Episode 54 Homes Under the Hammer

Hello. Now, at times of economic uncertainty,

it can be extremely worrying to part with your cash,

even to buy property which used to be considered as "safe as houses".

It can be daunting at the best of times, no more so than now.

You know what, you have to do your research, grit your teeth and then buy your home under the hammer.

One man's trash is another's treasure.

That's true of properties sold at auction.

Yes, sometimes you just need imagination to see beyond the depths of the dodgy decor.

So let's see what's in the treasure trove of properties in today's show.

In Walthamstow, London, things are far from ideal in this flat.

This is horrendous.

It doesn't get much better at this semi in Kent.

I always wonder why houses like this go to auction.

In this case, I think it's because of that.

And in Derbyshire the plot thickens.

That's kind of weird.

More investigation required.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them when they went under the hammer.

When it comes to property, being close to good transport links is regarded as positive.

However, not when this flat you're thinking about buying is right at the side of them.

I'm in Walthamstow, E17 in London.

£105,000 what did it get you at auction?

It's a one-bedroom ground floor flat with attractive period features. I love the bay window.

There is an area at the front which offers off-street parking potential.

As it's on the ground floor, there's also the bonus of a garden, although it's rather overgrown.

The first thing to say, you've got this shared entrance. Which isn't ideal.

It gets worse. You come through the door of the flat and into this horrible little corridor area.

Extremely claustrophobic.

I don't like that at all. It's redeemed as soon as you come into this room.

The lounge, front sitting room area. Absolutely lovely.

High ceilings and original features have been left here. Lots of light pouring in through the windows.

Then through to the bedroom.

Again not a bad size space. More nice airy kind of feel to the place.

Yeah, thank goodness for that. What are you going to do about this?

I don't know. It leads through to the rest of the flat.

This is horrendous.

You know, it's a real Jekyll and Hyde flat this one.

You have this big room at the front, reasonable-sized bedroom.

Then this horrible corridor, through to what is a really large kitchen/diner.

Somebody is half way through doing some renovation work. Interesting choice of location for the bath!

Joking aside, you'll have to put units in here and sort it out.

I love the fact you've got this big space to play with.

I know, if I owned this place, I would spend a lot of time in here. Thinking it through, maybe

thin corridor, compromise.

It's worth it?!

In addition to this vast kitchen dining area there is also

the more appropriate space for this bath in a well-sized bathroom.

The corridor is unusual, I don't mean in a good way.

It is rare to find such a spacious one-bedroomed flat,

with the bonus of that garden and a guide price of £105,000,

it sounds pretty reasonable to me.

What does a local estate agent think?

It's a lovely Victorian flat with plenty of character.

There is room for expansion.

You can extend to the front, with making off-street parking.

To the rear there is room to build an extension.

So that room for improvement is a definite plus.

But extensions cost money and sometimes they don't pay for themselves.

How much would the value change here?

For a one bed, in good condition, you are looking at £145,000, two bed, £165,000.

Adding an extension is unlikely to add to its worth on the market.

But would it alter rental values?

The one bedroom you are looking at £725 per calendar month.

Two bedroom could be up to £900 per calendar month.

That is where a possible extension might cover its costs.

For me, this is a real added bonus and I guess why ground floor flats command a premium.

Straightaway, I'm thinking stick a set of patio doors in there.

Bring the garden into the property itself. The down side is you have a railway line there,

so it'll be noisy, but I'd guess you will get used to that.

All in all, £105,000, for a one-bedroomed flat

like this, in reasonable condition, I've even got over that corridor.

It was a good one to go for when it went to the auction.

Lot 29.

Walthamstow. Where do you want to start on this one?

Good lot. Walthamstow.

No-one here for the Walthamstow.

How much? £100. £100,000 over here.

I will say £100,000. Anyone else?

£102,000, 103,000,

104,000, 110,000.

111,000.

You are going to lose it. I'm going to sell it to him at £110,000. £110,000. Anyone else?

It's going. Can't believe it. £110,000.

First time, second time, third and last time.

Have you all done? £110,000.

Sold to you, good buy.

They were hardly clammering for this one in the auction room.

The bidder who decided it was worth a punt and was prepared to stump up £110,000 was Londoner Roy.

-Roy, good to meet you.

-How are you doing?

-Congratulations. Very good. How about this place?

Very pleased with it really. We was going to go up to £120,000, so, £110,000 we was quite happy.

Right. Why did you want to buy it?

It wasn't this particular place. We was looking for somewhere we could probably make a few quid.

When we went to the auctions we were looking at three or four different properties. We got this one.

We was going to add a bit on with another one but we didn't get that.

-Right.

-This is one of the ones that we went for that we got. We are pleased with it.

-Tell me more about you? Is this something you do a lot of?

-I'm a builder. I do for other people.

The opportunity has come up to do it for myself.

-How long have you been a builder for?

-Since I was knee high to a grasshopper.

17, 18 I started in the building trade.

I'm now 27, turned!

So why the wait?

Why do it after all these years?

Financing. It doesn't matter how much you earn, when you've got a family it goes.

To save up enough money to do it, like I say, the opportunity arose.

