Episode 59 Homes Under the Hammer

Hello. Now, even in these troubled financial times

we all still need a roof over our head

or somewhere to invest our money.

And an excellent place to pick up a property bargain could well be at an auction.

Well, we've been trawling the country to find people who've have done just that.

Now, buying and doing up properties can be great fun, but also fraught with problems.

Now, some take to it like a duck to water and others, well, like cats to water.

So, which will it be for today's buyers?

In Derby there's a two bed terrace up for grabs if you can see it.

Look at the size of this tree!

This land in Kent comes with planning permission...

to build not one, not two, but three houses.

And there's a Grade 2 listed cottage in Wiltshire, but in what state?

I'm categorising it as "original" condition straight away.

All of these properties went to auction.

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

I'm in Alveston, a suburb of Derby which lies just two miles south of the city centre.

There's no planes in the sky at the moment, but there could be as we're close to East Midlands Airport.

Why is that significant? A lot of the people who work at the airport live and rent in this area,

so the property I'm here to see could have great potential.

I think it has. This is it, two bedroomed mid-terrace.

The guide price was 60,000 quid. Let's take a look inside.

Actually, before we go inside, I don't need to go anywhere else

other than the front garden to see a major problem. Look at the size of this tree!

Major problem. Three basic reasons. One, it's going to affect the foundations,

two, it'll affect the drains,

and three, it's blocking out all the light from the house. The first thing I'd do is chop it down!

Now, from the outside the house is quite wide, which bodes well,

however when you come inside, you realise it's not that deep

so in the living room here this is what you've got.

Good news, though, it doesn't smell damp.

You've got double glazing, which is good.

Fireplace, well, it's a bit dated, could do with replacing.

In fact, the whole place just needs a bit of a freshen up, but, overall, not a bad start.

So, the kitchen here is the only other room on the ground floor

so, as you can see, yes, it is very wide, but not very deep.

The kitchen itself, well, not exactly a huge amount of space and clearly in need of a bit of design.

One thing I do like is this. You don't see this enough these days - a pantry.

It's under the stairs, makes great use of space for you to put your beans and other stuff. Great.

Now, when it comes to the outside, well, a reasonable-sized garden and a downstairs loo,

one you can easily access from the garden. That is a plus point.

So, all in all, yeah, downstairs it's all right.

You could knock all this through and create a much bigger kitchen,

but any structural work would probably add a zero to the budget

and if you plan to rent this out you might not see your money back for a while.

So, upstairs, two bedrooms.

A good sized double on that side, then across the landing to a smaller single there.

But, you know, all in all, it's not too bad.

The only downside in some ways is this, the bathroom.

It's tiny. It's got everything you need, and at least it is upstairs,

but, really, there isn't enough room even for a door, but, all in all, it's not a bad little house.

Recent sale prices of similar houses on Baker Street show that many are going for just below £90,000.

So, with that guide price of 60,000, there is profit to be made here,

but just how far can you go?

I asked the auctioneer who sold this one for his thoughts.

Whether you'd alter it depends on the long term future for it.

If you're going to rent it out,

there's no point rearranging the accommodation.

There are obviously limitations with the kitchen,

limitations with the bathroom.

They can be altered, but you're adding significant cost to do that

and, from a rented point of view, it's fine.

And if whoever bought this property intended to rent it out what kind of market would they be entering?

There's quite a rental demand here. Most of Baker Street, I would say,

is a mix of first time buyer material and rented accommodation.

This would make quite a good rented material and I think you'd rent it out probably about £375 a month.

If someone renovated this as it stands, what could it sell for?

I would say this would go on the market at about £85,000.

You'd probably expect to get upwards of 80,000.

So, a decent enough little house. It doesn't need a lot of work doing to it to get it into tiptop shape.

A good rental potential. The only problem is the tree.

Let's find out who went for it at the auction.

Lot number seven is 194 Baker Street in Alveston.

Who's got 50 to start me? £50,000 bid, somewhere?

50 is bid. Thank you very much. £50,000. That's £50,000.

51 is bid here. 52 on the back corner.

52. 53. 54. 54,000. 55, sir?

55. 56?

I'll take a half if it'll help you. 55 is bid on the front row.

It's in the market, no mistakes. 55 and a half?

At £55,000 then, all done with it.

194 Baker Street.

500. 56 is bid. 56,500.

Seven?

56 and a half. All the bids are yours. At £56,500.

Once, twice, third and last opportunity.

We're selling at 56 and a half.

Sold on the back wall, 56 and a half. Thank you.

Electrician Rich made the winning bid for almost £5,000 below the guide price,

but there seemed to be some discussion about it on the day,

so I met up with him back at the house to find out why.

-Rich, nice to meet you.

-All right, Martin?

-Congratulations.

So, why this house?

There are several reasons, but, to be honest, the actual one reason is it was an accident.

-An accident?

-Yes. My wife was talking to me all the way through the auctions.

This one came on, she said, "This is the one we seen first, isn't it?" I said, "Yeah, this is the one."

The business starts. 54, 55, 55 and a half.

