Episode 65 Homes Under the Hammer

Hello. From first time buyers to property veterans,

all sorts of people buy property at auction.

No previous experience is required.

The only necessity is you do have the finance to buy what you bid for.

For sure. Then you can get down to your auction rooms and bag yourself a bargain.

The important point to remember is that when you buy at auction

and you win your bid, you have exchanged contracts.

That's right. It's vital to know what you're letting yourself in for

and make sure you've got finance in place.

So, did today's winners find themselves well prepared or ill equipped?

In Derby, I feared the worst when I finally got into this bungalow.

Is it going to smell, is it going to be damp, is it going to be water dripping through the ceilings?

It's a London property that dates back to Victorian times.

I mean, it really is such a delight to come into a house as untouched as this.

And exploring this South Wales terrace could take longer than expected.

That seems to go back

a very long way.

All of these properties went to auction and we'll find out who

bought them and what they paid when they went under the hammer.

Right in the back, sir.

I'm in Derbyshire, in a former mining area near the old Rawdon Colliery.

It's the last deep mine in the region, which closed in the early '90s.

The colliery is now home to a discovery centre, which is at the heart of the new National Forest.

It's an area of 200 square miles where hundreds of thousands of trees have been planted.

This is Moira, near Swadlincote, on the border between Derbyshire

and Leicestershire, and I'm here to see this.

It's a two-bedroomed bungalow built in the 1960s.

Lovely.

It went to auction guided at 95,000 and the unkempt front garden and old garage

certainly don't boost the appearance, so first impressions aren't too good.

It's so funny. Even after doing this show for six years, I still walk into

a house and you don't know what you'll find.

Is it going to smell, is it going to be damp, or water dripping through the ceilings?

And, you know what? Sometimes, like right now,

I'm quite pleasantly surprised.

Blimey! Look at this!

It looks like it's been recently repainted. It's got double glazing.

There's an open fire, there.

It looks horrible, but only because of the floor.

It's got rubbish on it, it hasn't got a carpet.

Stick a carpet in here and it's like a showhouse.

Well, maybe that's going a bit too far!

But at a guide price of 95,000, there does seem to be a lot on offer here.

There are two bedrooms - a large double at the front with built-in wardrobes

and a smaller double to the rear, all recently decorated,

but there's no carpet or central heating, just storage heaters, not to everyone's taste.

That's great. Nice white bathroom suite, reasonable condition,

and then you come through into the kitchen.

You've got a tiled floor. OK, not the most the most up-to-date units, but perfectly serviceable.

One slight issue - that definitely a bit damp.

I reckon there's a bit of a leak around the flashing on the chimney, so that needs to be looked at,

but apart from that it's perfectly serviceable.

You could just move into this bungalow as it is. What a surprise!

And I've made another discovery because potentially, there is room to extend here.

Just a bit of a hint and tip here.

Take a leaf out of the professional's book and if you're looking at a lot of properties,

why not stick a set of ladders in your car? You can get telescopic ones, not that expensive,

because it's really important you look into the loft space.

For instance, in this place I'm thinking,

there's opportunity to expand up there, maybe put a dormer in,

and I noticed that the way the roof is constructed means

you've got easy access, you could create a room up there.

So, you wouldn't know that if you couldn't look up there. That's today's tip.

There's even more opportunity to create accommodation at the rear of the bungalow.

No, a bit of a surprise inside, then!

Much better than I anticipated and you ain't seen the half of it!

Because along with the house comes the garden

and it's...

pretty big.

It goes on and on.

It's a bit confusing, though, because although you end up a long way

from the bungalow, the garden actually finishes at these trees.

However, I happen to know that the auction lot also came with that huge great paddock.

Absolutely beautiful!

What a bonus!

What can the auctioneer who sold the bungalow tell us about this property with its large paddock at the rear?

Could it be developed in some way?

I would say the paddock is probably not large enough to support

livestock because the adage is that you need almost an acre for a pony

and it isn't that sort of size.

The property belonged to a housing association.

They had consultations with the planners before they decided to market the bungalow

as to what the development potential was at the back there and I really think that they...

They got a very firm no, hence the fact that it came together as one lot to be sold at auction.

Now, somebody else might try

their hand in a year or two's time and they may get a different answer, but at the moment, no.

I suppose for a speculative investor there's always that hope factor, and if you just want a nice spot

of land as it is it's ideal, but how much could the bungalow be worth after some refurbishment?

It's not an easy one to put a value on for two reasons.

One, because it's almost an individual property, and the more important ingredient is the paddock

and, of course, that depends on to what extent somebody values that, but I think it's 175,000, 180,000.

Where you to extend it and make it three, four bedrooms, then you'd

probably be raising its value only to about 225,000, 235,000.

Well, I guess I'm going to have to eat my words.

For a guide price of 95,000 quid, this is a lovely little bungalow.

Yes, it's a bit tired and dated, but basically you can move into it as it is, and if that isn't enough,

the paddock at the back!

It's a great one. Let's see who spotted it at the auction.

Lot 53, number 82 Donisthorpe Lane

in Moira, traditional two bedroom double fronted detached bungalow

and an area of paddock land to the rear of it. Start me on this, ladies and gentlemen, where you like.

May I suggest £100,000? 100 is bid here, thank you.

102 I have. 104. 106. 108. 110. 12.

114. 116. 118. 20.

