[Music] despite the uncertainty in the market people are still chasing the property development dream in tonight's special edition the rules on how not to lose everything in a falling market from not paying full price for materials too wide by an unmodern Icehouse develop could spell disaster plus the story of two novice developers who think they can make a cool quarter a million on a converted industrial units water sausage factory that they paid too much for to millionaires what to live in rather hide and get too personal about oh this is great so it was cover the whole house in this in a market that comes tumbling down around their ears the realities were going to walk away with several hundred thousand pounds of a loss [Music] now there's no rising market to cushion the mistakes of amateur property developers and forever being asked if there's money to be made from property it's certainly much harder than the same rules still apply so here's an ultimate guide on how not to lose everything in a falling markets my first rule is don't hang around in a falling market the truth is no one knows whether the markets bottomed out already or how long it will take to start to climb back up again so unless you want to possibly risk having to wait years for it to head back up to enable you to break even the golden rule is get in and get out quick and follow the 2020 rule a schedule under 20 weeks and a 20% contingency means that your profit margin should be protected even with big falls in the prevailing property prices but a quickie is the last thing on night'll are bev and sarah Donahue's minds it's February 2008 and they're convinced that rubberize holds the key to their success set in London's East End it's a relative late comer to the proxy boom but during the good times peat prices jumped 15 percent as speculators rushed in when other parts of London became too expensive the problem is that last to rise is often the first to fall and things of well and truly stall just as tonight's first-timers into the market Nigel and Sarah both have successful careers he's developed nutrition products for bodybuilders and she's a world champion powerboat racer now they're risking it all on a million pound developments we're second a little bit of a calculated risk of it but would rather be slightly risky than just do something that's boring and mediocre I mean if we wanted to do that we would have gone and bought a flat and decided to convert that when you're developing in a falling market no project is boring and certainly not when you're banking it all on this they're investing more than a million pounds on a former sausage factory in rather hive East London it's already been developed once but they think there's still potential to create something really really flash the whole idea is to have the ultimate Yaffe pad gonna have a cinema in there there'll be a gym sauna spa just gonna be absolutely gorgeous it's gonna be a real plush pad when it's done it will be the ultimate you won't need to walk out the door got everything right on your doorstep 5000 square foot as well where else do you get that in London at 5000 square foot it's five times the size of an average family house this is going to need serious team effort when it comes to being the boss for problem-solve and I have to solve everything to solve everything that's not true is to content with everything yeah it's all right yeah don't worry about it no it's not all right yeah we won't worry about it I'm a big believer if you don't like something take the bull by the horns and sort it out yeah so I'm a little Rottweiler even with doglike tenacity this is one seriously problematic development so you bought a sausage factory it's a great name isn't it we went in and then every time we went to possessive stairs we were absolutely blown away well then when we got up to the to the top floor that just really sealed it for us didn't it you know we just thought we've got a weapon even though it's literally is four times the size of the kind of property I was looking at and four times a surprise I know it was a case that I couldn't go on and miss this opportunity this is a once in a lifetime opportunity to go do something like this Nigel and Sarah aren't the first to think that the previous owner already had a go at developing this Factory but after some refurbishment he put it back on the market where it languished for years until Sarah and I supporters it was on the market for quite a long time we think is about four years early yeah four or five years but I think the original asking price was like 1.8 yeah he was awesome way too much and were you a bit suspicious about the fact it had obviously hung around on the market for a very long time we did think you know one of the main reasons is as it stands at the moment is he's very child unfriendly you cannot have a family in this place there's hard edges everywhere it's all concrete glass and steel so it's dangerous for kids so the only people realistically that could buy this at people like me and Nigel our sort of age without kids because those are the only people it would really suit if finding child 3 couples with cash to burn wasn't hard enough they have super size development plans on the ground floor there are two empty cavernous spaces