The notion of a craft fair sends shivers down the spine, with its suggestions of village halls, shabby clay pots and the Women's Institute. But, at the V&A over the past few days, a thoroughly modern craft fair (or "applied art event") has been flogging its wares. Collect 2005 is billed as "a visual feast of superb art objects", and in 2004, its inaugural year, it made more than £1m for the exhibitors involved.
A glance through the exhibition's gleaming doors makes clear immediately that my expectations were very wide of the mark. Sleek metropolitan installations from Denmark and Australia vie with each other for viewers' attention: there are woven pictures and aquiline glass objects. As one hardened collector tells me: "It's not earthenware pottery and knit-your-own knickers anymore. This is bordering on fine art. It might be called 'high craft'."
Emboldened with my new-found collector's vocabulary, I take a stroll to see if this is the sort of place to pick up a real bargain. But, with more than 350 artists and 43 galleries displaying their work, it is hard to know where to start. Amanda Game, the convenor of the Scottish Gallery's installation, gives me a tip: "Let your eye wander, and if something interests you, you'll be naturally drawn to it." As it turns out, the object I am naturally drawn to first is in the Scottish Gallery's show, where a hypnotically colourful, spiralled bangle by the Glasgow-based artist Paul Chang sits glimmering in its glass display case, waiting for me to snap it up. But the price tag is an astonishing £6,500.
Having quickly checked that the price has not been misprinted, I am bound to ask Amanda how on earth a bangle can cost this much. I mean, what's it made of - gold? Well, yes, actually, she replies. And wood, and multilayered plastic. It's a tortuous, lengthy process, and, what's more, Paul is incredibly well respected in collectors' circles. "People are absolutely jumping up and down for him in America," says Game's colleague, Christina Jansen. "He's a complete one-off, an original." Suitably humbled, I move on.
Next to impress are Dovecot Studios, tapestry weavers based in Edinburgh who have a stunning collection of individually commissioned works on show. But with prices as high as the mid £20,000s for a large tapestry, I assume only big institutions can afford to commission the weavers. Again, my assumptions make an ass of me. "We used to receive commissions primarily from galleries or hospitals or the like, but we're receiving more and more one-off commissions from private collectors now," says Dovecot's David Weir. When I find out later that one of these private collectors was the late Queen Mother, I start to realise how staggeringly out of my depth I am.
Having established that I can afford nothing, I decide to do the next best thing and make friends with someone who can. John Malthouse, an accountant in his fifties, is a friend of the Bluecoat Display Centre - which is displaying the work of seven artists from the North-west at Collect - and a lifelong collector of work by Julia Carter Preston, a Liverpool potter. "I have a lot of her work. She is simply brilliant," Malthouse tells me. "In fact, I think that I now have more of her work now than she does. I've been collecting for 20 years."
But what's the appeal of collecting craft rather than art? "Well the gallery sells sculpture. How do you decide sculpture that's art and sculpture that's craft? I just know I like it." Point taken, but whether it's art or craft, it all seems prohibitively expensive. Again the collector takes issue. "I suppose most of my collection cost between £50 and £250. Occasionally you can find something absolutely gem-like for £200." But at Collect, there is nothing under £500. Where are they hiding the cheap stuff? "Everyone takes their best stuff to Collect. It is God's own kingdom in terms of making sales."
One item at Collect receives more than its fair share of adulation: a massive crucifix necklace adorned with Coca-Cola bottle tops, entitled The Real Thing. It looks like the work of an enterprising school project, but the price suggests it is anything but. At £3,619, one cannot imagine anyone being foolish enough to make the purchase, but I am learning to expect the unexpected in this rich man's playground.
The trouble is that so much of what is on show looks so practical - there are jugs, vases, and benches everywhere - that one does not immediately associate it with "art". Perhaps this is also because many shops selling well-designed items for the home at reasonable prices (Ikea springs to mind) have appropriated a gallery structure for their stores.
Many experts in the craft, or "applied arts" industry, have recognised the dilemma. "The trouble surrounds the boundary between craft, something reasonably practical, and art, something without practical use," says Julie Pottle of the Cosa Gallery in London. "It's difficult. What we are seeing, though, is the rise and rise of craft as a serious collector's market. Collectors are becoming really interested, I think, in something that's hand-made and unique."
Many collectors, I later discover, do not pay the full price in a single go. Schemes such as the Arts Council's Own Art, which offers interest-free loans of up to £2,000 each to buyers from 250 galleries nationwide, are helping first-time and seasoned collectors. Even a long-time collector such as John Malthouse has taken advantage. "If you're looking at something that costs two grand, not many people are going to shell out that kind of money on a whim. But if you're talking about £200 over 10 months, then it's slightly more acceptable."
So, after two hours of making sure I don't break anything, I make my way to the exit with my wallet intact but my head suddenly full of the joys of collecting. Suddenly, that crucifix doesn't look such bad value. It's only, I consider, £10 a month for a little over 30 years, by which time it will be a classic. What's more, as a Londoner, I will be right at the heart of the craft revolution, as Karen Turner of the Craft Council explains. "London is fast becoming Europe's leading centre for applied art exhibitions... Collect is the anchor holding that reputation fast." She seems to have a point. Many collectors have flown in from all over the world. One American couple turned up to Collect specifically to inspect one ceramic item. Village halls have never looked so prehistoric.