Episode 69 Homes Under the Hammer


Download Subtitles

SRT

ASS


Episode 69

Series about properties that have gone to auction. Martin and Lucy visit a semi in Telford with a strange layout, a difficult piece of land in Letchworth and a former pub in Derby.


Similar Content

Browse content similar to Episode 69. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Hello. you may have bought something at a charity auction, even a car.

0:00:020:00:05

Have you ever thought about buying a house that way?

0:00:050:00:08

Lots of people do. Some to make money,

0:00:080:00:10

others take on a ruin and turn it into their dream home.

0:00:100:00:14

Either way, there are some fantastic opportunities when you buy your home under the hammer.

0:00:140:00:19

Buying property can be a protracted and time-consuming experience.

0:00:440:00:49

But at least when you buy at auction when the hammer falls, the property is yours,

0:00:490:00:54

provided you have the money to buy it.

0:00:540:00:56

Sometimes that can be the least of your worries.

0:00:560:00:58

Auction property can need a lot of work doing to it.

0:00:580:01:01

There's a very odd layout in this Telford semi, all very puzzling.

0:01:010:01:07

You've got this crazy area here which I just do not know what's going on.

0:01:070:01:12

You'll need lots of money and patience to build on this land in Letchworth.

0:01:130:01:17

It's a time-consuming process and one potentially fraught with difficulties.

0:01:170:01:22

And in Derby, did this former pub hang around on auction day?

0:01:230:01:27

The guide price may be low but if it's a business that's losing money,

0:01:270:01:31

it's going to be a noose around your neck.

0:01:310:01:33

All these properties went to auction. We'll find out who bought them

0:01:350:01:39

and what they paid when they went under the hammer.

0:01:390:01:42

I'm in Dawley, a small town just outside Telford in Shropshire.

0:01:450:01:50

Although it looks like any other ordinary town up and down the country,

0:01:500:01:54

it was at one time the centre of the Industrial Revolution, due to rich coal deposits

0:01:540:02:00

and the local ironworks.

0:02:000:02:01

So appearances can be deceptive, which is also the case with this property.

0:02:020:02:08

It goes without saying that you should always read

0:02:080:02:11

the particulars in the auction catalogue very carefully.

0:02:110:02:14

In this case, this particular lot, it says, "It is our understanding

0:02:140:02:18

"that the property is considered to be non-standard construction..." # Dun-dun-dun-dah! #

0:02:180:02:23

"..and that potential purchasers make their own inquiries of the mortgage lenders

0:02:230:02:27

"as to whether the property is considered fit for mortgage purposes prior to making a bid at auction."

0:02:270:02:33

Take heed! That's the property that I'm here to see.

0:02:330:02:36

It is non-standard construction.

0:02:360:02:37

It's a specific type of non-standard construction called cross-wall construction -

0:02:370:02:42

brick walls with either wood or concrete beams stretching across between the two brick walls.

0:02:420:02:48

As non-standard constructions go, it's not a bad one.

0:02:480:02:51

So it wouldn't necessarily put me off, especially when you consider the guide price,

0:02:510:02:56

which is a cool £35,000.

0:02:560:03:00

Let me say from the start, non-standard doesn't mean wrong or bad. It just means different.

0:03:000:03:05

And in these parts, it's certainly not unusual.

0:03:050:03:10

At least 16% of the houses in this area are of non-standard construction.

0:03:100:03:15

So what have we got?

0:03:210:03:24

Well, that's a bit strange, for a start.

0:03:240:03:27

It's a strange room when you come in through the door.

0:03:270:03:30

It's not a living room. It's not part of the kitchen. It's not a utility.

0:03:300:03:34

It's just a space. Well, there's fun to be had with that, for sure.

0:03:340:03:38

That is, however, not so funny.

0:03:380:03:40

Nasty cracking going on both sides of this door frame.

0:03:400:03:44

Could just be constant use of the door has caused that but you'd want to check that out.

0:03:440:03:49

-The walls.

-HOLLOW BANGING

-That's a bit of a giveaway.

0:03:490:03:51

The walls, if you whack them, on an exterior wall, you'd expect that to be really solid.

0:03:510:03:56

That feels more like an internal wall, which backs up this idea of this unusual construction.

0:03:560:04:01

This room isn't bad.

0:04:010:04:03

We like this big sort of open-plan living area here, lounge.

0:04:030:04:08

Obviously the fireplace is a bit dated. We'd replace that.

0:04:080:04:11

I'd also think about putting French doors in there, out onto the garden.

0:04:110:04:14

Good space. Through to the kitchen.

0:04:140:04:16

Well, it's not bad. Fairly economy units but the biggest thing in here is just the complete waste of space.

0:04:160:04:23

You have a cupboard here with a boiler in it. That takes up so much room.

0:04:230:04:27

And then you have this crazy area here which. I just do not know what is going on.