A friend of mine had a few quid as well. He put some finances in.

And, like with my knowledge and his money we should do all right.

Roy had been looking to dip his toe into the property developing game for a while.

He felt that the timing was right now and sees the current slump

in prices as an opportunity rather than a deterrent.

So why Walthamstow?

No particular reason just, as I say, like I live in Islington.

I had a house over here years ago, like long time ago.

I sort of know the rough sort of prices.

I know it's an affordable area. I couldn't do this in Islington.

I'm feeling sort of Hackney, Walthamstow is the next sort of

best place that I could be able to afford it. That's why Walthamstow.

OK.

Walthamstow came to me rather than me going to Walthamstow.

This is where some local knowledge is useful.

Roy knows his area and his market.

He has checked out prices nearby so has some idea of his potential mark-up.

He is also aware of what work is worth carrying out on the flat.

-Not next door, but one past that is up for sale now for £200.

-£200? Right.

If we put an extension on and make it into a two bedroom hopefully there's a few quid to be made.

Single storey?

Single storey, but we want to go right across the whole width of the garden, as opposed to

the width of the house at the back.

Make that into a courtyard there that will have an entrance into it through this.

That window is going to be a door.

-Oh, wow.

-The bay will be a door.

If you look out the back, there will be a wall across there with a door.

There will be three doors coming into a courtyard there.

These two will be bedrooms. If they let us

go the whole way the living room will be going right across the back.

The kitchen, the kitchen dining area will be down there.

That's ambitious and means the whole layout of

the flat will change significantly if he gets the planning permission.

There are, of course, other areas to tackle regardless of whether Roy can extend or not.

What about this little corridor?

It's the only bit of the flat that really bugs me?

Where the stairs go, where it goes round the corner

we will open up underneath the stairs to make it spacious.

It's a bit tight as you go down there. I can hardly walk down there.

I was going to say I have to go sideways, but sideways is probably worse than straight on.

How much is it going to cost?

If we don't do the extension, £10,000, £12,000, something like that.

If we do the extension, you can probably add another £12,000, may be £15,000 on.

We are £25,000 to £30,000 if we get the extension like.

That's with, like, we'll do the front garden, we'll do

the back garden, new fences, like new bathroom, new kitchen.

It will be all be brand new. So, it will look nice when it's done.

Presumably you are doing all the work?

Majority of it. Sometimes I might delegate, most of it I'll do. Me and my son.

My son does a fair bit.

He is pretty handy now. My old man might help me a bit.

That is interesting - three generations working on this project?

Probably the two generations, apart from me, won't do too much, they're a bit lazy. Mainly down to me.

As I say, they'll help out for sure.

This is potentially an exciting and extensive

first solo project for Roy, but he will have a little help from friends and family.

Well, Roy has certainly got the experience needed to make a success of this.

It's great he has his son and dad involved in the project.

I'm a bit concerned about what he thinks he might get for it on the open market in today's conditions.

Also, a lot depends on getting the planning permission. How will he get on?

You can find out later in the show.

The Kent coast around the River Medway is an area well geared up for commuters.

Trains whisk you to London in under an hour. There is the benefit of living in the countryside,

except maybe not in the heart of Gillingham, where I am today.

As you can see, I'm on a busy A-road, parking is a no-no.

You've got a bus stop here. By the sounds of things, sleeping may be off the agenda as well.

Here we are, it's a semi-detached, two-bedroom house.

The guide price just £80,000 to 90,000.

Let's go inside and get some peace and quiet.

Well, if it's transport links you're after, this is about as handy as it gets.

You won't have far to struggle with the shopping.

I'm not sure I would want a bus stop directly outside my front window.

The house itself could do with a bit of paint to bring it up to par with the neighbours.

Let's get in from that busy road.

Wow, this place just goes on and on and on.

It is like a tardis. We've got a front reception room here. Luckily, there is double glazing.

You won't hear all that traffic noise - so much.

You still can hear it faintly. You have polystyrene tiles in here.

They need to come down.

The whole place needs renovating. It really is in a bad state of repair.

Look at this, walls feel a bit wet.

There is wallpaper ripping off.

The carpets are awful. It's interesting, though, because there is

a spiral staircase leading to the cellar.

Then round here, look at this, you've got a spiral staircase

with a beautiful curved wall leading upstairs to the bedrooms.

You wouldn't expect to see something like that in a house like this in Gillingham.

It's quite unusual. You have a little kitchen to the back there

and through here, you've got the back reception room.

OK. So the garden table doesn't exactly scream luxury living.

This place is always going to struggle with its location on the main road.

But that spiral staircase does leave space for two good sized reception rooms on the ground floor.

The kitchen obviously needs a total revamp, but with a bit of thought

you could make better use of the space on offer.

When you consider that there's also a toilet just beyond that,

well, all in all, there is quite a lot of scope here.

The same is true of the garden, which could become

a welcome sanctuary from the road, if you tidied it up first. What about the bedrooms?

Up the spiral staircase and it's impressive, as well as practical.

These staircases just give you so much more floor space.

Up here you've got two bedrooms.

It really feels quite spacious.

