Even in the current rising market, taking on a restoration project can be a major gamble but the rewards can be huge. The seemingly unstoppable rise in UK property values in the past decade has enabled a large number of young couples to build up substantial amounts of tax-free personal capital by buying and restoring rundown houses which they later sell on at a profit. But, even in a rising market, the restoration process involves risk as well as reward, as Richard and Victoria Church discovered when, in October 2000, they embarked on their fourth renovation project, that of Grade II-listed Willey Place, two miles from Farnham, on the Surrey-Hampshire border.

Mr Church recalls their restoration drama. ‘We had already renovated and sold two houses in London and one in the country, when we bought Willey Place a former private nursery school, comprising a large rambling Regency house built round a much earlier one, with 10.9 acres of gardens, woodland and paddocks in July 2000. Substantial repairs were needed, including reroofing, rewiring and so on, but everything went according to plan, and by spring 2002, we were looking forward to putting the final touches before moving in on our return from a skiing holiday in Val-d’Isère. While out there, however, we received a phone call from a neighbour telling us that the house was on fire, and returned to find the house burnt to the ground with just the stone outer walls left standing.’

Having successfully negotiated a large insurance settlement, the Churches embarked on a second, more ambitious, restoration programme, which cost twice as much, and took twice as long to complete. ‘But this time, we were able to totally remodel and update the entire property, ending up with a far better house than the one originally approved by the planning and listed-building people,’ Mr Church comments with evident satisfaction.

Racing enthusiast Mr Church and his wife are already looking forward to their next venture, despite the fact that a sale agreed through Lane Fox (01256 702892) in September 2006, at a guide price of £2.85 million, fell at the final hurdle. Undeterred, they have now ‘upped the ante’ to £2.9m for state-of-the-art Willey Place, with its five reception rooms, six bedrooms, four bathrooms, gym, pool, an annexe, staff flat, a tennis court and stables.

Generally speaking, the higher a building’s listing grade, the more complex the restoration process is likely to be. Previously part of the South Wraxall Manor estate, Grade I-listed Manor Farmhouse at South Wraxall, near Bradford-on-Avon, Wiltshire, may originally have been a Benedictine hospice, or even part of a 14th-century manor which was later replaced by South Wraxall Manor itself.

The present owner of the historic Cotswold stone farmhouse has already paved the way for its conversion from its current use as two let dwellings to a substantial five-bedroom family house, through discussions with the local district council, the Society for the Protection of Ancient Buildings (SPAB) and English Heritage. Lane Fox (01285 653101), who quote a guide price of £800,000 for the farmhouse with six acres of land, say initial proposals were ‘warmly received’, but that ‘further discussions would be required to establish how best to convert the building in the most sympathetic manner’.

Set in 7? acres of wooded grounds at the end of a tree-lined drive, secluded Broomwood Manor at Chignall St James, near Chelmsford, Essex, looks every inch a classic small Tudor manor house with its herringbone brickwork, exposed timbers, leaded light windows, fine shafted chimneys and oak joinery throughout. Yet the house was, in fact, built in 1912, and is unlisted.

Lost in its 20th-century time warp, Broomwood Manor has stood empty since the death of its owner earlier this year, but is now on the market through Savills (01245 293233) at a guide price of £1.1m. Selling agent Stephen White reckons that a new owner would probably want to extend the 3,000sq ft house, which currently has four/five bedrooms, three reception rooms and two bathrooms, in which case Broomwood’s unlisted status should make life a whole lot easier.

On the other hand, Mr White warns, there is a problem of subsidence caused by some large mature trees growing close to the building, which, although covered by insurance, could involve additional costs ‘running into tens, if not hundreds, of thousands should the foundations need under-pinning’. Yet such is the current demand for period properties in need of renovation that dozens of prospective purchasers have already rushed to view, and Savills expect to be seeking ‘best and final offers’ within a matter of weeks.

This article first appeared in Country Life magazine on November 23, 2006