However, Charlie Noel-Buxton of Cluttons Estate Agents adds a note of caution.  In the past, he says, there has been confidence that prices will rise, nowadays, though, there is no capital growth to cancel out any losses. That means that going over-budget or exceeding scheduled time will have a far greater effect on any profits than in the past.

Then, of course, there could be difficulties in getting the necessary finance, with residential development attracting less lending than most other sectors.  Calum Kerr, from broker Savills, reminds us that high street banks no longer offer residential development loans, limiting options open to those hoping to buy and redevelop. Where finance is available, lending criteria are incredibly stringent and loans will be granted only to those with proven development experience.

You could consider specialist lenders that will lend on self-build and large renovation projects. Remember though that these will often be stage payment loans lending on the present value of the property and then revaluing once some work has been completed with a view to releasing an additional stage payment. These are also slightly more expensive than standard mortgages.  You could apply for standard mortgage finance if you are intending to live in the property whilst renovations are undertaken.

The ubiquitous Sarah Beeny gives the following advice:

• Focus on who will ultimately end up buying your property and designing it to suit that buyer.
• If you can buy a house in a quiet road, near a good school with a garden and ample parking, alter the layout to include a kitchen diner and finish it to a good standard, there is no reason why a family would not want to buy it but deck it out as a bachelor pad, and you’ve got problems.
• The safest properties are Victorian terraces in quiet streets, close to schools and with a good garden, but these will be the ones that have the least potential profit because they are safe bets.
• The easiest way to add value is by adding space. House extensions increase the square footage of a property and allow you to sell on for a higher price.
• Finding a property where there is a problem to overcome should also ensure a good return.
• If the layout of the house is awkward you can add value by rectifying it to open up the space.
• Ugly façades of Sixties and Seventies buildings can be improved quite easily and will boost sale prices.
• If renovations have previously been executed poorly and period features hidden, revealing them will boost resale value.