0:00:02 > 0:00:05Hello. you may have bought something at a charity auction, even a car.
0:00:05 > 0:00:08Have you ever thought about buying a house that way?
0:00:08 > 0:00:10Lots of people do. Some to make money,
0:00:10 > 0:00:14others take on a ruin and turn it into their dream home.
0:00:14 > 0:00:19Either way, there are some fantastic opportunities when you buy your home under the hammer.
0:00:44 > 0:00:49Buying property can be a protracted and time-consuming experience.
0:00:49 > 0:00:54But at least when you buy at auction when the hammer falls, the property is yours,
0:00:54 > 0:00:56provided you have the money to buy it.
0:00:56 > 0:00:58Sometimes that can be the least of your worries.
0:00:58 > 0:01:01Auction property can need a lot of work doing to it.
0:01:01 > 0:01:07There's a very odd layout in this Telford semi, all very puzzling.
0:01:07 > 0:01:12You've got this crazy area here which I just do not know what's going on.
0:01:13 > 0:01:17You'll need lots of money and patience to build on this land in Letchworth.
0:01:17 > 0:01:22It's a time-consuming process and one potentially fraught with difficulties.
0:01:23 > 0:01:27And in Derby, did this former pub hang around on auction day?
0:01:27 > 0:01:31The guide price may be low but if it's a business that's losing money,
0:01:31 > 0:01:33it's going to be a noose around your neck.
0:01:35 > 0:01:39All these properties went to auction. We'll find out who bought them
0:01:39 > 0:01:42and what they paid when they went under the hammer.
0:01:45 > 0:01:50I'm in Dawley, a small town just outside Telford in Shropshire.
0:01:50 > 0:01:54Although it looks like any other ordinary town up and down the country,
0:01:54 > 0:02:00it was at one time the centre of the Industrial Revolution, due to rich coal deposits
0:02:00 > 0:02:01and the local ironworks.
0:02:02 > 0:02:08So appearances can be deceptive, which is also the case with this property.
0:02:08 > 0:02:11It goes without saying that you should always read
0:02:11 > 0:02:14the particulars in the auction catalogue very carefully.
0:02:14 > 0:02:18In this case, this particular lot, it says, "It is our understanding
0:02:18 > 0:02:23"that the property is considered to be non-standard construction..." # Dun-dun-dun-dah! #
0:02:23 > 0:02:27"..and that potential purchasers make their own inquiries of the mortgage lenders
0:02:27 > 0:02:33"as to whether the property is considered fit for mortgage purposes prior to making a bid at auction."
0:02:33 > 0:02:36Take heed! That's the property that I'm here to see.
0:02:36 > 0:02:37It is non-standard construction.
0:02:37 > 0:02:42It's a specific type of non-standard construction called cross-wall construction -
0:02:42 > 0:02:48brick walls with either wood or concrete beams stretching across between the two brick walls.
0:02:48 > 0:02:51As non-standard constructions go, it's not a bad one.
0:02:51 > 0:02:56So it wouldn't necessarily put me off, especially when you consider the guide price,
0:02:56 > 0:03:00which is a cool £35,000.
0:03:00 > 0:03:05Let me say from the start, non-standard doesn't mean wrong or bad. It just means different.
0:03:05 > 0:03:10And in these parts, it's certainly not unusual.
0:03:10 > 0:03:15At least 16% of the houses in this area are of non-standard construction.
0:03:21 > 0:03:24So what have we got?
0:03:24 > 0:03:27Well, that's a bit strange, for a start.
0:03:27 > 0:03:30It's a strange room when you come in through the door.
0:03:30 > 0:03:34It's not a living room. It's not part of the kitchen. It's not a utility.
0:03:34 > 0:03:38It's just a space. Well, there's fun to be had with that, for sure.
0:03:38 > 0:03:40That is, however, not so funny.
0:03:40 > 0:03:44Nasty cracking going on both sides of this door frame.
0:03:44 > 0:03:49Could just be constant use of the door has caused that but you'd want to check that out.
0:03:49 > 0:03:51- The walls. - HOLLOW BANGING - That's a bit of a giveaway.
0:03:51 > 0:03:56The walls, if you whack them, on an exterior wall, you'd expect that to be really solid.
0:03:56 > 0:04:01That feels more like an internal wall, which backs up this idea of this unusual construction.
0:04:01 > 0:04:03This room isn't bad.
0:04:03 > 0:04:08We like this big sort of open-plan living area here, lounge.
0:04:08 > 0:04:11Obviously the fireplace is a bit dated. We'd replace that.
0:04:11 > 0:04:14I'd also think about putting French doors in there, out onto the garden.
0:04:14 > 0:04:16Good space. Through to the kitchen.
0:04:16 > 0:04:23Well, it's not bad. Fairly economy units but the biggest thing in here is just the complete waste of space.
0:04:23 > 0:04:27You have a cupboard here with a boiler in it. That takes up so much room.
0:04:27 > 0:04:33And then you have this crazy area here which. I just do not know what is going on.
0:04:33 > 0:04:36You need to get rid of this wall, put the boiler somewhere else,
0:04:36 > 0:04:39and take out this wall, for goodness' sake,
0:04:39 > 0:04:43to make a really nice, family kind of living area/kitchen.
0:04:43 > 0:04:48So there is a slightly odd layout and a fair amount of refreshing needed downstairs.
0:04:48 > 0:04:51But it does have a good, airy feel.
0:04:51 > 0:04:55Generally it's so far, so good.
0:04:55 > 0:05:00So upstairs you have a boxroom at the front there and then two good-sized doubles.
0:05:00 > 0:05:03You have a bathroom and separate loo.
0:05:03 > 0:05:07The jury is out on whether or not you keep it as two or knock this wall out to make one.
0:05:07 > 0:05:11For a family house, it's really nice to have a separate loo.
0:05:11 > 0:05:14In general, it needs a bit of refurbishing.
0:05:14 > 0:05:20It needs a new carpet, a paint job, but, all in all, it's not a bad little house, is it?
0:05:20 > 0:05:25Remember it was guided at just £35,000 for a house with a decent-sized bathroom,
0:05:25 > 0:05:30complete with shower, and three bedrooms, one of which is more of a single one.
0:05:36 > 0:05:42The large master bedroom shows signs of damp and there's a perfectly adequate third bedroom.
0:05:42 > 0:05:48There's also a slightly overgrown but good-sized family garden, complete with swing.
0:05:48 > 0:05:51On the face of it, it seems good value, but how much
0:05:51 > 0:05:56does its non-standard construction hold this property back?
0:05:56 > 0:05:59What does a local estate agent think?
0:05:59 > 0:06:02Good-sized family home. Does want some work doing to it.
0:06:02 > 0:06:06Some tender loving care, really. The main points I'd probably say
0:06:06 > 0:06:13are that because of the situation of the property, where it is situated,
0:06:13 > 0:06:16there isn't actually any parking to the property,
0:06:16 > 0:06:21which, as a resale point of view, could prove a problem to people.
0:06:21 > 0:06:25If the property was actually fully modernised,
0:06:25 > 0:06:29I feel the resell figure would be around £100,000.
0:06:29 > 0:06:34With that non-standard construction, the resell price is always going to be limited
0:06:34 > 0:06:36so is rental the best option?
0:06:36 > 0:06:43The property would rent for around £500 to £525 per calendar month once renovated.
0:06:44 > 0:06:48Well, a nice enough little house which had a very attractive guide price,
0:06:48 > 0:06:52especially if you're looking to buy this and then rent it out.
0:06:52 > 0:06:54It would be a rent machine, as we say.
0:06:54 > 0:06:57Let's find out who fancied it when it went under the hammer.
0:07:00 > 0:07:03Lot number 16 is 9 The Hollow,
0:07:03 > 0:07:05off King Street, Dawley in Telford.
0:07:05 > 0:07:10This is a three-bedroom semi-detached house. £30,000, can I say?
0:07:10 > 0:07:1225, can I say, then? Lot number 16.
0:07:12 > 0:07:1525,000, can I say? 25 I'm bid.
0:07:15 > 0:07:18Thank you. Seated right at £25,000.
0:07:18 > 0:07:21£30,000. Bid's left. 35?
0:07:21 > 0:07:2435.
0:07:24 > 0:07:2640? 40.
0:07:26 > 0:07:2945? 45.
