Most people venturing into the world of property approach the market with fairly fixed objectives, sure of what they want and reasonably certain of what to expect from a purchase.
Then there is also a tendency to play it safe. Even those with building experience will opt for more traditional residential or commercial spaces when prospecting for long-term financial gain. This obviously makes good sense, as any investor hoping for healthy returns will want to invest their money in a building that is easy to let.
Commercial investors are traditionally fairly conservative, often buying into safe developments such as office space or pubs, where long-term tenants might be involved. This is hardly surprising, as the capital outlay is invariably greater and with it comes a higher risk.
Residential portfolios with assured shorthold tenancy contracts offer the buyer, like most commercial investments, an immediate income and can also make attractive investments. However, many property auction buyers in particular like to take on a project that entails refurbishment. A challenge maybe, but we all know that a decent makeover can easily put an extra 20% on the value.
Even empty land plots can present amazing opportunities and although these usually fall into the hands of bigger developers, they shouldn’t be dismissed out of hand. If you do find a plot with potential, consider getting an architect on board to find out what exactly can be done with it.
It’s also worth keeping your eyes open for something that little bit different and unusual. As well as the more obvious residential or commercial buildings, occasionally something will turn up at auction that, because of its characteristics or condition, doesn’t fit easily into either category.
Recently at a property auction sale in Cardiff, a truly unique former YMCA building near Merthyr Tydfil, with a staggering 15,330 sq ft of space, sold for just over £20,000. At that time the building was neither a commercial nor a residential site, but the new owner had the chance, pending permission, to do whatever he desired. Although the space lent itself well to either use, it wasn’t impossible to imagine it as an art centre, a music or nightclub venue, even a museum. All that was required was a little imagination and some lateral thinking.
This is just one case I recall of a property whose potential was far from run of the mill. At the same sale an old bakery came up for bids and although it was withdrawn, it nevertheless had great promise. Like the YMCA, here was another vast space with a ridiculously low guide price. These are just a couple of isolated examples, but in auctions houses across the UK I have encountered a whole variety of strange buildings, all of them presenting exciting challenges to the imaginative would-be buyer.
There’s an old expression that says that an Englishman’s home is his castle. Today castles are homes for many English men and women. Scottish, Irish and Welsh citizens are also proud owners of some of these amazing historical monuments, many in a poor state, bought cheaply at auction.
The auction room will often throw up such oddities and with land space in short supply in the UK, it’s perhaps no surprise to find its residents now owning and occupying the quirkiest of buildings. These can range from old mills, churches, towers, fire stations, to former railway stations. I once met a couple who even lived in a lighthouse.
Living in and converting one of these buildings takes considerable imaginative flair, but as long as it’s not a complete ruin, the sky’s the limit. Needless to say, some buildings are beyond repair and few are straightforward, but the financial rewards and the sheer pleasure of creating something fresh and original can be tremendous.
Some might argue that surveyors are a waste of money, but if the project entails restoration and repair to an old building, then they are a must. In any case, it’s unlikely that a lender would be willing to fund a property that requires attention without a full report. The surveyor’s report to the lender is limited and not designed to highlight all the negative conditions: a full report will be necessary.
For old, unusual properties contact the Royal Institute of Chartered Surveyors (RICS – rics.org) whose customer information service will put you in touch with surveyors working within your area. All members offer two types of survey - the Homebuyer’s Report and the Building Survey.
The Building Survey is by far the most comprehensive and technical and is designed for older properties and unconventional structures. They will offer a detailed assessment and this information could prove vital. Certainly if the building you intend to purchase has been abandoned for a number of years, there may well be faults that might otherwise go undetected.
Generally, it would be unthinkable to make a conversion or restoration without respecting the building’s original character. One wonders why people covet old churches or chapels, only to transform their interiors into a series of cramped box rooms. Last year I witnessed first-hand one such conversion and needless to say the results were disastrous. Surely the idea of living in a former church is to enjoy and take advantage of that feeling of space.
Barns, too, should be treated with sensitivity. They were built with large open interiors and excessive partitioning will negate their original charm. Most were made from wood or stone and built without windows. Whilst light is obviously necessary, it’s worth remembering that including too many new windows can destroy the whole effect from the outside. A medieval structure sprouting television aerials, roof lights and vast picture windows loses its originality very suddenly. Getting a conversion wrong can make a wonderful old building look like it belongs in suburbia, rendering the whole restoration process somewhat pointless.