22. 124. 26. 28. 30. Two.

34. 36. 38. 140. 142.

144. 146. 148. 150. 152.

154. 154, are you sure? 154,000.

56 I'm looking for elsewhere.

At £154,000. 56, quickly?

At £154,000, then.

For the first time. 56.

58. 160? 59.

160. 61?

61. 162?

162. 63?

63 is bid. 64?

164. Five?

65. 166.

167?

£166,000 for the first time.

166,000 for the second time.

The bid is here, no mistakes.

All done, third and last time at £166,000.

Yours, sir. Sold to you. Thank you.

Wow! Auction table tennis!

That very fast and furious bidding battle was won by Derbyshire- based couple Keith and Jean.

The £166,000 they paid was well over the £95,000 guide price,

but Keith's a builder, which should come in handy.

I met up with them back at the bungalow to find out about their plans.

-Keith, Jean, congratulations!

-Thank you.

-It's a surprisingly nice bungalow once you get inside, isn't it?

-It's not too bad, yeah.

Tell me why you wanted to buy it.

-Investment.

-Yeah.

Yeah, well, you know, we bought it as an investment and, you know,

to see if we can make a few shilling as years go by.

And what do you feel about what you paid for it?

About right for the area. About the right sort of money.

-It's a good price, considering the ground we've got.

-The ground was the big attraction.

There's not many houses come up with that amount of ground with it today.

You know, for that sort of money, as well.

And is the plan to actually move in here, or what?

Yes. I think we will do, yeah, eventually.

We're going to modernise it totally and extend, if we can, and then move in.

Tell me a bit about you two.

Been together about 12 years, or just over.

We had a split up and we were apart when we actually bought this at the auction and we're back together now.

This is the second week back together.

Oh, congratulations!

So, was the auction anything to do with getting back together again?

Well, I suppose it was. It's given us a common aim to renovate the property.

So the auction, in some way, has acted as a bit of a Cupid?

Possibly, yeah. Look at it that way, yeah.

Oh! Well, in all the time I've been doing Homes Under The Hammer,

it's the first time we've heard of that being a...

Being a relationship saver!

Well, that's amazing!

All the pressure of property developing usually puts a real strain

on relationships, but this couple are determined it'll save theirs.

They've also got some big plans for this bungalow and the paddock.

What about the property itself? What are you planning to do with it?

Extend the back.

-Right.

-And up.

-And up. A loft conversion.

And then we'll get another two rooms upstairs.

See if we can get two more bedrooms.

-One ensuite.

-We've got a bit to do!

-Well, quite ambitious plans, then.

-Yeah, just a bit, yeah.

Yeah, some work. Quite a big job.

# Let's go round agsin... #

Keith has got nearly 40 years' experience of renovating properties and new builds, but although this

is the 10th property he and Jean have worked on, it's the first one since they got back together again.

So, who's going to do the work?

-Me, Jean and the team of lads that work with me.

-How much is it all going to cost?

I think possibly we've got figures around about 30,000

to do, but it may sort of run into a little bit more.

-I think it will.

-When we've actually got in and sort of had a look round.

It'll be nearer 40.

Probably be nearer 40 by the time we've done everything.

And any idea how long it's all going to take?

Well, usually for a big renovation it's about a three-month period from start to finish.

I can get it done in that time fairly comfortable.

Yeah, that's all subject to planning.

And then we've got the ground to make use of, whether it's with horses or any other thing, really.

Yeah, we'd... We'd spoke about sort of log cabins, didn't we at one time?

-Log cabins?

-Yeah, up there, but I don't know whether we would get enough access down here.

-What do you mean by log cabins?

-Well...

-Holiday lets.

-Holiday lets. It's just an idea.

-It's a bit of a touristy place.

-We're in the National Forest here.

-Right.

-And there is a shortage of places for people to stay.

Presumably, the planners would sort of mumble a bit.

May do, may do, yes, yes.

So, what do you think the biggest challenge is going to be, Jean?

-Keeping the peace.

-Yeah, keeping...

Staying happy!

Well, listen, good luck with it all and I really do wish you all the best on all fronts.

-Thank you.

-We'll look forward to seeing how you get on.

-Thanks.

-Thank you.

So, Keith with some quite ambitious plans, then.

In terms of the ones for the house, not too much of an issue.

In terms of the stuff in the paddock, well, I think he'll have a fight on his hands,

but you can find out how he gets on later in the show.

This is Earlsfield, a leafy South London suburb

just half an hour's commute from London's Waterloo station.

I'm here to see a property that hasn't been on the market for the last 30 years.

Now, when I hear that, I think there's value to be added.

Now, I imagine houses that are an unmodernised and in desperate need of repair.

They're the ones that developers like me are keen to get their hands on.

Now, the guide price for this seven-room mid-terrace property is just £350,000.

I can't wait to get inside there today!

It looks like a lot of house for the money

and don't let those metal safety grills on the windows put you off.

They're only there to protect the house from intruders.

People often see a photo in an auction catalogue and presume that

the windows are broken and the house has been vandalised or, worse still, that the property is fire damaged.

It's not so in this case.

I can't wait to look inside.

Just as I had suspected!

It's been untouched. It's almost as if you had been transported back to the Victorian times.

Look at the old wallpaper! I mean, it is incredible.

