Fancy a free house?

The property

There's a new contender for the title of Britain's cheapest house. In fact this one could go for pennies. The three-bedroom Victorian terrace house is in Nantymoel, near Bridgend, where Zoopla calculates three-bedroom properties have an average asking price of £148,560.

So why is this house so cheap?
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The house

The property is for sale at action in Cardiff on June 20th, so there's no asking price. Buyers will simply pay what they believe the property is worth. Usually a seller will set a reserve price, so if no-one is willing to buy for more than the reserve, the property won't sell at all. What makes this house so different is that there's no reserve. If the highest bid is 1p, that's what it will sell for.

Admittedly you don't get an enormous amount for your money. The windows are boarded up, there are no slates on the roof, and every single room would need to be gutted and started from scratch. The property was once a lovely home, but ten years of neglect have left it uninhabitable. Auctioneer Paul Fosh said in a statement that it was "little more than a shell".

He added: "The freehold property has a nil reserve which means that it could be sold for just a few pounds but the new owner must be well aware that they'll need funds to renovate the place as it is currently unfit for human habitation - it doesn't even have slates on the roof. We're told all there is of the house are the walls and the only concession to comfort appears to be a leather sofa which is in the forecourt to the front, outside of the building."

It's a serious project for someone very committed if it's ever going to be a family home again.

So is it worth investing in?

According to whatprice.co.uk, a total overhaul of a run-down property can cost anything between £20,000 and £60,000. Given the quantity of work involved, and the fact that even the roof needs replacing in this instance, even the most dedicated DIY fan would struggle to get change from £50,000.

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Of course with all these things, the value it adds depends on the property you have to start with, and the kinds of improvements you make, but Which? estimates the cost of a new kitchen at £8,000 and HSBC calculates the added value to your property at £4,500 - which is a clear loss.

This has been done by 41% of people in the last three years, and 29% of people plan it in the next three. It's cheaper than a kitchen, and Which? estimates the cost at £3,000. This is roughly the same value that HSBC says it will add to your property - so you'll break-even.

It may be difficult, but getting your property ready for sale means depersonalising it. 

Clutter can distract viewers and more than half (60%) of the property valuers who took part in the 2012 HSBC Home Improvement Survey said that the number one way to increase a property's chance of selling quickly, and for a good price, was to de-clutter.

This has been installed by 31% of us in the last three years, and 15% plan it in the next three. Installing central heating is a disruptive job, and according to WhatPrice it will cost you around £3,235. However, this is the first of the top ten to actually pay off. Property expert Phil Spencer says it will add £5,000 to the value.

A quick splash of paint can work wonders on tired-looking walls, and sticking to neutral tones is the safest bet.

Keeping the colour scheme simple, fresh and inviting will help potential buyers to see themselves living in your home.

Some 18% have added one in the last three years, and 30% will in the next three. This is another huge job, but with more people struggling to move and deciding to improve instead, it's increasingly popular. The amount it costs will depend on an enormous number of things, from the area you have to work with, to the size of the extension. However, assuming you add a single room you could spend around £20,000. HSBC estimates it will add around £15,500 to the value of the property, so you are unlikely to gain as much as you spend.

According to Halifax valuers, loft conversions - which require lofts with a roof height of at least 2.4 metres - are a good way to increase the potential sale price of your home.

Be sure to stick to your budget, though. The average loft conversion will cost between £10,000 and £30,000, while HSBC's figures show that they typically add £20,876 to the value of a property.

Putting in new windows adds around £5,265 to the value of the average property and can reap big rewards when it comes to energy efficiency.

It is, however, sensible to ensure that your new windows are in line with the style of your property to maximise the added value - particularly as putting them in can set you back about £5,000.

Off road parking or a garage can be especially advantageous in areas where parked cars line both sides on the street.

Nationwide's figures show that adding a garage, which can cost anything between £8,000 and £25,000, can increase the value of your property by 11%.

Outside space is just as important as inside - especially when people are seeing your home for the first time.

While 63% of the HSBC survey expert respondents said that repainting or varnishing a front door would make a difference, only 23% of homeowners recognised this. Peter Dockar at HSBC said: "It is often the smaller jobs like painting the front door that can make all the difference when looking for a sale."
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You also have to add in the fact that if you are buying this as your family home, you'll need somewhere else to live while the work is ongoing. In some cases you can renovate room-by-room, but given that there's not even a roof in this property, unless you're happy in a tent in the garden, you'll need a budget for renting elsewhere.

The area

Once you have finished, you will be the proud owner of a property in a former mining village near Bridgend. It's not a particularly wealthy area: some 54% of people work, and 12% are retired. This makes unemployment higher than the average for Wales. The level of qualification is also lower: as 48% of people have no qualifications. And car ownership is lower - as 35% of households have no car. It means the area isn't booming, and house prices are unlikely to outperform in the future.

However, it's within striking distance of the M4 (8 miles), it sits among some beautiful scenery, and has one of the few village primary schools left in the area. There is some demand for rental property, which can fetch £600 a month for this size of property. There will be plenty of people for whom this represents a real opportunity.

So what do you think? Would you buy it?

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