She elbows me. "What are you doing?" I said, "Well, you wanted me to bid, didn't you?"

"No, I said, 'That's the one with the small bathroom, isn't it?'"

I said, "Ooh...!" "Sold, man at the back."

-No!

-I said, "I hope you wanted it because we've just bought it!"

Sold on the back wall.

Oops! You could forgive someone who's never been to an auction before for an error like that,

but Rich and Sue have gone to more than a couple.

-Eight, ten auctions we've been to.

-You went to eight or ten auctions, you did all your research...?

-Yeah.

You knew about auctions and you bought it by mistake.

Yes.

But that's just how it goes. It might have been a mistake, but it was obviously meant to be.

-So, tell me a bit more about you.

-I left school when I was 16, went straight to the Electricity Board,

did my apprenticeship with them, worked for them for ten years, decided to work for myself.

As you do working for yourself, you end up dabbling in all the different trades,

working alongside different ones until you can do those trades, too.

There are very, very few things house-wise, domestic, that I can't turn my hands to,

so it makes money sense that we buy a house and I do it myself.

Rich and Sue have been looking to buy a property to renovate for some time.

They were waiting until their two daughters were old enough to look after themselves

before making that financial commitment and they hope this will be a wise investment.

If somebody offered us money tomorrow, and it made a profit, then, yes, I would sell it,

but as it stands at the moment, we intend to fix the house up and rent it,

more than likely, to my daughter and her boyfriend,

as long as they realise we're not in this for the fun of it. It's got to pay the mortgage.

-What does your daughter think about this?

-Buzzing like a little girl.

And I tell you something, it'll be great to get a bathroom back!

So, Rich's first development project has a tenant lined up before work's even started.

He hopes it'll take about five months to get the property ready, with him doing almost all the work.

I would say around 8,000. 10,000 if something goes wrong,

but 8,000 I'm expecting to be able to buy all the materials,

new kitchen, new bathroom, rewire it, central heating,

strip everything down and redecorate the whole lot.

Brilliant. What about the internal layout? Are you going to do anything to knock through walls?

We've obviously got interesting thing with pantries, and downstairs loos, all that kind of stuff.

The only thing that's of question is the upstairs bathroom. It is quite small.

If I was to go in the bath I think I'd probably hit every wall with my arm.

I think all we're going to end up doing is probably a large P-shaped bath with a built-in shower into it.

So, no, structurally it's going to pretty much stay the same.

The only thing I really have got in question is to look on to the deeds

and make sure that that isn't a shared access to the side

because if it isn't, we may look into pushing this kitchen right to the side wall

because at the moment it's just wasted space.

It's an interesting idea and not one I'd have thought of,

which just shows that Rich certainly knows what he's doing.

Would you contemplate doing this full time, giving up the day job and becoming a full time developer?

If it works out that way, then great,

but my honest intentions are to make sure I've got some sort of retireable future

because I had an accident on my back some years ago

and I can't say by the time I'm 50 if I'll be able to walk properly.

So, with these 10 years now, if I can cram as much work in years as I can,

I can secure a future for my wife and a pension for myself.

-Well, listen, I hope this all turns out brilliantly for you. Good luck with it.

-Thanks very much, Martin.

Congratulations.

Well, it's funny how things turn out sometimes, isn't it?

This may well have been an accidental purchase for Rich,

but I think it gave them the push they needed to finally get into property development.

Let's face it, he's got all the skills and the enthusiasm he needs

and it's great to see his level-headed approach.

How's he going to get on? I think pretty well. Find out later in the show.

I'm in Kent today at a rather wet Kemsley.

It's just a short train ride from Gillingham and a mere hop from Sittingbourne.

I'm hoping the lot I find here will brighten my day.

This is the busy Grovehurst Road.

Now, I'm here to see a plot of land for a guide of £120,000 to £130,000.

Now, that is a lot for a piece of land, but it's not just any old piece of land.

It's a plot with planning permission to build not one, not two, but three houses.

The three houses will be three-bed starter homes with gardens and parking for two cars.

So, let's talk about the benefits of a new build.

No maintenance, no old lead piping to replace, no flaking paint, no crumbling pointing etcetera.

New build homes are also four times more energy efficient than older homes, therefore, they're greener.

Now, this also means they're far cheaper to live in with lower heating bills

and there should be no onward chain, so significantly speeding up the buying process.

Now, that is all the good news.

And now for the bad news.

New builds are often sold at a price premium which can reduce how much the property goes up in value

in the first few years compared with other older properties in the same area.

It's also getting harder and harder to secure that finance in this current climate.

And so, whilst it's not impossible to make money on these developments,

the profits of yesteryear are no longer for the taking.

The key thing is to construct the right homes to appeal to the market,

build them quickly and make them affordable.

This site ticks most of the boxes.

It was previously owned by the council, who drew up the outline planning permission,

so getting formal permission shouldn't be a problem provided you stick to those plans.

But are the current proposals right?

What does a local estate agent think?

Having had a chance now to look at the site, it's quite compact,

it's very overgrown, but it's well connected to the highway,

so you haven't got any access problems

and, as such, the services should be quite easy to bring into the site.