But do you know what? Alarm bells are ringing.

I always wonder why houses like this go to auction.

In this case, it's because of that.

A crack-and-a-half. The wall is about an inch away from the door frame.

I'm just wondering if you can see that on the outside wall?

There is only one way to find out.

As I suspected, this crack runs deep.

It runs all the way from the top, to the bottom of this wall.

A survey on this house is a must.

It is certainly a worry and could cost a lot to sort out. But the bathroom here is huge.

I reckon that with all the space on offer you might get at least one more bedroom in this property.

So, at the £80,000 to £90,000 guide price, is this a worthwhile project?

I've invited along a local estate agent to hear what he thinks.

I like the house. I like the character.

I like the fact that it is in a central position and it just has a nice feel about it.

It needs pretty much everything doing.

Most of the windows have been double glazed,

there is a heating system included.

It has a cellar, which a lot of buyers are looking for now,

to convert to another room or a gym or a work area.

What about that main road?

It must be a disadvantage?

It is a busy road during the day time.

I think evenings it will be a lot quieter.

The trade-off for that is the fact that the station is less than a two-minute walk.

Which makes this attractive to local buyers and London commuters.

What could you earn from this as a rental property?

Similar properties in this area that we rent

are making somewhere around £600 to £625 per calendar month.

Creating a third bedroom and converting the rear reception room into a fourth

could add as much as £350 per calendar month to the rental value.

This would apply especially if you were looking at this as a student let for the nearby university.

But it would cost more to do and wouldn't necessarily add to the resale value.

I would put this house on the market for up to £135,000.

This house has issues.

Now the road will keep prices down.

That bowing wall is a worry.

It could prove costly.

There is, however, a healthy margin to be had here.

If it goes for anything near the guide prize and sells on for the

estimated £135,000, well it could be a nice little earner indeed.

Let's see who did their figures in the auction room.

Lot 59. Jeffrey Street in Gillingham.

Where will you start me on this one? Guide of 80 to 90.

Is there a bid off 80 to start me? £80,000.

80, I'm on the way. £80,000 I'm bid.

81, take it slowly. 81,000. And 2.

81,000 I'm bid. 82 I'm looking for.

Are we all done at £81,000? 82, I'm obliged at the front.

82 I've got. And 3 at the back.

More on that side if you like. 83.

At £82,000, I've got 83 I'm looking for.

83 I've got.

4, if you like. 84.

And 5, 85 in the aisle. 85 and 6.

86, 85, sitting in the aisle I've got. I've got you now, sir. 85.

And 6, if you like.

More at the back. At £85,000.

I will sell it at 85. It's got to be worth another bid. £86,000 at the back, if you like.

Maiden bidder. 86. Against both of you.

Another 1, another 1.

At £85,000 I've got. Sitting in the aisle for the first time.

At £85,000.

For the second time. Good value this one. One last chance.

85 for the third and final time if you're sure you're all done. It's yours, sir, for £85,000.

Well done.

The winning bidders were first time developers and motorbike enthusiasts Richard and Martin.

Richard works as a housing office.

Martin has given up his job as a handyman to take on this property full-time.

# Motorbiking

# Motorbiking

# Motorbiking... #

Guys congratulations. This is really good news.

Tell me about the auction, how were you feeling?

-Very nervous.

-Very, very nervous.

-Were you?

-Very apprehensive about it.

It was a bit of a mess really.

-Quite confusing.

-I'd gone to the toilet.

There were three more lots.

Then I thought, that will be enough time.

Two of them were just like, we are not doing those ones.

I could hear as I was washing my hands. Quick get back to the room!

Were you the one that was going to bid in the first place?

Yeah, we had decided I was going to do it.

I sat down with you.

I said, "Have you bid yet?" You hadn't, had you?

-No...

-We were waiting to bid. We both went at the same time.

Hilarious!

And that was it. Hands up once.

We only bid once.

-Had Martin not got back in time from the toilet, would you have bid on your own?

-I would have done!

I was getting ready!

Richard and Martin own a few properties between them.

But this is the first development project they've taken on together.

There is a good reason why Martin was designated bidder

and that is, despite his training as a surveyor,

Richard had only ever seen photos of the property.

Richard has a full-time job.

I go out and look at all the houses to get the potential shortlist.

I would take a photograph

of every single conceivable corner and feature

that I could think of doing.

Richard would have to come home from work and look at hundreds of photos

of this angle and that angle of some ratty old house.

From hundreds of different houses?

From about five or six.

I would shortlist them. Then further shortlist after that, you know.

So, it was the staircase, really,

-that took both of our attention, didn't it?

-Yeah, yeah.

It just had such a kooky feel about it which then, in turn,

makes all the rooms larger than they would normally be

in a house this size.

That spiral staircase certainly gives this place a lot of character.

But there was one thing that didn't show up on Martin's photos.

The crack in the wall.

I took a photograph from down the lane of the side elevation.

-Completely missed the big giant crack.

-Huge.

The side of the wall coming off the side of the house.

-He didn't take a photograph of that, did he now?

-No, I didn't know about that!

I photographed the side wall!

But I missed. I did miss that one.

