At Home Magazine

Buying, and then renovating, a run down property to sell on afterwards is one way to make money – but for all the big profits you hear about, remember that success needs thorough planning...

The way to make a profit out of property renovation or development is by being steely-eyed when it comes to controlling your money.

It’s important to understand that renovation projects are part of a business venture as a whole – not to be undertaken a whim.

There is no need for grand statements unless the end result gets you a higher profit on your renovated property. However, it is possible to over-economise to the detriment of the finished project so make sure you know your budget inside out.

The right property

To start with, you need to bag the ideal house to renovate. Buying a house that is in less than perfect condition gives you something to work with and is certainly a way to create a modern, attractive and saleable home without forking out to remove previous home ‘improvements’, which can be costly.

But taking on a derelict or even a tatty property can be a real challenge, even for the hardened DIY enthusiasts. In today’s market, it’s rare to find a cheap, run-down property with just superficial or cosmetic problems. Often there is something more serious that needs to be put right. This does not mean that less than perfect properties are off limits, but it is vital to enter into any deal with both eyes open – get a survey done, check it out and know exactly how much it will cost to put it right.

Managing your budget

Many fingers have been burned over budgets and the way to avoid this is by being realistic to the point of negativity about what your development will cost. This way there are no surprises.

A 20% safety net is a good guide, but some projects can easily double in cost. Watch out for ‘project creep’, where the cost goes up and up because you, the builder or the architect are adding more work. Make sure ome money, at least, is to hand as cash, as there will always be unexpected and urgent bills to pay.

Fearless honesty – as well as enthusiasm – is what you’ll need right from the word go. Take apart your day-to-day finances as well as those you have set aside for your development project, and immediately try to trim away any unnecessary expenses. Save money now as it will be needed later on. Unless you truly love property, enjoy the work, and like the people you’ll be working with then it can be exactly like any other job – a chore.

Time is of the essence

There are no short cuts when developing or renovating a property. There’s always an order that has to be followed. Permissions have to be sought, deliveries and workmen must be scheduled and then rescheduled, measurements need to be taken accurately and budgets adhered to rigidly. It’s quite a challenge to stay on top.

Let any of this slip and you might end up with a delay – and time costs money, possibly adding serious costs to the project. Human error is a common problem in property development projects, and regardless of whose fault it is, you’ll pay the price.

Employing tradesmen

Decide exactly what work you want to undertake before asking

for any quotations. Write a clear specification – it need not be technical, but it should detail the work you want to carry out. Reputable builders will always want to do their best for you from the start. The JCT is an independent body that has produced a standard contract for use between you and the builder. This is a robust legal document that avoids technical and legal jargon, making it easy to understand and stick to.

It confirms the precise arrangements for the work to be done, including the price, the payment terms, working hours, insurance and guarantees plus how to resolve disputes, should they arise.

It also deals with how to make changes to the work

in progress and how to manage a builder who wants to extend the time taken for completing the work. Remember that your builder should be someone you feel completely comfortable with and you should feel that you are able to communicate well together. Try and build up a positive relationship with him.

Making a quick buck

One of the easiest ways to make a little money out of property investment is to buy a new apartment off-plan in what you believe will be a sought-after development. Off-plan purchases are how big developers maintain their cash flow and they will often offer discounts to investors in the early planning phases of a new development.

Buying off-plan means you will be getting a property at the cheapest price – assuming it is a good one – will offer. Subsequent phases will almost certainly be more expensive, and even modest appreciation should ensure you a few thousand pounds of profit when it comes to sell.

People power

A project manager will liase with the builder and ensure work is carried out to a specification. You could manage your own project or employ an independent advisor. There is a Joint Contract Tribunal (JCT) contract you can use to formalise your relationship with your project manager or building consultant.

Always get quotes well in advance, from carpets to carpenters. That way you can calculate all your expenditure, but never expect the scheduled timescales to be met.

Know your market

Start by comparing like with like. Research should include finding out what the price difference between a well-appointed house and one that needs a lot of work in the same street is – as a rough guide.

The savings might not be that great so ask local estate agents for an indication of how much the house would be worth once it is done up, then reduce that figure by 10% to allow for the agent’s enthusiasm, and add at least 10% to the cost of any work you plan to do. This will give you a more realistic idea of the figures.

If there is still a positive difference, the house is worth considering. The maths are straightforward. A house that costs £180,000 in an area where they regularly sell for £200,000 won’t be worth touching if it is going to cost £25,000 to put it right and bring it up to scratch. Use your head and only go for a property where you’ll get a good return – otherwise it just isn’t worth your time.

Survey – or be sorry!

Never be afraid to consult the experts, because a job done well is a lot cheaper than a bodged job that has to be put right. You might start with a good chartered surveyor. Ask for recommendations to find someone who is thorough and knows about refurbishment.

A surveyor might be willing to give a property a quick check for a relatively modest fee or even visit several properties on a shortlist for a day’s fees.

Once you’ve decided to take the plunge, get a full independent structural survey. A bank or building society valuation on its own will be next to useless for this type of property.

If it’s a large project you’ll need more help – maybe even an architect. Their fees come to around 15% of the total cost of the work, but often an architect can save more than this by better use of space and materials. Employing an architect will also help to keep the project on time and budget.

If the property needs structural work, the architect might recommend a structural engineer’s services too. Arrange for builders and plumbers to quote for the job before you make an offer. Then you have an idea of how much the work will cost, and you can use this in your negotiations.

If you plan conversion work, such as changing a commercial building to properties for residential use, consult the local planners. Most planning departments will give basic advice by phone or email, and this can save serious headaches further down the line.

Money matters

Talk to lenders at an early stage about the work. Most banks and building societies will cap loans for less than perfect properties, until the work is carried out. This is known as a retention and will cause cash flow problems unless you budget for it in advance.

For large-scale projects, a phased release mortgage might be the answer. In these cases the lender makes staggered payments as jobs are done, such as roofing or plastering.

Few people have the financial security to be able to simply throw in their day job, buy their first investment property and get on with improving it. The reality is a difficult and precarious task made up of balancing known demands of an old way of life and new and unexpected working demands.

Most first-time developers will have to endure the challenges of their day job as well as lunchtimes, evenings and weekends of trying to co-ordinate what might be a tricky process. Employing a project manager can deflect an awful lot of the stress of a project, but at the same time is guaranteed to cost around 10% of your budget. It’s important to weigh up the pros and cons and decide what works best for you as you start out in the property developing business.

If you decide to project manage yourself, you need to know what you are letting yourself in for. Much of your time will be spent on site or on the phone and you’ll have to make quick decisions and cope calmly with issues as they arise.

Should you reach the stage where you feel confident that this is the future for you, time will be spent planning for that – and finding the next project.

As a full time developer you will need to source and then nurture professional relationships with a wide variety of people, among them estate agents, an independent mortgage broker, a solicitor, surveyor, accountant, builders, plumbers, electricians, tenants, letting agents, and perhaps a project manager and architect. You will also need to form constructive relationships with neighbours who might be affected by your development.

While properties may throw up unexpected and unwelcome surprises, it is almost always people who will surprise the most. Suppliers may fail to deliver on time, tradesmen may leave you in the lurch, and buyers mayl back out at the last minute. A successful developer will have a contingency plan.

Have you got what it takes to be a property developer?

Money If juggling your own money is a monthly nightmare then full-time property development may not be for you. Multiple on-going projects will require separate budgets. Becoming self-employed will also mean the annual chore that is the self-assessment tax form, as well as sorting out your own National Insurance payments, health insurance and pension plan.

Satisfaction The idea is attractive and developing property brings out the show-off in some people. But what matters is your livelihood and therefore the end profit. To realise that crucial 20% profit margin you need to satisfy your target buyer’s expectations – not your own peccadilloes.

