Young firms turn to Old Masters

Helen Jones talks to a company that rents out 'instant heritage'

Impoverished but the lucky owner of a fine piece of art? Then some of your financial worries may be over. Instead of sellingfamily heirlooms, owners of country houses faced with enormous bills, or Lloyd's names with mortgages and school fees to pay, have found a new source of income - renting their works of art to companies in return for an annual fee.

The Langford Fine Art Collection was set up by Tony Harris, who was a guest at a country house and saw a space on the wall where a large painting had hung. The owner explained that it had been sold to pay for the upkeep of the house and Mr Harris then devised a system for owners to retain their ownership while receiving an annual rent.

Corporate art has graced the offices of City and financial institutions for years and some, such as the Hong Kong Shanghai Banking Corporation, own particularly fine collections, but renting rather than owning art is a relatively new idea. Susan Ahlquist, the joint managing director of Langford, says: "People come to us for a variety of reasons. Some to raise money and others find insurance costs are prohibitively expensive or are frightened to display their pieces for security reasons."

Rik de Stroumillo, a graphic designer who rents out a painting via Langford, says: "I thought it was a good idea. I have a picture that I didn't particularly want to get rid of but I see this as a way of getting some pin money." He adds that to fill the gap on his wall he "may consider renting something that I might not be able to afford to buy".

But the business is not without its difficulties. Langford has to assure owners of confidentiality not least for security reasons but also because some family members may not know that an heirloom is on loan or because some fear what their well-heeled neighbours might say. "You have to be sensitive. Some do not want anyone to think that they are strapped for cash and we have to respect that," says Ms Ahlquist. Langford handles paintings, tapestries, sculptures, porcelain, glass and other objets d'art, usually with a minimum value of pounds 25,000, which will generate a rental of around pounds 3,000 a yearfor a minimum of two years. The more valuable the work of art, the higher the rental income.

The most expensive work on its books is a painting by Sir Joshua Reynolds valued at pounds 1.5m. Other paintings include works by William Hogarth, Canaletto and John Singer Sargent.

The company handles most subject matters - landscapes, marine, still life and sport, though cherished portraits are more difficult to place. Paintings and sculptures also have to be of a reasonable size. Too small and they will not be suitable for reception and office areas. Having sourced a work of art, Langford works in conjunction with International Art Consultants, a firm of corporate art specialists, to find a suitable firm to rent it.

Peter Harris, the chairman of International Art Consultants, says: "The system allows companies, who are unwilling to commit the sums of money needed to acquire works of art of Old Master status, to rent them instead. It enables companies to achieve the image they require at a rental cost that is wholly tax deductible."

So why do companies invest in works of art? Mr Harris says: "It gives companies an aura of heritage, history and pedigree even if they are reasonably young companies. It also gives a sense of what the company is about both to visitors and employees."

But Mr Harris warns that it is not good enough just to have any old painting as long as it is valuable. "Although the Japanese tend to go for value rather than what the picture is actually of, we find that most companies want something that relates to their business," he says. "It is not just decoration, like ordering a new pair of curtains. It has to have relevance to the company and its image."