You've got no mature trees on the site, you haven't got any demolition work to undertake,

therefore, from a development and construction point of view, this site should be easy to procure.

Quite a few positives there, but what about the negatives?

Grovehurst Road is a busy road. At the end of the day, these properties are situated right on that road,

so there is going to have to be some form of discount on the price

to reflect the fact that you do have a lot of roads and traffic noise.

Taking all that into account, what kind of values could each of the three houses command?

Prices of the individual houses, I'd have thought that prices in the order of perhaps £185,000 can be asked,

and I would expect these to sell in the order of about £175,000.

Multiply that by three and you're looking at £425,000 to £440,000.

Even with build costs of approximately 150,000 to 200,000,

this plot was always going to interest a few developers

with its £130,000 guide price, even in the current market.

It's a sizeable plot, it comes with planning permission,

but the area and the road lets this lot down slightly.

The market's not at its best so I worry about the profit margins here,

but someone thought there was money to be made. Let's find it who that was as we go to the auction.

Lot 104, we move to a residential site, a development site with outline planning permission.

120 to start me? 120,000, land with planning for three houses.

120? 120?

120 I have in the middle. At £120,000 I'm bid.

125. And 130.

135. And 140.

145. And 150.

155. 160.

165. £160,000 I am bid.

At £160,000, then, being sold for the first time.

This is lot 104. At 160,000. 162. 165.

166. 168.

And 170. 172. 175.

178. 180 do I see?

At 178,000 then.

Being sold for the first time at 178,000.

The gentleman standing on the wall.

At 178 for the second time.

178 for the third and final time. Are you all done?

Sold at 178.

David made that winning bid of 178,000.

After a quick look around the site we'd had enough of the wet weather

so I met David in a nearby cafe for a chat.

-Dave, it's really nice to meet you and get out of the rain and find out all about your purchase.

-Yeah.

What is it you do for a living, David?

I am a developer. I'm a carpenter by trade

and I've been actually developing for wages for probably three or four years now.

Now, when you say you've been doing this for wages, what do you mean?

Well, I take wages out and then roll the money over because obviously you've got to go again,

and hopefully, a little bit bigger each time.

-Do you have your own building company?

-No, no, I employ contractors.

-So, you're a one man band, really?

-Yeah, that's it.

# Well I'm a one man band Nobody knows, nor understands

# Is there anybody out there Wanna lend me a hand

# To my one man band...#

David's but has no plans to retire.

He just wants to continue doing what he enjoys and property is a passion.

-Let's have a look at these plans now, because I know you've been slightly tweaking them.

-That's right.

Have you made any changes?

We're actually levelling out the step-down on the roofs and there is one step forward,

-we're levelling that out, so it actually will be a straight block.

-Why have you decided to do that?

Because I think, aesthetically, it would have looked nice having it sort of staged.

Yeah. Well, these are actually low cost housing so the cheaper we can build them for,

and all the staggers and drop downs cost money to do, more work for the bricklayer, more work for the tiler.

If we can level it out it makes the houses cheaper to build,

and we can sell them cheaper so obviously move them on quicker.

And what is your budget, David, for the work here?

I would say around 150,000.

Have you had to adhere to any special conditions?

Because I know that, you know, keeping green is an important thing when building a new house.

Well, there's coming more online now, every house in the nation will have to abide by these new rules,

such as recycling rainwater,

off road parking, things like cycle racks, everything like that.

Tell me about the cycle racks!

A cycle rack on the wall encourages someone to use their bike,

which keeps everything greener.

Yes, these days it's not just about building houses,

it's how you build them, what materials you use and how efficient they are once built.

# I want to ride my bicycle I want to ride my bike. #

Will you be on this site every day...

-Every day.

-Checking everything, talking to everybody, sorting out the budget, being in charge?

Every day. I'll actually get a team of bricklayers in to do the shell.

I'll set out the ground. I'll do all the roofs.

I'll do the kitchens, the stairs, second fix, first fix and the ground work.

What sort of foreman are you?

I would say I like to get on with all the trades that I use, I the same ones each time.

And the guy that will help me do the roofs, a fellow carpenter, I went to school with him,

he was my best man when I got married years ago and we always work together.

You look really relaxed about it all and you seem to completely be enjoying doing something like this.

-Am I right in saying that?

-Definitely, yeah.

But what is it about it that you love?

You're just creating something, yeah. Years to come people will say,

"Oh, Dave built that one.

He's right. There is something to be proud of,

but it involves an awful lot of effort and means his wife, Belinda,

won't see much of him in the coming months.

-How involved does your wife get?

-Very involved.

-Or does she just try and make sure you get home on time?

No, no, no. She gets very involved. She can't actually wait until it's her time to come in.

She'll do all the buying of the paint, choosing the bathrooms and so forth.

And they she'll come and actually do the painting.

Is it something you two just talk about constantly, property, property, property?

-All the time, yeah. It is a hobby.

-Is it?

When we're on holiday we're looking at property.

-We don't look in souvenir shops, we look in estate agents' windows!