Never plump for the first mortgage that you’re offered. Research the available products yourself, but then go through your finances and your business plan with an independent financial advisor (IFA) whose services have been recommended to you. Your IFA should then be able to suggest a range of mortgages at the best possible rates, and also identify a figure that you can realistically spend on a property without you getting into serious trouble. Remember you will also have to budget for the new Home Information Packs (HIPS) from June 1 2007.

Stress However experienced you are, you can still be caught unawares by an unforeseen or overlooked circumstance.

To overcome this make sure you have allowed for every potential disaster in the initial business plan – and that includes trying to read the movement of the housing market where your project is happening.

Research For the first-timer premium properties will almost certainly be beyond your budget so look for something unusual within a desirable area that you could possibly develop as a marketable home. Better still, work out the down-at-heel places that will become the next big thing.

Locations next to property boom hotspots often benefit from reflected glory. It’s always better to try and redevelop the worst house on the best street rather than the other way round. Have in mind at all times the kind of buyer you will be targeting the refurbished property at, and the highest price that a property of that type will fetch locally.

Timing Look before you leap and trust your instincts. Keep that profit margin to the forefront of your thinking. If a property in your target has been on the market for a long time then make a low offer. The vendor may be grateful of a lifeline. Once you have bought your development property it is vital to set a budget for improvements and stick to it. Your profit margin relies on you doing the minimum that you can get away with to attract your target buyer.

Priorities There are some jobs that have to be done, come what may. Make sure they are the ones at the top of your list – things like structural work, roof repairs and rewiring are unavoidable. Potential buyers share the same characteristics – they don’t like downstairs bathrooms and bad kitchen layouts. These are the key areas that need to be resolved.

Avoid costly mistakes Managing the project yourself will save money but may ultimately prove more expensive if mistakes are made, or decisions delayed. When employing builders or tradesmen, always seek out recommendations and at least three quotes. Doing some of the work yourself will obviously save money – but make sure you are up to it and can also afford the time.

Recycling The kitchen and bathroom must look efficient, smart and clean, but do you really need to replace all the fixtures and fittings? Dressing up old kitchen unit carcasses with new doors and handles, and fitting attractive taps to existing baths and wash basins can make a massive positive impact. What’s more, these improvements needn’t cost a fortune. Check out the property’s existing features – they may be battered but they might also be redeemable. Renovation is cheaper than replacement. Keep it simple and don’t be tempted to go over your budget.

Supplies If the kitchen and bathroom are going to need replacing then consider sourcing replacements from further afield. DIY products can be bought for considerably lower prices on the continent. At the same time keep your eyes peeled for period and antique finds and visit salvage yards.

Selling up Selling the finished house needs to be considered right from the commencement of the project. And the longer it takes to sell the less you’ll profit. You can sell it yourself but an estate agent will have the expertise and the potential clients. He will, of course, charge a fee but it might well be worth it.

Tax The higher the purchase price of your renovation project, the more you will pay in stamp duty. It rises fast, so for a house costing £255,000 you will pay £5,200 in tax!

Stamp Duty is only paid by the purchaser of a property, so when you sell on your renovation project you will not have to pay the tax, although you will potentially be liable for capital gains tax on any profit if the property is not your main residence.

One way the Stamp Duty burden can be reduced is by purchasing a property in an area designated as disadvantaged by the Government. In these areas, the 1% Stamp Duty threshold is £150,000, and the rest of the thresholds remain the same.

Property is still the most reliable investment you can make and that is why so many people renovate, self-build and buy and sell. However, some people throw themselves into the project without planning it first – and that is when disaster strikes.

Kirstie Allsopp describes her favourite interior design features and gives her advice on creating enviable home style

You own a great house and want to make a big impression for visitors. As you know, the right interior design can have a dramatic effect on the wow factor of your property. But before you go wild with grandiose style statements, perhaps its best to start with a clean slate. Then, and only then, can quality interior design work to its full effect.

Blitz it
To start with, work through the house room by room – and be ruthless! Throw away or recycle anything that’s broken because – let’s face it – you’ll never get around to mending it. Weed out the stuff you no longer like or need. Paring down your possessions to a core collection of must-haves is a cleansing process and one that can transform your home.

Once your home is an uncluttered haven, it becomes far easier to sort out all those other little jobs you’ve been meaning to do: fixing the door knob; re-upholstering the sofa; and putting up those pictures that have been scattered all around the house for weeks – if not months or years!

Revamping your home costs little and can have an enormous impact: simply by sorting out and storing your possessions effectively, your living space can take on a new lease of life.

Once it’s done, add the odd finishing touch to bring it bang up to date: re-cover your chair seats in the latest fabric; give the walls or the furniture a fresh coat of paint; or add a few fashionable accessories such as cushions, throws or a different lampshade. To avoid slipping back into bad ways remember that if you buy anything new, see if there is something you can throw away, recycle or give to charity at the same time.

Cool kitchens
Of course, one of the main areas of the house is the kitchen – increasingly the focal point of the house. Money spent here can be a good investment, so long as you think about what you are doing. It is possible to spend too much money.

‘In the kitchen new doors and a new counter top and in the bathroom just retiling and replacing the suite, rather than shifting around bath or basin, is the cheapest and sometimes most effective option,’ explains Kirstie.

‘Don’t be afraid of so-called “cheap kitchens”. Yes, today’s families are so busy that mealtimes are often the only family time. My kitchen came from Ikea and initially cost £700. I’ve since added some additional units from the same range bringing the total to just over £1,000.

‘What I did do, however, was pay a proper fitter to put it in place. That was the key to making it work.

‘You can spend £5,000 on a kitchen and it might add £10,000 to the value of the house but it is also possible to splash out £10,000 and not recoup the money. There is a certain point at which interior designs don’t continue to add value to the property.

‘On the whole, it is the kitchen and bathroom that people are afraid of doing up themselves. It should be possible to do both kitchen and bathroom for £5,000,’ assures Kirstie.

And as for mixing styles between a more traditional look and fully-functioning modern gadgetry – well, Kirstie reckons you can mix and match to suit all of your needs.

‘There are a number of kitchen designs which happily combine both styles,’ she says. ‘I’ve seen Belfast Sinks with stainless steel dishwashers, glass splash backs with wooden surfaces. There is no need to be 100% one way or the other.’

So, what’s Kirstie’s top tip?
‘Compromise is the key! Again, cheap does not mean nasty. Calculate what you can afford and go out and find the kitchen that fits your budget.

There is one out there. ‘I’m also a great fan of putting as much as possible in the utility room – leaving the kitchen as a cooking and entertaining space, not a glorified laundry room.

‘Design your kitchen so that all you have to incorporate by way of appliances is a cooker, sink and small fridge. Put the deep freeze, washer, dryer and the majority of the storage for cleaning products in the laundry room cupboards – that’s if you’ve got this utility space.

‘That way you won’t lose the dream kitchen and the laundry room is really an area for keeping things clean Creating space

Now that reshaping of homes is commonplace, the same question often arises: do you knock through the kitchen into the underused dining room and make one big area or do you keep them separate?

If you’re selling the house, Kirstie advocates taking advice. ‘Talk to a number of local estate agents to find out if buyers in your area and at your price range set any store by separate dining areas.

‘I personally would always prefer a bigger family kitchen to two separate smaller rooms.’

Kirstie does suggest an alternative solution to the problem:

‘Perhaps you could put in double-doors that were open the majority of the time but that would ensure that a buyer could have separate eating space if he wanted?

‘When doing work to any property you must research properly in advance and not assume that all buyers will want what you want,’ advises Kirstie.

Traditional versus trendy
‘I tend to be a bit old-fashioned when it comes to interior design,’ says Kirstie. ‘In my own home I’ve got wallpaper and there are some fantastic designs available. I like wallpaper from Coles.