0:04:270:04:33

You need to get rid of this wall, put the boiler somewhere else,

0:04:330:04:36

and take out this wall, for goodness' sake,

0:04:360:04:39

to make a really nice, family kind of living area/kitchen.

0:04:390:04:43

So there is a slightly odd layout and a fair amount of refreshing needed downstairs.

0:04:430:04:48

But it does have a good, airy feel.

0:04:480:04:51

Generally it's so far, so good.

0:04:510:04:55

So upstairs you have a boxroom at the front there and then two good-sized doubles.

0:04:550:05:00

You have a bathroom and separate loo.

0:05:000:05:03

The jury is out on whether or not you keep it as two or knock this wall out to make one.

0:05:030:05:07

For a family house, it's really nice to have a separate loo.

0:05:070:05:11

In general, it needs a bit of refurbishing.

0:05:110:05:14

It needs a new carpet, a paint job, but, all in all, it's not a bad little house, is it?

0:05:140:05:20

Remember it was guided at just £35,000 for a house with a decent-sized bathroom,

0:05:200:05:25

complete with shower, and three bedrooms, one of which is more of a single one.

0:05:250:05:30

The large master bedroom shows signs of damp and there's a perfectly adequate third bedroom.

0:05:360:05:42

There's also a slightly overgrown but good-sized family garden, complete with swing.

0:05:420:05:48

On the face of it, it seems good value, but how much

0:05:480:05:51

does its non-standard construction hold this property back?

0:05:510:05:56

What does a local estate agent think?

0:05:560:05:59

Good-sized family home. Does want some work doing to it.

0:05:590:06:02

Some tender loving care, really. The main points I'd probably say

0:06:020:06:06

are that because of the situation of the property, where it is situated,

0:06:060:06:13

there isn't actually any parking to the property,

0:06:130:06:16

which, as a resale point of view, could prove a problem to people.

0:06:160:06:21

If the property was actually fully modernised,

0:06:210:06:25

I feel the resell figure would be around £100,000.

0:06:250:06:29

With that non-standard construction, the resell price is always going to be limited

0:06:290:06:34

so is rental the best option?

0:06:340:06:36

The property would rent for around £500 to £525 per calendar month once renovated.

0:06:360:06:43

Well, a nice enough little house which had a very attractive guide price,

0:06:440:06:48

especially if you're looking to buy this and then rent it out.

0:06:480:06:52

It would be a rent machine, as we say.

0:06:520:06:54

Let's find out who fancied it when it went under the hammer.

0:06:540:06:57

Lot number 16 is 9 The Hollow,

0:07:000:07:03

off King Street, Dawley in Telford.

0:07:030:07:05

This is a three-bedroom semi-detached house. £30,000, can I say?

0:07:050:07:10

25, can I say, then? Lot number 16.

0:07:100:07:12

25,000, can I say? 25 I'm bid.

0:07:120:07:15

Thank you. Seated right at £25,000.

0:07:150:07:18

£30,000. Bid's left. 35?

0:07:180:07:21

35.

0:07:210:07:24

40? 40.

0:07:240:07:26

45? 45.

0:07:260:07:29

Take one if it helps, sir.

0:07:290:07:32

It does. £46,000. 47.

0:07:320:07:36

48, sir? Another one anywhere else?

0:07:360:07:39

At £47,000, for lot 16, then, are we all done?

0:07:390:07:45

At £48,000, new face.

0:07:450:07:48

49, 50, 51, 52, 53, 54,

0:07:480:07:55

55, 56.

0:07:550:07:58

At 56, 57,

0:07:580:08:01

58, 59, 60.

0:08:010:08:06

No? At £60,000, the bid is in the aisle.

0:08:080:08:11

At £60,000.

0:08:110:08:14

60,500, he's saying.

0:08:140:08:17

61, now, sir. 61.

0:08:170:08:21

And a half? 61 and a half.

0:08:210:08:23

62. Another half?

0:08:230:08:27

62 and a half.

0:08:270:08:28

63. Another half? 63 and a half.

0:08:280:08:34

Shaking his head. It's with you, sir, at £63,500.

0:08:340:08:38

First time at 63,500. Second time at 63,500.

0:08:380:08:44

Third and final time, are we all done? At £63,500.

0:08:440:08:50

It's your lot, sir. Well done.

0:08:500:08:52

So, for £63,500, nearly £30,000 over the guide price,

0:08:520:08:57

engaged couple Louisa and Chris bought

0:08:570:09:01

this non-standard construction, three-bedroomed semi in Dawley.

0:09:010:09:05

Chris currently works in commercial properties and Louisa used to be in human resources.

0:09:050:09:11

They hope this might be the start of a new venture for them

0:09:110:09:14

and also a chance to get their 15 minutes of fame.

0:09:140:09:17

-Louisa, Chris. Nice to meet you.

-And you.

-Congratulations.