0:07:29 > 0:07:32Take one if it helps, sir.
0:07:32 > 0:07:36It does. £46,000. 47.
0:07:36 > 0:07:3948, sir? Another one anywhere else?
0:07:39 > 0:07:45At £47,000, for lot 16, then, are we all done?
0:07:45 > 0:07:48At £48,000, new face.
0:07:48 > 0:07:5549, 50, 51, 52, 53, 54,
0:07:55 > 0:07:5855, 56.
0:07:58 > 0:08:01At 56, 57,
0:08:01 > 0:08:0658, 59, 60.
0:08:08 > 0:08:11No? At £60,000, the bid is in the aisle.
0:08:11 > 0:08:14At £60,000.
0:08:14 > 0:08:1760,500, he's saying.
0:08:17 > 0:08:2161, now, sir. 61.
0:08:21 > 0:08:23And a half? 61 and a half.
0:08:23 > 0:08:2762. Another half?
0:08:27 > 0:08:2862 and a half.
0:08:28 > 0:08:3463. Another half? 63 and a half.
0:08:34 > 0:08:38Shaking his head. It's with you, sir, at £63,500.
0:08:38 > 0:08:44First time at 63,500. Second time at 63,500.
0:08:44 > 0:08:50Third and final time, are we all done? At £63,500.
0:08:50 > 0:08:52It's your lot, sir. Well done.
0:08:52 > 0:08:57So, for £63,500, nearly £30,000 over the guide price,
0:08:57 > 0:09:01engaged couple Louisa and Chris bought
0:09:01 > 0:09:05this non-standard construction, three-bedroomed semi in Dawley.
0:09:05 > 0:09:11Chris currently works in commercial properties and Louisa used to be in human resources.
0:09:11 > 0:09:14They hope this might be the start of a new venture for them
0:09:14 > 0:09:17and also a chance to get their 15 minutes of fame.
0:09:22 > 0:09:26- Louisa, Chris. Nice to meet you. - And you.- Congratulations.
0:09:26 > 0:09:29Let's discuss what you paid - more than the guide price.
0:09:29 > 0:09:33- They all did that night, yeah. - That's why we pulled out on two or three of the others.
0:09:33 > 0:09:37- Going too high. - We went over so we could be on telly, basically.- What?!
0:09:37 > 0:09:40Yeah, we went three-and-a-half grand over-budget,
0:09:40 > 0:09:43- just so we could get on TV.- What, on Homes Under The Hammer?- Yes.
0:09:43 > 0:09:47'Crikey! I think they're sort of joking.
0:09:47 > 0:09:52'But they were in fact after another two or three properties in the same auction,
0:09:52 > 0:09:54'which all went way over their budget.
0:09:54 > 0:09:59'So they went the extra mile on this one as they didn't want to come home empty-handed.
0:09:59 > 0:10:04'After all, it's no good being a property developer without any properties.'
0:10:06 > 0:10:10- Why did you want to buy this house? - We wanted to do a project together.
0:10:10 > 0:10:12Louisa was made redundant in January.
0:10:12 > 0:10:16We thought this was a great opportunity, with the way the house prices are at the moment,
0:10:16 > 0:10:21- to do something like that.- Together and different.- Why property?
0:10:21 > 0:10:28It's something different for both of us but it's something we've been talking about for a while.
0:10:28 > 0:10:34And given the way the house prices are at the moment, it's an ideal time to invest in bricks and mortar.
0:10:34 > 0:10:40We're just looking to buy something to rent out as an investment for the future.
0:10:40 > 0:10:44So this is, what, will become a substitute career for you?
0:10:44 > 0:10:49Yeah, I think so. That's what we're hoping. We have about five that we're going to look at the next week,
0:10:49 > 0:10:53so it's definitely something that we're going to continue to do.
0:10:53 > 0:10:56We're going to be working on this full-time.
0:10:56 > 0:11:00- How many would you like to have in your portfolio?- As many as we can.
0:11:00 > 0:11:03As many as we can afford, really.
0:11:03 > 0:11:07We've got the cash sitting there at the moment so it's better off in property
0:11:07 > 0:11:08than it is in the banks at the moment.
0:11:08 > 0:11:11As they were cash buyers, they didn't need a mortgage,
0:11:11 > 0:11:15so the non-standard construction of this house wasn't an issue for them.
0:11:15 > 0:11:19Louisa's father is a surveyor. He checked it out and gave it the thumbs up.
0:11:19 > 0:11:22So what's the plan for property number one?
0:11:24 > 0:11:28As you walk in, there's a bit of a funny area there
0:11:28 > 0:11:35and we're kind of thinking possibly knock down the wall from the kitchen to make it a big kitchen-dining area.
0:11:35 > 0:11:38In here, just cosmetic,
0:11:38 > 0:11:43take out the fireplace and change the paper, carpets, things like that.
0:11:43 > 0:11:48Upstairs, I don't know whether you've seen the toilet is separate to the bathroom.
0:11:48 > 0:11:52We're going to knock the wall down between the two and make that one.
0:11:52 > 0:11:55But there's three good-sized rooms upstairs.
0:11:55 > 0:11:59- I don't think there's a great deal of decor that needs doing to them, is there?- No.
0:11:59 > 0:12:02And then outside, just lots of tidying up.
0:12:02 > 0:12:09- What's the budget for what you've got planned?- Well...- We're kind of guessing around £5,000.
0:12:09 > 0:12:14- It's like the blind leading the blind. We're saying a ballpark figure of £5,000.- That's right.
0:12:14 > 0:12:20- It seems like a few things are a little up in the air.- Yes, that's how we work, though. That's just us.
0:12:20 > 0:12:22Just go with the flow.
0:12:22 > 0:12:28- And I guess, as your first project, there are going to be a few steep learning curves?- Yeah, we know that.
0:12:28 > 0:12:33We're quite looking forward to learning from our mistakes, so we know for next time.
0:12:33 > 0:12:37So we appreciate there's going to be hurdles we have to cross
0:12:37 > 0:12:42and we're going to come across some problems and stuff but we're looking forward to it.
0:12:42 > 0:12:44It's going to be a good challenge.
0:12:44 > 0:12:49As the wedding is in a year's time and they're also embarking on this new career,
0:12:49 > 0:12:53they really do have a challenging time ahead.
0:12:53 > 0:12:58An interesting property for Louisa and Chris to take on as their first development project together.
0:12:58 > 0:13:03I'm a bit concerned they paid a little bit too much for it and feel a bit responsible
0:13:03 > 0:13:06but - hey ho! - I'm sure in the long run it'll turn out just fine.
0:13:06 > 0:13:10They are going full steam ahead with their investments, though,
0:13:10 > 0:13:13and maybe there needs to be an element of caution thrown in there.
0:13:13 > 0:13:16You can find out how they get on later in the show.
0:13:20 > 0:13:26For the next auction lot, I'm in Letchworth, Hertfordshire, founded in 1903 by Ebenezer Howard.
0:13:26 > 0:13:31It was one of the first new towns to be built with a rural feel.
0:13:31 > 0:13:34As a new garden city,
0:13:34 > 0:13:40Letchworth was designed as a planned, self-contained community, surrounded by greenbelt.
0:13:40 > 0:13:44The emphasis was on trees and open spaces everywhere.
0:13:44 > 0:13:49In fact, only one tree was felled during the entire initial construction phase.
0:13:49 > 0:13:54So it seems rather appropriate that I'm actually here in Letchworth today to see a garden.
0:13:54 > 0:13:58But rather contrary to the town's founding principles,
0:13:58 > 0:14:03this green space has planning permission to be built on.
0:14:03 > 0:14:08In fact, plans have already been passed for a three-bedroom property to be built on the plot.
0:14:08 > 0:14:14Access to the site is via a footpath and it's tucked away between two end-of-terrace houses.
0:14:14 > 0:14:20So straightaway you can see access might be an issue and there's no parking with the plot.
0:14:20 > 0:14:23Well, this is it.
0:14:23 > 0:14:27First impressions, how on earth are you going to get a house on here?
0:14:27 > 0:14:29It's really overgrown.
0:14:29 > 0:14:33This fence line here divides the garden and it forms the boundary.
0:14:33 > 0:14:38I know it's 0.047 acres and basically it's a flat, rectangular plot,
0:14:38 > 0:14:41but it's really hard amongst all this undergrowth
0:14:41 > 0:14:45to visualise a three-bedroomed house being built here.