‘The thing about wallpaper is that it is so much more forgiving than paint. You can knock and bump into it without leaving marks and it wears well. I find it very comforting.’

Home decoration, like clothing, goes through fads and trends and if Kirstie is right, the days of stripped wooden floors might be numbered.

‘Recently I changed the wooden floor I had upstairs in the bedroom for a carpet and it is so much more comfortable,’ she reveals. ‘I think wood and tiles are fine downstairs but you want warmth and comfort in the sleeping quarters of the house.

‘My real bug bear is houses where a room has walls painted in different colours. The thing about paint is that if you like a colour you should go for the lightest shade available. That’s because the walls reflect off each other and even a light colour becomes richer.

‘I also like fabrics and when you see some of those being used 100 years ago you can only marvel. They are beautiful, rich textured fabrics and are quite magnificent. I really can’t see why anyone would want those wooden slated blinds on a window when they can have proper curtains.’

According to Kirstie, the art of interior decoration is putting your stamp on a house without cluttering it and going over the top. You can make a statement without going over the top – it’s all about having a light touch.

Kirstie’s style prediction
The next big trend is for built-in or banquette seating which means you get the maximum use out of every corner of your kitchen and could perhaps find a space for a small sofa or armchair. Kitchen sitting rooms are definitely the way forward. Cosy is a good watchword!

10 Tips for a tidy home

If you haven’t used or looked at anything for a year, get rid of it. Chuck out or recycle anything that’s broken. Don’t hang on to unwanted gifts – give them away to friends or charity shops. For easier recycling, buy bins that allow you to separate your rubbish. Go through your wardrobe regularly and give your clothes a sell-by date. If you still don’t wear something, give it away. Look after your possessions by keeping them dust-free, prominently displayed or properly stored. Invest in smart-looking storage so you can leave it on show. Store like with like so you can find things easily. In a small home, buy furniture that doubles up as storage. If you buy something new, get rid of something old.

Property expert, Phil Spencer, reveals the tricks of the trade when it comes to buying and selling your home...

As Phil Spencer will tell you, buying a home is one of the biggest investments of your life. Getting it right is about doing the research, spending lots of time going through everything with a fine-tooth comb and knowing what you want right now – and in the future also.

Phil advocates house buying as a move to be made as soon as you are in a financial position to make it. And once you’re on the housing ladder you can start moving up it – the tough part is getting on the first rung.

‘Buying a house is about taking on 25 years of debt. It might be tedious having to carry out extensive research to make sure you have all the information you need so you can make the best decisions, but I can’t emphasise enough how important this is. What’s more, you must tailor your research to match your needs – everyone’s criteria is different.

Buying a property is about what you want, what you need and what you can afford. There is a huge amount tied up – emotionally and aspirationally – in the properties people buy. There are lots of dreams attached to your purchase. Everybody thinks they know what they want but often, what they end up with is often quite different from that.

If you’ve seen a property you love, don’t let that cloud your ability to make a sensible and rational decision because if you do, you may well end up regretting your purchase and you certainly won’t feel at home in the house.’

Phil’s top tips for buying

In an ideal world the objective is to out perform the market, so how do you find a property that is likely to make you money?

‘Essentially, you need to buy a property you can improve in terms of layout and fittings, a property that you can extend, or one in an area that becomes more popular while you’re living there,’ explains Phil. ‘The best opportunities combine all these key elements. The well-worn mantra, “Location, Location, Location”, remains the unalterable truth. It is often the case that up-and-coming areas are adjacent to locations that are already popular. Most buyers will be prepared to compromise a little on where they live in order to buy a larger house – hence the ripple effect. Even in mature markets, you can still find a few postcodes that are surrounded by more expensive property.

‘If the architecture in these areas is strong, but the neighbourhood has historically been considered shabby or unfashionable, then the anomaly in values is likely to correct itself at some point,’ says Phil. ‘Today, Hackney, in East London, has become the Chelsea of the 1950s, with the largest concentration of creative people anywhere in Europe. The architecture is good, as is the transport and there’s even some green space.

‘Another buy-signal is Government spending. Cardiff is a recent example of an area where Government-incentivised investment has caused property prices to rise. Urban regeneration schemes, such as the one underway in Liverpool, will improve trade, travel, retail and housing. As it becomes an attractive place to live, demand, and prices, will rise. London’s Elephant and Castle is to have £1 billion spent on it, which will have an enormous effect in years to come.’ Phil also reckons patience is a virtue. ‘Take the London Docklands development of the 1980s,’ he says. ‘The area didn’t take off until the long-delayed transport links were established. Transport links are essential, so look for improvements to road or rail.

‘Other signs of a mini-boom include a small increase in the number of consumer-led businesses, such as gift shops or a smart café. Builders’ skips and scaffolding outside houses are also good signs, as is the proximity to good schools, advises Phil.

And, according to Phil, you’ve probably missed the boat if you see a surfeit of estate agencies, bars, bric-a-brac shops, neat lawns and Montessori nurseries. When it comes to specific properties, look for large plots and outbuildings that you could convert.

Properties that meet most of the above criteria are most likely to attract attention, and least likely to require lots of phone calls, ads and viewings, to sell.

‘Any property can be a good deal – if you buy at the right price,’ advises Phil.

Phil’s top tips for buying
‘The first step is to consider your target market. Who do you think might buy your property? Then try to tailor your space to appeal to the main group without alienating other groups that might also be interested.

‘If you feel a professional couple would be ideal occupants, then leave the second bedroom as a bedroom – rather than a study – and make a space for a work station elsewhere in the house.

‘Potential buyers need to imagine themselves living in your house, so get rid of ornaments and photos – especially posters in children’s bedrooms. Put things you don’t really use on a daily basis in the attic or into storage. Large pieces of furniture should also go into storage as this will make rooms feel much bigger. Clear away clutter in the hallway, hide all your products in the bathroom and clear the surfaces in the kitchen.

‘A fresh coat of neutral paint, new tiling or lino, and a couple of new kitchen doors can do wonders to smarten up a tired-looking property.

‘If you’d rather not re-decorate, it is still essential that the house is spotless. Getting industrial cleaners in to make your home sparkle is money well-spent. Have the carpets, sofa covers, oven and windows cleaned while you’re at it. Pay special attention to the kitchen and bathrooms, which need to be inviting and hygienic. Finally, the garden is now seen as an additional room, so be sure to make your garden feel like a great space for entertaining and relaxing.

‘Always try to get three agents to value your property. Don’t necessarily go for the one with the highest valuation, or the one that you may also buy through – this is an old trick used to win clients. Many agents will often try to tie you into a 12-week exclusive contract – negotiate the minimum

time possible, so that if you’re not happy with the service, you can change. It’s a good idea to instruct a solicitor to do your conveyancing early. Ask him to prepare a draft contract and apply for the title deeds, while you pull together all your own paperwork on the property.

‘Given estate agents’ fees, it’s cheaper to sell sole-agency rather than multi-agency, so I recommend staying with one agent for the first four weeks and giving them the best chance and motivation to sell your property fast.

‘Always have a board up, and tell your neighbours – word of mouth is a powerful tool. You never know who might live just around the corner, waiting for your house to come on the market.

‘The person who offers the highest price is not always the best choice. Listen to your agent’s advice on buyers and push your agent to find out as much about the buyers’ circumstances as possible.

‘How are they financing the purchase? Cash buyers are best, but if, like the majority, they are raising a mortgage ask to see

a mortgage “in principle” letter from their lender. Are they first-time buyers? If so, they will need some hand-holding by the agent and could protract conveyancing. Do they have a related transaction? If they have something to sell, then it should be under offer before you take your property off the market.

