Oct. 7 (Bloomberg) -- Damien Hirst's 111.5 million-pound ($199 million) record auction in London last month marks the top of the art market in the U.K., for now at least, according to a survey by valuers.

At the time that Hirst was grabbing headlines, the collapse in real-estate sales in the U.K. was taking its toll on prices of lower-value art and antiques, said the Royal Institution of Chartered Surveyors.

``The credit crunch and bank collapses are slowing down the markets, as is the falling house market,'' said Simon Jones of Oxfordshire auctioneers Jones & Jacob, who was quoted in the survey. ``It will get worse as the recession continues. That said, best quality lots are finding buyers at good prices.''

Auction houses are watching for signs of how their sales will perform in London and New York in the next two months. Even wealthy art buyers may be deterred by the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc., tumbling stock markets and slowing economic growth, said dealers.

A net balance of 34 percent more auctioneers and valuers reported prices falling for items estimated at 1,000 pounds and below in the quarterly survey completed last month. By contrast, a balance of 39 percent reported that prices rose for more expensive works of 50,000 pounds and higher as wealthy people snapped up trophy art. Contemporary art registered the strongest growth, with 41 percent more surveyors reporting increased prices.

Antique Furniture

Twenty-two percent more of those surveyed by RICS said prices were dropping for items valued up to 5,000 pounds. Prices fell most sharply for antique furniture and traditional paintings, said RICS.

``It seems average buyers are reassessing their spending in the current financial crisis,'' said the survey, based on responses from 63 RICS members. ``With less people moving home, there is a diminished supply and demand for art and antiques.''

In August, the RICS's U.K. housing survey reported that the average number of transactions for each surveyor in the previous three months had dropped to 12.7, the lowest figure since the survey began. During that period, some estate agents in a number of regions reported making less than one sale per week, said RICS.

Silver and jewelry also continued to increase in price at auction, helped by strong commodities and precious metal markets, according to RICS members.

Sotheby's ``Beautiful Inside My Head Forever'' auction of new work by Hirst on Sept. 15 and 16 ended with 98 percent of lots finding buyers.

On Sept. 27, the Edinburgh auctioneers Lyon & Turnbull sold only 27 percent of the lots at a 300,000-pound sale of modern and contemporary art and design in London. Most of the works in the auction were valued at less than 5,000 pounds.

(Scott Reyburn writes about the art market for Bloomberg News. Opinions expressed are his own.)

To contact the writer on the story: Scott Reyburn in London at sreyburn@hotmail.com.

Last Updated: October 6, 2008 19:01 EDT