The celebrities who lost money on property

NEW YORK - FEB 15: Victoria Beckham attends the launch of Britain's GREAT campaign in Grand Central Station on February 15, 2012

Most of us expect to sell our home for more than we paid for it - particularly when we've invested in improvements.

While house prices have fallen over the last three months because of fears over Brexit, there's been a general upward trend for decades. And renovating, extending and redecorating usually bump that profit up.

However, this isn't always true of celebrity homes, with research from US estate agent Redfin finding that they tend to stay on the market for a month longer than other homes, and usually sell for less than the original asking price.

The reason seems to be that celebs tend to over-develop their homes - or develop them in a particularly personal way.

"Celebrities will sometimes add amenities to a home, which might not be a selling point for future homebuyers," says Redfin's Alec Traub.

"For example, a celeb might install a basketball court in the basement of a home, where another person might want to use that space for something else. Those homebuyers may be less inclined to want to pay the initial asking price."

We look at a few who made a property loss.

Posh and Becks
This summer, we took a peek at the six-bedroom house in Bargemon, Cote d'Azur, that the Beckhams have been trying to sell.

The couple bought the house for £1.5 million in 2003, and then spent £5 million on renovations, having one living room painted purple and the dining room kitted out in medieval style.

However, the house still hasn't sold - and even if it does make the £2.4 million asking price, they Beckhams will make a loss of more than £4 million.

Robbie Williams
The former Take That star paid a whacking £8 million for his seven-bedroom, eight-bathroom Wiltshire manor house in 2008. However, just 18 months later, it was on the market again, at a cut-price £7.5 million.

Earlier this year, he tried again - putting it on the market for a bargain-basement £5.5 million.

Sarah Jessica Parker and Matthew Broderick
The acting couple bought a New York townhouse for $19 million in 2011 - and spent a fortune doing it up. However, when they tried to sell it a year later, they failed to reach the $20 million price.

It took them until last year to shift the property, for just $18.25 million, representing a significant loss.

Charlize Theron
The Oscar-winning actress bought her Hollywood penthouse for $2.75 million in 2007. However, when she came to sell the one-bedroom, loft-style penthouse earlier this year, she reportedly netted just $1.75 million.

Kim Basinger
Perhaps the most extreme example of a celebrity making a property loss is acress Kim Basinger. In 1989, the actress bought not just a house, but a whole town.

She paid $20 million for Braselton, in Georgia, but fell into financial difficulty - and sold it five years later for just $1 million.

10 things that add value to homes in an area
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10 things that add value to homes in an area

A view out over the park isn’t just a nice bonus, it’s a valuable asset. A study by Marsh & Parsons has found that a park view can add up to 10% to a property's asking price.

It carried out its research in London, where it found that a view over Warwick Square in Pimlico added £75,000 to the asking price of a one-bedroom apartment.

Understandably, this is largely a London phenomenon, where the vast majority of train-based commuting takes place in the UK.

The Nationwide Building Society found that being 500m from a station would add 10.5% to the value of a property in London. In Manchester it fetched a 4.6% premium and in Glasgow 6%.

The researchers found that the closer the property was, the higher the premium would be - until the proximity of the station started having an impact on the area itself.

Having a Tesco, Sainsburys, Waitrose, Marks and Spencer or the Co-operative within striking difference, will add value to your property. In fact, a survey by Lloyds claimed that it would add 7% - or just over £15,000.

However, apparently what we all really want is a Waitrose, because the same study found that having a branch nearby added almost £39,000 - or 12% to the value of the property.

The way the survey was carried out, however, doesn't make it clear whether this is a reflection of the attraction of the supermarket itself, or whether the supermarkets tend to target affluent areas with expensive houses.

People will pay 12% more to live in a market town than they will for the same property in the surrounding countryside. The findings come from Lloyds Bank, which claimed the towns offered a balance between country life and community spirit that proved irresistible to buyers.

It added that in some market towns the mark-up was even larger, with Beaconsfield in the South East attracting a 156% premium over the surrounding area.

A study by the London School of Economics found that living in a conservation area adds 23% to the value of your home. Given that this was an academic study, the researchers went even further and adjusted the results based on the kinds of properties in the area, and other aspects of the location (which none of the other studies took into consideration), and it still found an uplift of 9%.
Being near a good school will add 28% to the value of your home - according to Savills - with parents calculating that it’s cheaper to move into the catchment area of a good school and pay anything up to £100,000 more for their property than fork out for years of extortionate private education.

A study a few years ago by Zoopla discovered that living on a road with ‘Hill’ or ‘Lane’ in its name meant your property was likely to be 50% more valuable than the national average.

Those with ‘Mews’, ‘Park’ and 'Green’ in their names were also more valuable.

It’s unlikely that there’s any element of cause and effect here: instead they are by-products of the same thing. Expensive houses have always been built in the more exclusive parts of town, including the hills and the quiet ‘lanes’ around those hills.

A survey by Primelocation claimed that being near a top golf course would add 56% to the value of your property. It added that prices were also rising faster near golf courses than elsewhere in the country.

Of course, there’s a chance that the results were impacted by the fact that many of the courses are in leafy and exclusive areas, where people pay a premium to live regardless of the course.

You’d have thought the threat of flooding would make people take to the hills, but it appears we’re still happy to pay a premium to be beside the sea.

The Knight Frank Waterfront Index found that overlooking an estuary adds an average of 85% to the price of a property, a harbour adds 83%, while the coastline in general adds 56% to the value of the property. If you have a mooring, that’s even better, as it adds 104% to the value of your home.

Despite all the bad press surrounding flood plains and rivers breaking their banks, being near a river is actually more valuable than being by the sea.

The Knight Frank Waterside Index claims it adds 57% to the value of your property - making it the most valuable asset to have in the neighbourhood.


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