It's packed with features and in the front reception room

you've still got the beautiful Victorian fireplaces.

I'm sure once you've taken the grills off the windows

you've got some original sashes underneath all of that.

But fantastic proportions. You've got the cornicing in there.

I mean, it really is such a delight to come into a house as untouched as this.

Now, you've got the second reception room.

Again, you've got wonderful high ceilings.

It really is echoey because it's so empty in here.

You could possibly think about knocking through here to create one big open-plan space.

You've got a lovely old original cast-iron fireplace.

You know, I'm really glad these little gems still pop up

in the auction room because it's houses like this that keep me interested.

It's becoming increasingly difficult to find houses like this.

It's a real joy to come in here and step back in time.

At the back of the hallway, down five steps, is a small dining room and what remains of the kitchen.

And on the half landing, there's a bedroom and a bathroom-cum-washroom.

Up another flight of stairs, the challenge continues into the main front bedroom.

But the good news is that the bedrooms have more Victorian features

that I just hope don't get ripped out.

At a guide price of £350,000 it does certainly have something that people are prepared to pay a premium for.

With this house, you get a chunk of garden which is good for this part of town.

Now, you may need to spend some time out here with the old garden shears, but it's still a good family space

and when you look next door at the other gardens, you can't help but feel

a little smug when you see you have much more than double their space.

So, with this garden, the Joneses have to keep up with you!

Time now to see if a local estate agent shares my initial excitement about this house.

Yes, it's beautiful, but with signs

of damp and some dry rot, it could turn into a money pit.

Amazing house. It's almost like a timewarp.

It's not been touched for many years.

It's a Victorian house. beautiful house.

No walls have been removed, so you've got the original layout

which gives you loads to do with it.

So, yeah, very nice. Lots of potential.

It needs to be refurbished to a very good standard, but the one thing it does have is it's got a good roof.

That will save you some money.

And, let's be honest, whoever takes this on is going to need a substantial budget

if they're going to realise the full potential of this lovely house.

It's a property you can add a lot of value to because nothing's been

done to it, so you can do what you want, you can bring it right up to

standard, modern day technologies as one would put it, because nobody's touched it in so many years.

And that's the big appeal here, all those wonderful original features.

The house went to auction guided at £350,000, so once renovated,

what could it sell for and how much income could it produce for a buy-to-let investor?

When renovated, I think it would be on the market towards the top end of 600,000. So 595,000, 600,000.

Per calendar month, it would rent at around the 2,000 or just above mark,

depending on the time of year because it's very seasonal.

This is fantastic, but it's a huge undertaking.

Dry rot, possible signs of subsidence - this is far from just a cosmetic job.

Whoever took this on was a brave bidder.

Let's see who that was when we go to auction.

Lot 15, this is 5 Dingwall Road, Earlsfield.

I don't know - where do you want to start?

Where would you like to start?

350, anyone? I'm not going to go below 350.

It must be cheap at that.

350 at the back. 350. 355 anywhere?

355. 360?

360. 360. 365. I've lost you. 365.

370?

370. 375. 380?

380. 385?

385.

390.

395.

400?

400. 405?

405. 410.

What's that? 46? 46.

47.

48.

49. 410.

411?

411. One more go.

411. What are you going to do?

I've got 411 down here. Are you coming back in? If not, 411.

First time. Second time. Third and last time if you're all done?

Sold 411. Well bought, well done.

The winning bidders who were so hard to spot in the auction room were Jay and his wife, Christine.

They paid £411,000 for the house, 61 grand over the guide price, and they intend to make it home.

Jay's a financial risk manager, Christine's a producer/director

and they currently live in a two-bedroom flat.

They've been on the lookout for their ideal home for over two years.

Christine and Jay, congratulations!

-Thank you.

-First of all, I love this house.

What an amazing find!

So, who's responsible?

-He is, really.

-Basically, I am.

I've gone to a lot of auctions and always come home empty handed and finally, finally managed to get one.

-So, what happened? You saw it the catalogue?

-Yeah.

-Did you go to the viewings?

-Yeah, we came here twice, had a look around and then thought it's worth the risk.

We didn't have time to have a survey done before.

We've probably looked for about three years, on and off.

-Yeah.

-We've been to auctions where we've been outbid before we've even put one bid on

so we just, I don't know, we just had a good feeling and then we won, so...

Yes! And it was yours and you paid 411,000.

-Yeah.

-Yeah, that's right, yeah.

As Christine's expecting their first baby in a couple of months, time was running out.

Jay's financial management skills were needed to secure the funding and it went right up to the wire.

Did you have your finances in place on the day?

Five minutes before, literally.

Jay had a good relationship with one bank and they phoned him five minutes before

and he then came back into the room to bid to say "We'll be able to give you what you need."

-So, it was all a bit touch and go all the way along?

-Stressful, yeah.

Yeah, it was. It's not an easy time to go to find a mortgage.

'So, that's why Jay was so difficult to spot at the auction, but having spent £411,000, I was intrigued

'to discover their plans for this lovely house.' So, have you got an architect in place for this job?

Yeah, we've got an architect called Jeremy who was recommended to us by

a friend who's done some property development in this area, so he's

a local chap and he knows this area really well and he's already come up with some really nice plans.

So, that's quite good, he'll have probably worked with the

local planners before anyway, which always goes in your favour.

