Episode 14 Homes Under the Hammer


Episode 14

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Transcript


LineFromTo

Hello and welcome to the show.

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Some investment properties need loads of work from top to bottom.

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And others need just a bit of sprucing up and they do you well.

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The trick is knowing what to do and what to pay.

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And when you do know,

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why don't you head down to your local property auction?

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If you buy wisely, the property market can give great returns.

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Yeah, but were today's buyers wise or not?

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Let's find out. Here's what they bought.

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Today we're all at sea.

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There are stormy waters in this three-bed semi in Welling.

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I am greeted by a sea of polystyrene ceiling tiles.

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This terrace in Nottingham gives me a sinking feeling.

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There's nowhere to put the captain's table.

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Cos there's neither a kitchen nor a dining room in here.

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And this three-bed detached in Callington, in Cornwall,

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isn't exactly shipshape.

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But will it float my boat?

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I am expecting a complete wreck.

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All of these properties have been sold at auction.

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We'll find out who bought them and what they paid for them

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when they went under the hammer.

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Sold.

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This is Welling, in the London borough of Bexley,

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which not only offers a quick 30-minute commute

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by train to the city, but also has a lovely park, great schools,

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and a high street with plenty of amenities on your doorstep.

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It really does have...

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# The best of both worlds. #

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Well, this is a popular street.

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Only a ten-minute walk from the high street.

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And I'm here to see a three-bedroom semidetached house

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which had a guide price of £220,000-plus.

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So the neighbouring houses look well-kept.

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And then, aha.

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I think the port on these windows

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have certainly seen better days, don't you?

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Guess which one is the auction property.

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The exterior is really very worn out.

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The wood looks damp and rotten, which is a telltale sign

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that there is worse to come.

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So, on the inside, I am greeted by a sea of polystyrene ceiling tiles.

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Look at them, they're everywhere.

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And it is, to be fair, a bit of a state on the inside.

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Although you could sand these back and paint them,

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and they could look quite lovely.

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But there are no '30s features in this property at all.

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More ceiling tiles. More peeling paper.

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I mean, it's bad enough out the front.

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Let alone... Look!

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I mean, that is wet to the touch. There's lots going on under there.

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In fact, I'd probably get an expert in to have a look around this place.

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You've got a radiator, which tells me there's central heating.

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But you've got a gas fire over there.

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There's stuff everywhere that's going to need to be cleared out.

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But if you can see beyond that, you've got a nice big space.

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The windows, sadly... Look.

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You've got lovely leaded light there. Pretty little features.

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But because they're only single-glazed, I think they're

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going to have to go and be replaced with something a lot more modern.

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-But for starters...

-SHE GROANS

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..I'd be using that.

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Getting rid of all that stuff in the house would certainly suck.

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And at the moment,

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it's making it hard to properly look around the house and investigate.

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It's crowded, confined and cramped.

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# I want to break free

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# I want to break free... #

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As I said, the trick is to look past all this stuff

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and focus on the issues.

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Upstairs, the plaster around the windows has completely blown.

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The other rooms aren't so bad. But there are those awful ceiling tiles.

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And as you would have heard me bang on about before,

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they can be a fire hazard.

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The bathroom is old and dated and needs to be replaced.

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But at least it's upstairs.

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Back downstairs, I think

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I've found a way to get a bit more space out of this property.

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As is typical of '30s houses, well,

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the kitchen here is a little bit on the small side.

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But the good news is - out here, well,

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you've got a really long garden.

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So I think there's just enough space to extend

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and create a really nice, large kitchen/diner out the back here.

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Though beware, you might get caught in the sticky web of planning.

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This house looks as though it might have had an extension

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added in the past.

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So you might not be allowed to add anything else

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under permitted development.

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This is one to talk nicely to the planning department about.

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If you didn't have the budget for an extension, another option could be

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knocking the wall down between the kitchen and the dining room

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to create an open-plan kitchen/diner.

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A family house needs a family space.

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So either option needs to be looked at, in my opinion.

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There's just one last thing.

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With this property, you do get a garage.

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Wait a minute.

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But to get there,

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you've got to go through this very narrow shared driveway,

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right the way down to the end of the garden.

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Go on.

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FRANTIC MUSIC

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All right, you can come back now.

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You see? I told you it was far away.

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And I don't even think you'd get a car in

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once you got all the way down there.

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And then you've got to walk all the way back to he house. No.

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I think it's fair to say you could use that for storage.

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But a much better thing to do with this property would be to

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create some off-road parking out the front there.

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You feeling all right?

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So, after a quick, old breather, we're back in action.

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And just in time too, as a local estate agent has arrived to

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give us his thoughts on the house.

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Had a look round. You need new windows.

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New kitchen, new bathroom.

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The plasterwork is blown in many places.

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It looks like the central heating would need upgrading.

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Possibly a re-wire.

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I would be inclined to remove the wall between the kitchen

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and the dining room to make a nice kitchen/diner.

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There's potential to extend the property,

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particularly into the loft,

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to create a fourth bedroom with an en suite.

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A number of properties locally, they have also done the same.

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Would parking out the front also add value?

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Creating off-street parking at the front of the property would

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increase the value by between £5,000 and £10,000.

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What kind of figures could we be looking at

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once the renovation is done?

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Once renovated, the property would achieve in the region of £370,000.

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And in terms of the rental value,

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I would estimate around £1,500 per calendar month.

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If you were to extend the property into the loft and across the rear,

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I would estimate that the value would increase by around £60,000.

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Yes, it needs plenty of work,

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but this is a 1930s semi with a layout that could be improved.

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And it's got a decent-sized garden.

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So that really is a good start. Who wanted to take this on?

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Let's head to auction and find out.

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Three-bed semi. Needs some upgrading.

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You've got a garage as well.

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It's always dead handy to have a garage.

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You can all get a chance at 200.

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Are you sure?

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200 with you.

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Anyone else?

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200. Anyone else?

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205 with you.

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You better not stop. You stopped halfway through the last time.

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205. 210.

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215.

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Five.

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There's stopping in this lot, so we join the action at 280,000.

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282, sir? Try and help. 282.

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284.

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I think there's a bit more in this. I thought there was. 286.

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288.

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288, madam? 288.

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290 standing up, sir.

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With you. 290.

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Taking your bid. 290.

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292.

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294.

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You'll regret it going home.

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294.

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Just for a couple of thousand more. 294.

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Yes? You've got to do it. 294.

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Makes sense. 294.

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296. 298?

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298.

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Round it off to 300? 298 here.

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First time. Second time.

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Third and last time.

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Sold. 298. You got there.

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Winning with the bid of 298,000 were husband and wife Andrew and Lale.

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They've brought their son,

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Jimmy, along to check out the latest purchase.

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Lale is a Turkish interpreter

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and Andrew runs a Turkish textiles and dance-wear company.

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They bought this house to add to their rental portfolio

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and hope to cash in on their rental properties in the future

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to buy themselves a larger family home.

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So let's hope this project turns out to be a delight.

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Guys, congratulations. Lovely to meet you both.

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-Andrew. Lale.

-Thank you.

-Now, tell me about this property.

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Who was the one that wanted to bid for it the most?

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We both wanted to bid.

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We had a list of about ten properties at the auction.

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And it was... We gave this one one tick, didn't we, on the list?

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But there were some properties which had three ticks.

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-Oh.

-But we didn't get to those.

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So this wasn't your chosen property really?

