A canary for the (UK property) coal mine - Omaze winners' "£4m" house

[Frank Hovis]

I've been waiting for a good example of kite flying to track the collapse and one landed yesterday.

This was won on Omaze recently and valued by them at £3m.  I assume that Omaze uses an independent valuer but they are likely to be generous in their valuation at the very least given that they would wish for repeat business.

To this generous £3m valuation the winners have added £1m to £4m and placed it onto the market.

It's a perfectly nice house but it's some distance from the estuary, right by a road, and it what looks a fairly bleak and exposed location to me given the scrubbiness of the unkept land to the right with its very low vegetation.  The wind will certainly whistle in winter.

The listing says Wadebridge but it's actually the other side of the estuary and set some way back from Rock; not that the side of the estuary would particularly affect the valuation as they are both perfectly pleasant.

I'm not expecting any rapid changes but I will update if and when it does change.  And IMHO after the massive rises in price of houses in seaside areas in Cornwall during lockdown these have further to fall than most.

 

Popcorn anyone? I have lots.

 

https://www.rightmove.co.uk/properties/127876466#/?channel=RES_BUY

https://www.cornwalllive.com/news/cornwall-news/omaze-mansion-winners-put-cornwall-7700358

[Boon]

I think every winner on Omaze has ended up selling.

The idea of winning a house seems great but it isn't, but if you can't afford to live there or get a job and relocate there, it seems to become an expensive trophy. You would be quite nervous for instance if you had that empty, nothing to stop bums from chilling in your garden.

Nevertheless the current prizes seem to come with £250k cash as well, so the upkeep/running/security costs are covered for some time.... I could imagine this will be a very slow grind down, who knows when some kind of rich foreigner might emerge.

As for canary, no, I believe these type of properties are in a bubble anyway and don't interact with the regular market.

What I think is more relevant could be new build flats. The premium to regular property is absurd and they contain hidden liability as well in the form of service charges that can grow at 10%/year. A collapse in their values then has questions for the new ones hitting the market but also upstream.

[Frank Hovis]

16 minutes ago, Boon said:

who knows when some kind of rich foreigner might emerge.

 

Though as I said with regard to another big project house, a Grand Designs one inland from Mawgan Porth up for £1.8m which almost seems reasonable in comparison, below, someone with a big chequebook looking to buy in Cornwall is going to want a house that ticks every box: private, great sea views and by the sea, big garage for their cars. 

Neither of these houses tick those boxes, the latter can't see the sea and the former is a glorified bungalow right on a road and very exposed.  And tbh can't see the sea either.

These are both luxury builds in the wrong places, built with an eye to profits by buying cheap sites rather than paying a lot more for a prime site with a house already in situ and demolishing in it.

I cannot see either going for the asking price though the Mawagn Porth one has far more chance of coming close as it comes with land and is less than half the price to start with.

No, the Omaze one is not an "aspirational" home by any stretch of the imagination; and I would know as I'm looking for one to buy in a few years when my pensions kick in.

 

https://www.cornwalllive.com/news/celebs-tv/grand-designs-ferris-bueller-cornwall-4357365

[spunko]

I was ogling this on Street View just now. Surprised by how near the road it is, and there's a caravan holiday park right next door. I wouldn't pay £2m for it.

What confuses me is that Omaze bought it for £3.7M. Why were they marketing it as a £3m house if they paid £700k more?

https://houseprices.io/?q=pl276rj

In any case, I suspect it'll sell for between £3m and £4m, given all the publicity it has received.

I knew from one look at the winners that they wouldn't live there...

Also @Frank Hovis it looks like the builders of the Omaze house paid almost £1m for that plot of land. Seems a lot to me?

Assuming another £1m build cost, they made a tidy profit when they flogged it to Omaze.

[spunko]

I'm also not quite sure I understand Omaze's business model.

Their new draw is for a Marbella house. Let's assume it cost them £2m.  https://omaze.co.uk/pages/enter-marbella

But then it says this:

Omaze UK Limited is the promoter of the Marbella Superdraw with Teenage Cancer Trust being the charitable beneficiary, registered charity in England and Wales (1062559) and in Scotland (SC039757). 80% of the net proceeds of the draw will go to the charity, with Omaze being paid 20%. It is expected that approximately £500,000 will be raised for the charity, which would mean Omaze being paid £125,000.

What about the cost to buy the property? I don't get it. Oh hang on:

Net proceeds means everything that is left over after deducting the costs of the prizes and marketing only.

So let's say they are spending £2m on the property, and say another £1m on marketing, and only making £125k profit?