and this is where Nigel and Sarah plan to add some la glitz there'll be an entrance hall a home office a third bedroom with a wet room sauna eight seated cinema and fully equipped gym the top floor already has an amazing glazed reception room and large roof terrace which is being left largely alone on the first floor there's currently a huge kitchen diner with three beds and two bathrooms they're going to reject this into one smaller bedroom suite and a master suite with walk-in wardrobe and luxury fitted bathroom it's all very very extravagant we're gonna have a huge walk-in wardrobe an amazing master bedroom it's gonna be absolutely stunning but in here this is gonna be really nice the whole of this room is gonna be a saltwater spa cracking me and this is effectively a swimming pool in here so that's a lot of weight to hold up on the first floor it's gonna have to be downstairs a structural support way out of steel because these spires we may actually end bespoke had a concrete it's gonna weigh about three tons he's a very glamorous clouds all right these are very big and very expensive plans what are you thinking that this amazing conversion is going to cost well my budget set for its 350 thousand pounds okay but I think that seems incredibly shy when I first walked in I thought I would have spent half a million creating this Sarah and Nigel's strategy is to create an interior so good that buyers will be prepared to stump up megabucks and overlook the less than desirable location but I don't think it all adds up they paid 1.1 million pounds for the sausage factory a 250 thousand pound budget is tiny when its to include all the gadgets and gizmos Nigel and Sarah want they plan to sell a development for 1.6 million clearing them a two hundred and fifty thousand pound profit this is one big gamble in the current market not least because ninety and Sarah are banking on selling it for half a million pounds more than the most expensive property has sold for in the area but that had river views Sarah and Nigel's development doesn't you have to remember where it is do millionaires want to live in rather highs the answer to that is probably no but we're hoping that a couple comes along very much like me and Nigel and likes it so we're on them in a very small proportion of people you may find that you'd have to sell this at a massive loss to actually sell it and this is going to horrify you and it sounds incredibly dull but I think that you should try and get planning permission to turn this into lots of smaller units which are much more appropriate for this area and and are going to be lot cheaper and therefore more this building is so unusual and it's so strange and it's so gorgeous it would be almost criminal to partition things off because then you lose the experience of something where you walk up and you go wow this is amazing it would pain me to do it it really would what you don't want to do is discount the idea of turning it into several units and keep it as a house and then in six weeks time think you know why it really doesn't stack up meanwhile you could have could be two weeks away from having Planning Commission so I wouldn't waste any time I'd get planning in now anyway at least you've got it and then you can make the decision even though I'm totally horrified about ruining the architecture Nigel and Sarah have completely misjudged their market really they should be turning this into three flats from your business point of view and looking on for sort of risk and return for investment that's probably the best bet I will do my due diligence and think about it but I think I can see that's probably where we'll end up going I know sometimes you have to think well hold on no we should be looking at this is a money project but it is it is so important yeah but it is also something that we want to enjoy as well I personally would have no enjoyment at all doing flux non zero time and time again amateurs developers fall into the trap of thinking that just because of properties and modernize there's profit in it my next rule not always and certainly not in a falling market take this street in Clapham South London where has this sell for 1.5 million this one's on the market for nine hundred and fifty thousand it's tired run down and needs total renovation what do these would-be developers think it will cost to turn it from down trodden to market I think this property would probably need about two hundred fifty thousand pounds spent on it one hundred and eighty thousand one hundred and forty two thousand pounds between fifty and sixty thousand pounds none of them are even close because to get the high-end finish it needs you're unlikely see change from four hundred thousand pounds it knees totally stripping out new wiring new plumbing and new roof and that's just for starters with a starting point of a 1.5 million resale price you then need to take off the cost of the development of four hundred thousand pounds leaving you with 1.1 million a 20% profit would be two hundred and fifty thousand and this gives you the price you should be paying for this property which is more like eight hundred and fifty thousand suddenly it's 950 thousand pound asking price doesn't seem like such a bargain so if you can't seal the deal then walk away