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Well, it was a bit disappointing,

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because the property after this one, which we'd also had our eye on,

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sold for about £100,000 less than we thought it would.

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And how many ticks did that have against it?

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-That had three.

-Oh!

-And this only had one.

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This only had one and you paid more for this

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than you would have paid for that.

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So, I want to know about your level of research, guys.

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Did you look at the property before you bought it?

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-No.

-No.

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We drove past after the auction and we were a little bit shocked.

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We looked through the windows

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and we could see that it was in a terrible state.

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But I think it'll be OK.

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We've got a good builder, who's done work for us in the past.

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So I think it's cosmetic, most of it.

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Apart from the wiring and the gas, which...

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And the window and the doors.

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And polystyrene tiles.

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And the wallpaper and the carpets and the gas fires.

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-It's a bit of a long list there.

-Yeah, basically, everything.

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This property is one of those that you walk in

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and it's absolutely rammed full of stuff.

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Tell me what do you think and what you're going to do here.

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We'll get a new kitchen and a new bathroom.

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Probably need rewiring.

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We probably... Haven't even found the boiler yet.

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But once we've found the boiler,

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I guess we'll probably have to remove it and replace it.

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The windows on the front are a lovely period feature,

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but I guess they'll probably have to go as well.

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I know. It's a shame cos they've got the beautiful, lovely glass in them.

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It's such a shame to get rid of them but they're not going to do the job

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that you require them to do at this stage, because they're quite old.

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-That's right.

-Yes.

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In my mind, the kitchen is a little bit on the small side.

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Have you thought about how you could change that?

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Perhaps by knocking the wall down and having an open-plan

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living/kitchen area.

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Yes, I think we are going to knock through between the kitchen

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and the dining room and make a large kitchen/diner.

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Because I think that's more attractive to tenants these days.

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I'm glad they agree and want to open out that kitchen.

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And even though they only want to rent it for the time being,

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when it's time to sell on - as is the plan eventually -

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this would make it much easier.

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There's a lot to do here and it's going to need a pretty

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substantial budget to cover all the work.

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I guess, including windows, doors, electrics, gas and everything,

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probably about 20,000.

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-OK, so 20,000 maximum?

-Yeah.

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I mean, there is a lot you can do here.

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You could extend. You could go up into the loft.

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But are you feeling you might need to work within

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the footprint of the building?

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Yeah. I don't think...

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In the buy-to-let framework,

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I don't think it's worth doing an extension really.

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Cos I don't think it would add enough value, rental value,

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to make it worthwhile.

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How long do you think it's going to take you

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to get this project complete?

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I would like to have it done within about six weeks,

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if possible. So that we can get it rented out.

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Wow, that is a quick turnaround for the level of work required here.

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I hope their builder is up to the task.

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They could also call on the help of their son, Jimmy,

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who I'm sure will be looking into getting his hands dirty.

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I think he will come and clean with us.

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He will help us to clean and clear the clutter.

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Yeah, just the design ideas. He's got some good ideas.

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Imagination is clearly required here. As are some deep pockets.

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I'm worried about that budget.

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It's going to be a challenge, I think,

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to be able to keep within the budget.

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And who's the one that will be knuckling down,

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making sure all the pennies come in?

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-Andrew.

-Is it you, Andrew?

-Yeah, yeah.

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I haven't actually got the money at the moment.

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-He hasn't even got the pennies!

-It will come in.

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I'm hoping, with my dance-wear business,

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the belly dance stuff, there will be a bump this year.

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Wow. So it's all about the belly dancing outfits?

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-Yeah.

-I'm really excited to see the outcome of this property.

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I hope you stick to that £20,000 budget.

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-Thank you.

-Good luck.

-Thank you.

-Thank you. Lovely to meet you both.

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Thank you so much. Lovely to meet you.

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So, Lale and Andrew took a huge risk

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and didn't even see inside the property before the auction.

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Let's just hope Andrew's business thrives so they can fund

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the works now they've seen what they've got to contend with

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and it doesn't all go belly up. How will they get on?

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Join me later on in the programme and you can find out.

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Basford in Nottingham is only a 15-minute tram journey

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to the city centre.

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It's split up into two areas - Old and New Basford.

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And that theme continues on this street.

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As I'm walking up here,

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I can't help thinking that this is a street of two halves.

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One half has got original terraced houses.

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And on the other side, there's more modern houses.

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What they've both got going for them

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is that there's a tram stop just at the bottom there.

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That will get them into the centre of Nottingham in no time at all.

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The house I'm here to see is this.

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It's got three bedrooms and a guide price of £60,000-plus.

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Let's get inside and have a look.

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OK, straight off the street into the front room.

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Some old-fashioned wallpaper there with flowers on.

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And an old-fashioned gas fire.

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Some really nice hardwood flooring here as well.

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It's nice and bright. I do like it.

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Straight through. Small corridor. What have we got here?

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Storage in there with a few hangers for your coats.

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Nice, big storage space there.

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OK, and this would have been the kitchen,

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judging by where the sink is.

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And right at the end of the property, there's the bathroom.

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And it's a good-sized bathroom as well.

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It may need updating, just to freshen that up.

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But in here was definitely the kitchen/dining area.

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It's not that at the moment cos there's neither kitchen nor

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dining room in here.

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But spend a bit of time in here, spend a bit of money,

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it could be a really nice family area.

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Talking of money, if you need a mortgage to buy this property,

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you might find it tricky.

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Most lenders' criteria demand that a house be structurally sound,

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insurable, and have a working kitchen.

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We definitely don't have that here.

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And remember, it's not just you who has to qualify for the mortgage,

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it's the property as well.

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Upstairs, we've got two bedrooms on either side of the stairs.

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Front bedroom here in a nice, bright pink with some textured

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wallpaper, which would have to come off. Just brighten it up.

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New flooring in here as well. Nice, new carpet.

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And on the other side, which is the back of the house, again,

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more textured wallpaper.

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And you'd want to put a nice, soft carpet there as well.

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What I haven't shown you is this.

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That's right. There's a third floor.

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A word of caution, though. This house is described as a three-bed.

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But I would want to check out this space meets building regulations.

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You need to make sure of this before it can qualify as a third bedroom.

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One thing, though.

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If you're stuck up here in the middle of the night

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and you want to go to the toilet...

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# It's a long way down

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# It's a long way down... #

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We've asked along a local estate agent to get her opinion.

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I think that the house could do with an additional bathroom

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on the first floor,

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as it is a family property.

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However, the bathroom is quite a nice size downstairs.

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I agree. A bathroom upstairs would be nice.

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But it's hard to see where it could go without sacrificing a bedroom.

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What else would be worth doing to this house, guided at £60,000?

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I would recommend to redecorate the property throughout.

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Fit a new kitchen and new bathroom.

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This is a good rental area and the agent thinks this place could

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fetch around £525 per calendar month.

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But what about sales?

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The sales market of this property would be around £85,000.

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That is a good, solid house in a good location.

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It does need a total overhaul

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and I would have liked to have seen a bathroom on that first floor.

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But that's a decision for whoever buys it.

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Let's go to the auction house and find out who that was

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when it went under the hammer.

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A large, three-storied, three-bedroom townhouse.

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Start me where you like with this one.

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I'll take 50. Thank you.

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A starting bid at £50,000.

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At £50,000.

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51 somewhere?

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51? 51 is bid. At 51.

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52.

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At 52,000. 53?