[Frank Hovis]

2 minutes ago, spunko said:

I'm also not quite sure I understand Omaze's business model.

Their new draw is for a Marbella house. Let's assume it cost them £2m.  https://omaze.co.uk/pages/enter-marbella

But then it says this:

Omaze UK Limited is the promoter of the Marbella Superdraw with Teenage Cancer Trust being the charitable beneficiary, registered charity in England and Wales (1062559) and in Scotland (SC039757). 80% of the net proceeds of the draw will go to the charity, with Omaze being paid 20%. It is expected that approximately £500,000 will be raised for the charity, which would mean Omaze being paid £125,000.

What about the cost to buy the property? I don't get it.

 

"Net proceeds" innit.

Expected receipts:  £2,625,000

Costs:  £2,000,000

Net profits / "proceeds": £625,000

[spunko]

10 minutes ago, Frank Hovis said:

 

"Net proceeds" innit.

Expected receipts:  £2,625,000

Costs:  £2,000,000

Net profits / "proceeds": £625,000

That is still not that much, they run one of these every 3 months in the UK I think.

And they throw in £250k cash to the winner, and I've just had a look they're doing an "early bird" promotion where someone else who enters will win a Mclaren GT which are about £180k.

Just thought like most of these competition cum gambling companies they'd be operating on huge profit margins.

For example, on a £2m house I assumed they'd be making £4m profit etc.

[spunko]

To get round the fact they are a lottery but don't have a lottery license, Omaze let you enter (unlimited times) for the price of a 2nd class stamp.

https://omaze.co.uk/pages/postal-entry-route

You can enter as many times as you want per household, so 68p a pop. Not bad, works out about the same cost per entry as their paid options.

[Frank Hovis]

13 minutes ago, spunko said:

I was ogling this on Street View just now. Surprised by how near the road it is, and there's a caravan holiday park right next door. I wouldn't pay £2m for it.

What confuses me is that Omaze bought it for £3.7M. Why were they marketing it as a £3m house if they paid £700k more?

https://houseprices.io/?q=pl276rj

In any case, I suspect it'll sell for between £3m and £4m, given all the publicity it has received.

I knew from one look at the winners that they wouldn't live there...

 

The problem with such publicity is that it attaches an arbitrary value to a house when it is no such thing: it is an asking price.

That is not a house in which I would want to live; there are far better houses to buy in Cornwall available for much less than that.  I genuinely would take my current house in preference which is a small fraction of the value per Zoopla.

I have selected it because even against the backdrop of the mentalness of the current Cornish seaside property market it stands out as being ridiculously priced.

It's listed at £4m so I have taken a selection of £1.5m - £3m houses within a 25 mile radius of Wadebridge (the nearest big town) on Rightmove.

This returns two, each at £1.5m, so that you can buy both for the price of the Omaze house and still have £1m left over to pay for a fish supper at Rick Stein's.

 

Second one:

Key features

• Exceedingly Handsome Detached Barn Conversion
• Set within Approximately Six Acres of Pristine Gardens, Grounds & Pasture
• Four En-Suite Double Bedrooms
• Immaculate Two Double Bedroom Annexe
• 30 Foot Studio/Workshop with Vaulted & Beamed Ceiling
• Over 4,250 Square Feet of Elegant Accommodation
• On the Market for the First Time
• Located in a Stunningly Tranquil Countryside Setting

https://www.rightmove.co.uk/properties/127428491#/?channel=RES_BUY

 

First one:

Key features

• Authentic Cornish four bedroom Farmhouse
• Detached two bedroom annexe
• Approximately 28 acres of rural land
• Half a mile of river frontage with fishing rights
• Quiet rural location close to the north coast
• Character Farmhouse requiring modernisation
• Utterly splendid charming location
• No immediate neighbours
• No legal rights of way/bridleways exist over the property
• Paddocks, equestrian facilities and woodland

https://www.rightmove.co.uk/properties/127101887#/media?channel=RES_BUY

 

This is the context in which I am looking at the £4m exposed bungalow which, as @spunko has pointed out, is right next to a caravan site.

It is nowhere near as good as either of the two houses above, each coming with land that isn't exposed and scrubby, priced at £1.5m each.

What then does that make the genuine value of the Omaze house in the current overheated Cornish seaside market?

Anything between £0.8m and £1.2m IMHO.

[light n dark]

https://www.rightmove.co.uk/properties/127876466#/?channel=RES_BUY

Fuckwit estate agents. !st paragraph:

Quote

The Waterhouse is an award-winning architectural masterpiece due to its extremely economical standard.

The house has an extremely cheap standard?