To be fair to Martin, that crack wasn't as obvious

when he visited the property.

But given that Richard has the surveying background,

wouldn't it have made more sense for him to check it out?

I wasn't available for the viewings.

-They come up at such short notice sometimes.

-Midweek.

I'm just not able to do it. We had to rely on Martin.

It is your expertise that we needed at that time. It's funny isn't it?

-It's a bit of a wing and a prayer.

-It was a bit of a risk.

But we found a report on the floor

talking about the crack, and there is no ongoing subsidence.

The bowing is symptomatic of end of terrace houses,

which can be rectified.

I hope they're right. Obviously, Richard's experience

is going to be very useful when it comes to mending that crack.

Martin will be overseeing this project on a day-to-day basis.

What is his background?

I've had a number of jobs in the last few years.

Immediately before this

I was a professional handyman on a motorbike.

Before that was a compositor working in visual effects.

Before that I was a costume designer.

So quite a mixture of work there.

Yes, I've been trying to get from costume design, which was sort of five years ago,

to a bit more... I want to change my tool set to be a bit more, like,

you know, butch!

-What do you mean, a bit more butch?

-You know, sewing machines!

You want to get rid of the curtains

and start doing something more like knocking walls down.

Some of the costumes that I was...

Yeah, I used to use tools, occasionally.

I really liked it, you know, proper workman's tools.

I really liked it, so...

I've tried to sort of get myself to this side of the creative sphere.

You know, you will have to do the curtains here.

-You will have to start doing all that again!

-I can do all that, you know.

I can do all that. Which is funny.

And handy too.

The guys have allocated themselves a £15,000 budget to renovate.

It will be Martin's job to see that they stick to it.

I will do three days in the week.

Staying over. The other days I'll to-and-fro home, you know.

-Just to keep the mileage down a bit.

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

-Three to four months.

-Three to four months, we hope.

-You're quite excited about doing this, aren't you?

-I am.

You twinkle when you talk about it?

I am. Very... I like to organise things.

I'm probably more scared of the whole project than Martin, maybe.

But, I've got faith in what he's going to do.

I'm looking forward to the transformation it's going to take.

Hopefully give us the confidence we need to keep on going.

It's an exciting time for us.

Richard and Martin are two totally different characters

that compliment each other beautifully.

A real ying and yang combo.

The question is, will they be firing on all cylinders

and go at full throttle to have this finished, or will it be a bumpy ride?

Join me later to see how they get on with their journey.

Coming up: In Derbyshire,

there is more to this site than meets the eye.

Suddenly, it's getting very interesting.

We return to Kent to find out whether Richard and Martin

are cracking on or cracking up.

There were some low points.

We really just wondered what it was we were trying to do.

But first, has Roy's optimism been well founded?

With my knowledge and his money, we should do all right.

Back in Walthamstow, London,

builder Roy paid £110,000 for a one bed-roomed flat at auction.

He was keen to maximise its ground floor position

and the garden that came with it.

If we put an extension on, make it into a two bedroom,

hopefully there's a few quid to be made.

Right. Single storey, obviously?

Yeah, single storey, but we want to go

right across the whole width of the garden.

So, five months later had Roy's ambitious plans come to fruition?

Well, the front's looking great,

with a new hard-standing parking area.

While out the back...wow!

He's done wonders with the garden.

Yes, there is an extension.

But it doesn't look quite as large as I was expecting.

The two biggest changes we made to the property

is the extension and the garden.

Unfortunately we didn't get the planning permission

that we applied for in the first place, which was

a full width extension coming the full width of the garden.

We had to make do with a smaller one, but it's turned out nice anyway.

Secondly, we've done a hell of a lot of work in the garden,

flattening it, landscaping it.

Unfortunately we didn't budget for this,

but we're quite pleased with it anyway in the end.

The garden's a definite plus

and shows the benefit of ground floor flats.

So often these spaces are neglected.

But Roy's turned it into a major selling point,

designing the new layout of the flat around it.

As you see, the extension turned out quite well.

We've got a nice flow from the garden to the living room.

The living room's a fair size.

Also we're very pleased with the kitchen, the way it came out.

Very nice, clean lines, modern looking.

Also I got a very good deal with the man I play golf with.

Everything was good.

Yes, that new kitchen suits the new kitchen-diner area off to a T.

With the front living room and bedroom redecorated and finished,

Roy's been busy, although he's had help from family members.

My old man did most the painting.

My son done most of the donkey work.

Between us we got it all out on time.

Yeah, we get on all right. As long as they do what I say!

Under Roy's supervision, the team have definitely

now got the space optimized to the max here.

He's even improved that narrow hallway,

by removing the cupboard under the stairs.

The bathroom's now got a bath.

There's also a brand new suite and space-saving units.

So, the flat is just about finished.

Is Roy pleased with his first solo project?

Well, it's more profitable, so therefore I enjoy it more.

You know what I mean? I enjoy building anyway.

I really do get a buzz out of taking something old

that looks sort of dilapidated

and when you walk out it's a lovely building.

So I get a lot of pride from that anyway.

So, I mean, doing me own one is the icing on the cake

because I earn a little bit more out of it.