0:14:47 > 0:14:53So the first task would be to clear the site in order to get a good idea of what you've got.
0:14:53 > 0:14:59One benefit of being so close to the other houses is that the access to the main services
0:14:59 > 0:15:03like electricity and water should be pretty easy.
0:15:03 > 0:15:06I've got the plans to this property so you can really visualise
0:15:06 > 0:15:10the internal layout of it and it's quite interesting.
0:15:10 > 0:15:12You've got the walkway through here.
0:15:12 > 0:15:14Downstairs, there's a living/dining area,
0:15:14 > 0:15:17a very small kitchen to the back and a toilet,
0:15:17 > 0:15:22then you go up on to the first floor where you've got two bedrooms
0:15:22 > 0:15:26and you've got a landing and a small bathroom in the middle.
0:15:26 > 0:15:30And then, interestingly enough, they've made a bedroom out of the eaves.
0:15:30 > 0:15:35So they've totally utilised every single bit of space in this house.
0:15:35 > 0:15:42So the plot of land that went to auction guided at £25,000 might look small but it does seem sufficient.
0:15:42 > 0:15:46It's got planning permission in place and the plans look OK.
0:15:46 > 0:15:50So you might imagine it would be quite a straightforward build.
0:15:50 > 0:15:52Oh, if only property developing was that simple.
0:15:52 > 0:15:57The new-build here would be attached to the adjacent building, which is here.
0:15:57 > 0:16:00This raises the issue of a party-wall agreement.
0:16:00 > 0:16:02You may have heard of that.
0:16:02 > 0:16:07So the new owner of the plot has to serve a written notice on the owners of the adjoining property
0:16:07 > 0:16:10at least two months before work starts,
0:16:10 > 0:16:15and then these guys here have to, in writing, give their consent or refusal.
0:16:15 > 0:16:19And no work can begin until the neighbours have given the OK.
0:16:19 > 0:16:24So it's a time-consuming process and one potentially fraught with difficulties.
0:16:24 > 0:16:29At the moment, the neighbour's side door is in the wall
0:16:29 > 0:16:32that would become the joint party wall between the two buildings.
0:16:32 > 0:16:35So they could walk straight into your house. Not ideal.
0:16:35 > 0:16:40The other problem is that the neighbouring house is currently empty
0:16:40 > 0:16:42so finding the owner could prove tricky.
0:16:42 > 0:16:45Also, it wouldn't be wise to make changes to the current plans.
0:16:48 > 0:16:52Now, planning for his house was granted on appeal,
0:16:52 > 0:16:56having initially been refused because of parking congestion in the area.
0:16:56 > 0:17:01So it's probably best to be cautious about making any major changes to these,
0:17:01 > 0:17:04because you don't want to go through planning again and risk rejection.
0:17:04 > 0:17:10And of course, reapplying would mean more time, and time costs money in the property game.
0:17:10 > 0:17:12It's got planning permission
0:17:12 > 0:17:15but would it be financially worthwhile to build here?
0:17:15 > 0:17:18I asked a local estate agent
0:17:18 > 0:17:23to have a look at this plot of land that had a guide price of £25,000.
0:17:23 > 0:17:27The frontage is very tight. You can't really see the new house
0:17:27 > 0:17:30that's going to be built, unless you're on the path,
0:17:30 > 0:17:33so a lot of potential buyers will drive past
0:17:33 > 0:17:35and not really see the house for what it is.
0:17:35 > 0:17:41When the house is built, what's the best plan, bearing in mind the current market conditions?
0:17:41 > 0:17:43Should they hold on to it, let it out or sell?
0:17:43 > 0:17:46If the house is built, it would be brand new.
0:17:46 > 0:17:53By putting somebody into rent it, it'll then become second-hand, which may impact on the resale.
0:17:53 > 0:17:57So depending on market conditions, it would be very tempting
0:17:57 > 0:18:00just to clear the site and sell it off as a building plot.
0:18:00 > 0:18:05If you opted for building, what would a three-bedroom house around here be worth?
0:18:05 > 0:18:08Resale value for this property, once it's completed,
0:18:08 > 0:18:13depending on specification, would be £175,000 to £180,000.
0:18:13 > 0:18:20So if you did manage to get this near the guide price of 25,000, and kept build costs to about £100,000,
0:18:20 > 0:18:25potentially, there's a £75,000 gross profit here.
0:18:25 > 0:18:30The biggest selling point for this plot of land is that it already had planning permission,
0:18:30 > 0:18:34albeit only for a very small three-bedroomed house.
0:18:34 > 0:18:38The party wall agreement, I think, may cause some problems and delays.
0:18:38 > 0:18:44But with a guide price of just 25,000, it was bound to cause some interest in the auction room.
0:18:44 > 0:18:47Let's find out who made that winning bid.
0:18:47 > 0:18:54158. Lot 160, which is a site, 25-27 Caslan Way,
0:18:54 > 0:18:58freehold site with planning permission for a three-bed house.
0:18:58 > 0:19:00Anybody start me at 15?
0:19:00 > 0:19:0315 in the back? 16?
0:19:03 > 0:19:0615 I have. 16 behind. 17?
0:19:06 > 0:19:1017, 18? 18, 19? 19 I'm bid, then.
0:19:10 > 0:19:1420, can I say? 20, 21? 21, 22, 23?
0:19:14 > 0:19:1923 from you? 23, 24? 24, 25? 25, 26?
0:19:19 > 0:19:22Either of you? 25, sitting down on my left.
0:19:22 > 0:19:25Your bid at the moment, sir.
0:19:25 > 0:19:27First time 25...
0:19:27 > 0:19:30Second time 25. Any more?
0:19:30 > 0:19:33Sold at 25.
0:19:33 > 0:19:40That short but sweet bidding battle ended with the winning bid of 25,000 being made by Joseph.
0:19:40 > 0:19:44So he now owns a garden plot in the garden city of Letchworth.
0:19:44 > 0:19:48I met up with him there to hear about his plans.
0:19:49 > 0:19:51- Joseph, congratulations.- Thank you.
0:19:51 > 0:19:54£25,000 spent on a plot of land.
0:19:54 > 0:19:57- Yes.- What do you know about the plot?
0:19:57 > 0:20:01All I know about the plot is that it's got good potential.
0:20:01 > 0:20:08It's got a full planning application, so in this case I think it's something worth going for.
0:20:08 > 0:20:10Why did you want to buy this plot of land?
0:20:10 > 0:20:15I intend to take a career break from my standard teaching work for about one year
0:20:15 > 0:20:22and I need to do something to keep myself busy for a year.
0:20:22 > 0:20:27- Have you ever built a house before? - Yes, I have built a house before.
0:20:27 > 0:20:30I built one for my parents back at home in Kenya.
0:20:30 > 0:20:37In this case, building is nothing new to me, but as you know, you've a got different type
0:20:37 > 0:20:42of building standards but, more or less, it's bricks and mortar.
0:20:42 > 0:20:45What job have you been doing whilst you've been here in the UK?
0:20:45 > 0:20:48I've been teaching high school,
0:20:48 > 0:20:52comprehensive school, year 11 - 18.
0:20:52 > 0:20:59- What subject?- Science, specialising in all three sciences - physics, chemistry and biology.
0:20:59 > 0:21:01It's going to be quite a challenge for you,
0:21:01 > 0:21:05or quite a different type of job, teaching to building a house.
0:21:05 > 0:21:11Yes, because I'm used to giving instructions to pupils, but now it will be to builders.
0:21:11 > 0:21:15- I don't know how that will relate. - What about teaching? Has that gone by the wayside?
0:21:15 > 0:21:21It hasn't gone by the wayside, I've dropped it down to a day-and-a-half per week.
0:21:21 > 0:21:24- Are you going to be physically involved in the build?- Yes, I will.
0:21:24 > 0:21:29In this case, around three or four days a week, I'll be here on a full-time basis.
0:21:31 > 0:21:36Joseph wants to stick to the plans which have been passed, but because the house he hopes to build
0:21:36 > 0:21:40will be attached to the neighbouring property,
0:21:40 > 0:21:44he still has some issues to sort out, crucially that party wall agreement.
0:21:44 > 0:21:50The interesting thing about the plans that we have for this plot is that there's going to be
0:21:50 > 0:21:53a party wall agreement because the neighbour's door opens up into your land.