Perhaps the EA meant "The Waterhouse is an award-winning architectural masterpiece due to it's extremely energy efficient construction standards."

or at least 

"The Waterhouse is an award-winning architectural masterpiece due to it's high standard."

[Frank Hovis]

32 minutes ago, spunko said:

That is still not that much, they run one of these every 3 months in the UK I think.

And they throw in £250k cash to the winner, and I've just had a look they're doing an "early bird" promotion where someone else who enters will win a Mclaren GT which are about £180k.

Just thought like most of these competition cum gambling companies they'd be operating on huge profit margins.

For example, on a £2m house I assumed they'd be making £4m profit etc.

 

I assumed that the US was their main market and they did the one in the UK and other European countries but that wasn't their focus.

Pure assumption though.

[Frank Hovis]

1 minute ago, light n dark said:

https://www.rightmove.co.uk/properties/127876466#/?channel=RES_BUY

Fuckwit estate agents. !st paragraph:

The house has an extremely cheap standard?

Perhaps the EA meant "The Waterhouse is an award-winning architectural masterpiece due to it's extremely energy efficient construction standards."

or at least 

"The Waterhouse is an award-winning architectural masterpiece due to it's high standard."

 

Or, perhaps not:

is insulated with blown recycled newspaper

 

[spunko]

Interesting that they chose a London EA too. I would have thought Savills or similar in Cornwall would have been better.

[spunko]

19 minutes ago, Frank Hovis said:

 

The problem with such publicity is that it attaches an arbitrary value to a house when it is no such thing: it is an asking price.

That is not a house in which I would want to live; there are far better houses to buy in Cornwall available for much less than that.  I genuinely would take my current house in preference which is a small fraction of the value per Zoopla.

I have selected it because even against the backdrop of the mentalness of the current Cornish seaside property market it stands out as being ridiculously priced.

It's listed at £4m so I have taken a selection of £1.5m - £3m houses within a 25 mile radius of Wadebridge (the nearest big town) on Rightmove.

This returns two, each at £1.5m, so that you can buy both for the price of the Omaze house and still have £1m left over to pay for a fish supper at Rick Stein's.

 

Second one:

Key features

• Exceedingly Handsome Detached Barn Conversion
• Set within Approximately Six Acres of Pristine Gardens, Grounds & Pasture
• Four En-Suite Double Bedrooms
• Immaculate Two Double Bedroom Annexe
• 30 Foot Studio/Workshop with Vaulted & Beamed Ceiling
• Over 4,250 Square Feet of Elegant Accommodation
• On the Market for the First Time
• Located in a Stunningly Tranquil Countryside Setting

https://www.rightmove.co.uk/properties/127428491#/?channel=RES_BUY

 

First one:

Key features

• Authentic Cornish four bedroom Farmhouse
• Detached two bedroom annexe
• Approximately 28 acres of rural land
• Half a mile of river frontage with fishing rights
• Quiet rural location close to the north coast
• Character Farmhouse requiring modernisation
• Utterly splendid charming location
• No immediate neighbours
• No legal rights of way/bridleways exist over the property
• Paddocks, equestrian facilities and woodland

https://www.rightmove.co.uk/properties/127101887#/media?channel=RES_BUY

 

This is the context in which I am looking at the £4m exposed bungalow which, as @spunko has pointed out, is right next to a caravan site.

It is nowhere near as good as either of the two houses above, each coming with land that isn't exposed and scrubby, priced at £1.5m each.

What then does that make the genuine value of the Omaze house in the current overheated Cornish seaside market?

Anything between £0.8m and £1.2m IMHO.

Difficult to compare though, I'd take that second one in an instant. But for some reasons these "eco homes" like the Omaze one do seem to attract a premium. To my eye, most modern builds including high end ones are just soulless grey spaces. This is fairly near to me, it makes me feel cold just looking at it, and I wouldn't even pay half the asking price. But I bet it goes SSTC shortly. People just seem to go a bit mental when it comes to new builds.

https://www.rightmove.co.uk/properties/123260003#/

[Frank Hovis]

3 minutes ago, spunko said:

Difficult to compare though, I'd take that second one in an instant. But for some reasons these "eco homes" like the Omaze one do seem to attract a premium. To my eye, most modern builds including high end ones are just soulless grey spaces. This is fairly near to me, it makes me feel cold just looking at it, and I wouldn't even pay half the asking price. But I bet it goes SSTC shortly. People just seem to go a bit mental when it comes to new builds.

https://www.rightmove.co.uk/properties/123260003#/

 

I agree that I certainly wouldn't want to live there, primarily because of the small grounds and being in an estate of the same type of houses, but it has a vast amount of interor space and a double garage with one bed annexe above so £1.35m looks like a price at which somebody would buy it who has little or no interest in their garden or grounds, isn't bothered about a view, spends all their time at home indoors and drives everywhere.