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After a slow start, we rejoin the bidding at £57,000.

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57.

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At 57. 500? 500.

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58?

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Sure?

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57,500 for the first time.

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Second time.

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Third time. 58.

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58.5, sir?

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58.5.

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59.

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59.

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59.5?

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500. 60 for you? 60,000.

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At 60. 500?

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500.

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61.

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At 61,000. Is that it?

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£61,000.

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Going once.

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Going twice.

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Third time.

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Sold here at 61,000. Thank you.

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With the successful bid of £61,000 was social worker Maria.

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She bought the place with her partner, Wayne.

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And I'm keen to find out what attracted her to this house.

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-Maria, nice to meet you.

-Nice to meet you, Dion.

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-Congratulations.

-Thank you.

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Tell me what made you buy this house.

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Well, I was buying a house nearby.

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It fell through because it had rising damp.

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So I had two days to buy a house

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before my mortgage application ran out.

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I went to the auction and I bought this house.

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It was very quick decision. It was a big risk.

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HE LAUGHS

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And hopefully, it will pay off.

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What made you, first and foremost, go into property developing?

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-Recently, my partner had a health issue.

-Mm.

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And it made us look at life differently.

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And think that, you know, we want to spend more time with the children.

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We want to do something positive and constructive.

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We had some savings and we thought, you know,

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I had to take some time off work to look after him.

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So that's when I was watching Homes Under The Hammer every day.

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That's when I was researching buy-to-let mortgages.

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So it's something that we talked about for quite a while.

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But because of his health issues, I think

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it made us think about it more seriously.

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-Of course.

-And we thought, "Yeah, we'll do it."

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Maria and Wayne have obviously had a tough time of it.

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And I wish them well.

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But since Maria is such a big fan of Homes Under The Hammer,

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she'll know our mantra off by heart. Won't she?

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I know the golden rule is you've got to see the house before you buy it.

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-Correct. Correct. Good work.

-And you've got to read the legal pack.

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Exactly. Did you do either?

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I didn't do any of those things.

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We came to see the house the next day, and I was like,

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"Oh, no, what have I done?"

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# Regrets, regrets

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# Regrets, regrets... #

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To make matters worse, the bank refused to lend Maria

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and Wayne the money to purchase the house due to its poor condition.

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Their only option was to take out an expensive short-term bridging loan

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in order to secure the house.

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Hopefully, once the work is complete,

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they can remortgage and pay this off.

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They will also need to get some cash together

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to pay for the improvements.

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How much have they got to get this place in shape?

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Well, the original budget was £5,000 with £1,000 contingency.

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-OK.

-But now, when we've been speaking to people,

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other people that have had a look at the house and given us quotes,

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they're saying that we're looking at probably seven to eight.

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-Any contingency after that or is that everything?

-No, that's it.

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We've got no contingency after that. And that is pushing it.

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We know that the windows and doors are going to be the most expensive.

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Basically, the house needs renovating from top to bottom.

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We're going to have to get a new kitchen, a new bathroom,

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new windows and doors.

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And I've been researching where's the cheapest place to get them.

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-Cos we obviously don't want to do it to a really high standard.

-OK.

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So we just want to try and keep our costs down to as low as possible.

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Has Wayne got a say in this as well or is it just...?

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Well, he wants to do everything to a high standard.

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-OK.

-And he wants to spend an absolute fortune.

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I'm like cheap as chips.

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I want to do it as cheap as possible

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and spend as little money as possible.

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But that's where we've got conflicting views at the moment.

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-Do you?

-It's causing a lot of arguments.

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Great(!)

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That's a great place to start a property-developing partnership.

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So I'm like, "Are we sure we really want to do this?"

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Cos it has caused a lot of stress and arguments and stuff.

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But we'll get there in the end. We'll just reach a middle ground.

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A middle ground is the right answer.

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Because they plan to rent out,

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they don't want to overspend on fixtures and fittings.

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Although, I do think it's good practice to

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give your tenants as good a finish as you can afford.

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Happy tenants tend to rent for longer.

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Standard of finish isn't the only area for a good old barney.

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Who's going to do the work?

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Well, I'm going to try and do a little bit of work.

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Because I've just started a construction course.

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-I started that at a local college.

-OK.

-And you can pick three trades.

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-So I've picked carpentry and joinery.

-Yes.

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-Painting and decorating.

-Yes.

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-And tiling.

-Tiling?

-Yes.

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-That's a hard skill.

-It is.

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-So I want to try and do some of the work myself.

-Of course.

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But my partner's saying he wants to get proper people in

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and he wants to have a proper job. If I start tiling the tiles,

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they'll probably end up falling off the wall.

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HE LAUGHS

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Wayne's not sounding like he's got a lot of confidence in his missus.

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He's got no confidence in me whatsoever.

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But I'll prove him wrong.

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# I'm going to prove myself true to you somehow

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# Have faith Have faith... #

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Maria and Wayne's son, Kiel, is along to give support.

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And I've no doubt he believes his mum

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and dad have what it takes to turn this house around.

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So we've got three months to basically do the work

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and remortgage the house.

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OK. So is there penalties after that?

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Basically, what will happen is, the monthly payments will double.

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So that's why we have to keep everything as tight as possible.

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And meet deadlines. We do have a lot of pressure.

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So I think it's best we leave you alone as soon as possible.

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So you can get on with the work.

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As soon as you've gone, that's when we're going to start doing the work.

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All the things that we've ordered are coming tomorrow.

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From tomorrow, that's when we're going to be on it.

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All the stuff is going to be delivered, and that's

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when we're going to start doing the work.

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-Good on you. Positive thinking. I like it.

-Yes.

-Good for you.

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I hope everything works out for you and your partner as well.

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-Thank you.

-Good luck. Wish you all the best.

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This is Maria's first venture into the property developing world.

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I do like the fact that she's trying to learn

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the skills in order for her to do the job.

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But my main concern is that timescale.

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Will she get this project finished

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before those repayments start to double?

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You can find out how she gets on later in the programme.

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Coming up...

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Although I'm in idyllic Cornwall and this house seems like a bargain,

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I'm not optimistic.

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But there's got to be something wrong.

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And in Basford, Maria was hoping her DIY courses would help.

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What could go wrong?

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I dropped out after a few weeks.

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We're back in Welling, in the London borough of Bexley, to see

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this three-bedroom detached property which had some characterful,

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pretty windows. Pretty rotten, that is.

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And things, well, they weren't much better inside.

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I mean, it's bad enough out the front, let alone... Look!

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I mean, that is wet to the touch. There's lots going on under there.

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Yes, there was lots going on in the rest of the house too.

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Blown plaster, polystyrene tiles

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and a cramped kitchen were some of the other issues here.

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Andrew and Lale weren't put off by the state of this house,

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because they didn't see it first.

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Tut-tut. They paid £298,000 for it

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and planned to rent it out in the short term.

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I know they have developing experience, but was there

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a chance Andrew was underestimating the level of work that was needed?

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I think it's cosmetic, most of it. Apart from the wiring and the gas.

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-And the windows and the doors.

-And the polystyrene tiles.

-Yes.

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And the wallpaper and the carpet.

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Yes, it was quite the list to be getting on with.

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And originally, Andrew hoped to get the work done in about six weeks.

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Three months later, those rotten, old windows have gone.

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And with some rendering and a paint job,

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the house can now sit proudly with the others in the street.

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But what's happened with that small, pokey, little kitchen?

