Auction expert Scott Hendry on week two of The Great House Giveaway.
“Their saving, not scrimping mantra is one to remember” .
Here at Together, we like to think we know a thing or two about auctions – we’ve been helping buyers to finance their auction purchases for over 15 years. And that’s what we did here, working closely with the production company to fund more than 20 purchases and renovations.
Each weekday afternoon throughout October, you can see how pairs of budding property developers got on when they were paired up by actor and property developer Simon O’Brien. Tasked with buying a property at auction and selling it on within six months, they were given a renovation budget and the promise of keeping any profit they make for themselves.
There’s lots to be learned about property development, so we asked our resident auction expert, Scott Hendry, to share his thoughts on how last week’s contestants got on.
Former school friends Annie and Sherri-Leigh got a surprise when they were randomly teamed up to renovate a stone-built terrace in the Welsh Valleys on a tiny £8,000 budget. Fastidious about managing their money, their ‘saving, not scrimping’ mantra is one to remember.
It was important they kept a close eye on costs, as property prices in the area have a ceiling. That said, Simon’s shortlist of potential buys – all guided at £50,000 or less – demonstrates that the area might be a relatively affordable place to make a first-time auction investment.
Sherri-Leigh gave everyone a masterclass in price negotiations, coming through with a free kitchen and a total bargain on their windows. They ran out of time so sold well under the asking price in order to meet their six-month deadline, but still managed to walk away with a five-figure profit. “Tidy”, as they say in South Wales!
On Tuesday we met Zoe and Raja, who didn’t win any of their shortlisted properties at auction – and instead found themselves with a substantial end-terrace in Kidderminster. On walking around, they learned why it was sold under the hammer: the kitchen’s outer wall’s single-brick thickness meant the property was deemed ‘unmortgageable’ – and their £22,000 renovation budget would have to include putting this right.
Disagreements between the pair robbed them of time, and once their six months were over the property still resembled a building site. The old adage ‘it gets worse before it gets better’ was proven here: their half-finished project had actually dropped in value.
We went back to Wales on Wednesday, when engineer and sheepdog trainer Osian teamed up with estimator’s assistant Elen to tackle a tired bungalow near Mold, Flintshire. A previous owner had converted the loft, adding a dormer window and central heating – but it was only accessible using loft ladders, so didn’t meet building regulations and couldn’t be counted as a bedroom.
Lifestyles have changed since this bungalow was built, so the pair were smart to create an open kitchen/diner that suits today’s families. Adding a staircase up to that loft may seem like a daunting job, but it’s more than worth the effort for the increase in value that adding another bedroom (without sacrificing much space from elsewhere) brings.
Budding developers Catherine and Steve did everything right at their 1930s semi in Prescot, just outside Liverpool – and it still wasn’t enough to see them turn a profit. They got on brilliantly, did loads of work themselves, and stuck to their budget. Tick, tick, tick.
But their story proved that you also need Lady Luck on your side to make it as a developer. There was simply no interest from the market when their tastefully refurbished home went on sale, and it ultimately sold for little more than their original purchase price.
Bafflingly, this is despite there being lots of interest at auction. Cathy Hold at Sutton Kersh, the auctioneer who sold this property, said “This property proved very popular, with five block viewings and 12 copies of the legal pack downloaded. It was in need of modernisation throughout but due to its excellent transport links and close proximity to Whiston Hospital, would make a great investment property.”
“The Merseyside property market is very buoyant right now. Liverpool has always been a popular city for people and professionals to buy, invest and live in. Here, like the rest of the country has seen a rise in property prices over the last few months.”
Catherine and Steve were sanguine about making a loss, but gained something money can’t buy: a friend for life.
Friday’s episode featured couple Colin and Wendy, and divorcee Jane, who attempted to prove that three heads are better than two.
Their spacious terrace in Porthmadog in North Wales was bought through an online auction; dated and spartan, it needed major renovation. The trio moved the bathroom upstairs by dividing off one of the bedrooms, also enabling them to knock through and create a larger kitchen. This was a great decision and really shows they’ve thought about how modern families want to live.
Had they not sold it through the open market, they could have marketed it at investors. This part of Britain is popular with tourists, and canny buy-to-let landlords are looking at holiday lets as another income stream – especially given recent changes to taxation and the booming demand for staycations.
Five more teams will be trying their luck this week. Tune in at 4pm to see how they get on.
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