‘Your agent will be the middle man and should present every offer that is made. Make sure you insist that he has all the background information to hand on the potential buyer’s position and their ability to move quickly. Ask that offers be made in writing.

‘The longer it takes to reach the stage where you exchange contracts, the higher the chances of the deal falling apart.

‘Keep in weekly contact with your solicitor and agent to ensure that the channels of communication stay open. You need to be kept informed of where the conveyancing is at, and how your buyer is feeling about the progress.’

Money talks
‘There are thousands of mortgages available from different providers and it can be a bewildering task to find the right deal for you,’ admits Phil. ‘Start your search with your bank or building society. Then, widen it to include the Internet. You should also onsider a good independent financial adviser.

‘Read the small print in the details to see if there are penalties involved, should you be in a position to pay off your debt suddenly or want to switch providers. You want the mortgage money now – and probably as much as you can get – but think about how making the repayments will affect the way you live.

‘What you need now and what you’re going to need can be directly affected by the mortgage deal you take out. There are tempting offers that promise low rates, cash back and mortgage holidays, but are these facilities what you really need?

‘The fact of the matter is you don’t get something for nothing. The banks are businesses and they operate to satisfy the profit wishes of the shareholders. You should demand and expect good service – don’t allow lenders to baffle you with overcomplicated deals.’

The presenters of Location, Location, Location, Phil Spencer and Kirstie Allsopp, offer their views on the state of the housing market today and reveal their thoughts on the situation facing first-yime buyers...

What are your thoughts on the state of the housing market in 2007 in light of the interest rate rise in January and climbing inflation?

Phil: Prices can’t go up at the same time as interest rates. There are two opposing influences at work and they don’t go together. What I think is happening is this: the top of the market is very strong with lots of city money and international buyers. They are stretching the market from the top end. These buyers, however, are not so affected by interest rates – at least not in the same way as someone who has scrimped and saved for a mortgage of 95% on a £200,000 house. These are the people who need to sort out whether they can afford the debt in times of rising rates. The market will rise but it’s going to be an interesting year.

Kirstie: I don’t think we have a national housing market now. It’s very regional – for example in London. Of those properties selling for £5 million or more, 75% of buyers are from overseas. I recently heard about a £300,000 flat being bought – it was for the buyer’s staff. That was another home taken out of the reach of first-time buyers. Prices are high in particular areas and this then spreads outwards. A while ago, Notting Hill was a down-at-heel area, now it is ultra trendy. Neighbouring areas have come good and in turn their neighbouring areas will improve. Forest Gate, south of the river, is another place that is regenerating. The same is happening all around the country.

Is there anything to be done to help the first-time buyer?

Phil: Not really, because this state of affairs is a reflection of the times rather than the market. It was always difficult to get a foothold on the property ladder.
These days people want more flexibility of lifestyle and we are more open about becoming tenants. Maybe, years ago, there was a stigma attached to renting rather than paying a mortgage. As I see it, that has gone.

Kirstie: We need far more help from the Government, who should encourage home ownership from an early age. Money given by parents to their children for homes should be tax deductible and the mindset has to be that owning a home is a number one priority.

We could also help by rethinking our building programmes. Small, ten-house rural developments on the edges of villages at an affordable price would regenerate our villages. We also need to clear a lot of the red tape that holds people back.

More and more property purchases are in the buy-to-let sector. Does this worry you in terms of the supply of housing for future generations?

Phil: It’s a fact of life that’s governed by supply and demand. This sector has risen greatly. A few years ago, 9% of sales were to the buy-to-let market – today it is 11% and will continue to rise.

Of course, it’s worrying that there are places where the locals can’t buy – take the West Country as an example. It’s not great that the local shopkeeper can’t live near his shop because of second home-owners inflating the market.

Kirstie: People have to look at the best ways to invest for their futures and property is the answer in my opinion. I’ve looked at various pension schemes but, as soon as I become interested, along comes the Chancellor to raid it. You can’t stop people doing what is best for them – and buying-to-let is it.

Is Stamp Duty fair?

Phil: It isn’t fair for first-time buyers and I’d love to see it abolished for them.

When it was brought in it wasn’t designed and conceived to be paid by those buying their first homes and the threshold left out was somewhere in the region of 90% of buyers. The trouble is that it is easy to collect and provides far more revenue than was ever imagined. That makes it rather attractive to the Treasury.

There’s a further negative spin-off for the first-time buyer and another bonus for the taxman. Buy a house and you end up with all sorts of other expenses beyond the mortgage. There’s the fixtures and fittings, the carpets and curtains – all carrying VAT.

If the Government is really concerned about first-time buyers it should scrap it.

Kirstie: It’s a disgraceful tax. It’s wrong that if you move from one side of town to the other and spend £250,000 on a home you should be clobbered. After all, you’re paying tax on money you’ve already paid tax on!

It is, to my mind, the single cause of the stagnation of the market and the cause of the disappearance of first-time buyers.

If you want the tax to be fair it has to be at the high end of the market – for example, on homes costing over a million.

And what about Inheritance Tax? Is that fair?

Kirstie: I read recently that the art market had enjoyed its best week ever. Imagine I’ve been left a Picasso that I really like and want to hang in on one of the walls of my house – well, I can’t, because I’ve got to hand over 40% of its value to the Government. We’re talking millions! And this is a Government that has taxed people throughout their lives – on what they earn and what they buy.

Inheritance tax is a double taxation. I see the insides of many homes where the furniture is, more often than not, just knocked together ‘rubbish’. It’s because the luxurious and more quality pieces that have been in the family for years can’t be kept because of this tax drain. The threshold has got to be higher than it is.

Phil: Inheritance tax is another hugely political hot potato and will most certainly be on the agenda the next time there’s a general election.

Talking of politics, what is your view of Gordon Brown’s announcement, as Chancellor of the Exchequer, that in ten years’ time all new-build homes should be carbon neutral?

Phil: It’s a fantastic idea. We are now far more aware of the dangers of global warming and this really concentrates peoples’ minds.

Most of us are aware of the damage that cars do to the environment but what a lot of us don’t know about is the damage that our homes do – in fact, they’re worse than cars.

In Britain we’ve been far slower to latch on to things like recycling and there doesn’t seem to be a properly orchestrated campaign to make us better. But let me tell you this, if we could all cut our energy bills by £50 a year not only would we save money but we would reduce carbon emissions by the equivalent of 2.3 million cars. And it’s not difficult to do.

If people knew how much money they wasted by leaving appliances – like televisions and DVD players – on standby, they’d be appalled. We’ve got the worst record in Europe for recycling but it doesn’t have to be that way. We all need to think about being more energy efficient.

Kirstie: I’m not sure the thinking on eco reform is particularly joined up. The likelihood of this taking off to any great extent is about the same as expecting carbon neutral motorways.

I’d like to see the money from the new air tax spent on research to form a cohesive green policy. When you think about energy waste look at the number of streetlight that are always on. Why not look at old-fashioned remedies for keeping our house warmer, like heavy curtains that keep the heat in rather than wooden-slat blinds that let it out. And is the energy expended in making a double-glazing unit commensurate to the energy savings it is meant to make in the house?

Have you made any energy efficient changes in your house?

Kirstie: I have old-fashioned heavy-duty curtains and I’m very careful about switching off lights. The house I’m in was built in the 1950s and I believe in recycling – there’s not a door in the house that comes from a tree chopped down in the last 50 years. We’ve found old doors and restored them. The other area where people could save is by buying solid old furniture from auctions. There’s amazing stuff out there. Lastly, where I can, I’ll walk or ride a bike rather than get in the car.

Phil: Yes. I moved in 2006 and was very careful to make sure that the new appliances I bought were energy efficient. The loft is insulated, the boiler is up-to-date and I’ve made sure to turn the thermostat down by one degree. I also use low voltage bulbs.