Well, earning more in theory.

That's provided he hasn't gone too wild with his spending

on this £110,000 flat.

It cost about £35,000, maybe a little bit more.

We done... I mean, the extension wasn't that much,

but the kitchen we spent a little bit more on.

We spent quite a bit more in the back garden.

We didn't allow anything in the back garden.

We was just going to flatten it off and turf it.

But we thought, no, in this sort of climate,

I'd prefer something a little bit better.

Hopefully we brought a bit of Hampstead to Walthamstow. That's what I like to think!

Well, that £35,000 spend

takes his total to around £145,000 to £150,000.

And this is Walthamstow, not Hampstead.

Has he perhaps been overindulging on his fixtures and fittings?

What's the opinion of two local estate agents?

In London it's all about station access.

You've got probably a five or ten minute walk

to the Victoria Line from here.

It's the key to it all. If it's more than 15 minutes away from the station

the prices come down considerably.

So you've got a good mix here, you've got a lot of space

and the station access, which adds to the value.

I like the finish to the kitchen. The kitchen is very important.

It's basically the heart of the accommodation

and it's presented very well.

In this area gardens are not normally done to this quality.

Any private garden in a flat is a big selling point.

Obviously they've landscaped it, new lawns, etc. I think it looks great.

So, it definitely ticks a lot of boxes.

But Roy has invested nearly £150,000 here.

So what about that all-important re-sale value?

We think this property in the current market should be worth,

for two bedrooms, about £195,000.

I recently valued the property between £190,000 and £200,000.

Wow, that's not bad! Around the £190,000 mark could potentially see

a £40,000 pre-tax profit.

What does Roy think of that?

The property's actually been sold.

It was sold within the first week of being advertised.

As soon as we finished we got the estate agent round and it went straight away.

The accepted offer was for £193,000,

which means he's on for that £40,000 pre-tax profit.

Surely it's onwards and upwards.

We're already looking for another property. The estate agent that's selling this

has probably got one that might be of interest, and we're going to the auctions this Tuesday.

So, this looks like the future for Roy.

He is to be his own boss and perhaps his son's boss as well.

My aspirations and hopes is to take an easy life, fishing and golf,

and let my son do the work.

Well, I think he might be quite a few properties away yet

from swapping spade and trowel for golf club and fishing rod,

but a few more developments like this

will certainly help him move in the right direction.

Welcome to Derby, a city undergoing a £2 billion regeneration.

There are going to be new shops, homes, offices and leisure facilities,

so things are definitely on the up here.

And so, I find myself on Madison Avenue.

No, not Madison Avenue, New York,

with its chi-chi designer boutiques, but Madison Avenue, Chaddesden,

near Derby, where up for auction was a plot of land

with detailed planning permission for the erection of a three bed-roomed detached house.

Guide price was £28,000.

# It's up to you, New York... #

What would £28,000 buy you on Madison Avenue, New York?

A designer outfit maybe.

So £28,000 for a plot of land with planning permission

seems a pretty good deal to me.

The first thing I notice is here on the curb,

because in terms of getting access from the road, there isn't any.

You will have to approach the council and get planning permission

to have that curb lowered so you can get access into the plot.

Next thing is the plot itself.

We like it to be level. That's good news, the plot is level.

It's about 20 metres by 11.

A big plot, but it's currently covered in this concrete.

That is going to be one devil's own job to get up.

You'll have to factor

some extensive excavation costs into that.

Those are the first two things.

But something much, much more serious is this.

That, I wouldn't be surprised, is a mains sewer,

running right through the centre of the plot.

Building regulations say you can't construct a building within three metres of that. Hang on a second.

One, two, three metres that way. OK?

And then, one, two, three metres that way.

The usable space on this plot that you can build on

has shrunk dramatically.

However, it has got detailed planning permission.

That's kind of weird. More investigation required.

Well, in the absence of Sherlock Holmes you will have to make do

with Roberts of the yard, or maybe that's Roberts IN the yard,

because this old garage space has got me puzzled.

I want to see what the auction catalogue describes as detailed plans.

Because without a thorough check

I fear there could be a host of unforeseen problems.

OK, let's talk about the numbers on this one.

Say you get it for a couple of grand over the guide prize, that's £30,000.

It will cost you about £70,000 to build yourself a three-bedroomed detached house on here.

Approximately. So you have £100,000 plus cost invested in here.

I know that a three-bedroomed detached house around these parts

will sell for about £150,000.

So you could potentially make £50,000, minus all your taxes.

So, suddenly it's getting very interesting.

OK, so, the numbers might add up,

but is a three-bedroomed detached house right for the area?

What does a local estate agent think?

I understand there's detailed planning on the plot for a three bed detached house.

We don't know how large the house is.

But I suspect something of this size

will probably take about 750-800 square feet.

That's an OK size for a starter home.

So the site can accommodate a house.

But there won't be much of a garden.

I think these days large gardens aren't everybody's cup of tea.

When you can fly to Spain for £20, they'd probably rather do that than dig the garden.

It's not such a big issue these days,

but it might be a little bit too small.