-You've certainly got the bug!

Yeah, certainly.

# Well I'm a one man band Nobody knows, nor understands

# Is there anybody out there Wanna lend me a hand...? #

David's come a long way since building his own house in 1979.

He's equipped with all the knowhow and resources, plus the planning is in place.

The hardest part of David's job is the resale. Will he recoup on his investment?

It really is a tough market at the moment for new builds.

So, he'll have to keep his eye firmly on the budget for this to be a success.

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

Coming up, there's lots to discover at this character cottage in Wiltshire.

Yeah, it's tired, it dated, but I think you could do great things with this place.

We return to this development plot in Kent hoping that more than just the weather has improved.

But first, back to Alveston, where Rich bought this property by mistake.

What are you doing?

You wanted me to bid, didn't you? No, I said that has a small bathroom.

It's been almost eight months since Rich, along with his wife, Sue,

accidentally bought this two bedroom mid terrace in Alveston, near Derby.

Sold on the back wall, and a half. Thank you.

-Sold! Man at the back.

-No!

-I said, "I hope you wanted it, we've just bought it!"

Well, Rich may not have intentionally bid on this house,

but it wasn't so bad as it was in, fact, something that he and his wife had wanted to do for some time.

So, for £56,500, Rich's dream of doing this for himself had finally happened

and I'm looking forward to hearing how he got on.

Everything's been taken down to bare brick.

The whole room... Every single room has been gutted.

All the trees have been removed out of the back garden, of which there was about nine!

We're putting everything back together.

Apart from the living room, the house is still work in progress,

but it's looking pretty good judging by this.

Rich intended to make this his first rental property and even had a tenant already lined up,

his daughter, Kylie. But, things have changed slightly.

We had actually planned to rent it to Kylie, but with the market the way it is

she's actually gone and bought her own house round the corner from us,

which is one of the reasons why I've not been here as much as I want to be,

because I'm working on hers as well as my own.

Although it's still unfinished, Rich had made some major improvements to this little terrace.

Well, there was a porch up outside. Obviously, it was in a bit of a rickety state,

so we knocked it all down and everything. There's still the concrete to take out.

There was bushes and everything over here and a massive tree over here.

We've taken all of that out. The only thing I wasn't expecting here is I thought we had a gas supply,

so this has all had to be dug up. We've put a new gas main in, the service is there,

but I've still got the guttering, the drains and everything to replace.

Rich's original idea of taking the kitchen out into this alleyway hasn't been done

because it would have been just too expensive for a rental property.

However, that's not stopped him from improving the layout upstairs.

I've done quite a few things up here.

Obviously, everything has been gutted down to bare brick.

I've taken this bathroom wall out because it was too far in.

The bathroom is small as it is, but I've at least made it level with the landing.

All that room has been gutted.

Everything's been replastered. There's going to be new laminate flooring there.

It's all been rewired,

central heating put in and ceilings and everything decorated.

Obviously, not finished yet, but it's getting there.

With Rich's experience as an electrician and his general building knowledge,

he's done almost all the internal work.

Outside, the family have tackled the garden with impressive results.

There's little that hasn't been changed or replaced

but because of Rich's skills, his budget has been kept low.

Because we didn't start straight away, we've made the best of all the offers

and at the moment I've spent, what? £5,147.

I would imagine by the time I've finished we'll be touching 6,000, so I'm well under budget.

So, things are looking good on the financial side, but what about Rich's health?

One of the main reasons behind this venture is that he had a problem with his back.

Has renovating this house affected that?

I'm quite pleased about it because the hospital said two years ago I possibly wouldn't be working now.

Not only am I working now I feel stronger than I've ever felt,

so if anything this has helped, but knowing that in years' time if I can't work

it doesn't matter because I've got houses I can rent.

There had been only seven years left on Rich and Sue's mortgage, but they extended it to finance this,

but it's a calculated gamble which Rich feels is vital for their future.

They bought the house for £56,500 and have spent only £6,000 on it.

Has that money been well spent? We invited two local estate agents to come and take a look.

Of what I can see so far the standard is fairly good,

but the essentials are -

the windows and doors, you've got to do the central heating,

you've got to look at the services.

You've got to get the basics right and I think that's what they've achieved.

He's done it to a reasonable standard

if he's going to rent the property out.

All the walls are flat

and the kitchen and bathroom are obviously work in progress,

but it seems that he's going to be doing it to a reasonable standard and it looks... It looks OK.

It's about the appeal, isn't it, and presentation? So, you've got to do the garden and the fencing

If it looks as if it's all been presented well,

tidy finish and reasonably good quality I think that does tick the boxes.

Rich will be pleased to hear that seeing as this is the first property he's done himself.

While he doesn't plan to sell it, how much value will he have added once it's finished?

I would suggest an asking figure of around about £75,000, and it will sell in this market.

I think you'd put it on the market at something like 79,950

and expect to get as near to that as you possibly can.

I didn't expect it to have gone up that much.

It doesn't really matter to us because we've no intentions of selling it,

we bought it to rent, but I thought with the current market at the moment

it wouldn't quite have reached that figure, so that's a surprise.

