MONEY COMMENT
Top Five Mad House Deals

By Maynard Paton (TMFMayn)
August 3, 2004

A sure sign of a market about to hit trouble is when low quality assets get bid up to ridiculous heights. So property buyers beware -- these five mad housing deals were all reported earlier this year.

1. A Garage, Weymouth: £40,000

For more than twice the average Dorset salary, desperate first-time buyers can live in a garage in Weymouth. For your money you get a freehold measuring 15ft by 8ft, which values the site at £333 per square foot. Sadly, there is a property on top of the garage owned by someone else, making it impossible to demolish the garage and build on the site. The estate agent involved alleged: "Parking is expensive... We've already had quite a lot of interest in it."

2.  A Beach Hut, Mudeford Sandbank: £145,000

The more discerning Dorset resident may wish to consider a 16ft by 18ft wooden beach hut on the county's coast. Though the 'property' has no running water, no gas supply, no mains electricity and the nearest car park is two miles away, it does boast a solar roof panel, a cylinder gas kitchenette and a bunk bed. As well as forking out £503 per square foot, the prospective buyer will also have to pay ground rent of £1,400 per annum. The owner claimed: "We have had some interest already and the sale will act as a pension for my wife."

(Alternatively in nearby Charmouth, a rundown toilet block with planning consent for a beach hut conversion was marketed recently for offers in excess of £25,000.)

3. A Broom Cupboard, London: £125,000

No list of mad house deals would be complete without a Knightsbridge broom cupboard. One such, er, apartment in the Prince's Court block near Harrods, measures 11ft by 6ft and was put on the market at £1,893 per square foot. The selling agent reportedly used words such as 'imaginative', 'clever' and 'economical', but 'room', 'swing' and 'cat' may have been more appropriate. Nevertheless, potential brooms will refer back to the late eighties, when a similar closet, ahem apartment, within the same complex went for 'just' £36,500.

4. An Ice-Cream Kiosk, Cornwall: £95,000

Whipping up interest in Polperro harbour is a 25 square foot wooden ice-cream kiosk. At £3,800 per square foot and room for just one person inside, naturally the new owner will need to spend half the year selling ices to make a return on his lolly. During the long, hot summer of 2003, said kiosk reported sales of a cool £39,000 and a gross profit margin of 60%, though the selling agent admits the freehold parlour is situated among many retail and catering establishments. The owner admitted: "We were a little bit surprised at the price but it's offering a lifestyle as well as a business."

5. One Acre of Scrubland, Halifax: £100,000

Land grab fever has reached manic proportions in Halifax. A one-acre plot of scrubland in the heart of the town's green belt -- with no planning permission for any kind of building -- recently sold at auction for £100,000. If that wasn't remarkable enough, guess how much the same plot sold for three months earlier... £2,500. The jammy seller reaped a fortybagger and can now boast of an annualised return of 255,999,900%. The auctioneer, who sold the land and experienced the last property boom fifteen years ago, confessed: "That [boom] was nothing compared to what is going on now. The scale of the boom over the past twelve months has been quite astonishing."

Maynard wishes to thank calcaria for his exceptional work on the Fool's Property -- Markets and Trends discussion board and for highlighting the above properties from stories within the Dorset Echo, the Sun, the Independent, the Financial Times and the Times.