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Yes, that's just what I had in mind.

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This is a much better use of the space.

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A new fully-fitted kitchen with additional breakfast bar,

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all with easy access to the garden

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thanks to some new double doors.

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This whole property has been stripped back to the brick,

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getting rid of the damaged plaster and old polystyrene tiles.

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That tired, old bathroom has had a total refit.

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It's now fresh and clean.

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I did say you have to look past other people's stuff

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when you're viewing a property.

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These neutral colours will really help a prospective renter or

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buyer to imagine their own stuff in the property.

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Time now for Andrew to explain how they went about tackling this

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very tired, old house.

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As you can see, we've knocked through

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between the old, original kitchen and this second reception room

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to make a large kitchen/diner.

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There used to be a door there, which we've blocked off.

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So now we're just using this doorway to gain entrance.

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We had to actually keep this beam here,

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because it's a supporting structure.

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So we incorporated it into a breakfast bar

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by accident. But I think it's actually worked.

0:28:240:28:27

But it's no accident that we're here eight weeks later than planned.

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Why the delay?

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There has been basically a full house of issues.

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I was hoping that one or two things wouldn't need to be done.

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But, in fact, everything needed to be done.

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Oh, dear. I can't say I'm surprised.

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I was a bit concerned about Andrew's timescale and budget.

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So has he managed to stick to that?

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Mm. It's been a little bit more expensive than

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we thought it would be.

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Originally, we did say a budget of around £20,000.

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But it's been more like £30,000. Unfortunately.

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To be honest, I haven't actually

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been keeping proper track of the budget.

0:29:070:29:10

So I'm saying £30,000, but hopefully I didn't go beyond that.

0:29:100:29:16

Who knows?

0:29:160:29:18

Who knows?! Andrew! You need to know.

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You are naughty.

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Especially since you said you didn't have any pennies.

0:29:220:29:25

Thankfully, he's delighted his business selling Turkish textiles

0:29:250:29:28

and goods has been doing rather well.

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So they have been able to get the refurbishment funds together.

0:29:300:29:34

Lale has more or less left Andrew to it.

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He dealt with everything. He project managed everything.

0:29:370:29:42

He works very hard with his job.

0:29:420:29:43

And also, he managed to fit this project in.

0:29:430:29:47

He did really well.

0:29:470:29:48

I'm really proud of him.

0:29:480:29:50

Yes, Andrew has done well.

0:29:500:29:51

But he's also got to share some of the credit with his son, Jimmy.

0:29:510:29:55

Well, I remember when the counter, the kitchen counter...

0:29:550:29:58

I decided to go for like a darker colour.

0:29:580:30:01

They wanted to go for a lighter one.

0:30:010:30:02

But most of the room they wanted to go with white and maybe grey,

0:30:020:30:07

but I thought putting a little bit of black maybe would have

0:30:070:30:10

made it look a bit better.

0:30:100:30:12

Looks like Jimmy can teach us a thing or two about design.

0:30:120:30:15

The main problem with this project has been that we spent too

0:30:180:30:22

much money on the initial purchase of the property.

0:30:220:30:27

Plus the renovations that we needed to do.

0:30:270:30:30

So I don't really think that we're going to generate much profit.

0:30:300:30:35

This is where I bang on again about the importance of viewing

0:30:360:30:39

a property before you bid in the auction room.

0:30:390:30:43

However, Andrew and Lale

0:30:430:30:44

have done a nice job.

0:30:440:30:46

So hopefully, they can make something

0:30:460:30:49

from the £328,000 investment.

0:30:490:30:51

We asked two local agents to come along and tell us if that's likely.

0:30:510:30:55

The main selling points

0:30:550:30:56

of the property are that it's a blank canvas.

0:30:560:30:59

So the buyer can move straight in.

0:30:590:31:01

Nothing to do. It's got a nice, large garden.

0:31:010:31:04

And a spacious kitchen/diner.

0:31:040:31:06

Largely, a lot of people would extend the property to gain

0:31:060:31:10

a bigger kitchen/diner.

0:31:100:31:12

They've knocked down the kitchen between the second reception area,

0:31:120:31:16

giving a kitchen/diner aspect.

0:31:160:31:18

Saves a lot of money having to extend the property

0:31:180:31:20

and gives the aspect of what everyone desires.

0:31:200:31:22

The couple hope to rent initially, but with £328,000 invested

0:31:220:31:27

in this property, are they right to be worried that they've overspent?

0:31:270:31:31

What could it sell for?

0:31:310:31:32

In the current market,

0:31:320:31:33

I would estimate the price would be in the region of £380,000.

0:31:330:31:38

For rental, I believe the property would rent for

0:31:380:31:41

approximately £1,400 per calendar month.

0:31:410:31:44

I believe you could achieve 380 to £385,000 on the sales market.

0:31:440:31:50

And for rental,

0:31:500:31:51

I believe you'd be able to achieve £1,300 per calendar month.

0:31:510:31:55

That top figure of £1,400 per month would give them

0:31:550:31:58

a yield of around 5%. And the profit,

0:31:580:32:01

if they sold for £385,000, would be a handsome 57 grand,

0:32:010:32:06

minus the usual taxes and expenses.

0:32:060:32:08

So I'm guessing a sigh of relief?

0:32:080:32:11

That's really good. It's a bit more than we were expecting. So, yeah.

0:32:110:32:15

That's been a good result.

0:32:150:32:17

Yes, it's very good. Yes. We were expecting under those values.

0:32:170:32:21

Could you be tempted to sell now?

0:32:220:32:24

Selling is more of an option now that the valuation has

0:32:240:32:27

come in higher. But I think that wouldn't really fit in with

0:32:270:32:30

our plans because, long term, we're hoping it will gain more

0:32:300:32:34

in about three or four years' time.

0:32:340:32:35

That's when we'll think about selling.

0:32:350:32:37

Callington is a small town in south east Cornwall.

0:32:410:32:44

It's formerly a busy mining area,

0:32:440:32:47

but it's now more known for farming, tourism and one other thing.

0:32:470:32:51

It has a unique feature that no other town in Cornwall has -

0:32:510:32:55

a mural trail, which I think really paints a nice picture of the town.

0:32:550:33:01

The property I'm here to see is just ten minutes' walk

0:33:010:33:04

from the centre of Callington.

0:33:040:33:06

But the fact that it's on a fairly busy main road

0:33:060:33:10

and right next to a garage is going to put a few people off.

0:33:100:33:14

But that still doesn't explain why the guide price of £85,000

0:33:140:33:21

was £200,000 less than the average cost of a detached property

0:33:210:33:27

round here. I need to investigate.

0:33:270:33:29

# Oh, I'm looking for clues... #

0:33:310:33:37

So, at that price, I am expecting a complete wreck.

0:33:400:33:44

No. Doesn't look too bad.

0:33:460:33:49

You've got a front living room area there.

0:33:490:33:53

It's very tired and dated and of its era. But we've got double glazing.

0:33:530:33:58

Another bay-fronted living area there.

0:33:580:34:01

Steps up to your bedrooms. I mean, it's freezing cold.

0:34:010:34:05

But it doesn't smell particularly damp or look particularly damp.

0:34:050:34:08

Into the kitchen here. We haven't got much of a kitchen.

0:34:080:34:11

Just got a sink.

0:34:110:34:13

Um...

0:34:130:34:14

Electrics look like they're fairly old. But...

