Pen y Bryn sits in a beautiful spot in the wilds of North Wales. Set in a bowl
of rolling hills, with stunning views, it is an ideal location. Yet the
condition of the property, which looks like a cross between a medieval
castle in ruins and the remains of an old mine, is less than attractive.
It could be perfect – if only the work were complete. Sadly, the credit crunch
and the banking crisis have taken their toll on the owners, Paul Hilton, 42,
a sculptor from Liverpool, and his wife, Harpal Rai, 39, a fashion buyer.
They cannot afford to finish the job.
“There is a huge amount to do,” Hilton says. “In the current market, there is
no incentive to spend money I haven’t got finishing the place. Something has
got to give.”
The couple’s mounting debt – they are also trying to sell their permanent home
– means they cannot continue with their ambitious plans or dream of moving
to a house in the country any time soon. They have had little choice but to
call in the estate agents. The property is for sale at £350,000: still
considerably more than they paid for it, but nothing like what they had
hoped for.
With the housing market in the doldrums, Pen y Bryn is one of many
half-finished projects to make a premature return to the estate agent’s
window. Blame it on the television makeover shows, perhaps, which
transmitted the fantasy of ever grander designs, encouraging sofa-bound
couples to hunt down a hovel in order to create a dream home – and make a
profit.
The housing boom brought out the developer in many ordinary homeowners, who
made their way up the property ladder by converting barns, churches and
warehouses, as well as doing up wrecks and ruins. That is, until now. For
years, rising house prices almost guaranteed a profit when it came to
selling on – even when one blew the budget. If you needed to raise more
capital to cover the works, you simply remortgaged.
As house prices have started to tumble, however, and previously generous lines
of credit have dried up, a number of those who took on more than they can
handle are being forced to sell at prices well below what they might have
expected to achieve had the work been completed.
Hilton, who enjoys doing up wrecks to supplement his income, has refurbished
two properties in the past decade, moving up the ladder each time. He bought
Pen y Bryn 18 months ago from the architect who had designed it and laid the
foundations, and who planned to spend his retirement in the fanciful
building – that is, until he ran out of money. Now Hilton finds himself in a
similar predicament.
Such bargains are enticing, offering as they do the potential for any new
owner to piggyback onto an existing project at a knockdown price. Completing
Pen y Bryn in accordance with the architect’s drawings – which include plans
for a 40ft tower, balconies with metal railings shaped like a crown and a
moat with a drawbridge – would cost an estimated £200,000.
So, do the sums add up? “Because of where it is, it would be worth £600,000 if
it were completed,” says Jonathan Major, a partner in the Chester office of
Strutt & Parker, which is selling Pen y Bryn. “It’s a stunning location.
If you are taking a long-term view, this isn’t a bad project. By the time it
is done, the market might be better.”
Similar examples of “shell-shocked” couples and families who have taken the
decision to sell and hand over the completion of renovation projects can be
found across the country. Diana Cooper has spent the best part of a decade
turning Dinnicombe Barn, near Totnes in Devon, into the cosy family home
that she shares with her two children, Joshua, 18, and Elly, 10.
The job of converting this huge 19th-century stone building, which nestles at
the end of a half-mile track between thick woods and billowing farmland, has
been painstaking. The kitchen, with its bright-pink cabinets and elm
worktop, is handmade. Restored original beams jut out everywhere, and new
oak-framed windows at the back are bespoke replicas of the originals that
open up at the front of the building.
“I’ve run out of money,” says the 48-year-old founder of Tideford Organic
Foods, who has spent tens of thousands of pounds on her home. “The payments
on my Northern Rock mortgage almost doubled in January, from £1,500 to
nearly £3,000 a month. It’s a ridiculous amount to pay.”
Bringing Dinnicombe Barn – which, at 4,000 sq ft, could house 18 double-decker
buses – up to scratch would cost between £100,000 and £200,000, according to
Richard Addington, director of West Country property for Savills in Exeter,
which is selling the property for £1.25m. It would be worth every penny. “A
similar barn conversion in the area is for sale for £1.6m,” he says.
The basic hard work has been done. There is plumbing, electricity and
insulation, none of which was there when Cooper inherited the place from her
family in 1990. The kitchen, sitting room, three bedrooms, shower room and
bathroom have been put in, but there is space to do the whole thing over
again at the other end of the barn, which Cooper has used for parties.
