Miles Shipside, of property sales website Rightmove, agrees. “We’ll see larger
falls in weaker markets due to oversupply and forced sales,” he says. “But
pockets where demand remains credit crunch-resistant and supply is low will
see prices underpinned, somewhat immune to falls.”
The Hamptons International agency believes central London prices will rise by
five per cent this year, bolstered by £7 billion of City bonuses, much of
which will go into bricks and mortar.
Meanwhile, many estate agents and developers in other parts of the country
have reduced current asking prices, presenting would-be buyers with tempting
bargains. But whether you move or not, there are still ways to make property
a nice little earner.
Here are our top 20 ideas – some entail canny use of your own house, while
others are pure investments involving a selection of homes or land to buy
and develop.
1 Buy to let Carefully choose where and what to buy. Most provincial
city centres have an oversupply of flats, so experts say the best returns
come from letting three- and four-bedroom houses to professional families.
Some lettings agents report 20 per cent rent rises in 2010, but do not
expect much capital appreciation until 2012 or later. For data on the best
locations visit www.rics.org and www.arla.co.uk.
2 Nab a bargain If you’re buying, try to find out why sellers sell.
Talk to neighbours, ask in the pub. If vendors are divorcing or must move
quickly to get into a school catchment area, they will compromise on price.
If the house has been on sale for months or recently switched estate agent,
go in with a lower offer.
3 Let out your driveway or garage The sums are small but could add up
to thousands of pounds a year. Advertise through agents such as www.parklet.co.uk,
www.parkingspacerentals.co.uk
or www.parkatmyhouse.com.
Fees are highest near airports and stations.
4 Buy a show home The flats and houses used by developers to
show off their schemes are usually built before any others, are in easily
accessible plots and are sold with good quality fixtures and fittings. Most
developers will take offers early on, and as they have a level of wear and
tear they will be reduced in price. The downside is that buyers may have to
wait a year to move in.
5 Be like Sarah Beeny If you buy a wreck at auction and then
renovate as economically as possible, you could make a serious profit.
Beeny’s Restoration Nightmare on Channel 4 chronicled the work of Sarah and
her husband, Graham Swift, to renovate Rise Hall, a 97-room decaying mansion
in East Yorkshire. She has not sold it, but lets it out for weddings and
photoshoots, and as a film location for up to a cool £7,000 a time.
6 Buy a holiday home to rent out Invest where prices are unlikely to
fall and where there is year-round renting. In Britain, try the Lake
District or the Scottish Highlands, which have big winter walking markets in
addition to summer tourism. Overseas, avoid Spain (prices may fall further
and it has a huge oversupply of rental property) but try family-friendly
Florida or ever-popular France. Market your own home or use agents such as www.holidaylettings.co.uk
or www.english-country-cottages.co.uk.
7 Buy a cheap house and convert to student lets Check where colleges
have too little campus accommodation, but growing student rolls. Buy a small
house and convert reception rooms to bedrooms. Register with student housing
offices, so you are approved and new students know of your property. Knight
Frank says student rents outside London rose 4.1 per cent last year; www.accommodationforstudents.com
shows typical student homes and likely income for your property.
8 Let out your home to event organisers If you live near Glastonbury,
Henley, Silverstone or Wimbledon, you could cash in and rent out to event
organisers who prefer several weeks of home comfort to living in anonymous
hotel rooms. Look at sites such as www.eventfulstays.com
and www.wimbledontennislettings.co.uk.
9 Self-build This is the hardest way to make money, but when you finish
a house it gains about 20 per cent on its build costs, so you could make
£100,000 on a big project. Start by ensuring you can get a mortgage, then
find a plot. Visit www.building-plot.org.uk
or www.buildstore.co.uk to
work out what skills you must buy in and what you must learn yourself.
10 Extend a short lease Central London estates such as the Portman,
Cadogan and Grosvenor have apartments with leases as short as 15 years. Buy
one, live there for six months, negotiate a lease extension or buy the
freehold, then sell it on. The combined costs are usually well under the
price of a similar property with a 99- or 125-year lease. Find details on www.tellerman.com
and www.landlordzone.com.
11 Separate your house into apartments If you do not require the
space, split your house into two, three or more flats and let or sell those
you do not use. Estate agents calculate that two-bedroom apartments in
southern England are worth 125 per cent of the price of the “unified” house.
So if your house is worth £400,000, the two flats would bag you £500,000,
but you must deduct the price of the conversion.