I would still call that Omaze house seriously over priced even at £2m.  For £4m it's squarely into "Would you like to buy some magic beans?" territory.

[spunko]

12 minutes ago, Frank Hovis said:

 

I agree that I certainly wouldn't want to live there, primarily because of the small grounds and being in an estate of the same type of houses, but it has a vast amount of interor space and a double garage with one bed annexe above so £1.35m looks like a price at which somebody would buy it who has little or no interest in their garden or grounds, isn't bothered about a view, spends all their time at home indoors and drives everywhere.

I would still call that Omaze house seriously over priced even at £2m.  For £4m it's squarely into "Would you like to buy some magic beans?" territory.

There's also that they want £200k more than they paid 18 months ago. That'll be the main issue with it I suspect.

21/04/2021

£1,082,000

Sorry, £300k*. Madness

[spunko]

Sometimes I toy with the idea of touring these places, meeting the owners and asking them what they have done in a year that justifies the £300k price increase.

I did do it once, it was a divorce, and the response (with straight face) was: "I need somewhere to live".

 

You want me to fund your lifestyle choices? Fair play.

[Boon]

12 minutes ago, Frank Hovis said:

 

I would still call that Omaze house over priced even at £2m.  For £4m it's squarely into "Would you like to buy some beans?" territory.

I would as well. At that price you could probably build to your own spec.

I think you can't underestimate just how much owners love their property though, or how much EAs egg them on with stupidly high valuations.

[One percent]

48 minutes ago, light n dark said:

https://www.rightmove.co.uk/properties/127876466#/?channel=RES_BUY

Fuckwit estate agents. !st paragraph:

The house has an extremely cheap standard?

Perhaps the EA meant "The Waterhouse is an award-winning architectural masterpiece due to it's extremely energy efficient construction standards."

or at least 

"The Waterhouse is an award-winning architectural masterpiece due to it's high standard."

That estate agent clearly has a future as a journalist given the writing ability. 

[King Penda]

2 hours ago, spunko said:

Also @Frank Hovis it looks like the builders of the Omaze house paid almost £1m for that plot of land. Seems a lot to me?

Assuming another £1m build cost, they made a tidy profit when they flogged it to Omaze.

The roof wants cutting 

[Frank Hovis]

1 minute ago, King Penda said:

The roof wants cutting 

Yes.

Having a lawn on your roof, or a "green roof" seems to be asking for trouble.

Flat roofs have far shorter lives than pitched ones but to put onto a flat roof a load of soil which is going to retain water and hold it against the roof through most of the year seems a fairly ludicrous design IMHO.

If you genuinely want to go green, rather than wishing to virtue signal to friends and family, then give up your car and forget all of the other nonsense.

[spunko]

Does anyone know why they have put the solar panels on the north facing aspect? Surely counter productive??

 

 

I suspect that the lawn roof was a planning permission ruse. Probably one of these Class Q houses where you wouldn't otherwise be allowed to build a 'normal' house.

[Frank Hovis]

26 minutes ago, spunko said:

Does anyone know why they have put the solar panels on the north facing aspect? Surely counter productive??

 

I suspect that the criterion for solar panels in the EPC rating, they have a B, has been loosely written in that having solar PV panels = fixed points credit.

In setting the EPC regs the assumption would be that no-one would be so stupid as to orient them to the north where they will generate very little electricity indeed in summer and none at all in winter.

Little did they know....

[roundhouse]

On 14/10/2022 at 12:39, spunko said:

Does anyone know why they have put the solar panels on the north facing aspect? Surely counter productive??

 

 

Sorry to disappoint... it's a long skylight! Bugged me so much I had to watch the EA video to suss. Has heat pumps, both air and ground I think. In fairness the house has some great natural light but this skylight is along a narrow corridor to bedrooms.

The external building by carport doesn't though - big failing in my mind when they describe it as having workshop or home office appeal, and iirc even with a cooker point so could be converted to hol let or airbnb! What! Why would someone want to do that if they could afford such a spacious house!

Pretty well agree with all other comments. My biggest thought on watching the vid was... such big rooms, how long would it take to clean them???? No thanks. 

[Frank Hovis]

Not sold yet then.

Open house day 12 November.

 

https://www.cornwalllive.com/news/cornwall-news/omaze-home-sale-cornwall-set-7749368