Following on from this theme, does it worry you that in the South East of England, where there is a huge demand for new houses, developments might be built in high risk areas, such as along the Thames Estuary, where global warming could lead to serious flooding in the future?

" align="left" border="0" Of course if we don’t think and act on global warming we’re going to be in trouble – it is a threat that can’t be ignored. You have to think about the area where you’re building and build accordingly.

That said, there are areas that look as if they might have future problems but where those problems can be overcome.

The Dutch drained much of Holland, against the odds, so you can make land useable and safe.

" align="left" border="0" The fact that builders today can erect shell homes with a 40-year life expectancy is ridiculous. Also, it’s daft to build in an area where there is a future flood risk because of global warming without thinking through your green policy and implementing it.

Are we overlooking the need for people to have a sense of community when building brand new housing?

Kirstie: It’s very important for people moving to a new area and particularly for young mothers who want and need to make new friends.

I live in Devon, where there is a great sense of community and a will to do things to better it – like our recent campaign to stop a go-kart track being proposed by Nigel Mansell. Everywhere you go, you find small communities pulling together with all sorts of campaigns – from saving the village post office on to stopping motorways and runways being built. Certainly, communities create soul and heart and a sense of belonging.

Phil: I think the need for a community is something that worries older buyers, not those making their first or second purchases. It’s a stage of life that probably doesn’t occur to youngsters.

The pace of life is so fast that many people, especially in big urban areas, like London, don’t have time for neighbours and a sense of community. So not only is it hectic, but it is also becoming more crowded and people want to go home, pull up the draw bridge and have some privacy. People are paying a lot of money for city homes so they expect to be left alone, if they so choose – and most do. Older people want community life and that is why in later years they move away from the cities.

With so many mortgage deals available how can buyers be sure they are getting the best deal?

Phil: Buyers must get the deal that suits them and not be seduced by the headline terms. The key question to ask yourself is this: is it suitable for you right now as well as in the years to follow? Everyone’s needs are different and getting the right deal is complicated. Borrowing money isn’t hard, but the terms of the loan are something else again. I would always recommend talking to an independent financial adviser and you really need to focus and concentrate on what is on offer. Tax is the biggest expense in our lives, the mortgage is the next – one isn’t negotiable, the other is, so it is worth getting to grips with it.

Kirstie: I would say that if you have a good relationship with your bank and a good credit history – start with them. That will give you a figure from which you can base your further research. It is difficult to just jump in and find one – you need some sort of foundation.

Is it wise to have a survey done on a property you want to buy?

Phil: The building society or bank will do a survey but you have to remember that if you’re borrowing 80% of the purchase price they will only be interested in getting back that money. The market value is not relevant to them. If you are buying an older propert, a full building survey lets you know what is right and wrong about your prospective home. New builds, of course, come with building guarantees.

Kirstie: I’m not sure it’s that worthwhile if you own a flat because the problem could be elsewhere in the building. I know of people who had a structural survey done on a property and it passed. But in the roof, through the loft hatch, was a warning sign of asbestos. It cost £7,000 to remove that asbestos and it wasn’t picked up on the survey. You are often better off taking a trusted builder around your potential buy and seeking his advice.

So, if overseas money is coming here, what about UK money going abroad to buy foreign homes?

Phil: I’m cautious and hesitant because I think it’s complicated enough buying property here when you’re dealing with a system you understand, in a language you understand. Abroad it’s unlikely you’ll have experience of the quirks of the property business and the complexities will go over your head. Plenty do it and plenty have success. As ever, the greater the risk you take, the greater the potential for profit.

So you can buy a property in Bulgaria and double your money in 18 months, but you are doubling £20-30,000. That’s nothing compared to the size of transactions happening here in the UK.

Kirstie: Like Phil, I’ve always been circumspect about buying abroad. If you don’t have a vote or a say in the running of that country I tend to be nervous and I’m not a risk-taker – but some are. I’d love a New York apartment but I just wouldn’t make that leap.

And lastly, if you had received one of those city £1 million plus bonuses, what would you have done with it?

Kirstie: I love where I live now so I wouldn’t be spending it on a new home for myself – but I might buy a run-down place and do it up as an investment to rent out.

As for that New York apartment – I’d need several more city-style bonuses before I felt financially safe enough to make such a commitment.

Phil: I’d retire! Or, maybe, in complete contradiction to my last answer, I’d buya place in Ibiza.

Has the arrival of big overseas spenders – the likes of Roman Abramovich – been good for the property market?

Phil: They are supporting the housing market and what goes in at the top feeds down through the system. The foreign buyer is here to stay – it’s not difficult to see why.

The tax regime is attractive for the overseas buyer, the country is politically safe and in terms of geography and as a financial centre, Britain is fabulously well-placed. Foreign money is supporting the market and if tax laws were toughened up and targeted at these buyers the market would collapse, causing a problem.

Kirstie: You’ve got to accept it because it’s a way of life and we have a diminished manufacturing industry and no more oil, so we need to move with the times. Because of our history we have an attractive country – this is the place of kings and queens and a lot of foreign buyers love that. They also bring spending money that goes to our restaurants and shops. This is a beautiful and unique country and this could be our economic niche market – we certainly shouldn’t discourage it.

The number of first-time buyers is dwindling year-on-year. How much of a worry is this?

Phil: It’s not a crisis for the market, even though the average age of the first-time buyer is the late twenties or early thirties.
What I think it does show is more of a social crisis. Commentators might think otherwise, but these same people who are not buying their own homes are still spending a lot of money on rent. It is a case of priorities changing.

As it is, buy-to-let investors are satisfying the demand for a roof over your head. The danger comes from the length of time they stay in the market – thus depriving it of stock. That noted, today’s first-time buyers have different priorities and values. They go to University and come out with debts. They have a lifestyle that is far more affluent than that of their parents and their parents’ parents. Those generations scrimped and saved for a deposit. They didn’t eat out twice a week and live off takeaways. That’s not to knock today’s younger generation, it just emphasises the changes.

Kirstie: It is a huge concern. When we first started filming Location, Location, Location, first-time buyers were mainly in their twenties, now they’re mainly in their thirties. The knock-on effect is that they will still be paying for their homes when they’re retiring. That means extra strain on a pensions market that we know is creaking.

There is no help, there are no tax breaks for getting married. I’m not married but if I did get married I would have two years to sell my property or face a huge tax bill because as a married couple we would be classed as owning two homes. As we’re not, we’re not affected. That’s wrong and the fact that married couples don’t pay inheritance tax is not an incentive to forming a family base, as we know people living together are more likely to part than married couples and therefore the family unit is undermined.

One of the main joys of Location, Location, Location lies in helping people achieve their dreams. When that happens, presenters Kirstie Allsopp and Phil Spencer are happy people...

Sometimes you get what you wish for and Phil Spencer is one of the lucky ones. Along with co-presenter, Kirstie Allsopp, Phil spends much of his time on top show, Location, Location, Location, battling to find people their perfect homes within a tight budget.

However, given the popularity of the programme, it was a surprise that in this age of the instant millionaire – thanks to the National Lottery – neither of them had knowingly worked with a lucky Lotto punter on a massive budget. And they thought it would present a challenge for them.

‘I spoke to Camelot about it,’ says Phil. ‘Simply because I felt we could help. You can’t go from a fairly ordinary lifestyle to a super-rich existence just by buying a mansion and a massive swimming pool.

Of course it’s a dream but you have to be careful how you live that dream. There are social aspects to consider. How will it fit with friends and relatives? How do you adapt to a new neighbourhood? Happiness isn’t just about the bricks and mortar – it’s about the spirit of the house.’

Lotto lovelies

Camelot were willing to assist and it was just a case of finding a winner. It finally happened when Kirstie and Phil were asked to find a property for a young Yorkshire couple who had scooped a big win.