Sarah Beeny, presenter of Channel 4’s Property Ladder, has some words of
warning for would-be buyers. “Bargain hard,” she says. “If half the work has
been done, make sure you knock more than half of what doing it would cost
off the total price. If you can’t, walk away.”
Beeny advises making sure that the fundamentals, such as the wiring and
plumbing, have been done, otherwise you may have to redo everything again.
“Half-finished houses are expensive and complex,” she says. “If you’re not
careful and don’t think it through, you’ll be left with a raft of unfinished
business.”
An easier task might be to finish off Glentworth Hall, near Lincoln. So far,
no expense has been spared refurbishing the nine-bedroom, eight-bathroom
period pile. It is almost complete, but the owner’s family and financial
circumstances dictate an early sale.
The Grade II*-listed mansion is on the market for £1.3m – substantially less
than the £1.5m it would be priced at when finished, but still rather more
than the £500,000 guide price at which it went to auction after featuring in
The Sunday Times in 2003. The new owner would have to spend between £50,000
and £100,000 to complete the work, which includes installing a master
bathroom and the fireplace surrounds, as well as general snagging.
Stuart Paton, senior director of the East Midlands country-house department at
Humberts, predicts that this is likely to be the first of many forced sales
of partly refurbished country houses. “We will begin to see the banks
refusing to lend any more money to complete projects,” he says. “They will
want to cut their losses early.”
Some developers and homeowners have reached that point already, according to
Gary Murphy, a partner and auctioneer at Allsop, who has seen a number of
repossessed projects coming into the auction rooms from developers who have
run out of money. “We will be seeing a greater number of unfinished projects
come through because of the economic climate,” he says. “If you can’t sell a
property though private treaty, you might need to make a difficult decision.
In a falling market, your first loss is your best loss.”
These might be harsh words for sellers such as Hilton, Rai and Cooper to
accept. “I couldn’t have chosen a worse time to put it on the market,”
Cooper says. “I’ve been trying to sell since September, but everything has
gone downhill. Nonetheless, it is time to move on. I would like to sell
Dinnicombe Barn, take Elly out of school for a bit and spend three months
travelling around the world.” + Strutt & Parker; 01244 354851,
www.struttandparker.com. Savills; 01392 455755, www.savills.co.uk. Humberts;
01780 762849, www.humberts.co.uk
Three proeprties in nned of a little help to reach their full potential:
Wiltshire £1.15m Set in an acre of gardens, the Coach House has six bedrooms,
three bathrooms and a kitchen with “room for a dinner party of 40 guests”.
The Grade II-listed Georgian house is two-thirds complete – the new owner
will just need to finish off the vaulted drawing room and gallery – and the
seller confirms that there is “always room to haggle” over the price. The
property is in Everleigh, 13 miles from Marlborough. Hamptons; 01672
516256, www.hamptons-int.com
Northumberland £435,000 The Georgian, three-bedroom, Grade II-listed
Coach House in Eglingham still needs about £20,000 of work to be done,
including fitting a bathroom. It has a sitting room, a study, a large
kitchen with Aga and a conservatory. George F White; 01665 603231, www.georgefwhite.co.uk
Cornwall £250,000 The main stone barn building at Milladon Farm, set in 15
acres in Trerulefoot, 13 miles from Plymouth, is only partially habitable.
It has three bedrooms, an open-plan sitting room, a kitchen and stables. The
conversion was not done in line with building regulations and is, the agent
says, “cobwebby and bohemian”. Further lots of paddock, other land and a
6,300 sq ft barn are available. Stags; 01752 223933, www.stags.co.uk
I've no sympathy for them. Too much greed and speculation has come back to haunt them. Perhaps they'll go bankrupt, and then in 5 years time someone can buy the barn for song.
Mike Livingstone, Reigate, UK
The people who have put these houses on the market are living in a fool's paradise. They are trying to pretend that the risks in such grand projects never existed.
The fact that no-one wants to buy their wrecks is the very loud wake-up call.
John F, London,
The sums do not add up here. Buy for £350,000 spend £200,000 completing it and it will be worth £600,000. £50,000 profit? For all that work? Yet the truth is that by completion prices will have fallen 10% and you will have spent £550,000 on a property worth only £540,000 and falling.
Paul Davis, York, uk