0:21:53 > 0:21:59Yes, and also his gas supply is straight into my lounge.
0:21:59 > 0:22:02In this case, I'll definitely need to have one end.
0:22:02 > 0:22:08Also, for the insurance, they can't give me insurance without...the Party Wall Act.
0:22:08 > 0:22:13You need permission from your neighbours. Have you had a chance to ask them?
0:22:13 > 0:22:19As you can see, the place hasn't been occupied for the last three years.
0:22:19 > 0:22:27I'm made to understand that the new place is having a new owner, and the completion was last week.
0:22:27 > 0:22:33So I've written to the person, but he hasn't come back to me yet.
0:22:33 > 0:22:37That's quite a worry for you, because you need to get everything in place,
0:22:37 > 0:22:42- but you can't do any of this until you have permission from your neighbours.- Yes, that's true.
0:22:42 > 0:22:44So that is worrying.
0:22:44 > 0:22:50It's quite worrying at the moment, but I'm asking my solicitor to try and chase people around.
0:22:50 > 0:22:53Let's talk about the money. You paid £25,000 at auction.
0:22:53 > 0:22:57- Yes.- How much is it going to cost you to build this three-bedroomed house?
0:22:57 > 0:23:03I'm budgeting in a range of 75,000 to 100,000 for the house.
0:23:03 > 0:23:09So in that case...that's my budget. So long as it doesn't pass the 100,000, I'll be happy.
0:23:09 > 0:23:12What do you think the end value of the property will be?
0:23:12 > 0:23:18Between 140 to 150, I'd be happy with that.
0:23:21 > 0:23:25Joseph has got a lot of work to do to make a gross profit of 25,000,
0:23:25 > 0:23:29but he reckons he can do it... all in four to five months.
0:23:29 > 0:23:31WHY are you building this house?
0:23:31 > 0:23:37The reason is that, if it works out nicely, I'd like it to be my full-time career.
0:23:37 > 0:23:45That's why I'm 50-50 - do I stick with education or do I move onto the building industry?
0:23:45 > 0:23:50Do you think there's any chance you might want to live in this property once you've finished it?
0:23:50 > 0:23:52The chances are around 15 to 20%.
0:23:52 > 0:23:56If I like the place, I may come and move in.
0:23:56 > 0:24:02If I really get good money, I may dispose of it straight away.
0:24:02 > 0:24:07- English weather and all, let's hope the sun shines for you.- Thank you. - Good luck. Well done.
0:24:07 > 0:24:13From science teacher to site manager, Joseph is definitely up for a challenge.
0:24:14 > 0:24:17I've got a few concerns about Joseph's plans.
0:24:17 > 0:24:20There's that party wall agreement with the absentee neighbour,
0:24:20 > 0:24:25and I think his four- to five-month timescale seems a little ambitious,
0:24:25 > 0:24:28especially for his first project in England.
0:24:28 > 0:24:32And all this work for only £25,000 profit.
0:24:32 > 0:24:34He's got to build a whole house.
0:24:34 > 0:24:39Let's see how he tackles these challenges later on in the programme.
0:24:40 > 0:24:45Coming up - with a flat upstairs, this Derby pub must have a sporting chance.
0:24:45 > 0:24:49You could move in here, or at least come for a drink tomorrow.
0:24:51 > 0:24:56Back in Letchworth, Joseph has made a discovery.
0:24:56 > 0:25:00I did not know how long certain things are going to take.
0:25:01 > 0:25:05But first, we return to our novice property developers in Telford.
0:25:05 > 0:25:10- We're really pleased with it, the way it's turned out.- Yes.
0:25:14 > 0:25:18Back in the 18th century, the Shropshire town of Dawley
0:25:18 > 0:25:20was at the heart of the Industrial Revolution.
0:25:20 > 0:25:26Now, in the 21st century, engaged couple Louisa and Chris were undergoing their own revolution.
0:25:26 > 0:25:32They hoped to wave goodbye to their former careers in commercial property and human resources
0:25:32 > 0:25:34to become full-time property developers.
0:25:34 > 0:25:42Their first step was the purchase of a non-standard construction 1960s three-bedroomed semi for £63,500.
0:25:42 > 0:25:47Three months later, had their first property venture gone to plan?
0:25:48 > 0:25:52There are encouraging signs on the outside.
0:25:52 > 0:25:54Someone has been busy with the lawn mower.
0:25:56 > 0:26:01Inside, it's definitely looking more modern with new carpets, decoration,
0:26:01 > 0:26:06a contemporary gas fire, and the kitchen has been spruced up a little.
0:26:06 > 0:26:09But what happened with those layout changes?
0:26:09 > 0:26:12As you can see, we've pretty much kept the kitchen the same.
0:26:12 > 0:26:17We were going to knock this wall down here, but decided against it
0:26:17 > 0:26:23because it was going to cost too much and wasn't really going to be effective enough.
0:26:23 > 0:26:30The electrics are in there, so it was going to be more expense and hassle to change round as well.
0:26:30 > 0:26:33Also, we've got the radiator on this wall,
0:26:33 > 0:26:38and on this side of the wall in the kitchen, we'd have lost the space of two cabinets,
0:26:38 > 0:26:41so it just wouldn't have been practical.
0:26:41 > 0:26:43We decided to keep this as a dining area.
0:26:43 > 0:26:48In some ways I think it's a shame, but this is a rental property
0:26:48 > 0:26:51so keeping costs down is the name of the game.
0:26:51 > 0:26:55Have they been more radical upstairs?
0:26:57 > 0:27:01The bedrooms have been freshened up and look ready to rent out.
0:27:07 > 0:27:10What about that separate toilet and bathroom arrangement?
0:27:10 > 0:27:15One of the initial first ideas with the bathroom was to knock the wall down
0:27:15 > 0:27:19and make it into one big bathroom,
0:27:19 > 0:27:25but we talked to some builders and, with the cost, it was going to be pointless.
0:27:25 > 0:27:28We weren't going to get any extra rent for it.
0:27:28 > 0:27:33Again, it was like the kitchen wall downstairs - it was spending money for the sake of it.
0:27:33 > 0:27:38So they pulled back from their original plans and have opted for a makeover instead.
0:27:38 > 0:27:43This was supposed to be the first of many houses in their property portfolio,
0:27:43 > 0:27:45so how have they found the process so far?
0:27:45 > 0:27:52It started off fine, but once we'd done the big room, this took quite a while to do,
0:27:52 > 0:27:58I think once you start the initial thing, you just want to see the end product then.
0:27:58 > 0:28:01I'm a bit impatient and I just wanted to see it like it is now.
0:28:01 > 0:28:04I left Chris to do some of the hard work.
0:28:04 > 0:28:07- Some of it, yeah(!)- 90%!
0:28:07 > 0:28:10So, perhaps it hasn't gone quite as they hoped,
0:28:10 > 0:28:13and this new business venture and partnership seems lopsided.
0:28:13 > 0:28:18So has less input from Louisa and more from Chris altered their costs?
0:28:18 > 0:28:20I've got a little bit of an idea.
0:28:20 > 0:28:23I think it's pushing 7,000, which is...
0:28:23 > 0:28:28- You're joking?!- No. - I didn't know that.
0:28:28 > 0:28:33- ..which is what we said initially. - No, we said five.- 5,000 to 6,000.
0:28:33 > 0:28:38But some things went wrong and we needed a bit of extra plastering doing and...
0:28:40 > 0:28:43- But now she knows. - I didn't know that.
0:28:43 > 0:28:47That surprise budget of £7,000 now pushes their total spend
0:28:47 > 0:28:51to over £71,000,
0:28:51 > 0:28:55as they bought the house for £63,500 plus costs.
0:28:55 > 0:28:59Although their plan is to rent it, does their property come up to the mark?
0:28:59 > 0:29:01What do two local estate agents think?
0:29:05 > 0:29:09First impressions - it's quite good. It's very neutral, clean, tidy.
0:29:09 > 0:29:13So from a rental or selling point of view, it should be fine.
0:29:13 > 0:29:17My first impressions are it's clean and tidy, the gardens have been done,
0:29:17 > 0:29:19it's well presented,
0:29:19 > 0:29:21which is all good for the property.
0:29:21 > 0:29:27The finish could be better, perhaps a bit more care and attention to detail would have paid off in the end.