0:34:140:34:18

nothing that sets my complete alarm bells ringing.

0:34:180:34:21

But there's got to be something wrong.

0:34:210:34:23

# You've got to dig a little deeper

0:34:230:34:26

# Dig a little deeper... #

0:34:260:34:28

Upstairs are three bedrooms, a separate loo and bathroom.

0:34:280:34:32

Yes, it needs modernising, but my alarm is still not ringing.

0:34:350:34:40

Hmm. There's clearly something else wrong here.

0:34:400:34:43

I'll have to do some digging to get to the bottom of this.

0:34:430:34:46

OK, so what is the problem?

0:34:480:34:51

Well, Callington's mining history should give you a bit of a clue.

0:34:510:34:57

Because this house is at least partly built of mundic block.

0:34:570:35:03

Now, between 1900 and 1950, a lot of houses were actually

0:35:030:35:07

built of blocks made partly from mining waste.

0:35:070:35:10

That contains aggregates which,

0:35:100:35:12

over time, basically destabilise and go all horrible.

0:35:120:35:16

So the result is that houses made of them

0:35:160:35:19

potentially have a serious issue.

0:35:190:35:21

There are different levels of problem.

0:35:210:35:23

And if it's isolated, say, maybe in a chimney stack or something,

0:35:230:35:26

it can actually just be cut out and replaced.

0:35:260:35:28

I am told, however, that the

0:35:280:35:30

mundic block in this particular house is fairly substantial,

0:35:300:35:33

which means that getting finance on it is going to be really tricky.

0:35:330:35:38

Nigh on impossible.

0:35:380:35:39

Yes, the mundic is going to be a stumbling block for anyone

0:35:410:35:45

who isn't a cash buyer.

0:35:450:35:46

And it could cost tens of thousands of pounds to put these issues right.

0:35:460:35:51

But is there a better option?

0:35:510:35:53

So what to do with this unmortgageable house

0:35:530:35:57

on this extremely large plot?

0:35:570:35:59

Well, it doesn't take a rocket scientist to work out

0:35:590:36:02

that they only way to go here really is to knock the place down

0:36:020:36:06

and start again.

0:36:060:36:07

I mean, you've got a really, really good-sized building plot here.

0:36:070:36:10

Great access with the road.

0:36:100:36:12

There's obviously electricity and all your services in place already.

0:36:120:36:15

So that's going to keep your costs down.

0:36:150:36:17

And I think the plot is easily big enough to get maybe

0:36:170:36:19

a pair of semis on here. Or even more.

0:36:190:36:22

You'd have to look into the local market

0:36:220:36:24

to make sure it was worthwhile.

0:36:240:36:26

But you know what, I hate to say it cos

0:36:260:36:28

I hate to see houses knocked down, but in this case, it's got to go.

0:36:280:36:32

Wipe the slate clean. Start again.

0:36:320:36:34

And you could actually be in for some big profits.

0:36:340:36:38

Of course, obtaining planning permissions, demolition

0:36:390:36:42

and building a new house will cost time and money,

0:36:420:36:45

while sorting out the property

0:36:450:36:47

and refurbishing might be the cheaper option.

0:36:470:36:50

We invited an agent along to get his thoughts on this lot.

0:36:500:36:53

If the property was fully repaired and renovated

0:36:530:36:57

and the mundic was all repaired, you'd be looking at a resale value

0:36:570:37:00

of 160 to £170,000.

0:37:000:37:03

That means there could be a profit in just repairing the house.

0:37:030:37:06

But does the agent agree with me

0:37:060:37:07

that starting from scratch is the best thing to do here?

0:37:070:37:10

In my opinion, I think the best use of the site would be to

0:37:100:37:13

demolish the property and put a small development on the site.

0:37:130:37:16

The type of properties I'd like to see built here would be

0:37:160:37:19

two-bedroom semidetached properties. Maybe three-bedroom semidetached.

0:37:190:37:22

Or road closed properties.

0:37:220:37:24

The agent thinks that you might fit six three-bed terraced

0:37:240:37:27

properties on the land.

0:37:270:37:29

And they could bring sales values of roughly £800,000

0:37:290:37:33

and a monthly rental income of £300,000 per calendar month.

0:37:330:37:37

So, if you have the right skills, you can make a handsome profit here.

0:37:370:37:41

Of course, you could look at this in a slightly different way and say -

0:37:430:37:46

for a cash buyer who didn't have to get a mortgage

0:37:460:37:49

and didn't worry about the mundic block,

0:37:490:37:51

this is actually a chance to get a pretty big house for a fraction of

0:37:510:37:55

the cost of something similar which didn't have this one's problems.

0:37:550:37:58

However, I think it's probably suited to a developer.

0:37:580:38:02

So let's see what happened when it went under the hammer.

0:38:020:38:05

OK, lot six.

0:38:080:38:10

Two-storey, three-bed, detached house.

0:38:100:38:12

Shown on the screens here. Guide of 85.

0:38:120:38:14

Somebody like to start me? Lot of interest in this one.

0:38:140:38:16

Somebody like to start me around about 100?

0:38:160:38:18

100 to go?

0:38:180:38:20

Anyone want to start at 100?

0:38:200:38:22

95 will do.

0:38:220:38:24

95 will do.

0:38:240:38:25

Thank you. £95,000 then.

0:38:250:38:27

95. Any advance on 95?

0:38:270:38:29

95 standing. 97.5 somewhere?

0:38:290:38:32

£95,000. 97.5?

0:38:320:38:35

Any advance on £95,000? We're ten over guide.

0:38:370:38:40

£95,000 standing.

0:38:400:38:41

I'm going to call it for the first time at £95,000.

0:38:430:38:45

Standing here.

0:38:450:38:47

That's the first call.

0:38:470:38:48

Second call at £95,000.

0:38:480:38:50

Gentleman scratching his head.

0:38:500:38:51

Second, third and last time at £95,000.

0:38:510:38:54

Are we sure we're all done?

0:38:540:38:55

We are, and we're not going to sell it to you at that level.

0:38:550:38:58

We're very close. So we'll turn on.

0:38:580:38:59

The property failed to make the reserve price at the auction.

0:38:590:39:03

However, negotiations afterwards secure it for John and son,

0:39:030:39:07

Richard, for £103,500.

0:39:070:39:11

I met them back at the house to find out why

0:39:110:39:14

they didn't bid for it on the day.

0:39:140:39:16

John, Richard, great to meet you both.

0:39:160:39:18

-Nice to meet you.

-Nice to meet you.

-Congratulations.

0:39:180:39:21

So how was the auction?

0:39:210:39:23

Well, we got there rather late.

0:39:230:39:25

We got hung up in traffic and...

0:39:260:39:30

And you missed the auction?

0:39:300:39:31

-Yeah, we missed the auction.

-Yeah. THEY LAUGH

0:39:310:39:33

We bid 110 for it, which was accepted,

0:39:330:39:37

the day before.

0:39:370:39:38

But because they didn't get all the paperwork

0:39:380:39:40

and we couldn't get up to Exmouth on time, it went to auction.

0:39:400:39:43

Then we bought it for 103,500.

0:39:430:39:46

-So you saved yourselves £6,500?

-That's right.

0:39:460:39:50

Somebody's smiling on you there, aren't they?

0:39:500:39:53

-I think so.

-Yeah.

-Result.

0:39:530:39:55

-Yeah.

-So, tell me, why did you want to buy the house?

0:39:550:39:58

We bought the house really for the plot of land.