And a nice one at that.

But this is an investment, so to be successful, Rich has to make a good rental return on it.

Once the property's finished I would suggest a rental value of around about £450 per calendar month.

My guess is the rental value would be probably somewhere between £400 and £425 a calendar month.

I'm actually quite surprised about that, as well.

We don't know, but we thought probably around 350ish mark, so, yeah, that's a nice bonus.

Sold at the back wall.

So, what started out as a case of mistaken identity has turned out to be a very successful venture,

but has this encouraged Rich to add another property to his new portfolio?

It's certainly encouraging. I think we'll be doing more at that sort of valuation!

With a view like that you could only be in the White Horse County of Wiltshire.

Surrounded by this beautiful countryside is the village I've come to see, Littleton Panell.

So, when up for auction came a three bedroomed end of terrace, double fronted,

Grade 2 listed character cottage with a guide price of 160,000 quid,

you could imagine it got a lot of interest. And from the outside, it's pretty spiffing.

Of course, buying a listed property comes with issues.

For example, you'll need consent for almost everything you do, even installing a fire alarm.

OK. Right, well, I'm categorising it as 'original condition' straight away,

but it's got a nice feel to it.

We've got a sitting room over that side and through into what I suppose is the main living area.

Love the little windows.

It's tired, it's dated, but I think you could do great things with this place.

Look at this fireplace. Lovely to have that.

So, yeah, onwards.

Upstairs there are three good sized bedrooms,

again needing a bit of money spent on them to bring them up to date.

And while you're at it, this bathroom needs to be completely ripped out,

though the room itself is also a decent size.

But I'm still looking for the heart of any home.

One thing that's quite nice is that there's lots of different levels in the house

with these sort of steps into different parts.

This is the kitchen.

We've got lots of different sort of doors and places to store things and the space itself,

well, it's a good size, but clearly very, very dated. You could spend a good bit of money in here,

but you would get your returns because you'd dramatically change the feel of this house

if you improved the kitchen.

And, when it comes to outside, well, there's good news and bad news.

The thing is, you've got a nice view over the garden. The only problem is it's not your garden.

It's actually owned by the house two doors down.

You have got this plot, but that has shared access for the properties round here,

so a bit higgledy piggledy, especially when your garden is over that way.

So, you know what? It's not ideal.

So, what's the good news?

Well, to the side of the cottage, behind the garage, you'll find the garden and it doesn't disappoint.

So, the house has great potential, but the potential profit, I think,

is in the land that also comes with the property.

It's this bit here, extending all the way round here to where this double garage is at the moment.

Now, it's about a quarter of an acre in total.

There has been a planning application put in in the past

to actually put a dwelling on this site.

It was turned down, but only on highways' grounds.

Basically, they were saying they don't like the fact that the access here is on to a fairly busy road.

So, if you could deal with that, if you could find some way round it,

I don't know what that might be, or just coming up with a solution that the planners liked,

then the idea of building something on here, well, now you're talking some serious profit.

For £160,000 suddenly this auction lot has options

and not just on the large plot of land.

The cottage is Grade 2 listed,

but that shouldn't put you off making changes,

as an agent from the auction house that sold it points out.

It would be worth extending the cottage

as it's only got three bedrooms at the moment,

so you could create a fourth bedroom with an ensuite,

which would make it more of a family home. And also add another reception room downstairs.

If you just really renovate what's already currently here, potentially updating everything inside,

you'd be looking in and around that Stamp Duty bracket of 250.

If the market steps up a little bit, then you might take it over the Stamp Duty bracket.

If you did extend it to create a fourth bedroom

then you'd be getting nearing up towards that 300,000 mark.

If you secured planning permission for a new built on that plot

you could potentially add another £200,000 to that, not including building costs, of course.

But once all the work's been completed, would this make a good long-term investment?

Looking at the figures, you'd be in and around £770-£750 per calendar month.

Again, there would be quite a good demand for it -

contracts with the MOD, Honda, other companies that would be looking for a cottage of this size as well.

Well, I don't know what you think, but I think this is a very pretty little cottage.

A few issues with the fact that it's Grade 2 listed,

but that's more than compensated for by the fact

you've got that plot of land at the side that you could develop,

subject, of course, to planning permission. Let's see who fancied this one when it went to auction.

Pretty cottage with a big plot on the side.

Good village, as you all know.

Where are you going to start me, 170, somebody? £170,000?

150, then. OK, we'll start there at 150. At £150,000. I'm selling lot 32 at £150,000.

Five I'll take to get on. 155. 160.

At 160. 165. 170 I've got. 175. 180 may I say? 180 I'm bid.

At 180. The bid's here on the wall at £180,000. 185, or 182, if you like?

Otherwise, at £180,000, it's going to be sold for the first time. 182, OK. I've got you, sir, 182.

184. Yes? Yeah? 184, OK. 186 to you, sir. 186.

188. 190. 192. 194. 196.

198. 200. 202. 204.

208. 210 to you, sir.

210. 212.