And what sort of ideas in terms of development are you going to be doing here?

So, there's a side return going adjacent to the kitchen and Jeremy basically decided to break

through the walls and extend the return up to the neighbour's house and make that a conservatory.

With a big high glass sort of ceiling one and a half storeys off that.

And then open out the front of the kitchen to the garden, so have decking.

Oh, fantastic! So quite airy and open and contemporary.

And at the front we want to sort of see from the front room through to...

We're going to knock the wall through to make a play room and then knock the next wall through so you'll

see the glass bit of the kitchen and then, hopefully, the garden.

So it's sort of when you look through, you see the whole way through the house.

-So, a lovely huge outlook on to the garden.

-Yeah. With lots of sort of family space.

What sort of realistic timescales are you looking at?

If the planning came through, I think the build could be done in sort of six months,

but who knows if the planning will come through that fast.

In London it's not always that easy.

Employing an architect familiar with the local

building regulations should help - however, they could still be delayed because they're thinking

of submitting a second planning application which would include a fourth bedroom up in the loft.

Of course, that means they would have to pay for two applications.

Whichever one gets the go ahead, this house will certainly need a lot of money spent on it.

-What's your budget for this?

-We're still exploring the possibility of making it a fourth bedroom

and going into the roof and trying to get that fourth bedroom.

If we did that it would be 150, and if we can't get planning permission for that, probably 110.

So, what sort of realistic timescales are you looking at here?

Eight months, hopefully. But that, again, might be quite ambitious.

-Have you guys ever embarked on anything as big as this before?

-No.

This is quite a brave step for you, isn't it?

-Yeah.

-Yes, yeah.

-What are you most nervous about?

I think going over budget, managing it financially with only one income.

And I don't think we're fazed by the project

and we know it's going to be hard, it's sort of surviving it without you know...well, stuff to eat, so...

Do you really think it's going to get that bad you're going to go hungry?

It will be tight, but it will be worth it. It will be worth it, yeah.

-We might have to make some compromises.

-Eat once a week or something, yeah!

Oh, dear! Beans on toast and baby food all round, then!

And with such a mammoth project and a new baby on the way,

let's hope they haven't bitten off more than they can chew.

What a fantastic story! A real home and not just a development project.

It will take time but they seem to have it well planned

and they are realistic with their budgets and timescales. I wish them well with this and the new arrival.

You can see how the whole family get on later in the show.

Coming up, this South Wales property won't appeal to everyone.

As a house to live in, maybe it's not ideal. As a rental property, it's got great potential.

Did the baby blues put this house in London in the red?

It has put a lot of stress and Christine and I.

We really did underestimate what we thought it was going to cost.

But, first, back to this Derbyshire bungalow where Keith's not given up.

I'll get there in the end. Oh, yes, must keep going.

Five and a half months have passed since Keith and Jean paid £166,000

for this Derbyshire bungalow, which they were hoping would strengthen their relationship.

Now, the signs certainly look good here.

A new drive has been laid and it's been repainted and retiled.

But, like a film set, it's not the same round the back.

There's no roof, loads of rubble and no extension.

Inside, the bungalow's been torn apart and the three chimneys have all been demolished.

Nowhere's escaped. Both bedrooms, the living room and the kitchen.

Everywhere, walls have come down while others have gone up.

Since the last time you were here I've moved this door further back,

it gives us a bit more room in the hallway.

I've moved a wall back and I'm going to put stairs up, leading to two large bedrooms and an ensuite,

which should make quite a difference to the size on the first floor.

Keith, a successful builder for 40 years, and his partner, Jean, hoped to cement their relationship

with this joint investment, so how have they been getting on?

When I bought this, I bought this with my ex-partner that we'd been split up with for a little while.

We did get back together.

It lasted three and a half months and now we've split again.

That sort of knocked me from being sort of flat out doing it to sort of half pace, you know?

It just has an effect on you, split-ups, like, especially when you've been with someone so long.

But I'm moving again now, so hopefully we can crash on.

Remember, they'd both invested in this bungalow.

Their plans for an extension have been passed,

so the lounge and the kitchen could be increased and a dining room added.

Well, the main extension will come out to about where I am now.

There's another bit sticking out for the lounge which comes at an angle.

We've had a little bit of trouble with the trees as regards the roots.

I've had to have words with the building inspector.

He was talking about maybe having to go down three metres.

I've got a structural engineer involved and he recommends

two and a half metres and that should get round the problem there.

In the meantime, the back garden remains a building site.

There have been major ground works with fences and a garage.

What about their plans for that large paddock and those holiday log cabins?

We looked at one or two or two prices.

She looked on the internet, but it didn't materialise at the end of the day.

Although Keith's done the majority of the work, he's had had some help from a friend

and his brother's on standby for the extension, but what about his business partner?

Well, Jean tends to do the bathrooms and kitchens,

she was generally into that. I think she'll still take that role, so...

We are sort of getting on at the moment, we are speaking, so that's a plus!

Has their budget fared any better?

The outside, the ground works and the garage and the stage we're at now, I've got about 20,000 put in.

If I can get it all in for 55, 60 grand, you know, that's...

That will be OK, I think.

Once the bungalow's completed, then what? This is a joint business venture, after all.

I think one of us has got to live in it, possibly me, and sell the one where we...

Where I live at the moment.