0:29:27 > 0:29:31But if they're just looking for a quick turnaround, it's adequate.
0:29:31 > 0:29:36The one thing that is missing is parking, and that could be a major concern.
0:29:36 > 0:29:40So, with the non-standard construction and lack of parking,
0:29:40 > 0:29:46what kind of current resale value would the experts put on the couple's £71,000 investment?
0:29:48 > 0:29:53From the resale point of view, they will be looking at pretty much at what they paid for it.
0:29:53 > 0:29:57Around the 60 mark. If they can get their money back, it would be good,
0:29:57 > 0:30:00but they may well have to look at a small hit on the price.
0:30:00 > 0:30:06There's a limited value to what we could get for this type of construction.
0:30:06 > 0:30:10We've recently sold a property for 55,000. That had parking.
0:30:10 > 0:30:14Therefore, I don't think we could ask any more than 55,000.
0:30:14 > 0:30:18Oh, dear. So present values aren't great.
0:30:18 > 0:30:22They could be looking at a 15 to £20,000 loss.
0:30:22 > 0:30:24What do they make of those valuations?
0:30:24 > 0:30:27- I'm shocked at that. - A bit disappointed.
0:30:27 > 0:30:30We were told a different figure the first time round.
0:30:30 > 0:30:32A bit disappointed with that.
0:30:32 > 0:30:36- Not really, because we're not selling it. - No, we're not selling it,
0:30:36 > 0:30:38but I was expecting a bit more.
0:30:38 > 0:30:41Let's hope there's better news on the rental front.
0:30:43 > 0:30:47At the moment, I'd probably ask around 525 per calendar month,
0:30:47 > 0:30:50probably achieving about £500 per calendar month.
0:30:50 > 0:30:55This would make the price of about £525 per calendar month.
0:30:55 > 0:31:00- Yeah, that's what we expected. - Yeah, that's good.
0:31:00 > 0:31:02- If we can get 500, that's great. - Yeah.
0:31:02 > 0:31:05OK, this might not work on the resale market,
0:31:05 > 0:31:12but £500 a month, or £6,000 a year, should see them clean up nicely on the rental market.
0:31:12 > 0:31:17That represents a return of around 8%, much better than leaving their money in a bank.
0:31:17 > 0:31:22But their plans to become full-time property developers are now on hold.
0:31:22 > 0:31:25I miss not being in an office, if I'm honest. I really do.
0:31:25 > 0:31:29And I'm quite bored just... I miss having people around me.
0:31:30 > 0:31:34So, it's back to the Office for Louisa, but what about Chris?
0:31:38 > 0:31:42I've just signed up on a course to be a driving instructor,
0:31:42 > 0:31:46so it's a very big career change.
0:31:46 > 0:31:49Driving instructor, eh?
0:31:49 > 0:31:51That IS a big change of direction.
0:31:51 > 0:31:54But Chris and Louisa haven't given up on their dreams.
0:31:54 > 0:31:59They've learnt a lot here and have already bought their second property,
0:31:59 > 0:32:01so their portfolio IS expanding.
0:32:05 > 0:32:11I'm in the old Derbyshire mining village of Codnor, about 12 miles outside Derby itself.
0:32:11 > 0:32:14I'm not here to see a traditional two-bedroomed terrace for a change.
0:32:14 > 0:32:19I'm here to see something much more interesting - the Sportsman pub.
0:32:19 > 0:32:22A few years ago, this was sold for £220,000,
0:32:22 > 0:32:28but when it went to auction just recently, it had a guide price of 58,000.
0:32:28 > 0:32:33It sounds as if it has a sporting chance of being a very interesting lot.
0:32:33 > 0:32:37Both coal and ironstone have been mined in the area for hundreds of years,
0:32:37 > 0:32:41and the village grew up around that. But today,
0:32:41 > 0:32:47there are no miners' thirsts to quench, so what does the Sportsman inn have to offer now?
0:32:47 > 0:32:54Whoa! That is incredible! It doesn't smell, I'm not sticking to the carpet,
0:32:54 > 0:32:59it looks pretty much like it was closed up last night.
0:32:59 > 0:33:03Reasonable furniture, it looks like that has recently been redone.
0:33:03 > 0:33:06The bar has even got glasses on it.
0:33:06 > 0:33:08It's a bit spooky in some ways.
0:33:08 > 0:33:12A good-sized space. It's dark and dingy, but that's partly because of the colour scheme.
0:33:12 > 0:33:16All in all, you could move in here or come here for a drink tomorrow.
0:33:16 > 0:33:23It's all rather ghostly. You half expect to see the staff appear behind the bar to take your order.
0:33:23 > 0:33:28But what we've got here is a big pub with a central serving point and pumps on each side.
0:33:28 > 0:33:33You could easily imagine the noise and atmosphere on a busy Friday night.
0:33:33 > 0:33:37Apart from alcohol, something else every pub needs is loos.
0:33:37 > 0:33:43They're at the back of the property, along with a small area that could optimistically be called a kitchen.
0:33:43 > 0:33:47Realistically, it's more like a cleaning area. Outside at the back,
0:33:47 > 0:33:53there's a really decent-sized beer garden and there's even a long-alley skittle pitch,
0:33:53 > 0:33:56a traditional game that requires quite a bit of skill.
0:33:56 > 0:34:00Down the alley at the side, there's a door leading upstairs.
0:34:00 > 0:34:05The real useful addition to this property is the fact that above the pub, you've got this flat.
0:34:05 > 0:34:10Again, it's in pretty good condition. You could almost move into it like it is.
0:34:10 > 0:34:15There you've got a loo and a shower, there's a small room there. Kitchen?
0:34:15 > 0:34:18It's tiny, but at least it's in serviceable condition.
0:34:18 > 0:34:21Living room there and through to the main bedroom.
0:34:21 > 0:34:26The reality is, this will probably be used by the person who owns and operates the pub.
0:34:26 > 0:34:28On the other hand, you could let it out,
0:34:28 > 0:34:31but most people would have an issue about living above a pub.
0:34:31 > 0:34:36Either way, for the guide price, it's real nice to have.
0:34:36 > 0:34:42It seems a bit of a bargain considering that guide price of £58,000 for the flat AND the pub.
0:34:42 > 0:34:48Two-bedroomed flats around here normally go for around 50,000 just for the flat.
0:34:51 > 0:34:53So, OK, you fancy having a go at running this pub.
0:34:53 > 0:34:57There are a few things you're going to have to think about before you take it on.
0:34:57 > 0:35:01First of all, there's licensing regulations to consider.
0:35:01 > 0:35:05Then you need to think about, why did this place close in the first place?
0:35:05 > 0:35:08If it was such a profitable venture. It didn't work for somebody.
0:35:08 > 0:35:13These are without doubt very tough economic times.
0:35:13 > 0:35:16I mean, the statistics when it comes to pubs are quite scary.
0:35:16 > 0:35:212,000 pubs closed last year, that's almost 40 a week.
0:35:21 > 0:35:25So, before you take this on, you've got to do your research on the local area...
0:35:25 > 0:35:27you know, what is required around here?
0:35:27 > 0:35:29Is it really worth taking it on?
0:35:29 > 0:35:33And then consider it very carefully, because the guide price may be low,
0:35:33 > 0:35:37but if it's a business that's losing money, it's going to be a noose around your neck.
0:35:42 > 0:35:45It's a sobering thought, and a quick drive around the village
0:35:45 > 0:35:48reveals there are no fewer than five other pubs.
0:35:48 > 0:35:52I reckon that any prospective publican is going to need
0:35:52 > 0:35:53a strategy and a lot of bottle.
0:35:53 > 0:35:55So, with all that in mind,
0:35:55 > 0:35:58I asked the auctioneer who sold it what he thinks.
0:36:01 > 0:36:05We had a lot of people looking at it, but that was probably
0:36:05 > 0:36:10more because of the guide price, which on paper seemed very enticing.
0:36:10 > 0:36:13It's a lot of property for £58,000 plus.
0:36:13 > 0:36:16Most people, I think, were looking at it
0:36:16 > 0:36:19from a point of view of converting it to residential accommodation,
0:36:19 > 0:36:23which I suppose it has some potential for.
0:36:23 > 0:36:29Clearly, to continue to run it as a pub is very much an unknown quantity.
0:36:29 > 0:36:33If you convert it fully to residential, assuming you've planning consent,
0:36:33 > 0:36:35you're really into enormous cost.