14. At £214,000. 216.

18. At 218. OK, the bid's over there. You're out now.

At £218,000 sat down. OK. At £218,000. Are you finished?

At £218,000, then, for the first time. £218,000 for the second time.

And 218 to all finish. Third and last time at 218. BANGS GAVEL

Your number, sir, is?

'The purchase of this period property was a bit of a family affair.

'Chris was bidding on behalf of his stepson Adam

'and his girlfriend, Laura, all with a bit of financial help from mum, Alison.

'I was looking forward to hearing what their plans were so I met them at the cottage to find out.'

So, Adam, Laura, nice to meet you both. Congratulations. Why did you want to buy this place?

I'm in university, but I'm looking for a work placement year in this area, in which case

I could live here for the year and help Adam do it up, so...

So, she'll be living with me for a year and, hopefully, get the property into the way we'd like it

in that time and, yeah, it would be a home for us.

So you've bought it to be a home?

Yeah, that's why we bought it, yeah. To live in, not to sort of do up and sell on again.

It was somewhere to live.

Do you have much experience? What you do for a living?

I'm an engineer and, yeah, we've done one property before.

Where I lived in university, with my mother's support, we bought a house and she put down the deposit,

the rent from the other tenants, my student friends, paid the mortgage.

We sold it. The money we made has gone towards this place.

-What made you want to buy this place?

-Primarily the garage.

The garage! Yeah. I looked at a number of properties, most modern houses have a much smaller garage

and, yeah, that had everything I was looking for. So, yeah, it was good.

-He doesn't mind about the house, just the garage!

-OK.

-So, why this house, then, obviously apart from the garage?

-That was it.

-You can't be serious!

-I am.

-Not the charm of the house, the Grade 2 listing,

the nice position, the garden, the potential planning permission?

Well, those were all bonuses that worked out well in my favour, I suppose.

But, yeah, I prefer kind of older houses than newer builds.

It's certainly got some nice aspects about it, it's a nice house,

but, yeah, primarily it was the garage that swung it for me, really.

'OK, I'm fairly certain that he's not pulling my leg!

'He really has spent 218,000 quid on a Grade 2 listed cottage

'with a building plot just for the garage.

'Well, as I've said, the property market is a little strange at the moment.'

-So, how come you're so into garages?

-I just want space for my cars, really.

-How many cars have you got?

At the moment I've got two, but I'm looking to buy another.

The thing is, when I lived at university I lived on a very steep incline, no parking or anything.

I just hate parking on the road, come out and your cars have been damaged

and it's something that's important to me, so, I want a garage.

'Now, this all sounded a bit unusual until I discovered that Adam is an engineer for a Formula One team.

'Cars are clearly a passion he's had most of his life, hence the attraction of that garage.'

But while he toils over carburettors and spark plugs, Laura has plans for the house.

The first thing we're going to do is get a new bathroom and kitchen and then just do each room,

-just make it nice, a bit more modern than this decoration at the moment.

-And Adam?

First things first, we need to get it rewired. We can move on from there, really.

So, any plans for any sort of major structural works or modifications?

We'd hoped the smaller downstairs toilet,

we'd hoped to, perhaps, convert into a toilet with a shower room in there.

We're deliberating over plans for the kitchen,

what with the possibility of knocking out one of the walls.

We need to determine if it's structural, but these are things we can play with.

OK. Any ideas on a budget for the work?

Well, from the money that we made on the property that I lived in while I was at university,

the original intention was to use that to pay off my student loan,

but as it's worked out, the rates on that aren't too bad,

so the money would be better spent on this property.

We think we've probably got around £20,000 to spend.

-What about timescales, then?

-Well, obviously we want to get everything done as soon as we possibly can.

-Make it liveable.

-Yeah. But I think... I think we'll be looking at maybe three, four months

before we're somewhere better off than we are now.

'So, this is a first for both Adam and Laura.

'Helping them make it a reality is Adam's mum, Alison, who has helped with the finance,

'but she also has some plans of her own.'

Now, what's your involvement in this whole thing going to be?

Well, I've funded it so far. Adam is going to get a mortgage for his part of... For the house.

And then what I'd like to be able to do is get planning permission on this area here

and be able to put a new build in here in keeping with the Grade 2 listing.

You'll have to leave the garage where it is

otherwise you're going to be in massive trouble, aren't you?

I either have to leave it or move it, as he'll be living in the garage, practically.

It has had an application turned down in the past, hasn't it?

What are you going to do to counteract that?

The property is owned up to the telegraph pole over there,

and if we cut the bank right back to here the visibility should, I hope,

be sufficient to obtain planning permission.

Right, OK. And have you had any indication that that might be the case?

-Not yet, no. We're just in the early stages of getting plans drawn up.

-Right.

'If successful, Alison hopes to be able to recoup her investment.

'She would pay off Adam's mortgage and have some money left over

'to spend on the next investment for one of her other eight children.'

-Eight!

-Yes. So, the next one down and we'll be able to help her along.

-Are you planning to help them all in the same way that you've helped Adam?

-Yes, we'd like to.

-Really?

-Yes.

-Wow!

I quite like doing properties up and so I... Yes.