it's a some developers Nigel and Sarah didn't do before buying this converted sausage factory they should be doing a radical rethink it's now March 2008 the markets on the slide but Nigel and Sarah are convinced that swanky glamour is the right thing to do it had taken the previous owner four years to sell it I think Nigel and Sarah should reduce their risk by carving it up into three smaller units but they're wedded to creating one luxurious 5,000 square foot dwelling we want to stick to the to the plan of doing it as a bit of a yuppie pod because it probably wouldn't even give us that much enjoyment making it into flux you know whether we'd make more money or not I mean how often do you get five thousand-square-foot to play with and do whatever you want to do with it you don't do it and to then move to just doing that into flats will kind of affect the whole object of why we went for this place in the first place and it's a gorgeous building it's beautiful you can't ruin it by making it into flats but exactly the problem is the market in rather hide is largely flats bought by those who commute across the river to the Docklands but you can't afford the sky-high prices of neighboring post coves the kind of buyer Sarah and Nigel want to attract are already very well catered for a stone's throw away in nearby shad thames Jay Thames has swanky restaurants where rather highs has a boarded-up pub shared Thames has cafes and abundance brother hive has sprawling estates share Thames has views of the river and Tower Bridge another hive has its tunnel and a boarded up sheep station I think saronite are living in cloud cuckoo-land thinking that they will find someone prepared to pay over 1.5 million pounds for their property and there's this type of competition so close it's time for a reality check but if you've got 1.5 million pounds this is where you go to spend it I don't know really because we have 1.5 million pounds and we looked at properties around each size we've a massive space 5000 square foot and you just can't get that space anywhere else in London it's only a 15 or 20 minute walk so I would have that sacrifice for such a big place there may be somebody who wants to buy an amazing apartment with more square footage where you are and they have to walk 15 minutes gets a nice coffee shops and bars but your market is so slim it's just a huge risk do you agree that that in terms of location this is at the opposite end of the spectrum to your flat I wouldn't sense the opposite and especially you've got users council blocks or otherwise tunnel derelict shops boarded up shops that's your your surrounding area which is fine but it's a very elite buyer you're looking to buy your property in those surrounding and that there is that big negative where which is why we've got to make sure that all of the positives are such an extremely outweigh that negative which is a big negative and that is going to come at a very high price making it good size I know that's we've got a lot of work to do we do but I think I think it will be successful we have to be I fear Nigel and Sarah are too close to their development and there is no rising marker to cushion their fall they desperately need to see the reality of the situation but instead they're burying their heads in the sand so we're taking the whole of the stairs out so we're completely changing the stairway yeah it's a collimator job for building designer Graham Cox the reality of reconciling their 250 thousand pound budget with their design ambitions is also creating a big challenge beating the budget is going to be tricky you've got to get the basics of the building work done which will give them a very sound idea of what remains of their budget but it's going to be up to now and Sarah the end the day as to what they finally decide they want to do with finishes as to where they're gonna keep within the budget or not a Sarah Nigel's development begins to take shape so does the realization about how unrealistic their budget really is in all honesty a place like this I mean Sarah was right we are gonna go over and we have been speaking about that we know are we gonna go over we're not gonna be able to help it if we want to make sure it looks beautiful you know and all the finishes are perfect we're gonna go over whilst work continues on site to create this lavish pleasure palace Nigel and Sarah go home to plan the design for their bathroom my preference should we go for this which i think is pretty funky so shower column type type thing but it's also a steaming room it fits in with the kind of the factory style of the building because look it's got like these pipes that sprout like this with Nigel and Sarah's expensive tastes it's not going to be long before they blow that increased budget with the Fishtown wall this is the kind of the closest I could get an idea of the kind of size doctor dimension being is we want it to be the full 3 meters length of the wall the only thing we need to decide upon is whether we go for one like this whether we go for two or whether we go for one big one this development is getting seriously out of control so what are you actually putting in the bathroom from the left will be a wall that comprises two fish tank so really like an aquarium wall and how much does