I think I've got to start afresh and coming down here will be that sort of dream.

It's only going to be half owned by me,

but, hopefully, I'll probably go to the auctions and buy another at some time, move again.

Time to see if two local estate agents

can look beyond the rubble and see the potential value in this bungalow.

I've had a good look at the plans and when they're done,

it's going to make a substantial home.

The bungalow is a bit boring from the front.

I think it lacks... It hasn't a lot of character.

I don't think it's a hugely appealing house,

albeit the position is very, very popular.

The market at the moment for chalet bungalows is that it is an acquired taste.

You either love them or you hate them.

But he's doing a good job of it and it looks like it's going to be

a decent house from the size of the plans.

First off, that extension needs building and the chalet bungalow will have to be finished.

How much could it then be worth?

Keith paid 166,000 on auction day and, looking at a budget of around 60,000,

he'll need over 226,000 for any profit.

I would have thought once the building is complete and depending

on the market conditions, we'd probably be looking to achieve towards about 300,000 for it.

In my opinion an open market valuation in the current market

would be in the region of 225,000 to 230,000 for it.

The 300 is bang on what I thought.

The 22 whatever's...no, that's low.

Of course, it's hard to get an accurate valuation in this condition.

Keith's going through a lot of changes in his life at the moment.

How does he see things shaping up in the future?

I shall sort of carry on developing as much as I can, if I've got the money there, you know?

Just get on with doing what I'm doing, what I do best.

I've always had drive and sort of ambition, if you like, so that's still there.

I've been knocked off track with this project a little bit through

things I've explained earlier but, yeah, I'll get there in the end.

Oh, yeah, must keep going.

Determination!

For our next property going under the hammer, I've come to a truly beautiful location.

Welcome to South Wales, to somewhere that's unpronounceable if you're English like me, so if you are Welsh,

please forgive me, but I is as far as I'm concerned this is Nantyffyllon.

The name actually means, "Farthing stream", as in penny farthing, so that's got to be a good start.

But will the place I'm here to see need more than loose change to put it right?

Well, actually the connotations to do with penny farthing were more to do with size than value,

and certainly the property I'm here to see is anything but small.

This is it, three bedroom three storey mid terrace, had a guide price of 49,000 quid.

That guide price is certainly not high, but it might be related to the location of this property.

Next door is a pub and the town itself is a bit off the beaten track,

which could put some buyers off.

Also, it's on a main road and there's even a bus stop outside.

But, for a lot of people of course,

it's what's on the inside that counts.

So, it is quite a busy road out there, but at least the house is double glazed, which is a good start.

And a nice sized living room. New fireplace.

The rest of it is in sort of medium state of repair,

but it gets really interesting when you start walking further back

because you've got, like, this little mezzanine floor.

This is where the kitchen is located, and I have to say it's a nice, big sized space.

It's not sparkling but it's perfectly serviceable.

These units are reasonably new and it depends on what you're going to use the house for.

If you're going to rent it out, this will be fine.

Let's take a look upstairs.

I quite like these multilevel properties.

You know, certainly lots of rooms for your money. Wowee!

Interesting yellow colour, there.

But... That seems to go back a very long way.

You've got a bedroom there, you've got a bathroom here,

you've got another bedroom here!

That goes further back than the rest of the house.

How strange!

What we've got, then, is a very large rear bedroom overlooking the hills...

..and a quaint sized bathroom, and even the smaller bedroom has room for a boiler on the wall.

But turn right at the top of the stairs and there's a third bedroom at the front.

The rooms are a good size and for any buy-to-let investor

looking to maximise accommodation, I reckon you could easily squeeze in a fourth bedroom up here.

The opportunities continue down in the basement, although there are some serious damp issues to sort.

The question is, why does this topsy-turvy house have so many stairs and more space the higher you go up?

I've brought you to the rear of the property to show you something

which actually explains why the house is a bit of a Tardis.

If you look at the rear, what you've got

is the bit below is a different property.

The bit at the top there, that is the property that's up for auction.

And, as you can see, it sits above another property.

It's what they call a flying freehold.

Now, it's not necessarily an issue unless the property down below doesn't look after itself.

If that gets into a state of disrepair you have issues. It's definitely worth

getting your lawyer or solicitor to check it out before you buy.

I invited a local estate agent to come and look

at this rather strangely configured house.

I don't know whether these properties were originally built like this,

but with the top of this rear property joined to the terrace at the front,

I wonder what precautions an investor should take about possible freehold issues.

There needs to be an indemnity policy put in place to cover

any future risk factors that the flying freehold creates.

Alternatively, another option here would be

to convert this property and the one below it

into a leasehold building and this would then become more of a maisonette than a house

and the insurance policy in place would cover both properties.

So, there'd be less confusion should there be damage caused to the basement area

by a problem on the first floor.

Of more immediate concern are the signs of damp in the basement.

Judging by the rear of the property, you'd certainly want to get the external structure checked out.

A lot to think about, then, and it would pay not to get too carried away.

My feeling, this property would sell in the current market in good condition

with all the problems solved for in the region of 70,000 to 75,000.

With the potential resale value of just £75,000, you'd have to watch your budget very closely

if you were hoping for any profit.

For a buy-to-let investor looking to generate income,

how much could be produced from the house in its current configuration

with just the three bedrooms?