Well, with the help from mum, Alison, Adam and Laura have got themselves a great place here.

There is development potential, all sorts of things they can do with it,

but, of course, the only thing that Adam is really bothered about is that garage.

Will it be filled with a new car when we return in a few months?

You'll have to join us later in the show to find out.

Well, the weeks and months have rolled by and there's no escaping it,

it's time to return to see how our buyers have fared.

Like you, we're trying to find out what's been happening.

It's time to take off the dustsheets and see what's lurking beneath.

It may have been a miserable rainy day when I visited Kemsley in Kent,

but the outlook is bright for carpenter and builder David.

He paid £178,000 at auction for this piece of land just a few minutes from where he lived.

With it came planning permission to build three three-storey terraced houses.

David planned to build them, then sell or let depending on the market.

While the weather hasn't improved much in months, the plot of land is a different story.

Well, actually building the houses hasn't been a problem.

It's been a nice build, gone smoothly,

the only problem is something that I didn't know about when I bought it, was the Code 3 Sustainable Homes.

Before I bought the plot, I went into the council to find out what it entailed.

Because it was a new thing they couldn't really give me a lot of information, only an outline,

which I thought was quite reasonable and I went ahead and bought the plot.

And then, after that, you have to find someone who's a registered assessor for the points system,

because it's all done on a points system, and he did his counts

and he actually got down to me just before Christmas with news of what I would have to do.

And the news was quite shocking, really, the amount of work I'd have to do to get it up to Code 3.

'When David bought this land, he asked the council about the Code 3 Sustainable Housing standard.

'Because it was all fairly new, nobody knew for certain what that involved.

'Perhaps upping the installation or the drainage? But, in fact, it meant quite a bit more.

'To reach Code 3 standard,

'facilities such as underground rain tanks, grey water tanks and thermal heat pumps had to be installed,

'which is where David had problems.'

This is the kitchen/dining room area. This is where the Code 3 would cause me the most problems.

This is the only place where we could position a thermal heat pump and it's the size of a double fridge-freezer,

and it's also got to be linked outside to another unit

which is probably the size of two wheelie bins,

and they've got to be linked together, but, as you can see, it's not a very big area.

It's the only area where you can have a table and chairs, and there just literally wouldn't be room.

And, not only that, it's got to be linked right up through all the floors to the loft area

where you'd have to have a heat exchanger and there's no room in the loft area for this heat exchanger.

And you would have ducting through all the bedrooms,

and in the kitchen area, you'd have to have another ducting off the cooker hood

which also runs up through the bedrooms into the heat exchanger,

and from the heat exchanger you'd have to have more ducting to come round to all the rooms,

so, it would just be totally unpractical to put it in.

'After several discussions with the council,

'David's hoping they'll compromise on the assessment of these new builds.

'While he will include recycling bins, water butts and other items,

'he's building the houses in the way he knows.'

This is the first floor layout. Behind me, there's bedroom number one that overlooks the back garden.

This is a bathroom. The bath comes down on the right-hand side here.

Wash basin, toilet, heated towel rail.

I'll come through into the landing.

That is the second largest bedroom, on the top floor in the actual roof space.

And come through into a third bedroom.

It's an L-shaped bedroom with a wardrobe space on the right.

And then you turn into the main part of the bedroom where you'd have your bed and a dressing table

overlooking the front.

'David has many years of experience building houses

'and it's only the new Code 3 regulations that caused him problems.

'Everything else went exactly to plan.'

What I want to do is finish them in a conventional way, in the way I planned

and the way I budgeted for.

Obviously, we can do a lot of the Code 3 Sustainable Homes which will move us towards the certificate,

but we wouldn't have done enough to get the Code 3, so it's pointless going for it.

'So, how has all this affected David's original budget,

'especially considering there was a three-month delay before he even broke ground?'

I think the original budget was 140, 150, and I think we'll be about 160, somewhere around there,

so, pretty close, really.

'Hopefully, the council will see David's point of view

'and he can do the finish to his own high standards,

'but is he likely to make a profit from this project after paying £178,000 for the plot

'and a further £160,000 building the houses?'

My first thoughts on the property is it's in a good location

with regard to the station.

Being a townhouse, it's different to the properties

in the road and a good amount of outside space,

with parking and a garden.

Three bedrooms are always highly in demand in this area

and due to the benefit of the great communication network

surrounding this area, I think there's a high demand for a property of this type.

'Until the development is completely finished, it's difficult to say exactly how well David has done,

'but is there a demand for this type of rental property around here?'

In terms of rent, I think this property

will be able to be rented between £750 to £775 per calendar month.

For rental value, I think the mid- and end-terraces would roughly be about the same

at £725 per calendar month.

They're higher than what I thought, yeah. Yeah.

Originally the estimate I had was to £650 to £700, so that's good.

'That's great news on the rental valuations, but what about the sale prices?

'It cost David about £338,000 to buy the plot and build three new homes here,

'so what could they be worth once finished?'

For resale, I'd recommend putting the properties on the market for £145,000 for the end-terrace

and £140,000 for the mid-terrace.