The estate agent only seems to have minor worries about the garden,

but what type of house is right for the area?

When it comes to marketing the property that's built here,

I think the main issue will be,

it may stick out like a sore thumb.

It will be the only detached house in the street.

They are mainly two-bed semis.

And that's never easy. It's better to sell the cheapest house in the street than the most expensive.

So they might struggle with that.

Well, it's a good sized plot.

I don't like the fact it's solid concrete. That's going to take a bit of clearing,

you have the issue with the curb and that whole thing with the sewer.

So definitely check this one out carefully before you buy it.

Let's hope that's what somebody did when it went to auction.

Lot number 18 is the building plot

adjacent to 51 Madison Avenue in Chaddesden.

Start me where you like for the building plot.

28, £25,000 in the corner.

At £25,000. 25, 26 somewhere else.

At £25,000. 26, 26 is bid.

At 26. 27. At 27. 28.

28. 29.

29. At 29.

30 for you, Sir? 30 is bid.

At £30,000.

31. 31. A fresh bidder. £31,000. 32?

32. At £32. 33, sir? 33 is bid.

At £33,000. 34?

34? £33,000. 34. At 34.

35?

35. Try one more. 35.

At 35. 36.

36? 35 on the far right. 36 somewhere quickly.

At £35,000 then, once, 35,000 twice.

Third and last opportunity.

We're selling at £35,000.

Sold at £35,000. Thank you.

For £35,000, the new owner of the Madison Avenue site

are Vic and his wife Poonam,

who live just outside Birmingham, nearly an hour-and-a-half away.

Builder Vic was attracted by the price

and had high hopes this could be a successful project.

-Vic, congratulations, you've got yourself a plot of land.

-Thanks very much, mate.

Why did you want to buy it?

I want to build a house here and sell it.

Now, there is a main sewer running across the plot.

Do you know about that? What do you think about that?

-We need to get in touch with Severn Trent for that.

-The water board?

That's right. The drawing didn't show any drainage or anything like that.

So, the word 'detailed' sounds a bit of an overstatement.

But they have at least been passed.

What do these elusive plans show?

They are showing the building with three bedrooms,

one toilet downstairs, one bathroom upstairs, that's all.

Nothing, they're not showing the ground level, where the sewerage can go,

where the main supply's coming from and stuff like that.

-They show nothing.

-So quite a lot missing then from those plans?

-Quite a lot, yeah.

Main parts are missing anyway.

-Did you know that before you bought it?

-Not really, no.

-So you've got a bit of negotiation with the planning people to do yet?

-That's right, yeah.

Let's hope this project doesn't literally

go down the drain before it starts.

But if Vic can get his hands on those detailed plans,

how much will he spend on the build?

# One way or another

# I'm going to find ya I'm going to get ya... #

It's going to be about 55 to 60, say.

-The whole house, front and back garden.

-Really?

-Yeah.

-So, are you doing a lot of that work yourself?

-Yeah.

I do have small contractors work for me, as well,

like for brick laying, and some carpenters.

I do most of the work myself, as well.

Vic may do the main grafting,

but he's ably supported by his wife, Poonam.

In this case, perhaps she'll have the hardest job.

Poonam, tell me what you're gonna be doing?

I think I'll be doing all the phoning around for him.

Getting the materials, the stock and stuff for him.

What do you think about it?

It's good. I think we've got it at a good price, yeah.

We've got detailed planning permission.

That is a bit of an issue. We're not sure what that is, are we?

I think we'll find it somewhere.

We've got the council reference number.

Hopefully the plans are there, but we haven't got them.

I can chase it up, yeah.

That's gonna be quite important, isn't it?

Ah-ha, that sounds a bit more encouraging.

Where there's a council number, there are probably some documents.

Let's hope for Vic and Poonam's sake they tell them

what they want to know so they can crack on with the build.

It might go up quite quickly because Vic appears to be a speedy worker.

So, where did you two meet?

We met at the airport in India,

cos he's my sister's husband's younger brother.

He came to pick us up at the airport for a holiday.

So we met there and eight days later we got married.

Eight days later!

Wow! That really was love at first sight!

It was, yeah.

Where did you get married?

In India, close to our house there.

Right. So, what did your friends think?

You went away, you weren't married,

and didn't have a boyfriend and came back and whoosh.

Yeah. We'd just gone for a holiday.

I told my friends on the phone and they didn't believe me.

So, we met up and I showed them all the wedding bangles and everything

and it was like oh, my God!

That's a heck of a thing to get on holiday, isn't it!

The best souvenir, I think, isn't it.

A husband!

# Airport

# Airport

# You've got a smiling face

# You took my lady to another place

# Fly her away

# Fly her away. #

Well, I know there are pick-up points at airports,

but I never knew there were that type of pick-up point!

But let's hope they can get this project off the ground just as fast.

So, not quite as plain sailing as Vic and Poonam

might have liked when it comes to the planning on this plot.

Definitely some issues to resolve, especially regarding that drain.

But if it's anything like his speed at getting married,

whatever's going on here will go up pretty quickly.

Find out how they get on later in the show.

You never quite know how it's going to go with property developing.

