneers say that while collections have often been regarded as an alternative investment the less attractive returns of savings products and property since the downturn are an added encouragement to spend cash on collectables.

"Interest rates are low so they are better off doing that than putting money in the bank," explains Chris Aston, a director at Aston's. "They collect anyway but the fact that the value is increasing is a double bonus." Among the most coveted items are Matchbox Superfast die-cast vehicles from the 1970s. While these vary in price from £5 up to around £5,000, each model has typically doubled in value since 2008.

"Once people get to 40 or 50 years old they have a bit more money in their pocket and want to buy things that hark back to their childhood," says Guy Charrison, chairman of the National Association of Valuers and Auctioneers. Some suggest investing in a physical item also has more resonance with a collector than money stored in a financial product. "People are buying tangible items," says Nick Letherbarrow, a consultant at Vectis. "Money in banks and pensions - they are less easy to understand."

Others in turn are choosing to sell valuable collections to profit from higher prices. A recent auction handled by Vectis raised £300,000 for a collection of Dinky toys, which translated into a retirement nest egg for its former owner.

While emphasising that examples are rare Vectis says it is also approached every few months by people interested in purchasing items purely as an investment, without being expert themselves in collectable toys. "One investor we know acts for a customer, buying and then selling on, so there is clearly an element of profit involved," says Mr Letherbarrow.

However, healthy demand does not mean those collecting with an eye on future profit are guaranteed a return. "If you buy the best, like a prewar Dinky toy, then prices are continuing to rise," says Mr Aston. However, he cautions you cannot assume a particular brand name will be enough to ensure an item has cachet. "[There are] certain areas where people have lost out, like the more modern Star Wars toys."

Owning an item with a rarity value can certainly pay dividends. Mr Gotch recalls the example of an early 20th century model tram made by Marklin, which failed to make its reserve price of £8,000 a decade ago. It sold for double that last year.

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