12 ‘Fractionalise’ an overseas holiday home Divide
ownership into quarters (three months’ usage) or 1/13ths (four weeks each)
and sell most of these shares to co-owners. Set up a management firm to
agree service charges and advertise for holidaymakers wanting to rent for a
week or fortnight at a time. This idea works best if your home is in a sunny
spot with year-round rental demand. The website www.thefractionaltimes.com
shows you how it works.
13 Filming Get your home into the movies, or at least in a television
commercial, and the money rolls in. Fees range from £350 daily for a
low-budget show to £10,000 if Harry Potter uses your living-room. Prepare
for large-scale disruption, though. Details from www.film-locations.co.uk or www.locationworks.com.
14 Sell, rent, then buy at auction It’s a brave way of moving up
the housing ladder at the least cost. Auctions are good for finding unusual
properties that need work, so if your calculations show the combined
purchase price and renovation costs are less than buying a ready-to-live-in
home, you could be quids in. But auctions require discipline and cool nerves
to ensure you do not bid beyond your budget. One of the largest auction
databases is on www.eigroup.co.uk.
15 Extend your house The single most effective way of adding
value is by creating a bedroom, but be careful you do not spend more than
you could ever recoup on resale. Loft conversions typically cost up to
£45,000; side or rear extensions are £25,000; a basement extension could
cost £50,000 or far more. Revamped kitchens and bathrooms are much cheaper
but add only minimal value. Visit www.planningportal.gov.uk
for details of building regulations and planning consent.
16 Get a bargain new home Newbuild homes are low-maintenance but
typically carry a premium. However, flats and houses at the very end of a
development are often sold off cheaply by developers keen to avoid security
and advertising costs for just one or two homes. Offers are listed on www.smartnewhomes.com,
but you must still barter – developers always play hard-to-get.
17 Public sector leasing If your home is empty for a fixed
period of up to five years, it could be let to a housing association,
council or third-party agency to sublet to social-housing tenants. You get
guaranteed rent even between tenancies, secure management of the property
and a pledge that it is reinstated to its original condition upon return.
But housing benefit caps mean this may be less profitable than private
renting in some areas. A typical scheme is run by www.hsd-london.co.uk.
18 Buy farmland It’s the most rewarding property investment right now.
Knight Frank research shows it has risen in value by more than 150 per cent
since 2000, far more than even prime central London houses. Past performance
is no guarantee of future success, but demand is reported to be very strong
from buyers in Denmark and Ireland. See www.knightfrank.co.uk
19 Win planning consent before you sell Is this adding value or
a sleight of hand? Homeowners who win planning consent for an extension but
sell without construction do not pay for the work but highlight the
property’s potential. As a result, the asking price rises by 10 per cent of
the extra value the extension would give when built.
20 Use your home as a b b If your house is large enough,
can be remodelled to have en suites and a communal sitting area, and is
located in a tourist region, this could be a big money earner. Your property
must pass health and safety tests, and win Tourist Board accreditation, too,
but there are classes and guidelines on www.bedandbreakfastacademy.co.uk
- Graham Norwood’s book, Profiting From Property in a Recession, is published
by Estates Gazette books, £19.99, and is available on www.amazon.co.uk
January Sales
Nash Court, Kent
This beautiful 17-bedroom country house could be an upmarket b b or boutique
hotel, for an ambitious owner who can cope with 32 acres. (Strutt and
Parker, 01227 451123; www.struttandparker.com)
Rectory Farmhouse, Shropshire
With a £100,000 price cut this is another possible bb, with four bedrooms, a
garage, summer house and 4.25 acres of gardens. (Strutt Parker, 01584
873711; www.struttandparker.com)
Cleeve, Somerset
This five-bedroom house has a separate cottage, stables and outbuildings,
formal garden plus eight acres of land. (Savills, 0117 933 5803; www.savills.com)
Llechwedd Melyn Farm, Aberystwyth
A four-bedroom farmhouse with views towards the Rheidol Valley, close to
Aberystwyth. There are 15 acres of land. (John Francis, 01970 630721; www.johnfrancis.co.uk)
Kingston upon Thames, Surrey
Reduced from £10m to £8m, this 11,000sq ft home has six bedrooms, staff
accommodation and a pretty garden. It also comes with a half share in an
Astroturf mini-football pitch. (Hamptons, 020 8946 0081; www.hamptons.co.uk)