0:36:35 > 0:36:40But as upstairs is already a flat, what about converting the pub into a second flat?
0:36:40 > 0:36:44Then, what would the chance be of selling both?
0:36:44 > 0:36:49I think if you converted it into two flats, you'd probably retain it as an investment property.
0:36:49 > 0:36:55Prospect for selling each flat, leasehold, in this location,
0:36:55 > 0:36:57has to be very, very limited indeed.
0:36:57 > 0:37:01So I think you're looking at it really from an investment point of view.
0:37:01 > 0:37:07I would say each would have a rental value of probably around £475 to £500 a calendar month.
0:37:07 > 0:37:14And what would the potential value be if the existing flat was refurbished and the pub reopened?
0:37:14 > 0:37:17My thoughts would be that if this was an operating pub,
0:37:17 > 0:37:20with a reasonable amount of trade,
0:37:20 > 0:37:22together with the flat above,
0:37:22 > 0:37:25I suppose it could be worth over £100,000.
0:37:25 > 0:37:28But it will depend on the level of business.
0:37:28 > 0:37:33So, is this pub a great opportunity or the dregs of the barrel?
0:37:34 > 0:37:39Well, pubs like this are part of our British heritage.
0:37:39 > 0:37:42And taking them on as a business, that's an appealing thing
0:37:42 > 0:37:46but really it is a challenge which is not for the faint-hearted.
0:37:46 > 0:37:49You're going to have to pull those punters in.
0:37:49 > 0:37:53The question is, did this brew up a storm at the auction? Let's find out.
0:37:53 > 0:37:57Lot number 19 is the Sportsman inn, Jessop Street in Codnor.
0:37:57 > 0:38:00A freehold, double-fronted former public house,
0:38:00 > 0:38:03with a two-bedroomed gas centrally heated flat above.
0:38:03 > 0:38:09Where do you want to be on this, ladies and gentlemen? Start me where you like. 60,000? 55?
0:38:09 > 0:38:1155 I have, thank you.
0:38:11 > 0:38:13At 55,000. At £60,000.
0:38:13 > 0:38:18At £60,000. Pub with a two-bedroomed flat at £60,000. 61 quickly?
0:38:18 > 0:38:2261, thank you, I have. 61. 62 now.
0:38:22 > 0:38:2563, sir? 63. At 63,000.
0:38:25 > 0:38:2964. 64 is bid.
0:38:29 > 0:38:3165. At 65,000.
0:38:31 > 0:38:3366 is bid.
0:38:33 > 0:38:34At £66,000...
0:38:34 > 0:38:3767, 68. 68 is bid.
0:38:37 > 0:38:40At 68, nine, 69.
0:38:40 > 0:38:4570, may I say 70,000? At 70, 71?
0:38:45 > 0:38:4771? 71.
0:38:47 > 0:38:4972? 72.
0:38:49 > 0:38:5172. I have taken the lady's bid.
0:38:51 > 0:38:5673 in that corner. 73, 74?
0:38:56 > 0:38:5874? 74, thank you.
0:38:58 > 0:39:00At 75.
0:39:00 > 0:39:0275, bid again? 76?
0:39:02 > 0:39:0476.
0:39:04 > 0:39:0776, wave your hand again at me, sir.
0:39:07 > 0:39:09Walks away at 76,000 once...
0:39:09 > 0:39:1177. 77.
0:39:11 > 0:39:1478? Another thousand could buy it.
0:39:14 > 0:39:17£77,000 once...
0:39:17 > 0:39:1977,000 twice.
0:39:19 > 0:39:22Third opportunity, any higher bid?
0:39:22 > 0:39:25We're selling at £77,000.
0:39:25 > 0:39:26Sold at the back at 77. 277.
0:39:26 > 0:39:32And that last order bid of 77,000 for the Sportsman Inn was made by Ken.
0:39:32 > 0:39:36Originally from Nottingham, he's lived in Derby for three years.
0:39:36 > 0:39:39He's brought numerous properties over the last 25 years,
0:39:39 > 0:39:43many residential, but also some commercial and workshops.
0:39:43 > 0:39:45This is his first ever pub.
0:39:45 > 0:39:50I met up with him at the bar to find out his plans. Ken, congratulations.
0:39:50 > 0:39:53- Thank you.- Good to meet you. You've got yourself a pub!
0:39:53 > 0:39:55- Mmm!- Why did you want to buy it?
0:39:55 > 0:40:00Well, I've always been interested in pubs, you know, basically on this side of the bar, not the other.
0:40:00 > 0:40:04But I did fancy opening a pub years ago, but erm...
0:40:04 > 0:40:09I just like the idea. If I see something, I go for it.
0:40:09 > 0:40:13And this appealed to me, especially at the price it went for.
0:40:13 > 0:40:15Why not? Try something different, life's short.
0:40:15 > 0:40:18Great attitude! Have you got any experience of running a pub?
0:40:18 > 0:40:21I have worked in a pub, no, I've not run a pub before, no.
0:40:21 > 0:40:24I've only worked behind the bar,
0:40:24 > 0:40:30but I do hope to get somebody experienced in who will occupy the flat upstairs.
0:40:30 > 0:40:31And then run it.
0:40:31 > 0:40:35But I will be here on a day-to-day basis, but I won't be living here.
0:40:35 > 0:40:39The reason is simple - Ken has a farm to run plus five flats
0:40:39 > 0:40:42and a couple of commercial properties to manage.
0:40:42 > 0:40:45He's a busy chap! I hope he did some research into the pub
0:40:45 > 0:40:49before be brought it at the auction, because, with our changing habits,
0:40:49 > 0:40:51this watering hole, like so many others,
0:40:51 > 0:40:55may have struggled to find regular customers.
0:40:55 > 0:40:58# For the times
0:40:58 > 0:41:00# They are a-changing... #
0:41:00 > 0:41:06So the pub has had its problems in the past, but you're hoping to create a new future for it.
0:41:06 > 0:41:07- Yeah.- How are you going to do it?
0:41:07 > 0:41:10I think people want a traditional pub.
0:41:10 > 0:41:15A real ale pub where they can come and have a decent drink and conversation. That's what I like.
0:41:15 > 0:41:19And the pubs I go to are all doing well, and good beer!
0:41:19 > 0:41:22- It's got to be good beer. - Are you a beer fan?
0:41:22 > 0:41:25- I am. I belong to CAMRA.- The Campaign for Real Ale.- Yeah.- Fantastic!
0:41:25 > 0:41:29If the beer's not good, then I won't go again. It's as simple as that.
0:41:29 > 0:41:33Tell me what you're going to do with the internal layout because,
0:41:33 > 0:41:35theoretically, you could open it tomorrow.
0:41:35 > 0:41:38- Yeah, yeah.- But are you going to do something inside?
0:41:38 > 0:41:41I am, yeah, I'm going to brighten it up a bit.
0:41:41 > 0:41:43The ceiling, the walls.
0:41:43 > 0:41:47You know, I think these colours have been put in
0:41:47 > 0:41:49because of smokers.
0:41:49 > 0:41:52But now, I don't think you've got to worry about that any more.
0:41:52 > 0:41:54So I think you can brighten it up a little bit.
0:41:54 > 0:41:58How much have you set aside for doing the restoration works?
0:41:58 > 0:42:01I don't think there's a lot to spend on this place.
0:42:01 > 0:42:04I think there's more to spend up in the flat. Right.
0:42:04 > 0:42:07It probably needs a new boiler up there.
0:42:07 > 0:42:10New central heating boiler, combi.
0:42:10 > 0:42:13The toilet and the sink wants replacing, bit of tiling.
0:42:13 > 0:42:16It needs re-carpeting and it wants decorating.
0:42:16 > 0:42:18The Artex wants taking off the walls.
0:42:18 > 0:42:22How much are you planning to spend down here and how much on the flat?
0:42:22 > 0:42:26I've not really thought of it, to be honest with you.
0:42:26 > 0:42:29I just thought, probably about £4,000 at the most, altogether.
0:42:29 > 0:42:32All in all, what do you feel about what you paid for it?
0:42:32 > 0:42:36Oh, yeah, I think it's a good price I paid for it, you know.
0:42:36 > 0:42:42It went for £220,000, I think it was October 2006. I can't fully understand why it went so cheap.
0:42:42 > 0:42:45I can't. There might be some reason, I don't know!