I would imagine on this particular property, in good presentable order,

we'd be looking at somewhere around 450 per calendar month.

Add a fourth or a fifth bedroom down in the cellar and that income could increase, but there are problems.

The house is next to a pub and there's the flying freehold and damp issues.

So, an interesting one, this.

The biggest issue, of course, the flying freehold.

If you're looking at this as a house to live in, maybe it's not ideal.

The closeness of the road, no garden, you know, the layout, a bit interesting.

As a rental property, well, I think it's got great potential

and, of course, it had that guide price of 49,000 quid.

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

Lot number 17 now is the large three bedroom mid terrace house

at 58 High Street, Nantyffyllon, near Maesteg.

It's a split level three storey mid terrace property.

What are we going to start on this one? Can I say 50 for it?

40? I'm in your hands. 38? Let's get started, ladies and gentlemen.

35, can I see?

Is that at... 35, thank you, sir.

At 35,000. And six will you? At six, thank you. At 36.

You're out. Seven. 37, I'm bid.

At £37,000. The hammer's up at 37,000 if you're done.

Eight, thank you. I've got it in the back.

Eight. Nine. 39. At 39.

40 can I? Right in the back, wave to me again, sir. At 39,000.

You're out right in the back? A fresh bidder again at 40,000.

At 40. One. 41 I'm bid. At 41.

Seated at 41,000. Two, if you like.

At £41,000. Can I see another one?

Two. At 42.

Thank you. At 42 you're out, seated.

Three. Thank you. 43 seated.

At £43,000. It's against you. Four.

44 standing right in the back.

At 44,000 you've come in again.

At £44,000. The hammer is up, make no mistake.

I'll take a half if it helps you. Shout if I'm missing you.

At £44,000.

Right in the back, sir, £44,000.

The successful bidder who paid £44,000,

5,000 under the guide price, is Dan.

Considering all the floorspace he's got, I think he's done rather well.

But when I met up with Dan back at the property, he seemed slightly startled to have bought it at all.

-Dan, congratulations!

-Thank you, thanks.

-It's a big house.

Why do you want to buy it?

I wasn't expecting to buy this one in particular.

It was the fact that I'm doing a house up the road anyway and I knew

there was a couple of properties in the area coming on the auction,

this being one of them, so I thought we'd have a day off and have a look in the morning and see what's about.

So, did you see it before you bought it?

Just in the morning, yeah.

It might sound like a bit of an impulse buy for Dan, but don't be fooled by his youthful looks.

With a nearby property close to completion, this will be his third renovation project for this year.

And did I mention that this is not even his full time job?

I run a restaurant in Whitland, the Road House Restaurant.

Where's that then?

It's about an hour and a quarter from here. It's coming up to the third anniversary now.

-I originally started in a 50-seater converted bus as a cafe.

-Wow!

A bit of a... A bit of a change.

-That was in one place or it drove around?

-No, no.

It was on the same location as the restaurant,

but after being there for four years, I decided to build the restaurant then.

-Build build as in...

-Build.

Yeah, right from the bottom right to the top.

So, did you run the restaurant?

Yeah, I'm still running it now.

Well, not today, my girlfriend's stuck there all day!

-But you cook and things?

-Yeah, I'm a chef, but I've always liked to have my hands...

you know, hands on work and I just want a bit more of a change,

so back to have a look at what else I can get my hands onto.

It sounds like swapping his chef's hat for a hard hat has come pretty naturally to Dan.

Whatever the renovation work needed here is, compared to building a restaurant from the ground up,

it's hardly jumping from the frying pan into the fire.

-You plan on doing a lot of the work yourself?

-Yes.

Yeah, if not everything. Apart from getting somebody in to sort out maybe the damp, tanking the walls or

injecting them, but apart from that, I want to do near enough everything.

And how are you at DIY or building?

Well, because I was brought up doing a bit of building and with building the restaurant,

you know, there's not much, I hope, that I can't turn my hand to and I do my own electrics as well, so...

You're qualified to do that?

Yeah, I got Part P registered last year and when my sister's house was being built,

I done the complete installation of that as well.

-I'm quite competent with electrics.

-What are you going to do to it?

There's possibly a damp issue in the basement down here, so I'll get down there, get some damp proofing in.

I might have to have a look up on the roof to see if there's any water coming in through the tiles.

And then the rest of it just a basic clear up and tidy it up.

Any plans for any structural changes or are you going to leave things as they are?

I was possibly toying with the idea...

Some of the bedrooms upstairs are very big.

I could split them back into a smaller bedroom, possibly might

get a better rental value from doing that.

But get all of the awkward jobs done first and then have a look.

-What about the kitchen?

-I don't think it's too bad.

It's a bit rough around the edges, but the units, they're pretty sound anyway,

-apart from the obvious doors falling off, but I think we can sort that out.

-So, any idea of budget?

We'll wait and see.

I do have an idea of how much it's going to cost, but it all depends if there's any nasty surprises...

But I can't see that there's thousands and thousands need spending here.

Fingers crossed, but at least Dan didn't have to pay a huge amount at auction.

Well, it just goes to show, £44,000 for this.

There are bargains out there for sure. Dan adding it to his portfolio.

The only issue, of course, is can he afford the time to sort it out in between being a chef,

doing up another property... Who knows?

You can find out later in the show.