Sometimes you take the wallpaper off and the plaster comes with it.

Absolutely! But that's why it's so important to have time on your side,

and a contingency fund, because things could potentially go wrong.

So, how have our plucky property developers got on today?

Earlier in the show, I met bike fans

and first-time property developers, Richard and Martin.

They had just brought this two-bedroomed

semi detached house in Gillingham, Kent for £85,000.

They'd set themselves a £15,000 budget

and three to four months to renovate the property completely.

Ex-costume designer turned handyman, Martin,

was going to tackle most of the work himself.

But the big crack which ran right down the outside wall worried me.

# You gotta go, go. #

As trained surveyor, Richard had been unable

to view the property before the auction.

I wondered if the guys had actually taken on

more of a wild one than an easy rider?

# I bought a new machine, hey I say. #

But, ten months on, the project is finally nearing completion

and seems to have been worth the wait.

With a fresh coat of paint and one or two carefully chosen details,

the front of the house has been transformed

from the uninviting grey house that I first saw.

At the back of the property the greenhouse and paving stones

have gone and a new lawn has now been laid in their place.

But the major changes are inside.

This whole back area of the house, where it really wasn't

planned very well, the back porch particularly had a problem.

There were three doors all interacting.

We sorted out the toilet door so it opens inwards.

At the same time the guys have added some new cupboards,

installed a new boiler and moved the door through to the kitchen.

The kitchen itself wasn't planned very well, at all.

There was a sloping ceiling that's been replaced.

As you can see, the whole room has been efficiently planned

so there's a much better use of space.

Martin has put his creative skills to impressive effect here.

A bigger window and this brand new kitchen

have transformed this part of the house.

Towards the front, the two reception rooms

are well on their way to completion, as well.

The walls have been re-plastered,

repainted and in the case of the front room, completely removed.

A new fireplace has gone in,

central heating installed and the place is all re-wired.

So, with just skirting, architrave and carpets to go,

the property definitely has a new lease of life.

In the process of fixing that crack,

they even uncovered some history along the way.

We had heard stories about this was the first house in the street

and it was surrounded by a farm and the houses next door weren't there

and the workers used to come on and off the farm.

They were paid their wages through this small window.

It wasn't until we actually found the window for ourselves

it made sense and people have since commented on it

and confirmed that was the case.

That was quite a sweet little surprise.

But the surprise they found in the cellar wasn't so sweet.

The whole spiral staircase was completely shot downstairs

in the cellar. The stairs were falling apart.

It became apparent it needed major repair, particularly in the cellar

that was supporting the whole staircase,

and the treads had to be strengthened a bit.

But I love it. It's been painted up now.

We don't know whether we'll carpet it or not, but it looks great.

Up that newly refurnished staircase, like the rooms

down stairs, the front bedroom has been completely renovated.

The guys have removed the fireplace

and fitted a cupboard here to make best use of this room size.

But it's at the back that the major changes

have taken place on this floor.

Remember that big bathroom? Well, it's gone.

Halfway through we actually made a decision to

take the bathroom out of there.

We looked at various ways of working the bathroom to keep it there. It wasn't working.

The sloping ceilings, the low level of the windowsill,

it was just impossible to make it work properly.

We made the decision to take it out of there

and split what was the rear double bedroom into two.

With that we created this new bathroom and we've done that by

putting the bath at the back of the room there

and knocking into the chimney breast to find a position for the toilet.

And the wash hand basin to the left.

And with nice tiling at the back of the bathroom, we think it's

quite successful.

So do I, Richard!

Getting that extra bedroom will certainly add value here.

Just as well because although Martin has done

almost all the work here himself with Richard helping out

at weekends, their £15,000 budget has been stretched.

There were some low points where we really wondered

what it was we were trying to do.

Everything we touched crumbled.

So this has been a big lesson for us.

The plastering throughout the property

we hadn't bargained on doing,

repairing the flank wall, which was bowing outwards.

All of the skirtings, all of the doors, there was a big problem

with the bouncing floor in the back bedroom upstairs,

that had to be stabilised and the floor to the old bathroom

had to be completely renewed.

Somehow you do just keep at it bit by bit

and week to week and in time you get to the point we are now.

Ten months on and after spending £85,000 buying this place,

Richard and Martin have shelled out close to £20,000 so far

to turn it back into a happy habitable home.

They expect to spend a few thousand more yet.

Taking their total just past the £105,000 mark.

But they're not quite sure what they'll do next.

We do need to make a decision

if we're going to let the property or put it up for sale.

If the valuations we get on the property are favourable,

we will be trying to re-sell the property.

As for letting, my day job is a senior housing officer in Hackney.

I do tenancy management day in day out.

Maybe I don't want to take that home with me

and become a private landlord.

Let's find out if creating that extra room

will add enough value to make that decision for them.

We asked two local estate agents to take a look at the property.

What do they think now it's nearly complete?

You walk in and expect something quite tiny.

But when you're in here it's really very big and goes back a long way.

So yes, it's a great house.

Quality is very good in the kitchen and bathroom.

I'm really impressed with it.

So, what they've done by giving the bedroom back

and dividing it off is much more sensible.

