Let bargain hunters beware

Savills's auction next week shows the benefits (and dangers) of buying a wreck.
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The Independent Online

Obtaining planning permission for a house can add hundreds of thousands of pounds to the value of a property, even before construction starts.

Obtaining planning permission for a house can add hundreds of thousands of pounds to the value of a property, even before construction starts.

The amounts that can be made are illustrated vividly by a number of contrasting lots in Savills's auction sale next Tuesday, 17 May.

Some sites have full planning permission for stylish new homes, complete with architects' drawings. Others are unkempt, unloved properties with no official permission to do anything.

And the risk is reflected in the prices they are expected to fetch, according to Chris Coleman-Smith, the man with the gavel.

"A property with planning permission will sell at a premium, and that varies with the risk involved," he says.

Lot 104 in the sale is a very high-risk property indeed. It is a few tottering stone walls that used to be Primrose Cottage near St Austell, Cornwall, in 1.6 acres of overgrown land.

There is no planning permission for restoration or rebuilding, which may not be possible at all. And a couple of shacks have been built by a guy who claims to own part of the site.

There is a lot of potential, however. The site is incredibly remote and very attractive, and if the planners can be persuaded to allow a larger house it could be a very profitable project.

But the risk is reflected in the guide price of just £20,000. Unfortunately, this sort of price attracts bargain hunters who bid enthusiastically but repent when they have looked properly at their "steal".

When Primrose Cottage came to auction last year, one such optimist outbid the opposition on a whim, but failed to complete the sale once the difficulties had been made clear.Now it is on the block again, and Coleman-Smith believes it will sell to a local who is prepared to put in the time and trouble needed to restore the cottage.

In total contrast, the old chapel in Great Massingham has full planning permission for conversion into a stylish home.

The former Methodist chapel was used for many years by a coal merchant to store his lorries, and the renovation will remove one of the few blots on the streetscape of one of the prettiest villages in Norfolk.

The owner, international figure-skating coach Peter Weston, bought it as a wreck and has spent the last three years getting planning permission and building-regulations approval for the conversion.

"The plan was to live in it ourselves but our circumstances have changed," he says. "We bought a 17th-century farmhouse close by and are doing that up, and we couldn't afford to do both."

Weston has devoted considerable time and thought to the chapel project that the buyer will benefit from. The main feature of the conversion will be a big roof terrace, compensating for the very small garden.

"We spent a lot of time seeing how the sun works, so the roof terrace will have a lot of morning sun and the full evening sun," he explains. The terrace also exploits the charming views towards the church.

"The design has a large sitting room on the ground floor that will get lots of light and overlook the pond," Weston says. The house will have three bedrooms, a mezzanine study area and a parking space - something of a rarity in close-packed Norfolk villages.

Without planning permission, the chapel would probably fetch about £80,000. As it is, the guide price is £115,000 and it will probably sell for at least £130,000. A very satisfactory return for the effort.

Lot 31, a plot of land in Westfields Road, Acton, is a middling-risk buy. It has no planning permission, but there used to be a bungalow there and it is in a residential area overlooking playing fields, so getting the planning department to allow a single dwelling on the site should not be difficult. Even so, if the property goes at the guide price of £145,000, it should be a bargain.

The auction takes place at the Café Royal, 68 Regent Street, London W1. For details ring 020-7824 9091.

fact file

Making plans: "A property with planning permission will sell at a premium," says Chris Coleman-Smith from Savills.

When and where:

Savills's auction sale is next Tuesday, May 17 at the Cafe Royal, Regent Street. For details ring 020 7824 9091.

One to watch: lot 104, which is currently derelict stone walls in Cornwall on an incredibly remote and attractive site, with a guide price of £20,000. Remember tha t planning permission may not be granted