As the saying goes, Martin, you win some, you lose some.

So, did today's buyers' gamble pay off or not?

Let's see how they got on.

When we were last in Earlsfield, South West London, Christine and Jay

had just paid £411,000 for this Victorian property.

Nearly all the original features were intact, but it needed a full refurbishment.

So what lay ahead for their new house and their new baby?

Well, eight months have passed, the windows on the house have now been replaced and

Christine, Jay and baby Rubin now have a lovely new home.

The large front bedroom has retained lots of the original Victorian charm.

I love those wonderful floorboards!

The nursery, too, has kept the fireplace and original doors.

Head down one flight of stairs and there's the third bedroom and the bathroom.

On the ground floor, the front living room is once again a superb drawing room,

just as the Victorian architect intended all those years ago.

The house was in a complete mess, basically.

There was frogs in the cupboard, there was mice everywhere, so we had to do essentially everything.

But they were determined not to lose the Victorian character.

Yeah, we did want to keep a lot of the original features, like the fireplaces,

the banisters and some of the arches in the hallway

and just to keep the sort of history of the house intact while putting a modern sort of feel to it.

We've sanded floors in the first reception room, done the walls in the sort of play room here.

We've brought the steps back towards the front of the house

to create a toilet underneath the staircase.

Going through to the kitchen, we've bashed through the side return and

we've sort of opened up the whole space.

Initially, this whole area, which has become the kitchen where I'm standing now,

was actually the outside and there was a window which we knocked through to create a sort of feature

for Rubin so that he could see what I was doing and I could watch him playing.

Now what we've done is actually lifted the roof height

by one and a half stories so that light comes streaming in.

And then in the middle, I wanted to have an island because I thought it's...

It's a huge kitchen and I didn't want it to do feel a bit like an ice rink.

Initially, the kitchen actually ended pretty much where I'm standing now and it was just a tiny dark,

dingy space, so now it's lovely, it's bright, it's open and that's what we wanted.

And when you walk out the back door, you're on to the deck, so it feels

almost like you've extended an extra sort of ten foot beyond the door.

I love the way it comes out of the house as an

extenuation of the kitchen, essentially creating another room.

It's south-west facing and it gets the evening sun and

it's pleasant just to sit here and have a drink in the evening.

By adding that side extension, they've been able to create a modern,

light and practical living area without sacrificing the charms of this house.

It has put been a lot of stress on Christine and I when we weren't spending that much time together,

with Rubin coming along and it has been quite trying, but just for the last couple of days

we seem to be getting our lives back and spending the evenings just chatting in the kitchen.

It's been a turbulent few months, though.

When they originally moved in here with baby Rubin, the builders were still hard at work.

Christine lasted three days before moving in with friends for three weeks.

It's been worth the wait, though.

What about their plan to add a fourth bedroom in the loft?

We did want to do you a loft conversion and we did actually get planning to do that,

but we were advised that, in the current market, it wasn't really worth doing.

We'd actually spend about 50,000 and we'd be lucky to get that back.

Although financial expert Jay kept a tight rein on the costs,

inevitably, there was a slight overspend.

The original budget was 150 with the loft conversion and 110 without.

From a build cost perspective,

that was pretty much what it was, but there were a lot of additional

-hidden costs that I didn't take account of.

-It was a huge shock.

Everything cost so much more than we anticipated and we kind of had our fingers burnt with that.

I think the build has come in at about 120, but to actually

finance it with the bridging loan and all other costs is about 180 now.

But will their superb finish be reflected in the valuations

of two local estate agents? Time to find out.

It doesn't seem like the same house.

It's like they've picked up the old house and planted a new one down!

It's wonderful that they've kept some original features,

like the fireplace and the corners of the ceiling.

I think it's crucial in today's market that people see the modern and

also the Victorian style of these properties are maintained.

The best bit from me is the kitchen, which has the glass roof.

It's a great space to have, especially with children,

with the doors straight on to the deck. Absolutely beautiful.

The downstairs loo, I think, is absolutely crucial in today's market. It's a must.

The downstairs toilet idea was brilliant.

I wouldn't have thought they would be able to fit one in.

I think subject to cost and obviously planning permission,

I would certainly carry out the loft extension.

It's OK to do a loft conversion if you're staying in the property for another ten years,

but as soon as you do it, you're at a loss because of the costs of doing it.

You don't make your money back straight away.

It's the moment of truth.

Remember, Christine and Jay paid 411,000 at the auction and their total budget has hit £180,000.

That's 591,000 in total.

So, what's the house worth now?

I'd value this property at £600,000.

The resale valuations in the current climate, I would ascertain would be 575,000 to 600,000.

Oh, well, only a maximum of £9,000 profit for eight months' work,

but of course the point of this exercise

was to create their home and Jay's happy with those figures.

We haven't lost money and we've... I mean, if anything,

we've made a tad, and in this market, that's quite encouraging.

I think we can be happy, really, with what we've done.

We want to stay here, so hopefully it will go up when all this mess in the economy gets sorted out.

And in the meantime, they've got a very beautiful family home to enjoy living in.

Back in the beautiful valleys of Mid Glamorgan in the town of Nantyffyllon,

local chef and restaurant owner, Dan, had bought this house for £44,000.

He'd bought a property which also extended into the top floor of the house behind,

so he would need legal advice about flying freehold issues.