0:42:45 > 0:42:48Maybe I'll find that out later, but...
0:42:48 > 0:42:51If it don't work out, I can always put it back into auction.
0:42:51 > 0:42:53# For the times
0:42:53 > 0:42:56# They are a-changing... #
0:42:56 > 0:43:01Reversing the fortunes of a place like this would be a challenge for anybody, but for somebody
0:43:01 > 0:43:06with no experience, like Ken, well, those challenges are intensified.
0:43:06 > 0:43:09But will his secret weapon, real ale, come to the rescue?
0:43:09 > 0:43:11You can find out later in the show.
0:43:14 > 0:43:18So months have gone by and we have high hopes of our purchasers.
0:43:18 > 0:43:20Did they do what they intended?
0:43:20 > 0:43:24- Or have there been unforeseen problems?- Let's find out.
0:43:24 > 0:43:28Spotting an opportunity is often the key to property developing and that
0:43:28 > 0:43:32is exactly what Joseph hoped he'd done in Letchworth, Hertfordshire.
0:43:32 > 0:43:35Originally from Kenya, he's a science teacher
0:43:35 > 0:43:38and he paid £25,000 for this piece of land
0:43:38 > 0:43:43with planning permission to build a new semi-detached house.
0:43:44 > 0:43:50Access wasn't going to be easy as it was tucked away between two corner properties.
0:43:50 > 0:43:53But 11 months later, the house is built.
0:43:56 > 0:44:00And the large plot of land at the back now just needs to be cleared.
0:44:03 > 0:44:09Inside, the three-bedroomed semi is plastered and the second fit has gone in.
0:44:09 > 0:44:13So, this squeezed-in house is just waiting for a paint brush and some carpets.
0:44:13 > 0:44:17You may remember the party wall issue that needed resolving
0:44:17 > 0:44:21as this new house is attached to the neighbouring property.
0:44:21 > 0:44:27Unfortunately, that one had been sold, so did tracking down the new owner cause delays?
0:44:27 > 0:44:34Yes, it did slow me down because I couldn't start working on the wall
0:44:34 > 0:44:39before speaking to the owners and agreeing on what we really need to do.
0:44:39 > 0:44:44Bearing in mind that his gas was coming from my plot,
0:44:44 > 0:44:47we needed to move that out first before we could start.
0:44:47 > 0:44:50As we've seen many times, when it comes to rerouting
0:44:50 > 0:44:54any of the utilities, you need to allow quite a bit of time.
0:44:54 > 0:44:58But it was the highways department that gave Joseph the real problem.
0:44:58 > 0:45:03I spoke to the people who are responsible for the land around here.
0:45:03 > 0:45:06I asked them if I could drive through,
0:45:06 > 0:45:10bringing the materials on to the site.
0:45:10 > 0:45:12They categorically refused.
0:45:12 > 0:45:16I asked them if I could put a skip on the verge
0:45:16 > 0:45:19and they said as long as it is not there for more than two weeks.
0:45:19 > 0:45:22So, in this case, they were not helpful either way.
0:45:22 > 0:45:28In order to get the building materials on site, Joseph hired a forklift truck.
0:45:28 > 0:45:31But it was a slow process. To speed things up,
0:45:31 > 0:45:33he decided to get well and truly stuck in.
0:45:34 > 0:45:39I physically carried about 20 tons of material.
0:45:39 > 0:45:41So that was tough!
0:45:42 > 0:45:45Blimey, I hope the builders helped!
0:45:45 > 0:45:50So, Joseph had paid £25,000 at the auction for the plot of land with planning permission.
0:45:50 > 0:45:53But then he discovered that squeezing in the three bedrooms
0:45:53 > 0:45:57meant some of the room heights didn't meet the regulations.
0:45:57 > 0:46:00This is the room that really caused us a lot of trouble.
0:46:00 > 0:46:07Because when we went in the detail planning, we couldn't attain the head room and so in this case,
0:46:07 > 0:46:13we had to lower the floor, redesign the stairwell, and in this case it all cost money and time.
0:46:13 > 0:46:18Joseph had taken a year off from his teaching job for this very ambitious project.
0:46:18 > 0:46:22Yes, he'd built a house before in his native Kenya,
0:46:22 > 0:46:27but with the weather here in the UK, this house needed another approach.
0:46:27 > 0:46:30Totally different in that the sense that in Kenya,
0:46:30 > 0:46:33it is a single skin.
0:46:33 > 0:46:36The design is geared towards cooling the house,
0:46:36 > 0:46:41unlike here where the design is geared towards keeping it warm.
0:46:42 > 0:46:47Also, British bureaucracy came as another big surprise for Joseph.
0:46:47 > 0:46:52I did not know how long certain things are going to take.
0:46:53 > 0:46:59For example, when I took the drawings for our building rates.
0:46:59 > 0:47:01I didn't know they were going to take eight weeks.
0:47:01 > 0:47:05At that time I had more or less contracted the guys to come in.
0:47:05 > 0:47:10Considering he'd had so many regulations to get his head around, it's all credit to Joseph
0:47:10 > 0:47:16that he's achieved his new build in the relatively short period of 11 months. But at what cost?
0:47:16 > 0:47:22You'll recall he set a budget of £75,000 to a maximum of 100 grand.
0:47:22 > 0:47:28Towards the end, I'm expecting to spend between 110 and 115.
0:47:28 > 0:47:31£15,000 over his upper limit.
0:47:31 > 0:47:33So, why the overspend?
0:47:33 > 0:47:39The main reason for being over budget is I expected to get all my utilities from next door.
0:47:39 > 0:47:45But this did not happen and the company has asked me to get them from the street.
0:47:45 > 0:47:50This did incur an over budget of approximately £5,000.
0:47:50 > 0:47:56There's still money to be spent as Joseph's going to employ a kitchen fitter and carpet layer.
0:47:56 > 0:47:59But he plans to do the decorating himself and make it home.
0:47:59 > 0:48:02Me and my family, we are going to move in here.
0:48:02 > 0:48:07Where I'm living at the moment, I've got planning permission to redo the house.
0:48:07 > 0:48:11In this case, I need to move into somewhere and this is my place now.
0:48:11 > 0:48:14My wife will be going to college not far from here.
0:48:14 > 0:48:20It's an ideal situation, it's convenient for both of us.
0:48:22 > 0:48:26Let's see how two local estate agents value Joseph's new build.
0:48:29 > 0:48:32When I saw the plans, I thought the building plot was tight
0:48:32 > 0:48:34and the footprint of the new build was limited.
0:48:34 > 0:48:37But I must admit, I've been pleasantly surprised.
0:48:37 > 0:48:40I've come back and quite a lot of house for the money.
0:48:40 > 0:48:45First impressions are a really nice property tucked away in a nice position, being end of terrace.
0:48:45 > 0:48:49There are quite a few new builds going up around the town centre,
0:48:49 > 0:48:53so the finish and to what spec he does it to is very important.
0:48:53 > 0:48:57It is tight. The family moving in here might struggle to find storage
0:48:57 > 0:49:00space and get the all beds in the correct positioning.
0:49:00 > 0:49:04But ultimately it is three bedrooms and it's a brand-new house.
0:49:04 > 0:49:11In terms of saleability, I would find it easier to sell a two-bedroom double in this location,
0:49:11 > 0:49:14rather than having two smaller bedrooms and one double bedroom.
0:49:14 > 0:49:18Although Joseph and his wife plan to make this their home,
0:49:18 > 0:49:22long term he's still thinking about selling or even renting.
0:49:22 > 0:49:24But how much could the house now be worth?
0:49:24 > 0:49:28Remember, he paid £25,000 at the auction.
0:49:28 > 0:49:34His budget is heading towards £110,000-making a total of £135,000.
0:49:34 > 0:49:40A property like this would be popular because it's brand new and people can move straight in.
0:49:40 > 0:49:42I'd be looking to get about 160.
0:49:42 > 0:49:49In my opinion, in doing my current market research, having a look at what is on the market at the moment,
0:49:49 > 0:49:53I would estimate at putting it on the market at between 160 and 165.
0:49:53 > 0:49:58Personally I'm expecting a little bit more than that, bearing in mind
0:49:58 > 0:50:05that the garden is still big, the rooms are not that small. With three beds, it should be OK for 175.
0:50:05 > 0:50:10Joseph's in no immediate rush to sell. But what about his career?