Roger Griffiths and his wife Lara, both 35, won £1.8 million by playing Lotto online in October 2005. Having set an initial budget of £650,000, they were quickly encouraged to smash this figure for their dream home just a couple of miles down the road from where they lived.

Their decision to stay local follows a trend for lottery winners – 91% move no further than 20 miles from their previous home after their win.

The most extreme example of this trend might be Paul and Thea Bristow from Torquay, who bought the house next door so they could renovate and extend their original property, turning it into their luxury, dream home.

‘Normally when people are buying a property, it’s because they need to move to a bigger place, relocate for work or perhaps even downsize,’ explains Phil. ‘But if someone wins a large sum of money on the lottery, it’s a completely different situation. There aren’t the same time pressures or financial constraints and the buyer has the luxury of being able to really push the boat out and find their dream home, since money is no object.’

For one-third of winners, their new dream house – typically a property with five or more bedrooms in the countryside, close to their existing home – is a favourite post-win purchase.

One in seven major lottery winners buys a property abroad, with over half of them choosing to invest in Spain or the popular Canary Islands.

But Phil warns that this can be a minefield if you do not know the rules and regulations. ‘As with any investment, it’s important to understand the market you’re investing in, so consider this carefully before looking to purchase abroad,’ he suggests. More generally, his advice to lottery winners looking to invest in property is to take their time and to very carefully consider their requirements.

He also urges winners to consider employing an experienced buying agent who can represent them in their search and any negotiations, and advise on tax implications. Estate agents, he points out, are working for the seller. Finally, he warns lottery winners to avoid the temptation to throw caution to the wind and to remember how much space they really need.

At the other end of the scale, Kirstie and Phil are sometimes asked to find an awful lot of house for not a lot of money – like the example of the couple who wanted a more rural property with a garage that was big enough to take their three beloved cars. The only problem was their budget – £250,000!

Fussy families

But perhaps the most fascinating show of them all was early on – when the series was still finding its feet. This was an episode you didn’t see! ‘We had this one couple and we went through their wish list with them,’ says Kirstie.

‘Properties were selected and we duly guided them around the short list. It was fine – except there was nothing that suited them. Both Phil and I suggested that they were better off staying in the house that they already owned. At that stage in the history of the show it was considered a bit of a ‘no story’ and so the programme was never screened. But as far as we were concerned, we’d given then the right advice.

‘We help people with properties, we explain how to buy them, what to look for and that is our brief. To be honest, the entertainment factor does not stop us from acting in a professional capacity. I can see why that show was dropped but I can’t help thinking now that it would have been good to run with it.

‘We get over a thousand applications a week from people wanting to be on the show,’ reveals Phil. ‘It is a fantastic response. Prospective candidates must, however, be eloquent, committed to move, able and committed to pull it off, be prepared to listen to our advice and keen to do so.’

In the last series, Phil and Kirstie were involved in eight searches which led to seven property deals – and they helped six families move homes. ‘The seventh deal didn’t complete,’ says Phil. ‘And the eighth client didn’t find anything suitable.’

Pure professionalism

Phil says that both he and Kirstie were upfront with Channel 4 from the very start, insisting that they would not give bad advice purely to produce good television.

‘This is a business for us,’ he says. ‘We are passionate about it. Channel 4 did get cross with us because frequently our advice seemed
like unexciting TV.’

There’s also a sense of devilment as Phil admits: ‘A lot of people come on the show not expecting us to sort out their property and if we crack on to that early on, we like to show them an amazing property that isn’t what they were after, just to confuse them. But sometimes it’s our job to take people around the houses (literally), to help them figure out what they really want.’

When a couple decides to ‘sleep on it’, Phil and Kirstie are left in suspense. ‘We do have bets between us, but Kirstie normally wins because people follow their hearts,’ says Phil.

For both of them, the show is about helping people find what they want – if it makes good TV, and the public seem to think it does, all well and good – but that is not what drives them on.

‘It does get emotional and we have had loads of tears, both happy and sad,’ says Phil.

‘There were six programmes in one series with tears in every show, and we’ve just filmed an episode with tears of joy followed by another with tears of great frustration. It is a real process, which is why it’s fun to be involved with – and hopefully fun to watch. I’ve always thought it’s a privilege to be involved in those journeys.’

But doesn’t Phil want to tear out what little hair he has left when his words go in one ear and out the other? ‘It does get frustrating when people generally aren’t taking our advice and we’re giving it in the best possible way. But it is their money, and not mine. ‘If they don’t listen to my advice, then so be it. It’s not something I lose sleep over. The clients are the ones who need the home.’

Going the extra mile

With runaway housing prices, there is a lot at stake.

‘It is fun but I am very aware that we’re dealing with a lot of pound notes and I’m never flippant with other people’s money,’ says Phil. He recalls a deal he did for a couple who wanted a little bungalow in Bath. ‘That’s right’, he smiles, ‘a bungalow in Bath. There’s not many of them around,’ he says. ‘We came across an ideal place but the bungalow in question wasn’t even up for sale. We found out that the owner had inherited it – it had been in his family for years. In fact, he’d actually been born and raised in the bungalow. However, he knew the day would eventually come when he would have to sell and we were fortunate enough to do the deal.’ For Phil, the best part was the follow-up visit a year later to see how the family were getting on.

‘They were still beside themselves with happiness, so it was very satisfying. We’d managed to overcome the odds simply by asking about the property in the first place,’ he beams.

And for Kirstie, she sums things up by saying: ‘I like property,’ she says. ‘But it is not property that is the be all and end all. It’s the amazing relationships. It’s finding out what makes different people tick. It is about the dreams and passions and desires. So many other key issues like education, pensions and financial security come into the equation. It’s all about the home that you own, or don’t own, or can’t ever own.’

Phil agrees. He gets huge pleasure takingpeople to a great house and seeing their eyes light up.

‘It’s very satisfying to help a couple find their dream home – and in some instances, to have a hand in changing their lives.’

Phil Spencer and Kirstie Allsopp have become an enduring TV partnership – but just what is it about each of them that makes it work so well on television?

The world of television can be a fickle business, one day you’re a star, the next you’ve been all but forgotten – not recognised in one of those ‘where are they now?’ columns.

Given that enduring relationships are few and far between and Location, Location, Location, is seven years down the line, it’s satisfying to know that Kirstie and Phil still enjoy each other’s company.

All change

In fact, 2006 saw them both become parents, Phil for the second time, while Kirstie gave birth to her first child. It meant that she was on maternity leave while Phil carried on, with Sofie, Kirstie’s younger sister, standing in.

‘It’s funny, we didn’t work together for six months and I was looking forward to teaming up with Kirstie again,’ says Phil. ‘I did wonder if it would have changed but that first time back we had a chat about the people on the show, walked down the road and nailed the introduction first take. It felt so comfortable. We both bring different things to the party and it just works.’

In the beginning

Perhaps a lot of this is down to how they found their way on to the screen in the first place.

Kirstie was working in an interior design business but then fate – or former New Labour spin-doctor Derek Draper – intervened. A friend of a friend, he asked her to find him a flat, and soon loads of Westminster and media types were ringing up, asking for expert help and advice in tracking down the right property.

There was a name check in the Guardian, closely followed by the Telegraph, and then Channel 4 asked her to do a screen test with an ex-marine called Phil Spencer.

The show is now in its eighth series, and its presenters are in a professional partnership off screen as well as on with their joint venture, Garrington Home Finders.

‘Property is my security blanket,’ says Kirstie. ‘If you don’t have a day job, or at the very least a job you can go back to, you are setting yourself up for a terrible fall,’ she reveals.