that the fish tanks ten thousand ten thousand okay then then you've got the two meter wide floor sunk hot tub spa how much just easy then some tension seven thousand yeah and how much will the task coming in that would be about sixteen seventeen thousand that's thirty four thousand pounds on bits and pieces ten percent of your entire budget on one bathroom and that's not even on the bathroom that's just on the bits and pieces together yeah a little less than ten percent but it's not gonna be out of place with a lot of the rest of the building so yes it's gonna be amazing but so does the rest of the place so I don't really think anyone's gonna have a nicer time living in this house because you spent 35 grand on the bathroom it's not going to improve living in this house which is but we do want a beautiful bathrooms I mean I love I really uh yeah I've been in friends houses and they've got the most stunning bathroom Alex aw nice go in a bathroom that's impressive because how many times you go in a bathroom and it's just a bathroom I don't think that you should have a boring bog-standard bathroom I definitely don't but I think you can achieve a great bathroom without spending thirty five thousand pounds on gadgets and gizmos even though Sarah Nigel are now five months into this development I still truly believe they should change their plans drawing up correct plans and sticking rigidly to them used to be a golden rule for amateur developers not anymore to survive in a falling market it's more important than ever to be prepared to adapt your plans as you go you may have set your heart on putting in a limestone wet room with ultra modern shower Basin and taps but if the market has changed and young professionals aren't buying there anymore you need to focus on who is and give them what they want if the market where you've bought has crashed four houses but stayed more stable four flats consider whether you need to convert your development that may mean big changes and spending more but the key is to constantly look for opportunities to protect your profit and if that means a radical rethink you can't afford not to in rather high though before I can convince Sarah and Nigel to change their plans fate plays a hand with the budget out of control and the housing market starting to nosedive the build comes to a shuddering halt pretty much all that's happened in the last four to six weeks we've we've been hearing there's been about two people on site instead of ten and all the time is that they put into the underfloor heating and on with in the first floor which is where it's happening they've put in a small additional bit of wiring finished off the plumbing it was already 80% done and put in a couple of ceilings and that's it I could have done more with Snow White in the seven doors probably Graham says that the reason they're behind is that he hasn't been given the right information at the right time and once he has it all work will proceed quickly so after a heated site meeting the relationship becomes increasingly strained but Graham and his team set about finishing the development meanwhile Nigel and Sarah power on with their vision to turn this into a swanky millionaires pad see now that is perfect I love that I'm just not sure I want a huge great head watching me one one my way I think the problem is I like things are really exciting and you're like stuff this is really perfect oh this is great see I think we should cover the whole house in this pink purple green bitters every stripe and I think it just look incredible got to get the zebra striping I just think it'd be nice to have the center unit you know with with the zebra stripes so we've got a huge mosaic of Napoleon's heads and some zebra skin material some purple Velvets and green shag pile grass carpet yeah yeah and this is the design I've expressed my opinion on Bonaparte and I think that he might not fit in but this is where we're not seeing eye to eye at the moment so likes to think that I'm all sort of just pursuing everything in black and wine and I'm not but you know I also do on the side of caution I mean I'm not saying I don't like it and I think sometimes she thinks that I may be saying that but I'm not what I'm actually saying I just wanna keep an open mind whose classic sentences let's keep an open mind cause now we're doing this I think you should be aware of one thing there's one danger with what you're doing that you need to be really aware of and that is that there's a very good chance you're going to own this for quite a long time because of the figure that you're not prepared to sell it for less than and bearing that in mind be very careful with your design that anything that's very fashionable becomes very unfashionable very fast so whilst you need to make a statement I think you have to be very careful it's not a very fashionable statement you don't want to have to gut this place in four or five years time when you can sell it for the figure you want because it's all completely yesterday's news but as I make a little progress with one problem another old one rears its head I can't believe he's built this the last two years have been unprecedented in the property market it's not just the extent of the downturn it's the speed at which it happened and when