An element of lateral thinking is essential, so always try to visualise the building from all angles, in all kinds of weather, in every kind of light. Once you’ve exhausted all your ideas, contact an architect and share them with him/her. Although they can be costly, their ability to pre-empt problems that you might have overlooked could save you money later. Additionally, they will have the knowledge and experience to help you visualise an old building functioning in a new way.
Developers have targeted redundant churches, like they have old schools, for a number of years. They certainly make unique homes or even apartments, but as I have already stressed, a botched job can result in something unattractive. A church conversion I visited last year was truly awful. The developer had been greedy and fitted too many small apartments into the existing space. To make matters worse, a number of fake features had been added, subsequently ruining the integrity and scale of the original building.
The best church conversions retain their architectural qualities and should enhance that feeling of space, light and period character. High-quality finishes to the interior are important and skimping will only mean devaluation later. Solid oak floors, limestone walls, granite worktops and high-tech wiring not only add real quality to the finished product, but they can also blend in effortlessly with the original characteristics of the place.
Railway arches are also proving to be romantic places in which to live and work. London has seen a number of these conversions recently. Long gone is the image of a leaky, back street lock-up for car mechanics; as land space gets tighter in the capital, so these old Victorian constructions get snapped up more quickly.
At present only a small percentage of railway arches become homes. Mostly they are being converted into B1 office space. However, a number have been bought by the leisure industry and are now functioning as gyms and nightclubs.
At Hartland Road in Camden Town, the derelict arches were a regular haven for vandals and drug abusers, but since their recent refurbishment they have housed a collection of thriving businesses. In other areas, arches have been incorporated into self-contained business estates.
In London I’m witnessing first hand the regeneration of these brownfield sites. Similar opportunities are on the increase in other parts of the UK and there’s a good chance that local councils will offer grants to those wishing to get involved in the process of regenerating property.
Victorian and Edwardian village schools can also make excellent homes, although one large assembly hall and lots of smaller classrooms will not suit all tastes. Research has shown that they tend to attract musicians, writers and artists and some of the more successful developments have been described as ‘unique’ conversions. Although they may not be as sought-after as churches, they can be bought cheaply and, besides attracting working communities, they can function equally well as letting space. It’s worth remembering that many schools will also have a playground and very occasionally a field. With planning permission, this space could be used for additional housing, so enabling you to squeeze extra value from your purchase.
A development group tackling a major project like a school or a large church would in most circumstances have the funds and the financial clout to get the necessary loan requirements. Many private individuals abandon any hope of purchasing an old oast house, windmill or railway carriage because they believe they can’t get a mortgage or a loan. Some mortgage brokers are reluctant to lend against such properties because their primary concern is with the building’s resale value. If a buyer cannot make the mortgage repayments, they will want to be sure they can sell the property with ease and regain the outstanding mortgage amount.
As I have discussed, it is vital to get a full report from the surveyor. The lender will also send their own surveyor to view and it is their decision that ultimately influences whether the deal goes ahead. Sometimes, if a property needs what is considered to be an unreasonable amount of repair work, or if the building is made from unconventional materials, lenders will reject the application.
However, there are lenders who specifically look for properties that have been discarded. The Ecology Building Society (ecology. co.uk) is one such lender. Their objective stems from an ecological viewpoint, with the aim of retaining existing buildings in order to avoid building new ones. Besides ensuring that the borrower has a sufficient income to cover the repayments, the only firm criterion is that the local planning department has granted permission for conversion to residential use.
HSBC bank also takes a positive view towards unusual residential projects and looks at each case individually. If they think there is a reasonable chance that another buyer can be found, in the event that repayments can’t be met, they will lend the money.
Other lenders who have adopted a similar attitude include Cheltenham and Gloucester, Bristol & West and Santander.
Auction houses always present the buyer with incredible diversity and often the more peculiar the property, the cheaper it will be; most people opt for mainstream. When you’re buying, just be careful not to take on board anything you can’t imagine handling. As long as you are aware of the pitfalls, the rewards can be amazing.