0:50:10 > 0:50:15Don't forget, he'd taken a year off from teaching to see if property development could be his future.
0:50:15 > 0:50:19So, what has this science teacher learned?
0:50:19 > 0:50:22The heart says, do the building.
0:50:22 > 0:50:26But the head says, be realistic.
0:50:26 > 0:50:30If it's not working, then play safe,
0:50:30 > 0:50:33and that's being back in class.
0:50:37 > 0:50:43We're going back to the Derbyshire village of Codnor, where Ken paid £77,000 for this traditional pub,
0:50:43 > 0:50:48which, like so many others across the UK, had sadly closed.
0:50:53 > 0:50:56Six months later, we're back to check on progress.
0:50:57 > 0:51:01Outside, it's only the name that's changed.
0:51:01 > 0:51:04Inside, though, it's a different story.
0:51:04 > 0:51:08The tobacco yellow colour scheme has gone.
0:51:08 > 0:51:13It's been replaced by a rather less than atmospheric cream.
0:51:13 > 0:51:16Meanwhile, the optics behind the bar may remain empty,
0:51:16 > 0:51:20but work has started in the rear kitchen.
0:51:21 > 0:51:25Upstairs, the kitchen and the flat looks pretty much the same,
0:51:25 > 0:51:27though decoration has started in the living room and bedroom.
0:51:27 > 0:51:31I'm sure putting up all that coving has worked up a thirst!
0:51:34 > 0:51:38As you can see, I've had five real ale pumps installed.
0:51:38 > 0:51:41I've had the cellar altered to accommodate this.
0:51:41 > 0:51:46One half is the keg cellar and the other half is the real ale cellar.
0:51:47 > 0:51:51But there's one crucial thing missing - the beer.
0:51:51 > 0:51:55As a free house, Ken will be buying it from small micro-breweries.
0:51:55 > 0:51:59So, has he decided on his first five real ales yet?
0:51:59 > 0:52:04I've got two lined up. I've phoned up two suppliers and they'll be able to supply me.
0:52:04 > 0:52:08What about the customers who aren't real ale fans? What will they drink?
0:52:08 > 0:52:12I need a bit of advice, to be honest with you, on that -
0:52:12 > 0:52:14what best to put behind the bar,
0:52:14 > 0:52:17what people will specifically need to drink.
0:52:17 > 0:52:19What's the most common?
0:52:19 > 0:52:23Obviously wine, beer, soft drinks.
0:52:23 > 0:52:27- I could do with a little bit of help now.- Ken's wise to seek advice.
0:52:27 > 0:52:30Running a pub is quite a business
0:52:30 > 0:52:34and getting the right selection of drinks and atmosphere is crucial to entice customers.
0:52:34 > 0:52:40But outside, Ken and his wife are turning their attention to the beer garden.
0:52:41 > 0:52:47What we've had to do here is take all the slabs up and re-bed them,
0:52:47 > 0:52:49which, you know, saves us a lot of money, really.
0:52:49 > 0:52:53Then we put the two smoking areas up. The wife's put some flowers in
0:52:53 > 0:52:57to make it more pleasant for people out here.
0:52:57 > 0:53:00She's put hanging some baskets up. I'm quite happy with it now.
0:53:00 > 0:53:03I've just got to finish off the coping stones
0:53:03 > 0:53:08and get the barbecue going and we can have something to eat!
0:53:08 > 0:53:11And hopefully something to wash it down.
0:53:11 > 0:53:14Ken plans to employ a manager to run the place.
0:53:14 > 0:53:19Maybe his daughter, who is currently getting experience in a Nottingham pub.
0:53:21 > 0:53:25As for that first-floor flat, perhaps the pub manager could live upstairs.
0:53:25 > 0:53:28But what's he got in mind for the refurbishment?
0:53:28 > 0:53:32The plan upstairs is to completely renovate the flat.
0:53:32 > 0:53:36I've already started, we've took all the old old carpet out.
0:53:36 > 0:53:43We've been rubbing the windows down. I want to keep the sash windows, they very nice on the outside.
0:53:43 > 0:53:48The electrics have been done. The electrician's been in and put new sockets in.
0:53:48 > 0:53:52It'll look good. It'll be top-notch when it's done.
0:53:52 > 0:53:57Remember, Ken paid £77,000 for the property and so far down in the pub,
0:53:57 > 0:54:02the main change is the colour scheme. So, how much has he spent to date?
0:54:04 > 0:54:06I should imagine I've spent about £3,500.
0:54:06 > 0:54:09Probably got to spend another £1,000.
0:54:09 > 0:54:13There's not a lot now to spend. It's just manual work mainly that's got to be done.
0:54:15 > 0:54:19And how long before he pulls his first pint for a customer?
0:54:19 > 0:54:21Basically, I could open it up next week.
0:54:21 > 0:54:26It's ready to be opened. It just needs the beer putting down in the cellar.
0:54:26 > 0:54:28It's ready to go, really.
0:54:28 > 0:54:33Time to get the opinions of two local property experts,
0:54:33 > 0:54:36but we can't offer them a drink, unless they want a cuppa!
0:54:39 > 0:54:43Great sized bath, really good size outside, but it's the area. It's the spot it's in.
0:54:43 > 0:54:47It's unlikely to attract the type of market that will make it pay.
0:54:47 > 0:54:49Hence, it was closed in the first place.
0:54:49 > 0:54:53The truth is that if he was going to keep it as a real ale pub, he didn't
0:54:53 > 0:54:56have to do very much to it, apart from just freshen it up.
0:54:56 > 0:54:59It was left as if it had stopped trading the night before they locked the door.
0:54:59 > 0:55:04With so many pubs becoming empty, people do have a choice as buyers.
0:55:04 > 0:55:07There are pubs on every street corner that seem to be vacant.
0:55:07 > 0:55:10Here, the only other opportunity is really to start afresh.
0:55:10 > 0:55:13To knock it down or redevelop it into something different.
0:55:13 > 0:55:17That would be a very expensive option, and Ken would have to get
0:55:17 > 0:55:21expert advice on the financial viability of such a scheme.
0:55:21 > 0:55:26But what if he just wants to get income from the first-floor flat? How much could that produce?
0:55:26 > 0:55:28The flat on its own works well.
0:55:28 > 0:55:31It needs a bit of TLC, it needs money spent, but once it's done,
0:55:31 > 0:55:36per calendar month, it's likely to fetch between £350 and £400.
0:55:36 > 0:55:40Your flat upstairs is going to be pretty good quality accommodation.
0:55:40 > 0:55:44It'll attract good rent, probably around £450 per calendar month.
0:55:44 > 0:55:46Of course, Ken's ideal scenario is for a pub
0:55:46 > 0:55:51full of regulars quaffing real ale with a manager living up in the flat.
0:55:51 > 0:55:54So, how much would it then be worth?
0:55:55 > 0:55:59The key to getting the best price back for this is to set up a trade here.
0:55:59 > 0:56:04If you then sold as a going concern and you got a rental income from upstairs,
0:56:04 > 0:56:09you could probably sell it for around £100,000, assuming the market is no better than it is now.
0:56:09 > 0:56:12In terms of value, it's just been through an open market auction.
0:56:12 > 0:56:17It's reached 77,000. That's kind of where it will sit for the building.
0:56:17 > 0:56:20The future valuation will purely depend on the business return.
0:56:20 > 0:56:23When it's all done...when it's all done, when the flat's done
0:56:23 > 0:56:28and the kitchen's done, basically it'll be immaculate...
0:56:31 > 0:56:33..I think it would probably be worth 120.
0:56:33 > 0:56:36Well, that would certainly be worth a toast.
0:56:36 > 0:56:40But with the beer yet to flow, what are Ken's plans for the future?
0:56:40 > 0:56:46If this does start trading well and it's paying its way, I might even look at another one.
0:56:46 > 0:56:48As long as they're cheap!
0:56:50 > 0:56:54That's all we've got time for today, but we hope we've armed you
0:56:54 > 0:56:57with some facts and figures from the world of buying property at auction.
0:56:57 > 0:57:02- Join us next time for more Homes Under The Hammer. - We will see you then.- Goodbye.- Bye.
0:57:23 > 0:57:26Subtitles by Red Bee Media Ltd
0:57:26 > 0:57:29E-mail subtitling@bbc.co.uk