0:39:580:40:00

We've put in planning for five two-beds.

0:40:000:40:03

Which is all in a terrace.

0:40:030:40:04

Or we could put two two-beds and two three-beds.

0:40:060:40:09

And we put in for flats.

0:40:100:40:13

You can put as many developments as possible on planning

0:40:130:40:16

and then they'll go for approval that way.

0:40:160:40:18

That's what I call hedging your bets.

0:40:180:40:20

These two have given the planners plenty to think about.

0:40:200:40:24

# Decide, decide

0:40:240:40:26

# Make up your mind

0:40:260:40:28

# Decide, decide. #

0:40:280:40:31

Does it make any difference to you which plan is accepted?

0:40:310:40:35

We'd prefer either the five two-beds or two-bed and two three-beds.

0:40:350:40:40

-Right. Not flats?

-No. Well...

0:40:400:40:43

Not really, no.

0:40:430:40:44

I think, more for the area, it would be better as a terrace of houses.

0:40:440:40:48

-Mm.

-But it's all down to planning, really.

0:40:480:40:52

As long as one of them goes through, then we're happy, really.

0:40:520:40:55

Have you got any indication really that they're going to

0:40:550:40:58

go for anything? I mean...

0:40:580:41:00

Yeah, before we bought the plot, we had our architect come out

0:41:000:41:03

and have a look around.

0:41:030:41:05

And we had some of the local council people come out.

0:41:050:41:09

They don't see any objection to it.

0:41:090:41:11

It'd improve it really, so.

0:41:110:41:13

There would be more affordable houses in the area

0:41:130:41:16

if we go down the terrace of houses.

0:41:160:41:18

-Right.

-That's the demand at the moment, really.

0:41:180:41:21

Right. So tell me about you two. Is this something you do?

0:41:210:41:24

-Yes, I'm in plant hire and groundworks. And...

-I'm a builder.

0:41:240:41:30

-Right. Good combination there.

-That's right.

0:41:300:41:32

I work with another guy, a carpenter.

0:41:320:41:35

And we really go round as... Well, as a pair.

0:41:350:41:38

And obviously Dad goes in first of all.

0:41:380:41:40

Just two of you plus Dad doing all the groundworks?

0:41:400:41:43

-Yeah.

-Really?!

-Yeah.

0:41:430:41:45

Wow. But you get electricians in and plumbers...?

0:41:450:41:47

Yeah, electricians and plumbers, obviously.

0:41:470:41:49

Fantastic. Great team.

0:41:490:41:51

And there could be a new addition to the squad,

0:41:530:41:56

as Richard's 12-year-old son, Rhys,

0:41:560:41:59

is also keen to get involved in the building trade.

0:41:590:42:02

Hopefully he will be able to get on the tools,

0:42:020:42:06

get to his piggy bank, and help out with the budget.

0:42:060:42:09

-We've got about 200 to 280,000 to spend on the developments.

-Right.

0:42:110:42:17

200 being the cheapest and 280, we don't really want to go over that.

0:42:170:42:23

So, OK. That's... Let's take the middle and say 250 plus about 100.

0:42:230:42:28

So 350-ish. What kind of cost do you think you might be able to get?

0:42:280:42:31

Or what kind of sale price do you think you'll be able to

0:42:310:42:34

get from the finished things?

0:42:340:42:35

-Two-beds - we're looking at anything from 110 to 130.

-Ooh.

0:42:350:42:40

The three-bed will be 140 to 160.

0:42:400:42:43

If we'd done the flats, it would be approximately 100 to 110.

0:42:430:42:47

The three three-beds, the detached ones,

0:42:470:42:51

you're looking at probably 150 to 180.

0:42:510:42:54

-So there's probably...

-There's a good margin of profit there.

0:42:540:42:57

Yeah, over 200,000 whatever you're going to do.

0:42:570:43:00

-Mm-hmm.

-Good.

0:43:000:43:01

-So hopefully...

-Worth doing.

-..it'll be worth doing.

0:43:010:43:04

Yes, with a project of this size, it will take some doing indeed.

0:43:040:43:08

How long will it take to complete?

0:43:080:43:10

All down to planning. It's a nine-month project.

0:43:100:43:13

Once we've got approval, it'll be up and finished within nine months.

0:43:130:43:17

-Right.

-So hopefully it'll be...

0:43:170:43:19

We've planned that, hopefully, it'll be three months for the planning.

0:43:190:43:22

So it's a 12-month project, really.

0:43:220:43:24

Great. Well, congratulations. And good luck.

0:43:240:43:27

-We can't wait to see how you get on.

-Thank you.

0:43:270:43:29

So it's goodbye house, hello new development.

0:43:320:43:36

I think Richard and John have certainly got the experience

0:43:360:43:39

and the right idea with what they're planning here.

0:43:390:43:42

And it'll be fascinating to see what's here when we come back.

0:43:420:43:46

You can find out later in the show.

0:43:460:43:47

Doing up a property can take much longer than you think.

0:43:510:43:54

Well, we saw how one property did, but what about the other two?

0:43:540:43:57

It's time to find out.

0:43:570:43:58

It's time to return to Nottingham and the suburb of Basford.

0:43:580:44:03

Here I saw a pretty tired-looking three-storey terrace.

0:44:030:44:06

The upstairs wasn't great, with no loo.

0:44:060:44:09

And a top floor that didn't look like it complied with building regs.

0:44:090:44:12

But it was downstairs that really bothered me.

0:44:120:44:15

But in here was definitely the kitchen/dining area.

0:44:150:44:19

It's not that at the moment cos there's neither kitchen nor

0:44:190:44:22

a dining room in here.

0:44:220:44:23

Maria and her husband, Wayne, weren't aware of these issues

0:44:230:44:27

because they bought the house for £61,000 without seeing it.

0:44:270:44:31

They then discovered that because of its poor condition,

0:44:310:44:33

they couldn't get a mortgage.

0:44:330:44:35

Instead, they had to take out a bridging loan.

0:44:350:44:38

So they've now found themselves in a race against time.

0:44:380:44:41

We've got three months to basically do the work

0:44:410:44:44

and remortgage the house.

0:44:440:44:46

OK, so is there penalties after that?

0:44:460:44:48

Basically, what will happen is the monthly payments will double.

0:44:480:44:52

So that's why we have to keep everything as tight as possible.

0:44:520:44:57

And meet deadlines. We do have a lot of pressure.

0:44:570:45:00

Three months later,

0:45:000:45:02

we're back to see how Maria dealt with the pressure.

0:45:020:45:05

Pressure can burst your pipes, but can also create diamonds.

0:45:050:45:10

It's deadline time, and we're back.

0:45:100:45:13

-# So shine bright

-Shine bright like a diamond

0:45:130:45:16

-# Oh, oh

-Shine bright like a diamond

0:45:160:45:19

-# Oh, oh, oh

-Shine bright like a diamond

0:45:190:45:21

# We're beautiful Like diamonds in the sky

0:45:210:45:25

-# Shine bright like a diamond

-Oh, oh

0:45:250:45:28

-# Shine bright like a diamond

-Oh, oh, oh

0:45:280:45:30

# Shine bright like a diamond

0:45:300:45:32

# We're beautiful Like diamonds in the sky... #

0:45:320:45:35

The bathroom sparkles too.

0:45:350:45:37

It's been fully tiled and has a fresh, modern suite.