I think on completion, this property will sell in the region of £150,000 to £160,000.

Yeah, I would say the second one is closer to the mark.

The valuation we had was 159 for the end-of-terrace and 155 for the middle-terrace.

That would leave David with a handsome profit.

Although this project has been a success,

he's not about to do it again anytime soon.

I think with new builds, there's too much red tape now.

It's just hard work. Unless you were doing one big house,

which isn't viable at the moment, but I think then you'd be all right,

but with these small developments there's too much legislation.

Sold for £218,000, this double fronted, two bedroom,

Grade II listed cottage in Wiltshire was a great auction buy.

With a building plot to the side,

it was pretty obvious why Adam and his girlfriend, Laura,

bought it as their new home, with a little help from Adam's mum.

Except, as it turned out, it wasn't that obvious.

-What made you want to buy this place?

-Primarily the garage.

-The garage?!

-Yeah!

He doesn't mind about the house, just the garage!

No, he was really serious!

But, thankfully, Laura had her own ideas for the cottage,

while Adam's mum, Alison, planned to recoup some of her investment

by getting planning permission to build a house on the large side plot.

Nine months later, we're back to see what's changed.

Well, while there's no sign of that new build,

inside there have been some changes.

As you can see, upstairs is quite different to how it originally was.

It was all appallingly decorated.

There were millions of different wallpapers,

the bathroom was in a terrible state and the toilet over that side.

So, all the bedrooms, we've completely redecorated,

had new carpets, everything.

Yeah, so it's all been completely redone up here, really,

and we are very close to completely finishing.

Just carpets and then furniture up here, really, and then that's it.

Downstairs has been restructured, as well.

As you can see, the main developments in this room are

we've knocked out the original pantry-style cupboard that was here.

That involved having an RSJ put in.

The whole ceiling had to be supported while it was removed.

We've had all the floor replaced,

and what we will be having fitted in here is a whole new kitchen

in a kind of L shape all the way round.

It'll probably be the small breakfast table over here for seating.

And then, out the back there, we've converted what was previously

a small downstairs toilet into a wet room with shower facilities,

and, yeah, sort of a smaller downstairs bathroom.

As you can see, Adam and Laura have still to move in.

They hope to do so in the next few weeks

once all the work has been completed.

Meanwhile, Adam's mum, Alison, has been looking into plans to build

a house on this side plot of land and is currently in the process

of buying half an acre from next door's field.

Originally, we were going to move the garage and put it over here

by the boundary and put a four-bedroomed house, detached house,

in the area of the front garden by lowering all the garden down.

There was a declined planning permission before,

but it was only declined in terms of access on the highways.

So, hopefully, in the long term,

if we are able to realise the negotiation on the field

and put another access in, then we've got the possibility

of building long term.

If successful, that new build would not only help pay off the mortgage

of this cottage, but allow Alison to fund

the next property for another one of her eight children!

But the majority of work here has been managed and funded

by Adam and Laura, so what has it cost them so far?

The initial budget we estimated to be round about £20,000...

and I think we've stuck reasonably well with that.

Obviously, it's not been the best time for the housing industry,

but, contrastingly, it means that we've been able to get quotes

from somebody to do work and then somebody else will undercut that.

It means that we've got a lot done for less money than we originally thought it would be,

so that has worked well in our favour.

So, for £218,000 and a budget of around £20,000,

Adam and Laura have nearly finished their new home

and are looking forward to moving in.

Well, at least Laura is!

Adam will be too busy in the garage with his car!

While he takes his pride and joy out for a spin,

we invited two local estate agents to come and see what they thought of this cottage.

The style, for me, looks very, very good.

The finish looks high quality. They've not gone too modern.

They kept the age of the property, tried to keep the character here.

-A very nice property.

-I think it's a fantastic cottage.

They've obviously spent a lot of time and effort

bringing it back up to its original state.

They've done some expensive refurbishment inside,

the heavy things like rewiring, new boiler.

The garden's a nice discovery. It was fairly overgrown when we sold it.

When the work's done, it looks like it will be quite a high standard.

The area... A very nice area. It's a very good sized garden, as well.

It's going to be a nice property for people looking for character.

Bought for £218,000,

they spent 20 grand renovating it to its current state.

While it may not be finished, what do the estate agents

think it could be worth in today's market?

Resale value for me, once it's renovated,

you'd probably be looking around £250,000 to £275,000 mark.

Once renovated, I'd imagine that the price is going to need to be

around that Stamp Duty of 250,

possibly 275...as a top level.

-Wow!

-That's better than we were anticipating

considering the current climate, really, yeah.

-That's excellent.

-That's good.

-Especially in its current state.

I thought it would be about 250 in the market

as it was when we bought the house, so that's very good.

Very pleased, yeah.

If Alison succeeds in getting planning permission to build that new four-bed,

they'll all be on to a winner, but for now Adam and Laura

can look forward to moving into their first home together,

complete with that all important garage!

Well, that's it for today's show. Make sure you join us next time for more Homes Under The Hammer.

-See you then!

-Goodbye.

-Goodbye.

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