Contractor "Hammers" the recessionPress release June 22, 2010 Homes & Gardens
Harrogate contractor Derry Construction Hammers Home a profit after appearing in "Homes under the Hammer"
Harrogate Contractor “Hammer’s through the recession”
October 2008 was a particularly bleak time for construction, the credit crunch began to bite, house sales slumped and order books dried up. With the economy looking down the long dark hole of a recession house builders began to mothball sites across the country. One Yorkshire builder however could see opportunity, opportunity to buy in a falling market.
The company, Derry Construction Limited found a good parcel of land with full planning permission for a three bedroom bungalow in Boroughbridge, North Yorkshire due to be sold at auction. The guide price of £60,000 appeared to provide value but following the discovery that pre-recession the site had been marketed for £150,000 the company could definitely see the value in the site.
Auction day arrived and with the auctioneer performing his opening gambit the bidding was off, with each bid escalating in £1,000 increments. Lady luck was with Shane Derry that day the director who bid on behalf of the company as all rival bids stopped at £49,000 securing the plot for a modest sum of £50,000. This was a full £10,000 below guide price.
It was also a fortuitous day for the Company in that Homes Under The Hammer were filming that day. Following Shane’s successful bid for the land the program’s researcher approached Shane to ask if he would be interested in being filmed for one of the forthcoming programs. Shane says “I was slightly bemused by the offer of being filmed for a program on the BBC but once the researcher had explained what was involved and with the additional benefit of being paid, I agreed.” “Although when I was told that they had already filmed the days action a close friend who had been sat next to me bidding over ½ million pounds for a property went rather pale at the news. I enquired why he looked off colour to which he reminded me of his pending divorce. I can only presume that he did not relish the thought of his wife viewing him bidding away her potential settlement! ”
Good timing in business is critical but more so when facing a recession. The decision to buy in a falling market was perfect timing but starting a build in the middle of a recession? Shane says “I made the bold decision to start the house build following the media’s constant barrage of depressing news over the economy at Christmas. I realised new business would be quiet during 2009 and decided to build our property during this potentially quiet period. This would help in keeping my workforce busy during the downturn and also return the completed house for sale towards the end of the year hopefully when things would begin returning to normal.”
So on January 5th 2009 Derry Construction began constructing the house. Three problems faced the Company immediately, one they did not have building regulation approval two Shane wanted to add a garage to the scheme and also build a larger property than what had been initially approved by the local authority and three they did not have any funding in place from the bank. The first problem was easily dealt with by a swift application to the council but the second and third could be a little tricky to deal with. Shane was informed by the planning department he would have to re-apply for full planning and the banking sector were not in a lending mood.
Both remaining problems could have forced work to cease before it had really begun. Without planning or money you cannot build, but Shane decided to press on applying to the bank for a loan and the Council for planning permission. In the interim the company used their own funds to pay for the works as they proceeded. A decision on the planning application would not be made until the end of February and with the proposed house within a Conservation area it was in no way a far gone conclusion that it would be passed. With this in mind and so as not to hold up progress Shane made the unusual decision to build the foundations wide enough to accommodate either size house! Luckily for Shane his gamble paid off and they received full planning permission in time to suit his build program.
Finance proved troublesome, banks were reeling from one bad press release to another and some did not know whether they would survive at all. Even though the company owed the land outright and it was financing the initial build costs it was still proving difficult to borrow money based on the projected value of the completed dwelling especially during a falling market. Surveyors were viciously downgrading their bank valuations with their own banks valuation returning a very conservative figure of £220,000 for the completed project. After prolonged negotiations and following over three months of the company financing the build the bank eventually loaned the money to complete the project.
With planning permission in place for a larger dwelling the company decided on a high quality specification inside and out with attention to detail in all aspects of the build from the choice of brick through to internal fittings and floor coverings. One unusual yet pleasing aspect is the boundary wall built to form a walled garden to the rear with the added benefit of providing a secure and private environment for its occupants. This modus operandi proved useful to the company in relation to its neighbours who did not wish to be overlooked by the new dwelling. The adjoining neighbours also agreed to share costs with Shane for the construction of the new boundary wall so neither property overlooked the other. The privacy gained from the new walls also allowed Shane to apply and receive planning permission for a Garden Room off the kitchen which now measures over thirty feet in length and looks magnificent with its traditional glazed roof lantern.
Homes under the Hammer returned to complete filming in November 2009 and with only the Derry Construction shoot scheduled for that day they were able to film every perceivable angle of the property to the delight of the company. Two estate agents attended filming to air their views and unsurprisingly both were impressed with the standard of finish. A valuation of £300,000 was received from the Auctioneer from whom the land had been originally bought and the second agent based in Boroughbridge gave £345,000.
Following the filming for Homes under the Hammer Derry Construction have agreed the sale of the property now named Rose Garden Cottage for £335,000 returning a very healthy profit to the company and justifying all the risks taken by the company during the recession.
Derry Construction Limited are a well known and respected building contractor based in Harrogate they are registered house builders with the NHBC and are members of the National Federation of Builders they are also approved contractors for Sovereign Chemicals specialist remedial products.
If you would like to see this episode of Homes Under The Hammer it will be shown on BBC1 at 10 am Tuesday 29th June 2010
Derry Construction limited
Tel: 01423 780760
Email: [email protected]
Shane DerryDerry Construction Limited
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