It also had a damp basement.

He planned to add this to his existing pair of buy-to-let properties.

Well, seven months have gone by and from the street, this mid terrace looks unchanged,

but in the road behind, the colour of its flying freehold section

now matches the property underneath.

Inside, the rear bedroom has a new colour scheme as well and

it's been curtains for the pink bedroom as a new carpet's been laid there.

But the bathroom looks the same.

The kitchen has gained an oven and the lounge, uh...

Well, a pot plant.

There's not a great deal to show for seven months' work.

It doesn't look as if it's changed a hell of a lot, but the outside,

the exterior, there's a lot of work's gone on there. I had a brand new roof.

There were two chimney breasts here last time, but they had to be taken down.

There was a lot of damp coming in through there, so rather than mess around, straight, brand new roof

and sidewalls re-rendered, and then general cleaning up and decorating inside.

Sensibly, Dan made fixing the leaking roof his number one priority.

With the top of the house watertight, the damp in the basement was next on the list.

Right, this is the room I've spent the most money on inside.

I've had the walls injected,

the wall's been tanked to stop any damp penetrating through and,

obviously, they've been re-skimmed and repainted and now it's a nice room in the house.

Dan paid £44,000 on auction day for this multilevel property.

Although his bank was happy to finance the purchase, he could have had problems

if he wanted to sell due to the flying freehold, so he got his solicitor on the case.

Obviously, the flying freehold could have been a bit of an issue,

but she's sorted all that out with an indemnity policy,

-so I'm quite happy that... That it could be sold quite easily.

-Well, that's reassuring.

Dan was very sensible to get that clarification, but the plan at the moment is to rent it out.

Upstairs, Dan has divided the front bedroom to gain an next room to let out.

As you remember, this was the original entrance into the bedroom,

but it was a real large bedroom so, I mean, all I've pretty much done is split the room into two

and this was only really done for the financial gain.

An extra room, an extra £10 a week possibly,

and I mean over a year £520, it didn't even cost me £400 to do.

No, just a bit of stud walling.

Remember, Dan is qualified to do electrical work and has had help

from his brother and his mates, so how much did he have to spend?

The budget has gone pretty good, really.

The roof cost me somewhere about six two with the outside work, but then

the rest of it inside, maybe £2,000, £3.000. I mean, it's not big money.

There just aren't enough hours in the day for Dan.

Apart from this house, he's got two other buy-to-let properties,

plus he's got his restaurant and he's been back to auction again.

How does he find the time?

With the restaurant,

it's been always long hours in the restaurant, but to fit this in in between then,

any time off I get, we come up here and we do the work, but we'd work through the night.

People say I'm a workaholic, but I enjoy it, so the hours don't matter so much.

Well, maybe for Dan, but his girlfriend's not quite so sure.

Me and my girlfriend, we don't have a lot of time together at the moment and she isn't best pleased.

We have bought a house since this one for ourselves, but we haven't moved in there because of

the amount of work that I've had to do up here, so at the moment we're living in a caravan, so she's...

She's pretty keen on me to come back home and get that house finished now!

Well, who can blame her?

But the good news is that Dan has already got a tenant lined up

for this house, so he should be able to relax a little more now.

Let's hear what two local estate agents make

of this split level property with its flying freehold.

Confusion is my first impression of the property!

From the front it looks like a miner's cottage and

it's a little bit of a Tardis.

It goes back and back and further back.

There's been a conversion of a bedroom in this property

since I was here last, where a room has been split into two.

The problem with that is it's created a room without a window.

For use as a bedroom it could cause issues with the Fair Rents Officer because it's not habitable

because of no natural light.

The standard of the property is fair.

It's not to the standard that I would put it on and sell it on the open market.

For a rental property, it's reasonable.

Dan always intended to rent it out, so that's OK.

But I wonder how much the property is now worth?

Remember, he paid £44,000 at the auction and estimates his budget around 9,000.

This property being sold as a freehold property with the flying freehold problems would mean

there would be very few, if any, mortgages available, therefore you're awaiting cash buyers.

In that situation, I wouldn't expect to sell this in today's market for any more than 50,000.

In the current market, if all the legal problems were all sorted out and it was very clear

from the outset what we were marketing, I would aim to achieve between £60,000 and £65,000.

Well, Dan's solicitor has sorted out those flying freehold issues, so it could be 65,000.

Is Dan happy with that?

Yeah, well, that's... It's probably about right, really.

But as I said in the beginning, it's the rental, it's not...

It wasn't bought for sale.

Yeah, I think the market for this property is for rent

and I would expect to achieve in the region of £450 per calendar month to rent this property.

Reasonable rental price in the current market, I would hope to achieve

in the region of 445 to 450 per calendar month.

Well, I'm quite surprised at that because I've already found someone who's paying 650.

For a workaholic Dan, this is the third buy-to-let property to add to his portfolio, so what next?

Another trip to the auction, a well earned holiday or will it be back to the kitchen?

I've... I have to go back and I have to finish my own house now. I don't have a choice.

I think my girlfriend would kill me if we didn't... If we hadn't...

If we don't sort that out now.

We hope you've picked up plenty of useful hints and tips on today's show.

And we'll have plenty more handy homebuyer advice for you next time on Homes Under The Hammer.

-See you then!

-Goodbye.

-Goodbye.

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