0:45:370:45:42

The tired, old living room has been transformed

0:45:420:45:44

with a contemporary colour scheme, and hardwood floor restored.

0:45:440:45:48

The other three rooms have also had a makeover.

0:45:510:45:54

Outside, the new rendering

0:45:590:46:01

and painting match the clean look of inside.

0:46:010:46:05

But as this was Maria's first time, it couldn't have been easy.

0:46:050:46:08

Unfortunately, we had a leak in the front room,

0:46:080:46:11

and it came through the ceiling.

0:46:110:46:13

What happened is, the boiler, the pressure was too much for the pipes.

0:46:130:46:18

More pressure, just of a different sort.

0:46:180:46:21

And then there was more bad news.

0:46:210:46:23

We found out that the house didn't have any gas.

0:46:230:46:26

And we had to dig up the pavement, which...

0:46:260:46:29

didn't go very well.

0:46:290:46:31

The other challenge was, we didn't have water for quite a while.

0:46:310:46:34

Cos we couldn't find a stopcock.

0:46:340:46:36

No gas or water. What more could go wrong?

0:46:360:46:39

Also, there was a flood in the garden.

0:46:390:46:42

The drain got blocked. I'm not sure what was down there.

0:46:420:46:45

But the neighbour was knocking on the door

0:46:450:46:48

saying her garden was flooded.

0:46:480:46:49

So we had to get the drain sorted out.

0:46:490:46:52

So it was just one thing after the other.

0:46:520:46:54

In the end, they have a really nice property here.

0:46:540:46:57

The finish looks lovely.

0:46:570:46:59

So I'm guessing those building courses Maria took paid off.

0:46:590:47:02

I dropped out after a few weeks.

0:47:020:47:05

So that all went out of the window.

0:47:050:47:07

So I think the only work that I did,

0:47:070:47:10

I just helped with a bit of painting.

0:47:100:47:12

And I helped strip the wallpaper.

0:47:120:47:15

But everything else, we had friends who were tradespeople.

0:47:150:47:19

Oh, Maria, I can't believe you gave up.

0:47:190:47:23

But it's probably best to take advantage of professionals

0:47:230:47:25

with mates rates.

0:47:250:47:27

The original budget was £8,000.

0:47:270:47:30

So what did they actually spend?

0:47:300:47:32

So the budget now, we've added up all the figures this morning,

0:47:320:47:36

and the budget has gone to £12,300.

0:47:360:47:41

Which is a shock. But...

0:47:430:47:46

you learn from your lessons and mistakes, don't you?

0:47:460:47:49

Maria, don't beat yourself up.

0:47:490:47:51

It looks like you've had some really bad luck.

0:47:510:47:54

But you've done a great job.

0:47:540:47:56

And it's all part of the learning process after all.

0:47:560:47:58

Of course, the biggest financial pressure on this project

0:47:580:48:01

was the prospect of those loan repayments doubling.

0:48:010:48:05

It took just over two months,

0:48:050:48:07

because we had tenants that wanted to move in.

0:48:070:48:09

So the last, I'd say, two weeks was mayhem.

0:48:090:48:14

We had to get everybody on site.

0:48:140:48:15

We had to say, you know, "We've got a deadline."

0:48:150:48:17

And we had to put the tenants off for a week

0:48:170:48:20

because the house wasn't finished,

0:48:200:48:22

which they weren't very happy about,

0:48:220:48:24

because they'd already given notice. So, yeah, it was very rushed.

0:48:240:48:27

And a lot of...

0:48:270:48:28

..shouting and arguing and just stress.

0:48:290:48:33

Well, now a tenant is in and the house is mortgageable,

0:48:360:48:39

all before that three-month deadline.

0:48:390:48:41

Let's hope all that stress has been worth it.

0:48:410:48:43

We've asked two local estate agents around

0:48:430:48:46

for their opinions on the house.

0:48:460:48:48

This is the second time I've visited this property

0:48:480:48:51

and I'm incredibly impressed.

0:48:510:48:52

It's certainly a phoenix that's risen from the ashes.

0:48:520:48:55

It's in very good order.

0:48:550:48:57

It's got a lovely kitchen. Nice bathroom.

0:48:570:48:59

Very bright light. And the standard is very high.

0:48:590:49:02

There's been a lot of attention to detail paid to the finish of the

0:49:020:49:05

property and it's above and beyond some of the standards of

0:49:050:49:08

accommodation in the area, which really makes it stand out.

0:49:080:49:11

Maria is already renting this out and plans to do so long-term.

0:49:110:49:15

However, the sales figures the agents gave

0:49:150:49:17

vary from 90,000 to £105,000,

0:49:170:49:21

which could mean a pre-tax profit of in between 17 and 32 grand.

0:49:210:49:27

That is really good for a first-time developer.

0:49:270:49:30

However, rental is the name of the game here.

0:49:300:49:33

In the estate agents' opinion,

0:49:330:49:35

is she getting the best return for her £73,300 investment?

0:49:350:49:40

For rental, I would anticipate the property

0:49:430:49:45

achieving in the region of £500 per calendar month.

0:49:450:49:48

With regards to placing this property on the rental market,

0:49:480:49:51

you're looking within the region of 500 to £550 per calendar month.

0:49:510:49:55

I think the rental value of 500 was a bit on the low side.

0:49:550:49:59

We've managed to rent it out for 550.

0:49:590:50:02

And we've got really good tenants, really nice tenants,

0:50:020:50:04

and we're really happy with them.

0:50:040:50:07

Maria's rental figures mean a yield of just over 8%,

0:50:070:50:11

so after a reasonable return and a lot of learning under her belt,

0:50:110:50:14

what has she made of the experience?

0:50:140:50:17

The experience was full of highs and lows.

0:50:180:50:21

But I think what you have to do is turn a negative into a positive

0:50:210:50:27

and make the most of what you've got.

0:50:270:50:29

And I think we've managed to achieve that.

0:50:290:50:31

And I'm really pleased with the outcome.

0:50:310:50:33

But it was really stressful.

0:50:330:50:35

And I was constantly telling people what to do and how to do it.

0:50:350:50:39

Some people took offence to it cos I was quite blunt.

0:50:390:50:44

So I just have to try and be nicer to people now,

0:50:440:50:47

if we buy another house, if they want to work for us again.

0:50:470:50:49

Cos I'll probably put them off.

0:50:490:50:51

SHE CHUCKLES

0:50:510:50:53

We're heading back to the picturesque town of Callington,

0:50:560:50:59

in Cornwall, now to see what's happened with this three-bed

0:50:590:51:03

detached house which was guided at what seemed a remarkable £85,000.

0:51:030:51:08

Why was this house a good 200 grand less

0:51:080:51:11

than the average house in this area?

0:51:110:51:14

Well, there was a big stumbling block.

0:51:140:51:16

Mundic block to be exact.

0:51:160:51:18

The house had largely been constructed using concrete

0:51:180:51:21

blocks made using mining waste that can become very unstable,

0:51:210:51:26

which means that getting finance on it is going to be really tricky.

0:51:260:51:30

Nigh on impossible.

0:51:300:51:32

The buyers paying £103,500 for the lot were not in the least bit

0:51:330:51:37

bothered by this issue.

0:51:370:51:39

John and his son, Richard, planned to flatten it and build, well, what?

0:51:390:51:43

Terraces, semis or even flats.

0:51:430:51:45

One thing was certain - they had plenty of options.

