If you love reading and browsing through bookshelves you might also enjoy collecting rare books or first editions. Not only could this become an interesting and enjoyable hobby, there is always the possibility that it could generate a very welcome income on the side.
The value of first edition books can be staggeringly high and up there with the price of original paintings by well-known artists. One of the most valuable books currently for sale at Abe Books, the rare book specialist, is a first edition copy of Ulysses by James Joyce, which is priced at just over £200,000.
Of course, because books like this are so rare, it makes them very sought after which adds to their value; and, as more people get involved in collecting, prices will continue to rise. Some experts estimate that the prices of first edition books have risen by around 145% in the past decade.
However, the average collector of first edition and rare books will not be dealing at this price point. For those on a budget, there are many first edition classics available to purchase for only a few hundred pounds.
What’s the appeal of rare books?
We live in an age of electronic books, with millions being downloaded every day. Surprisingly, this seems to have rekindled our affection for physical books. While an e-book might be convenient and easy to access, it cannot compete with the feeling of having a book right there in your hand.
Collecting rare books is, first and foremost, a passion. It offers the possibility of owning a little bit of history, a first edition print of a classic which was produced before the world was ever aware of who the author was.
For an avid book collector, there is the thrill of having in your possession a mint condition, classic book which could be hundreds of years old. For other collectors, it offers the opportunity to deepen their bond and affection for their favourite writers.
Fans of Charles Dickens, Graham Greene and Emily Bronte would be delighted to own a first edition by one of these authors. There is also the satisfaction of spotting the next up and coming writers, whose work goes on to become highly prized amongst rare book collectors.
Building a collection of rare books
Like any new hobby, there will be a huge learning curve at the outset while you build up your knowledge of the rare book world. Valuable books can extend across any genre. They can be penguin classics, science fiction, politics or poetry. What matters is their rarity, condition and collectability and they are usually first editions.
The conventional advice to any beginner is to always buy books that you would be interested in purchasing anyway; whether they are first edition books by your favourite writer or you are following your passion for photography or natural history. The long-term investment considerations should be of secondary importance.
There are so many potential collecting themes. There are books about science, medicine and economics and what makes these stand out as collectable is where important scientific or medical ideas are expressed in print for the first time.
Other options include collecting the iconic Orange Edition Penguin books from the 1930s onwards. These won’t be expensive and there will be a relatively liquid market for buying and selling the more popular titles.
Series such as Harry Potter, which has a dedicated fan base, also tend to be very collectable (see later in the article). James Bond books, and other famous franchises also have a healthy following as do award-winning books or authors.
When making a decision as to what to buy you should put quality first. A rare book needs to be in the best condition possible if it is to be attractive to other collectors. In most cases the real value will be achieved when the book is still in its original dust jacket.
Identifying first edition books
It can be surprisingly difficult to identify genuine first editions as different publishers used different codes and they often change. A true first edition is the actual first printing of a book.
In some cases, the publisher may state that the book is an actual first edition on the copyright page. Alternatively, you may use the number line which can also be found on the copyright page at the beginning. If there is a ‘1’ at the start, it is a very helpful sign that the book may be a first edition.
Some publishers leave first edition above the number line, but this may not always mean that it is a true first edition. They often leave this in place even for second and third editions. For example, if you see first edition followed by a number line beginning with 3, you have a third edition book.
Sometimes you will be able to tell the year. For example, you might see a number line which begins with 81 and ends with 2. This would denote a second edition book from the year 1981.
It can take skill and experience to positively identify a first edition and you may need help from an expert to be absolutely certain. The people at Abe Books have produced a very helpful video walk-through identifying the characteristics of a first edition book and it can be viewed here.
How to value first edition books
Assessing the value of first edition books can be difficult as there are no indexes to track prices and returns. It’s an often-repeated cliché but the value of a rare book very much depends on how much someone is prepared to pay for it.
Debut novels from the great names of literature tend to attract the highest prices if they are in excellent condition, with their original dust jackets and signed by the author. However, if you are on a budget, their later works could be a little less expensive.
For example, Graham Greene’s middle period books, such as Our Man in Havana (published in 1958), can be found for as little as £100, while a first edition copy of Brighton Rock (published in 1938) could fetch between £1,500 and £87,500 (including dust jacket).
In order to get comfortable with the price of a rare book that you wish to buy, it makes sense to research the market for price comparisons to see what similar books fetch. The book seller Biblio can give you some advice and insight on prices.
Biblio also has a comments feature where buyers and sellers share their thoughts on value and there is a form which you can complete to obtain a price comparison on the book you are interested in.
Where to buy rare books
Books collectors have always enjoyed going to auctions or rummaging around book fairs or antiquarian book dealers to find hidden gems. If you do decide to buy through an auction be aware that a buyer’s premium of up to 25% can be applied to the final ‘sold’ price of the book.
Rare book dealers can also be a haven for book collectors looking for classics. These are great places to find something interesting and, thanks to the internet, most of them have comprehensive websites you can browse.
Indeed, the internet has been a real game changer for anyone interested in collecting, It’s much easier to find almost anything you like online with sites such as Maggs Bros and Peter Harrington.
Of course, the ease with which you can purchase has created a buyer’s market which means it is possible to get your hands on a bargain, but it can lead to difficulties when the time comes to sell.
Harry Potter first edition books
The high-profile nature of the Harry Potter series of books written by JK Rowling has also brought a focus on the appeal of first edition books to the wider book buying public.
When the first book in the series – Harry Potter and the Philosopher’s Stone – was first published in 1997, it had a print run of only five hundred hardback copies as JK Rowling was then an unknown writer and demand was impossible to predict.
Back then the book would have cost £10, today the same book could fetch over £150,000. Results like that mean book buyers are waking up to the investment possibilities of rare books.
Once the Harry Potter series was up and running, print runs were much bigger which means first editions will be much less rare. Even so, collectable items from this series are still attracting enormous attention.
Rowling’s very limited edition of The Tales of Beedle the Bard sold for almost £1.95 million. The book is mentioned in the Harry Potter series and she produced seven copies from handwritten notes. Six were given to people who had been integral in the making of the Harry Potter series while one, known as the Moonstone edition, was sold at Sotheby’s with the proceeds going to charity.
What about tax implications?
The main tax advantage to owning rare books for investment purposes is that there is no VAT to pay and if the book is eventually sold for less than £6,000, then there is no capital gains tax liability.
However, as with many hobbies, something that starts out as a fun and interesting pastime can quite easily develop into a proper commercial venture. It is not unknown for people to tun their hobbies into businesses.
If you do find yourself buying and selling rare books in greater numbers and with increasing frequency (and at a profit) then strictly speaking you will probably be deemed a trader or dealer by HMRC and you should register as a self-employed business.
Anything else to think about
Having built up a collection of rare books it is important that the collection is protected and stored under the right conditions. To avoid damage or discolouration the books should be kept away from direct sunlight, heat and moisture.
Further information about collecting rare books
For anyone interesting in learning more about rare books and developing their interest, then you should check out the Antiquarian Booksellers Association website.
There is also an interesting article explaining the terminology around book binding and the buying and selling of rare books which can be read here.
Also consider following the rare books blog on Abe Books.
Other hobby investment ideas
Another potential hobby investment idea to consider is collecting vintage postcards.
