As vinyl sales hit 25-year high, should you invest?

First there was the CD. Then the MP3. Then smartphones. Then Spotify. All these formats and services were supposed to herald the death of the vinyl record, with music fans expected to shun their physical stores of music in favour of purely digital versions instead.

Didn’t happen. For some reason – a desire to have something tangible, perhaps, a sense of nostalgia, maybe – the end of the vinyl records hasn’t come. In fact, as new research from the British Phonographic Industry (BPI) shows, vinyl sales in the UK have hit a 25-year high with 3.2 million sold last year – the most since 1991. So do vinyl records constitute a good investment?

2016 was a stellar year for vinyl sales, boosted by events like Record Store Day and the deaths of some musical giants. To put the 3.2 million vinyl records sold in 2016 in perspective, around only 200,000 LPs were purchased in 2007.

The biggest-selling vinyl artist was David Bowie, with five albums posthumously featuring in the top-30 best-sellers, including his Mercury Prize shortlisted Blackstar, which was 2016’s most popular vinyl recording ahead of Amy Winehouse’s Back To Black, selling more than double the number of copies of 2015’s best seller on vinyl – Adele’s 25.

Geoff Taylor, chief executive of the BPI, said: “Led by sales of David Bowie, demand for vinyl jumped to levels not seen since the start of the Nineties.”

This is not to say, by the way, that streaming and downloads are dropping behind. They’re not, and vinyl sales still only account for five per cent of the albums market. But with demand for vinyl clearly rising, could buying up LPs be a good investment for you?

Potentially. If you know a lot about music, and about the trends of the vinyl market, you could well be onto something. If not, you’ll need to do your research, digging deep into record price guides, comparing costs and speaking to collectors.

Ian McCann, the editor or Record Collector, told This is Money that the key to a valuable vinyl is condition. “If you are the sort of person who treated these albums like they were made of glass and didn’t take them to parties, or rarely played them, they will be worth more today,” he said.

“You require all the original material that came with the album – lyric inserts, posters, sleeves – to also be in great shape to get top dollar.”

To make a success out of it, you need to know what you’re looking for. So if you’re not a music fanatic but want to tap into the demand for vinyl, you’ll need to hit the books and do some research. What’s more, you’ll need to hunt around – vinyls can turn up anywhere, from car boot sales to neglected cellars. But find a rare vinyl, in excellent condition, and you could well be onto a winning investment.

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