I think the colour scheme is good,

the quality of the fittings, the sanitary wear is excellent.

That will be appreciated by buyers.

If this was my property I would move in and make it a home.

So it's a big hit with the estate agents,

but moving in wasn't what Richard and Martin had in mind.

What they want to know is how much money can they make from it.

The rental valuation would be £595 per calendar month.

The sort of rental we should achieve on this

would be in region of £625-650 per calendar month.

I think it's worth more than that.

Even though that's the current,

that's what it would go for.

But we've done such a good job on it.

I know, but it would be painful to let it go for that much I think.

At the top end, £650 per calendar month,

is an approximately 7% return on their £105,000 investment.

That's not bad. If they can get a long-term rental.

But they would much rather sell.

The resale valuation would be £135,000.

I think we should be able to achieve somewhere between 130 and 135,000.

We may find that offers are going to come in at £125 - £130,000.

-Yeah.

-We've done a good job in a rubbish market.

Yeah. I think we were being quite pessimistic, given the state

of the housing market, to think it could go for that kind of value.

We could turn around with a decent profit, given the state of things.

If we can sell for 135 that would be a £30,000 profit.

Well, Martin's right. They could make a £30,000 pre-tax profit.

But only if they can sell quickly at the top valuation

and if they keep the cost of finishing to an absolute minimum.

Still, it's not such a bad result and it sound as though

they've made up their minds.

I think I would be tempted to sell.

Kerching! Sell it. Move on.

With this house to kick-start their property developing careers,

it's time to get those motors running

and head out on the highway in search of another auction purchase.

Back in the Derby area of Chaddesden,

an old garage and associated land

was sold as a potential building plot.

Vic and Poonam bought it for £35,000

and it came with planning permission for a three-bedroomed house.

There were some issues about whether there were detailed plans

and Vic and Poonam lived one-and-a-half hours

away from the plot in the Birmingham area.

As if that wasn't enough there was a drain in the middle of the site,

that was gonna be tricky to move.

So, nearly one year on,

have they overcome all the difficulties and built the house?

Well, it doesn't look like it!

So what's been going on?

To build a new house, it's very hard to sell it at a good price.

You can't sell it, the price is going down.

Coming from Birmingham to build it here,

so I don't think it would give me a good profit after that.

Obviously, if I build the house

I need someone here for security all the time.

After that, all the calculations I thought it's not worth it.

That's why I decided to sell it.

So, with travel and building costs, plus concerns about the market,

Vic decided to put it back in the auction room.

He had paid £35,000 for the plot,

and spent just over £2,000 on changing the planning permission,

and demolishing the garages, so how much did he get?

This time I sell my land

and I did make a loss because of the current market.

I did make loss, about £10,000 - 12,000 loss on that land.

In fact, Vic sold the land for just £25,000 at auction.

That £10,000 - £12,000 loss and the general property slowdown

has caused Vic to change career paths totally.

I've got a shop in Birmingham to buy gold and sell gold.

That's what I do at the moment.

# Gold... #

So, Vic decided this site wasn't a gold mine

and has now opted for the real thing.

But should he have persisted with this venture

and if so, could he have made decent money?

What do two local property experts think?

First impression with most plots is gosh, this is small,

how are we going to get a house on it.

But once thinking about it, it's possible to get

a decent sized house with parking and garden.

One thing Vic did achieve was getting the planning permission

adjusted from a three bed-roomed house to a four-bed,

as a possible means of increasing its end value.

How much would that have helped?

Well, you could get a four-bed on here.

I would have thought probably 1,000 - 1,100 square foot

which would sell for about 200, £195,000, something like that.

Whereas a three-bed you would look at £160,000.

So, even with a £100,000 build cost on a plot originally bought for

35,000, an end value of 200,000 could mean a healthy profit.

But the problem is that the house could have been six months

to several years away from being built,

so by the time it was completed the market might have dropped further.

That was not a gamble Vic was prepared to take.

Does the auctioneer who sold the land

in the first place, think Vic made the right decision?

I think it's been a victim of circumstances, unfortunately.

Bought it at the wrong time, the height of the market.

Build costs were going up.

Values were coming down. You get squeezed in the middle.

So, in one way you've got to cash it in and go, haven't you?

So, Graham the auctioneer

thinks Vic did make the right decision not to build,

but he could have hung on to the plot for a while and land-banked it.

Would that have been worth it?

To land bank, it means you're dependant on the market picking up

in the next two or three years maximum.

I think on today's market that's a long-shot.

So, this story really reflects the current market,

with still relatively high build costs

and falling house prices, new builds are having their margins squeezed.

So, many developers like Vic are choosing not to build.

# That's just the way it is... #

But the new owner of this plot thinks things are now turning.

He plans to build that four-bedroomed house

that Vic got planning permission for.

So maybe this rubble site will eventually be someone's new home.

Well, it's goodbye from us and we hope you've enjoyed

watching the auction room tales on today's show.

-Join us next time for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

For more information about Homes Under The Hammer,

including how the programme was made, visit the website at bbc.co.uk

Subtitle by Red Bee Media Ltd

E-mail [email protected]