The Cambridge Repossession And The Legal Squatter

21 Sep

Today I almost fell off my chair when I saw a 3 bed semi-detached house for auction in Cambridge with a guide of just £170k. It’s in a great location, just a 5 minute walk to town and would have great appeal to a family in the area.

Excited by the prospects of a decent project on my doorstep and some decent money to be made I headed straight out the door to the viewing.  I knew there would be a huge number of people interested, but I felt confident as I was prepared to pay way over the odds to secure this opportunity – with a resale of c. £400k there was plenty of money to be paid and made on this property. OK so the property had a dodgy looking extension and was in need of a fair amount of work:

 

 

But this is typical auction stuff – and to get top dollar you need a remodelling of the entire property so really the aesthetics are the least of my concerns. OK so the fact you can’t see outside the windows due to the creeping vines meant I was budgeting for a new roof:

 

 

But still I was optimistic…That was until I discovered the fencing that had been erected all around the perimeter of the garden:

 

 

Why on earth was there so much fencing – and why were these trees so huge I wondered?

And then I discovered….behind the fencing and the trees, on what used to be part of the back garden lives the previous repossessed owner in a caravan!

So the story is –  prior to the owner being repossessed he transferred part of the garden (with the mortgagees consent) to his son. His son then allowed his father to live on the land – the former garden in a caravan. From my vantage point on the upper floors of the house I could work out he had two caravans, a large van, a pick up truck and a car, plus, an odd assortment of building materials and other debris. From this picture below you can just about make out the outline of the caravans – I have highlighted them in red as they are quite difficult to see through all the trees which have been planted for screening!

This photo is taken from through his letterbox which is in the gate:

 

This is the drive that you now share with the repossessed owner  – he also owns the blue car in the drive!

 

OK no problem I thought – he doesn’t have planning for this so surely the council can get this sorted. No. It would appear the council have done bugger all.

So this stretches back over some years whereby the council had ordered him to remove the structures and to leave the land. He had then appealed and some 8 years later we are where we are now – he has several “temporary dwellings” on the land and nobody seems able to do much about it! Not willing to give up so easily I planned how I could buy the bit of garden off him. Having spoken with the estate agents I had discovered that with him on the garden the house was going to be a difficult sale and nowhere near the value I had anticipated.  And then I discovered he was planning on applying for permission to build a bungalow on the land…it wasn’t for sale…not as a garden at any rate!

And so the best case for this property was to buy it and use it as a student rental property. Grossing somewhere around £36k per year it could be a good income generator – but the issue was with lending. While the previous owner was on the land there was little hope for capital increase or much point in trying to get the most out of the property.  Any valuer in their right mind would down value the property so much due to it’s issues I had little chance of raising a good sum against the value.

In the end, and with a heavy heart, I have decided that the risks are too great. If the previous owner could get planning permission for his bungalow it would detract from the value of the house I was trying to develop. Moreover, given the repossessed owner intends to apply for planning permission means that the value of his garden is now worth more than what it would be to me to get the deal through.  While I will walk away from this deal, I fully expect the property to sell for it’s income potential and for somebody to factor in a lot of hope value – against a guide of £170k I wouldn’t be surprised if the end price is somewhere in the region of £275k.  The auction is tomorrow – I’ll let you know!

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