it happens not everyone was listening my next rule is no one safe in this market not even the very top end during boom times the super prime market in key areas rose fastest of all in the peak of the market in areas like hesitant Chelsea look like sweet Belgravia it rose by about 35% and whilst the rest of the market was well into its descent by the middle of 2008 properties over to millions seemed invincible in the summer Oh 8 we sold two houses in Chester Square one for 12 million and one for 15 million and that really was still showing that the super prime market was still extremely strong while the lower entry was very weak indeed but then in September 2008 Lehman Brothers collapsed and the international financial community started to unravel it was instantaneous it was like someone pulling the plug out of a bath suddenly you know these bars just disappeared the drop in the prices was more spectacular than the rest of the market this property in Notting Hill once belonged to supermodel Elle Macpherson it was on the market for nine and a half million pounds but fell to seven and a half the space of 13 months this elegant news has fell from 6.5 million pounds to 4.2 just ten months no one safe in today's property market least of all for super Prime's back in rather highs East London the markets dropped 37% which is putting even more pressure on Nigel and Sarah and their difficult development I can't believe he's built this thing there's bloody great box thing that has come straight into the room and he just stomped it why is he drop he's drilled holes in the New York for that is just a complete monstrosity that's supposed to be a maximum of 70 centimetres square and that is more like one or two meters those are supposed to be mounted in the ceiling why looks live at those units they're the wrong units and they just start them on the ceiling and he's just boxed of in Christ of easier to stay as well is that it are they those are not those are not supposed to be there I don't know why what I never sign off and having those put there they're absolutely enormous imagine also when those kick in the matter noise are gonna make you sitting on the balcony and those gonna be kicking out heat and noise and God knows what you're sitting out here trying to relax absolutely insane or what yeah it's really bad to sort that out it seems to reach the you know the final straw I mean I I'm gonna have to shut the site down I'm not the shot everything there's this the only option so I'm gonna have to shut the thing down I'm I that's just too much that's despite all our attempts to have meeting to try and get things on track to make sure that things are done properly things keep going getting done that are just absolutely astronomically wrong Grahame maintains that nigel was fully aware of the positioning of the air conditioning units and all the work undertaken but Nigel and Sarah decide to shut the site down on both sides agree to part company it's October 2008 and 14 months since Sarah and Nigel bought their property and nothing's now happened on site for two months this development is becoming a total nightmare so where are you with money now because you were gonna spend two hundred and fifty thousand on this originally that was originally originally but as you probably aware it's been creeping up and I know you came in so straight away that you reckoned it was from themselves twice that about about five hundred thousand looking like it's gonna be for ups about 460 already with it so moving on from this stage you've got a site that's shut down mm-hmm got a budget which is roughly double what you were initially expecting yes you're halfway through it's all gone a bit person I'm actually looking on positive side what how I say is is that do you see well how I say is is that you could look at it that way but the way I look at it is that we've actually by shutting it down now with a vertical Astra fee what we're doing is we're going to get the design package completed so we've actually got a design package then we're gonna cost to put about ready to put out to tender again so we'll get the existing contractor to price it unfortunately sarah has got some personal contacts who would be prepared to take on this project once it's finished he's then got the almighty problem of trying to sell it at something that isn't a dramatic and massive loss the vision we got for what this place is gonna be so stunning but despite the area and some walks in you're gonna get this effect where I think it's going to be wowed by it so much that they say have an extra million pounds I want to pay they're gonna give us a blank check do you know it's a beautiful place for you Sara and Nigel are in horribly deep but they are still convinced about breaking even on this project I think they'll be lucky to walk away with only a half million pound loss my next rule for how not to lose everything in a falling market is sometimes you just have to cut and run no one wants to stomach a loss but if you face up to it and deal with it quickly there are ways to reduce your liability by dumping your development part way through the trick is to be completely realistic about the price and make it appealing try and make the project appeal to less experienced developers who tend to be happy