‘We are a great double act,’ says Phil. ‘Kirstie is more forthright than me, while I prefer to give people information and empower them to make their own decisions. But we know we are better house finders together than apart.’
And, like Kirstie, becoming a TV presenter was not a planned career move for Phil. ‘I got a call out of the blue from Channel 4 who had conjured up the concept for a show,’ he says. ‘Trouble was, they didn’t know anything about buying property, so they asked me and five others to come in and consult for half an hour.’

Cue Kirstie who, like Phil, was one of a tiny brigade back in the 90s offering an independent property search service for house buyers. Phil and Kirstie were asked to help make a pilot show and very soon a hit series was born.
‘We knew of each other professionally and had a great deal of mutual respect, but my first impression was that she was barking mad,’ jokes Phil. ‘Now I’m probably more confident that she IS barking mad!’

Opposites attract
Phil admits that where Kirstie is gushing and bold, he is calm and measured. ‘We are completely different,’ he says. ‘She is either really excited or really hacked off, which makes great viewing, while I’m more on a level. She can fall in love with a house on somebody else’s behalf, while I will be the one saying, “yes, but you wanted it to do a, b, and c.”

‘Kirstie has a fantastic architectural and historical knowledge – which I don’t – and she is highly emotional about property – which I’m not. We get on very well – we just tackle things in different ways. Buying property is an emotional experience, so from a client’s perspective I’m better for the structural and maintenance side, whereas Kirstie is better at giving interiors advice.

And what does Kirstie have to say about her TV co-presenter?

‘Phil is very precise in what he does,’ she reveals. ‘He gets up, gets spruced up, irons his shirt and comes down for the hotel breakfast with the rest of the crew and he seems to have plenty of time on his side. I’m different. There’s the hair to do, the jewellery and accessories to get right and everything ends up in such a rush. I end up flying through the breakfast room grabbing what I can and shoving it in my handbag for later. It may not be the best way to start the day but whatever

I do, I just can’t find enough time to take it at a more leisurely pace.’

ups and downs

The conflicts are not presenter to presenter, but presenter to TV crew. Phil and Kirstie present a united front when it comes to dealing with the clients and whether they are on TV or not the customer always comes first.

‘It’s the telly things against the property considerations,’ says Kirstie. ‘We want to show the property in a certain way and there is a symmetry to the way we do that. The TV crew are into the light and the space and want us to approach the job more aesthetically. Sometimes the two just don’t go together and that is when we will put
our foot down.

‘There are properties that come up on the short list that have tremendous TV potential but just don’t fill the brief. I remember one property in Kent where the couple looking at it thought there was no garden – in fact, there was a magnificent walled-garden that we could unveil dramatically towards the end of the viewing.’

The two-presenter format has big advantages in that rather than too many cooks spoiling the broth, many hands make light work. The pair are constantly on the phone during filming, checking out properties, wheeling and dealing.

There is constant on-the-hoof research and there have been times when a home has been recommended and put on the shortlist only for it to be sold before the crew and the TV clients have the opportunity to look around it.

And then there’s what Kirstie and Phil each see in a property – they admit that they don’t always get it right, as sometimes the lure of a particular property can outwit them.

‘I remember one case where we were looking for a London home for a disabled woman and it was imperative that she had parking,’ says Kirstie. ‘Phil found a property that seemed perfect and was delighted that it did have parking. But I could see the problem straight away – yes, there was a dedicated parking spot, but it was two hundred yards from the house. The client burst into tears the minute she saw the set up. I miss things as well. Phil’s great on the structure and the roof. I can miss bits there and that is why our teamwork pays off.’

On-set secrets
Each programme is filmed as it happens, so if the prospective purchaser pulls a disgusted face at a property it will appear on the screen. ‘What you see is what really happens,’ says Phil.

Surely some scenes are mocked up? Phil can often be seen ringing Kirstie – or vice versa and the camera may only film one part because the call was unplanned.

‘That’s the only place where it might get mocked up,’ explains Phil. ‘My end might be recorded but they may have to get Kirstie to repeat her end later.’

Both hosts have become experts at jotting down extensive contemporaneous notes so that the eventual phone call will be as true to life as possible. But eagle-eyed viewers may wonder why Kirstie, Phil and their clients disappear for two or three days on their viewings and wear the same clothes throughout.

‘Kirstie doesn’t like that,’ says Phil. ‘She’s paranoid about it. But it’s for continuity reasons. We might have to do the piece for the beginning of the show later, for example. It’s much easier for the show’s editors if people don’t change what they’re wearing.’

Occasionally, however, small differences appear. Kirstie might wear a different necklace or shoes. ‘It’s her little way of rebelling,’ laughs Phil. ‘And on the day of filming the producer doesn’t notice anything!’ Poacher TO gamekeeper ‘I hate moving,’ admits Phil. ‘It’s too stressful.

I have invested in and developed properties but I’ve only lived in three houses.’

In fact, he’s just recovering from a house move. ‘I only looked at one house but I was very clear about where I wanted to live. Last time it came down to two roads, and only one side of those two roads. This time I only looked at one road and spoke to the three estate agents that dealt in that area. I was very focused in my search and worked out the specific road where we wanted to live. By putting a lot of thought into it and walking the streets, I was able to find what I call a “best of breed” property that has something extra – the better view, a garage, bigger garden or that extra bedroom.’

Dear readers,

The housing market is continually about surprises and changes. Areas see huge rises one year and then struggle the next – in part, the uncertainty is what keeps it fascinating.

For a man whose career consists of helping people move, I have to own up to the fact that it is not an experience I like – and I did it for probably the third time in my life last year.

This year – 2007 – has started with an interest rate rise and inflation on the up. That will have an interesting effect on the market, because interest rates and house prices can’t go up at the same time.

As it is, despite forecasts, 2006 saw some locations rise by massive amounts, but all the while the number of first-time buyers has dwindled. Those that are trying to get on the ladder are getting older and older. It’s a worry and a social problem that will need addressing, as will the matter of eco-living. What impact the carbon neutral house of the future will have remains to be seen – but it is an intriguing and encouraging idea.

So much has changed so fast, it’s difficult to know what is around the corner. Even traditional homes will have to keep up with the times. Everyone is changing fast to meet the demands. Builders are certainly more flexible than they used to be – but then, that is the effect of a highly competitive market. There are constant innovations.
The way the market in England and Wales works has long been considered flawed, but there have been moves to streamline the process and make it work better – which can’t be a bad thing.

Join me and Kirstie in this magazine as we look at some of the issues of today. We focus on trends and hot spots and offer practical advice and tips on how to make the best of the most expensive buy of your life. The only thing other than your home that you spend more money on is tax!

Now there’s a thought...

Dear readers,

It’s been an eventful year for me – the birth of my first child, a bouncing 11lb boy – and time away from the television.

Yet the issues I’m passionate about remain unresolved ­and are perhaps getting worse. Over the years on Location, Location, Location I’ve seen the ages of first-time buyers rise and rise from the mid-twenties to the mid-thirties.

That’s not good because it undermines the whole of our social structure and life. Is it really right that circumstances force you on to the property ladder so late in life that you’re still paying off your mortgage when you retire?

There needs to be a far more active and encouraging approach from the government – especially when it comes to Stamp Duty and even Inheritance Tax.

New homes are needed but are new builds fulfilling the need for which they are required? Houses have sold well during 2007, but within a market where there seem to be fewer buyers.

There has also been a marked move away from a national housing trend to something that is more regional. London, for example, has soared ahead of the field but has been bolstered by foreign investors and huge City bonuses.

What I do know is that people will continue to buy houses and they will still strive to create the perfect home.

Join us in this magazine as we analyse the market, offer tips on buying and selling, and let you into the secrets behind clever property moves. You can spend a fortune or you can think outside the box and create a stunning impression for little cash.

Read and enjoy!

We all know we could improve our homes to increase their value by making small changes – but where do we start and how much will it cost?

