Episode Information Shere & Bethnal Green

Date Published:

23/06/2009

It’s late 2007, and the once-buoyant housing market is starting to slow. Even so, data consultant Chris and his wife Jules, a bank manager, hope property development could help provide a pension. They think they’ve found an answer with a two bedroom, 400 year old cottage in Shere, Surrey.

There are all sorts of problems with the house. Not only is it falling apart at the seams, it’s also absolutely tiny. But with no loft conversion possible, and planning for an extension prohibited, there’s only one option left. They've got to dig down and excavate the cellar.

That’s scary stuff because when you start digging down, flooding, undermining the foundations and the lack of natural light are all expensive problems that can easily come your way. What's more, Chris and Jules have no experience with developing property, let alone basement conversions.

The Budget

They bought the house for £346,000. There’s a £115,000 budget, which seems very small for such an undertaking. The target sale of £550,000 would break the ceiling price for similar properties in the area. On these numbers they’d make a good £89,000 profit. Even without a downturn in the market, these margins are dangerously tight. An unrealistic 8-12 week schedule won't help matters either.

It’s not just their schedule and resale that are ambitious. This is one big development. The cottage is set out over four storeys. On the top floor there are two bedrooms, with another bedroom and bathroom below. Underneath there’s an unusual arrangement of a ground floor living area and a lower ground floor kitchen and WC, which provides access to the basement underground. Chris and Jules rightly want to knock down the internal walls to open up the small lounge, and then turn the lower ground floor into an appealing garden room. But it’s the dark basement below where the plans go awry. The idea is to excavate down to get enough head height to put a new kitchen-diner in, but there won’t be a single window to the outside world.

Fortunately, Sarah convinces Chris and Jules to move the WC to the rear of the new kitchen and knock through the wall to the basement area, bringing in as much daylight as possible.

Early on in the build, all is not well. Builder Tony is working on the basement excavation, which will make or break this development. Unfortunately the foundations of this 400 year old cottage are almost non-existent, meaning lots of expensive underpinning is required to make the house safe. Despite this unforeseen expense, Chris and Jules go ahead with buying a bespoke luxury kitchen. Both Tony and Sarah think they should save money with an off-the-shelf units, but there's no persuading these developers and they press ahead with their pricey custom kitchen.

As the build progresses, this professional couple are unable to take any time off work, so they're only able to visit the site at weekends when Tony and his team of builders aren't there. With little direction, Tony has no choice other than to press on, making decisions about somebody else's house because Chris and Jules simply aren't available.

This almost leads to disaster. When Sarah, Chris and Jules visit the site it's obvious that the layout isn't making the most of the structural work they did to bring sunlight into the subterranean kitchen. Tony has been working without the guidance expected on a project like this, and inevitably has to undo some of his work. This adds both time and cost to the already tight schedule and budget.

Already over their 12 week deadline, the last major job in this house is the family bathroom. Unfortunately, Tony didn't realise until the last minute that the couple plan to install a cast iron rolltop bath. When filled with water and a bather, it will weigh in excess of a quarter of a tonne. This means the floor will have to be reinforced - another unexpected expense which adds more time on to the build.

The low ceilings of this period property, coupled with the high level of the rolltop bath, mean that even 5' 5" Sarah struggles to fit underneath an undeniably swish shower head. Will this deter potential buyers?

Shower situation aside, it's hard to find fault with the exquisite finish on this project. The budget and schedule might be out of the window, but the new living room, centrepiece kitchen complete with natural light, and simple bedrooms should maximise value. But will it be enough?

Final Figures

Having originally budgeted £115,000, Chris and Jules spent £141,000 renovating their 400 year old house. Remember that they paid £346,000 for the house, so they need a hefty sale price of £487,000 just to break even. Agents value the property at £495,000 and £500,000, so it will be touch and go.

Undeterred, Chris and Jules market their property for £550,000, a cool £50,000 above the half a million pound stamp duty threshold. After six months on the market, and with no buyer in sight, they eventually decide to let it out for £1,600 a month.