to pay a little more have a detailed file about your bills and put in sketches and designs for kitchens and bathrooms which most suppliers will provide for free also list the potential budget tradesmen people could use in their quotes and certificates for any completed work and if you've got planning approval for extensions make sure you include the plans and a copy of the planning consent make one area of the development habitable so that any potential buyers could live on site and if all else fails go to auction they're packed with would-be developers who are willing to take a risk and if you end up with two or three people chasing the property it could go for up to ten percent more than you'd get from an agent [Music] in rather hide Sarah and Nigel are hugely over projects the super prime buyers have fled the market and just as I'm starting to doubt that they will ever be able to see how grim things really are Nigel and Sarah have a dramatic change of heart I can't believe it we were actually done a complete user and we decided that we're gonna split the whole place into three different apartments now which is going completely against I realized what we said we do originally but we've decided that what Sarah being said before is the right thing to do it's much more beneficial to do three apartments as opposed to one just for the simple reason it might be really difficult to sell something so big and so expensive where at least if you've got two small flats downstairs you're edging your bets aren't you you know you're at least gonna get a sale from one of them this is good news this project has now gone so off the rails there's no chance they'll see a profit but they might just avert total disaster they get a new team on board and put in a planning application to turn it into three separate units the upstairs two floors will be a large penthouse the top floor largely untouched with the enormous terrace and living area the downstairs will be a huge master suite including walk-in wardrobe and another double bedroom with ensuite together with a large kitchen breakfast room they'd always planned on the ground floor where there was once going to be a cinema wet room and further bedroom there will now be a compact one bed flat and a decent size to bed flat but there's no escaping the fact that their budget is still a huge issue the last time I saw you your budget was at four hundred and sixty thousand so what is it now that you're gonna make three flats out of the building total spend now has gone up to six hundred and fifty thousand you bought it at one point 1 million pounds so you're you're in it 1.75 million finished so what do you expect to sell the flats for well ideally one bedroom two 22-250 the two-bedroom 350 to 400 and the penthouse one play around 1.1 which would bring a total of 1.75 million so 1.75 that's the same as the amount that you're in at yes that would bacon they even know is that none mate is that an amazing coincidence which which was kind of made out the budget or the week sales obviously our preference is to actually have more revenue come in and it's costing us well of course that would be gorgeous but if I'm really honest I think that the reality of this situation is that it's going to be a lot less hmm that you'd get coming in you're more realistically looking at 220 for the one-bedroom flat 300 for the two-bedroom flat and if you're lucky 700 for the penthouse possibly as low as 500 but if you're lucky 700 so that would be a a total of 1.25 million in a good market making up your figures is a dangerous game but when the markets falling it's financial suicide more than ever you need to buy at the right price work out a decent budget and schedule and have a realistic sale price work to a rough estimate if it's a total renovation work on 150 pounds of square foot if it's a simple refurbishment look at more like 50 pounds of square foot and then get your quotes and include every tiny detail down to the last nail next and our 20% for the all-important contingencies even with a realistic budget it can all go horribly wrong if you're not realistic about your sale price this is not the time to be greedy [Music] in Rotherhithe Nigel and Sarah's hope of completing their development in six months for two hundred and fifty thousand pounds is a far and distant dream do you kind of accept that your figures are probably a little bit all very unrealistic I say they're a bit in between a little bit and very honest I think they're quite unrealistic I've always said we need to think bit lower whichever way this project goes the realities were going to walk away with several hundred thousand pounds of a loss I've had a lot of sleepless nights a lot of second eyes all over capsule or everything that I've got what we don't on your collections it doesn't really get any worse than this it really is bad but it's just one of those things now you know we have to move on and you know we're really looking forward to the point where we can just sell the whole lot and get out and move on there is one suggestion I've got that might help minimize your loss if you come with me upstairs now up here on this size of the first floor I think you can make this into a one bed apartment and I don't think it's going to affect the value of the