© Nick Kane

Buying at auction is one way of breaking the shackles of the normal homebuying process and you can pick up a bargain. But to be successful you need to be prepared

It's quick, it's exciting and it takes some nerve ' we're talking about buying a house at an auction. Get it right and you can make some great deals ' get it wrong and you can end up in big, big trouble.

There are golden rules to buying at auction and if you follow them you won't get burned and you could end up with a dream home at a fraction of the price you thought you'd have to pay for it.

Let's consider the appeal of the auction and what is likely to be on the market. The obvious attraction is that prices can be up to 40 per cent less than in the estate agent's window.

The idea is that the seller can quickly realise their capital from the property ' albeit at a lower price but what they gain is as good as an instant cash sale.

Mortgage lenders often put up repossessed properties for auction usually at deliberately reduced 'reserve' prices simply because they want to offload them quickly to realise their cash and the amount owing ' the money the mortgage lender is intent on recouping ' is unlikely to be anywhere near the market value.

Local authorities and housing associations also sell property this way. More often it is about immediate cash flow and the ease with which money can be accessed. Other properties put up for auction will be those with development potential, probate sales and homes that are difficult to sell. It is rare to find a property for sale at auction that can be moved into straight away. Around 25,000 properties now go to auction every year at more than 200 auction houses nationwide.

To be successful at auction the approach has to be right, you must do your homework and if you really are serious, you will have to speculate by spending money before you start bidding.

You will need to have your survey, or building society valuation, sorted beforehand as well as the conveyancing. The mortgage needs to be in place before you bid. You also have to move fast and there is much greater uncertainty than buying a home the traditional way. The auctioneer's hammer will fall on the highest bid and that is it.

The timescale from the announcement ' basically when the auction catalogue showing all the 'lots' for sale is printed ' to the date of the auction is often only three or four weeks. But with the right approach you can put all the pieces in place.

Succeed and you will more than likely have saved money and not become involved in a dreaded chain. If you're nervous about the auction process you could get your solicitor or surveyor to do the bidding for you. You can either stand beside them or, if you prefer, could stay chewing your fingernails while waiting for the phone to ring.

GOLDEN RULES OF BUYING AT AUCTION

As you would with a house that you were following up through an estate agent you would view the property. The basic details are in the auction catalogue but you need to be more thorough ' especially if you are seriously keen. When you turn up there will be the unnerving experience of looking at the house with a number of other people but do not be put off because the fallout between the viewing and the auction is huge.

Look at the property closely, gamble if you want on a survey but remember this could cost £500 or more and you might end up being outbid. It is a good idea to take a long look at the neighbourhood as well, the usual research you would do with any other property purchase ' including travel routes, shops and other amenities.

Are there any obvious problems? Is it likely to be noisy? Does the property back onto a railway line? Is it on a major flight path? Is it in the heart of the red-light district? These are things that you need to know, which is why it is a good idea to visit the house and the area at different times during the day.

If you are still convinced this could be the home for you visit local estate agents and see what the asking price is for similar properties. You now have a yardstick and can start planning your strategy.

For peace of mind it is worth considering a full survey done to protect you. It's possible the property is for sale because there is a structural problem ' something a simple valuation will not reveal.

And planning has to be precise. You need to be organised, and you need to devote time to the project. Caution and common sense are the watchwords and remember when the bidding starts it goes up in units of £5,000. The auctioneer will let it be known when the property has reached its reserve price.

Once the bidding starts to level off, the incremental rise in bids will be by £1,000. You should have a ceiling to the amount you are going to bid and avoid, at all costs, the temptation to push on that little bit further to get the place. But just because someone else is bidding higher does not mean the property has suddenly gone up in value. By having a valuation done beforehand you should know what to pay.

You need to remember that, as soon as you have made your auction bid and are successful, the property is your liability. You cannot change your mind just because you later discover it is too small. And if you renege on the deal, you will lose your deposit, and, if the property is offered for sale again and gets less than when you bought it, you may be sued for the difference.

Ensure you can genuinely afford to bid and take into account your total costs, including solicitors' fees, any repairs, renovation or redecorating, your mortgage and move costs. Work out what the absolute maximum you can afford then set your budget a little below this figure because you don't want to be overstretched.

It is a good idea to have a dummy run and go to a property auction where you have no4 intention of buying just to get a feel for the process. It really is a case of look and learn.

If you are successful you will need to pay a deposit (usually 10 per cent) as soon as your bid is accepted on the sale day. If you are a first-time buyer you will probably have that much available anyhow. Normally this money is paid as a banker's draft or building society cheque. Next you have to put together the finance to pay off the rest of the bill.

Ideally you should have a firm offer of a mortgage before you go to the auction and you must also tell your lender that you are buying at auction. Most lenders will probably be happy enough with this. You have your limit and it is easier to be granted a £100,000 mortgage and then reduce the amount that you borrow, then work the other way round.

And unlike a normal purchase, solicitors or conveyancing agents do a good proportion of the work before you actually agree the sale. They have to complete the local authority and other searches as well as making sure that the owner and property are accounted for at the Land Registry.

The auctioneer usually has copies of various legal documents that are kept available for prospective buyers. They may charge you a fee of around £10 for a pack that outlines the property's special conditions of sale and some details about the title deeds.

AUCTION INFORMATION

The real battle is finding homes that are for auction. The best way is to search on the Internet, check the local paper and ask at estate agents. On one site that lists houses coming up for auction, a three-bedroom home in Middlesex was down as likely to reach £165,000 in an auction. Interestingly, virtually the same house was being sold through estate agents for £15,000 more. And this is the attraction of auctions ' if you get it right, you get more home for your money.

THE DAY OF THE AUCTION

Remember to take two forms of identification, chequebook and all your banking details with you to the auction. If possible, arrive early and familiarise yourself with the empty auction room. On arrival, you may need to register with the auction house in order to bid prior to the start of the auction. Check with your auctioneer.

Get a copy of any addendum sheet. These are distributed around the auction room and contain late information or alterations. Don't assume that all the properties included in the catalogue will be offered on the day of the auction. Some may be withdrawn or sold prior to the auction.

Take a seat or stand somewhere in the room where the auctioneer will clearly be able to see you bidding. When placing a bid, make sure you gesture clearly by either raising your hand or nodding your head. The auctioneer will warn the room when he is concluding a sale.
If a property fails to reach its reserve price, don't give up. The vendor may decide to accept your bid later at the end of the auction. Make sure you leave your details with the auctioneer.

Don't forget that the property becomes the buyer's insurable risk as soon as the hammer falls. The conditions assume that the buyer has acted like a prudent buyer. If you choose to buy a lot without taking these normal precautions you do so at your own risk.

Case Study

Andrew Grant, of Andrew Grant Estate Agents in Worcester, had an unusual auction on his hands in the heart of England.

"One of the 12 lots is a gamekeeper's cottage in 10 acres near Hanbury, the village that was the model for Ambridge in The Archers.

"I sold the cottage for £500,000 about 18 months ago to an elderly Lottery winner who has since died, leaving it in a very poor state. We had set a guide price of £550,000, which was upped to £600,000 and then removed after we received a £700,000 bid from someone who said he wouldn't be attending the sale.

"The trustees, however, charities that would benefit, wanted to continue with the auction. It was an instruction I hoped they wouldn't come to regret.

"All my initial fears proved unfounded. Three familiar faces turned up to bid for the gamekeeper's cottage, which went for a staggering £950,000. In fact, every lot sold and all my clients were happy.

"Slight worry later in the day when a buyer had cold feet because there was nowhere to park his sports car. Our client is a wealthy and very polished businessman. Realising the buyer is upwardly mobile and moving from a little box, we pat him on the back and says that when you live in an Elizabethan mansion, you don't need to drive a Porsche."