0:51:450:51:48

We'd prefer either the five two-beds or the two-bed and two three-beds.

0:51:490:51:54

-Right. Not flats?

-Not really, no.

0:51:540:51:56

I think, more for the area, it would be better as a terrace of houses.

0:51:560:52:01

They had three different outline applications in.

0:52:010:52:04

Option one - a row of terraces.

0:52:040:52:07

Option two - some semidetached properties.

0:52:070:52:10

Option three - a block of flats.

0:52:100:52:12

I tell you what, join in and have a guess at which one they got.

0:52:140:52:18

Was it option one, two or three?

0:52:180:52:21

# Can you believe it?

0:52:230:52:25

# I'm down on my knees, yeah

0:52:250:52:27

# Tell me, what can I do? #

0:52:270:52:30

Ah. It's option four - a pair of bungalows.

0:52:300:52:34

Now, if you got that right, then this must be

0:52:340:52:37

a repeat of the programme and you've seen this before.

0:52:370:52:40

Cheater.

0:52:400:52:42

No short cuts were taken when designing these properties, though.

0:52:420:52:45

The front door is set-back from the road

0:52:450:52:47

and the curb has been lowered for easy off-road parking.

0:52:470:52:50

The old plot had a lot of space at the back,

0:52:500:52:53

so both houses have good-size gardens.

0:52:530:52:56

Still, the two bungalows were not part of the original plan.

0:52:560:52:59

So what happened?

0:52:590:53:01

We put planning in for two semis, a terrace of houses, flats,

0:53:020:53:08

which we got recommended by the councillors.

0:53:080:53:11

But in the end, they all got turned down.

0:53:110:53:13

The problem we had with the neighbours is that they

0:53:130:53:15

didn't want anybody overlooking their property, so we could

0:53:150:53:19

only put bungalows in, rather than a two-storey or flats as we intended.

0:53:190:53:24

It took two long years to get planning approved,

0:53:240:53:28

which was double their original timescale,

0:53:280:53:30

even before a single foundation was dug.

0:53:300:53:33

Six months later, the build was complete.

0:53:330:53:37

They are still putting finishing touches on this one,

0:53:370:53:39

but here's one they made earlier.

0:53:390:53:41

This one was finished first and has been lived in for a few months.

0:53:450:53:49

I think it looks lovely.

0:53:490:53:51

It has a nice open-plan kitchen and living area.

0:53:510:53:54

Two good-sized double bedrooms.

0:53:580:54:01

And one practical single.

0:54:030:54:05

The new owners had a choice in the standard of finish.

0:54:080:54:11

I really like the design of the bathroom and especially the kitchen.

0:54:110:54:15

However, getting to this stage was no easy task.

0:54:150:54:18

First, they had to demolish the old house.

0:54:180:54:21

To save money, John did this and the groundworks himself,

0:54:210:54:25

where he ran into a problem.

0:54:250:54:26

When we had the drainage inspected,

0:54:290:54:32

the inspector said they needed different sort of tanks put in.

0:54:320:54:36

So we had to put in a sewage plant.

0:54:360:54:38

The ones that we'd put in we had to take out.

0:54:380:54:40

Then buy another two to put in.

0:54:400:54:43

That near enough doubled the expenditure on that side of it.

0:54:440:54:48

Then it was Richard's turn.

0:54:480:54:50

He and a small team had to make the plans a reality.

0:54:500:54:53

First of all, we dug the foundations, put the blockwork in.

0:54:530:54:57

We decided to go for a joist floor system with insulation underneath.

0:54:570:55:00

Then obviously blockwork and stonework on the outside.

0:55:000:55:03

We had somebody come in to do the plastering.

0:55:030:55:05

But all the other works, me and my friend did all the work.

0:55:050:55:09

And Dad did the driving side, digger side.

0:55:090:55:12

I'm the digger man.

0:55:120:55:13

I'm below ground, then Richard takes over.

0:55:130:55:16

# Can you dig me?

0:55:160:55:18

# Oh, yeah

0:55:180:55:21

# Can you dig me?

0:55:210:55:23

# Oh, yeah... #

0:55:230:55:25

What about Richard's son, Rhys, who we saw back in 2013,

0:55:250:55:29

when he was 12 and was keen to help out?

0:55:290:55:33

Now 15, the passion to be in the family trade is still strong.

0:55:330:55:39

My son came over in the holidays and helped put the fittings in.

0:55:390:55:42

And some of the blockwork outside.

0:55:420:55:44

He was helping me labour, mixing up concrete, everything.

0:55:440:55:48

He's decided when he's older to become a plumber,

0:55:480:55:53

which is another trade in the family for these projects.

0:55:530:55:56

A third generation of the family in the trade, that's great to hear.

0:55:560:56:01

It should also help save some money on bill costs in the future.

0:56:010:56:04

But how much has this one set them back?

0:56:040:56:07

We spent approximately 100,000 on each plot, which was our budget.

0:56:070:56:11

And we were pretty much within 95, 105, depending on the spec.

0:56:110:56:17

John and Richard bought this site for £103,500.

0:56:170:56:22

So add their spend of £200,000 to that,

0:56:220:56:25

and it means each bungalow has cost roughly £150,000.

0:56:250:56:29

Let's see what two local estate agents think of their hard work

0:56:290:56:33

and if there's profit to be made here.

0:56:330:56:35

What they've done is a superb job for what was here previously.

0:56:350:56:38

The finish of property one is absolutely outstanding.

0:56:380:56:41

Really, really good.

0:56:410:56:42

The second property, yet to be finished, but I'm sure,

0:56:420:56:44

looking at the first property, the standard will be just as good.

0:56:440:56:47

First impressions of the layout is

0:56:470:56:49

it's a really wide-open, friendly space, as I would call it.

0:56:490:56:52

The wide sort of hallway area that leads through to the bedrooms

0:56:520:56:55

gives it a massive wow factor.

0:56:550:56:56

The agents think these bungalows could rent for between 750

0:56:560:57:01

and £800 per calendar month.

0:57:010:57:03

That's not a particularly exciting yield of just over 6%.

0:57:030:57:07

But John and Richard always wanted to sell.

0:57:070:57:10

So, will the bungalows make a profit on their total £200,000 cost?

0:57:100:57:14

If I was putting the properties onto the market today, I would

0:57:160:57:19

certainly put both properties on the market at £220,000.

0:57:190:57:22

I think each of these properties will fetch

0:57:220:57:25

somewhere in the region of £200,000.

0:57:250:57:27

That's an average price of £210,000.

0:57:270:57:30

That will land the father and son team a pre-tax profit of 120,000.

0:57:300:57:35

So what do they think of that?

0:57:350:57:38

We were quite happy with the valuations.

0:57:380:57:40

We sold both of them for £210,000 each.

0:57:400:57:43

So, pretty good all-round, really.

0:57:430:57:45

Well, it's been a bit of a slog.

0:57:450:57:47

But with a pre-tax profit of £120,000 in the bank,

0:57:470:57:51

they should be pleased.

0:57:510:57:54

It's been quite an experience, actually.

0:57:540:57:56

We can work together, father and son partnership.

0:57:560:57:59

And yeah, it's been really good.

0:57:590:58:03

Find out what more proud owners did with their new properties next time.

0:58:070:58:11

Yes, make sure you join us for more Homes Under The Hammer.

0:58:110:58:14

-Goodbye.

-Bye-bye.

-Goodbye.

0:58:140:58:16

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