penthouse you still got the rest of the first floor and the top floor and this could easily have a bathroom here a bedroom here and then a kitchen living space at the end you should be able to sell this for 200,000 it shouldn't cost more than about 30,000 to do so you're looking at taking 170,000 pounds off that proposed losses that you're looking at well certainly look into that and then you know if we decide to go ahead with it then you know we can hmm one of the advantages with developing in this market is that you don't always have to pay full price whether it's building work kitchens bathrooms or furnishings it's always worth having a go at haggling and see if you can get your costs down don't always take the price at face value most things that have a sale are up for negotiation whatever price you're quoted viewed as an invitation to make an offer on the price you need to pay you could get a discount of anywhere up to 50 percent the three golden rules of haggling are don't insult their intelligence by making a ridiculous offer because they know you're serious they'll be more inclined to cut you a deal pay cash so they don't need to wait for the check to clear money in the till is now a welcomed lifeline to anyone on the high street be prepared to take it away there and then take your van because you're much more attractive buyer if you can help them shift stocks quickly and easily [Music] this has now become a crisis management project Nigel and Sarah need to start coming to terms with what is going to be a very big loss there's a high chance we're gonna lose money we may break even you never know if the market goes up we may make a little bit of money but in all honesty win lose or draw I'm actually a bit past that now the whole thing's like a full chain around my neck it's July 2009 Nigel and Sarah have been developing their sausage factory in lava highs East London for 18 months they paid too much for the property even at the peak of the market and the property had been up for sale for four years since they started house prices have plummeted and despite nationalizing half of the banking industry mortgage approvals are still at critically low levels they set out to create one enormous 5,000 square foot luxury apartment but were forced to change their plans and carve it up into three separate dwellings they can't afford to finish the two-bedroom apartment or penthouse until they complete the first stage it's fantastic to have this first flat done there in sausage is a shame that we wanted to have the whole property tun point in hell but you know at least it's the first stage and with that done we can move on to the next and you know soldier on [Music] and if the finish on the one-bedroom flat is anything to go by their first stage puts them in a good position to sell there's wide oak flooring throughout Korean work tops leather sofas a large stylish bedroom and a top-of-the-range limestone bathroom complete with floating furniture perfect for the young professional market so this one's all finished but the other two aren't finished yet yeah it's the first one but we obviously looking to have the others match the standards of this if not surpass it once this lot is sold they'll use the money to finish off the other apartment on the ground floor which they plan to have a similar high quality finish but with an extra bedroom and bathroom but it's the penthouse where Nigel and Sarah still really hope to realize their design ambitions leading up the bespoke staircase to the first floor there will be a large kitchen diner with black Korean work tops and white high-gloss cupboards and the bespoke zebra covered central unit there will be a guest bedroom and an enormous master suite but it's the limestone bathroom with its double sunken bars plasma TV his-and-hers loose sinks in a rainfall shower where they will really go to town [Music] and leading up the steel staircase there will be the ultimate leisure zone with a cocktail bar and luxurious lounge area with green grass shag pile carpet and fashionable purple velvet sofas this leads through sliding doors to the swanky outside relaxing area where the final style statement will be the Jacuzzi hot tub I think you've proven your point with with their one-bedroom flats the rest hopefully will be equally gorgeous but you bought the property two years ago so right at the heights the market just as it was about to come crashing down we couldn't have bought this at a worse time really but then again you know there's more people than ours in the same situation we weren't another market drop right down and there's nothing that we could do about it and it's such a shame but the thing is if we sit here and get depressed about it you know it just makes things worse and we're in this situation it's not gonna change so we really have to make the best of it when I first met you you're planning on spending two hundred fifty thousand pounds on the building working and then when I met you halfway through and you decided to turn it into flats you were thinking it would be closer to six hundred and fifty thousands you were gonna spend on doing the work not obviously buying it where are you now it's actually I'll calm down we've been fed coming we're gonna be coming in about 10% under budget so it's around 580 thousand will be costs for the whole build now and that's managing to make savings on materials and building works costs and everything else Nigel and Sarah bought the sausage factory for 1.1 million pounds they hope to reduce the original six hundred and fifty thousand pound budget to five hundred and eighty thousand by the end of the project but a little too late you're in this project 1 million six hundred and eighty thousand pounds do you have any idea at the moment what you might be able to get from when they're all finished oh yes 1 million sits on the most thousand-pound spending it seems to be flexible resale figures depending on what you spent on it that was pretty much the same sort of lineup well says is is that if we can get what we're looking at which we believe we could be able to gage is 250,000 for the one bed 350,000 for the to bed that means that we'd need to go these 1 million 80,000 for the panel house to break-even which we believe that you know Israel is realistic there's one way to see if their figures are realistic and that's let the agents have a look one-bedroom flats such as this if priced correctly will sell very quickly we've sold one in king of Queen Wharf which went under offer after about 21 days it's important that the property is priced attractively to draw buyers through the front door they'll then be very impressed with the finish inside which I'm sure will help it sell if this penthouse was actually located on the river with direct river views you'd be looking at adding at least a 15 percent increase to the value of the property I would value the one-bedroom property at two hundred and forty thousand pounds the two-bedroom at two hundred eighty five thousand pounds the penthouse at six hundred and fifty thousand pounds I would valued a one-bedroom apartment at 250,000 the two-bedroom at 350 thousand and the penthouse at 850 thousand I would value the one-bedroom flats at two hundred and seventy-five thousand pounds the two-bedroom flats at three hundred and sixty thousand pounds the penthouse at eight hundred and fifty thousand pounds it's a good price for a one-bedroom flat a good price for a two-bedroom flat and the penthouse obviously that's the one that's kind of brought everything there because they haven't valued it as high would mean that you'd make between a five hundred five thousand pound loss a two hundred and thirty thousand pound loss and a hundred and ninety five thousand pound loss we can't afford to make a loss on on this so you know I said we've got all of our money tied up in this project so if we have to live in their cell first two flats and live in the penthouse so then for prom prepare us on to get at the price I mean that's what we'll have to do even if it takes ten years to get to the level that you would want to sell it for well the facts I mean it'll be nice property so it's not going to be difficult living in a penthouse for years and years that's but we we don't really have the choice really we need to sell it we need to sell it at a good price and we can't really afford to sell it for less you know we can't afford so let's blow I don't think it will take ten years in fact I think I'll be I'll be very surprised if we haven't got a buyer within 12 months this has been a rollercoaster ride for you it was the dream property and it's kind of turned into a bit of a nightmare along the way but you've ended up with a lovely flat and two more to go after you finish this one it's it must have taken it out of here bit you know I said if we did it on with properties of element that's a big F we wouldn't make the same sort of would say we would be we did you just say if we do another property division [Laughter] phase that if we get as far as if we get as far as completing when we completed this problem is a lot of money you know there could be the possible you know another one no I wouldn't the fact the fact the matter is is there's not enough time in my life to do that you've hung up you're developing that absolutely I mean I've enjoyed doing this flats been great but no I just I just couldn't be bothered I could be open to the possibility of doing our postures relevant in the future despite what's happened simply because we were you know we've had a very steep learning curve and the things some of the things that the yeah we would be do very differently would prevent some of the pitfalls occurring again and they just wouldn't occur they wouldn't be allowed to occur so would be a very different story well fingers crossed the two flats on the ground floor sell quickly and and then you can enjoy living in the penthouse and you never know we watch this space for Nitin and Sarah it could be a long wait because the housing market looks set to remain jittery for some time to come if you still think property developing the business for you then treat it with extreme caution whilst prices have come down considerably from their peak there are some areas that are still so sought after that bidding wars are still going on the most important rule of developing is to pay the right price for the right house if you get your figures wrong at the start like Nigel and Sarah you're going to be in for a rocky ride and this market will take no prisoners [Music] [Applause] you you