0:09:220:09:26

Let's discuss what you paid - more than the guide price.

0:09:260:09:29

-They all did that night, yeah.

-That's why we pulled out on two or three of the others.

0:09:290:09:33

-Going too high.

-We went over so we could be on telly, basically.

-What?!

0:09:330:09:37

Yeah, we went three-and-a-half grand over-budget,

0:09:370:09:40

-just so we could get on TV.

-What, on Homes Under The Hammer?

-Yes.

0:09:400:09:43

'Crikey! I think they're sort of joking.

0:09:430:09:47

'But they were in fact after another two or three properties in the same auction,

0:09:470:09:52

'which all went way over their budget.

0:09:520:09:54

'So they went the extra mile on this one as they didn't want to come home empty-handed.

0:09:540:09:59

'After all, it's no good being a property developer without any properties.'

0:09:590:10:04

-Why did you want to buy this house?

-We wanted to do a project together.

0:10:060:10:10

Louisa was made redundant in January.

0:10:100:10:12

We thought this was a great opportunity, with the way the house prices are at the moment,

0:10:120:10:16

-to do something like that.

-Together and different.

-Why property?

0:10:160:10:21

It's something different for both of us but it's something we've been talking about for a while.

0:10:210:10:28

And given the way the house prices are at the moment, it's an ideal time to invest in bricks and mortar.

0:10:280:10:34

We're just looking to buy something to rent out as an investment for the future.

0:10:340:10:40

So this is, what, will become a substitute career for you?

0:10:400:10:44

Yeah, I think so. That's what we're hoping. We have about five that we're going to look at the next week,

0:10:440:10:49

so it's definitely something that we're going to continue to do.

0:10:490:10:53

We're going to be working on this full-time.

0:10:530:10:56

-How many would you like to have in your portfolio?

-As many as we can.

0:10:560:11:00

As many as we can afford, really.

0:11:000:11:03

We've got the cash sitting there at the moment so it's better off in property

0:11:030:11:07

than it is in the banks at the moment.

0:11:070:11:08

As they were cash buyers, they didn't need a mortgage,

0:11:080:11:11

so the non-standard construction of this house wasn't an issue for them.

0:11:110:11:15

Louisa's father is a surveyor. He checked it out and gave it the thumbs up.

0:11:150:11:19

So what's the plan for property number one?

0:11:190:11:22

As you walk in, there's a bit of a funny area there

0:11:240:11:28

and we're kind of thinking possibly knock down the wall from the kitchen to make it a big kitchen-dining area.

0:11:280:11:35

In here, just cosmetic,

0:11:350:11:38

take out the fireplace and change the paper, carpets, things like that.

0:11:380:11:43

Upstairs, I don't know whether you've seen the toilet is separate to the bathroom.

0:11:430:11:48

We're going to knock the wall down between the two and make that one.

0:11:480:11:52

But there's three good-sized rooms upstairs.

0:11:520:11:55

-I don't think there's a great deal of decor that needs doing to them, is there?

-No.

0:11:550:11:59

And then outside, just lots of tidying up.

0:11:590:12:02

-What's the budget for what you've got planned?

-Well...

-We're kind of guessing around £5,000.

0:12:020:12:09

-It's like the blind leading the blind. We're saying a ballpark figure of £5,000.

-That's right.

0:12:090:12:14

-It seems like a few things are a little up in the air.

-Yes, that's how we work, though. That's just us.

0:12:140:12:20

Just go with the flow.

0:12:200:12:22

-And I guess, as your first project, there are going to be a few steep learning curves?

-Yeah, we know that.

0:12:220:12:28

We're quite looking forward to learning from our mistakes, so we know for next time.

0:12:280:12:33

So we appreciate there's going to be hurdles we have to cross

0:12:330:12:37

and we're going to come across some problems and stuff but we're looking forward to it.

0:12:370:12:42

It's going to be a good challenge.

0:12:420:12:44

As the wedding is in a year's time and they're also embarking on this new career,

0:12:440:12:49

they really do have a challenging time ahead.

0:12:490:12:53

An interesting property for Louisa and Chris to take on as their first development project together.

0:12:530:12:58

I'm a bit concerned they paid a little bit too much for it and feel a bit responsible

0:12:580:13:03

but - hey ho! - I'm sure in the long run it'll turn out just fine.

0:13:030:13:06

They are going full steam ahead with their investments, though,

0:13:060:13:10

and maybe there needs to be an element of caution thrown in there.

0:13:100:13:13

You can find out how they get on later in the show.

0:13:130:13:16

For the next auction lot, I'm in Letchworth, Hertfordshire, founded in 1903 by Ebenezer Howard.

0:13:200:13:26

It was one of the first new towns to be built with a rural feel.

0:13:260:13:31

As a new garden city,

0:13:310:13:34

Letchworth was designed as a planned, self-contained community, surrounded by greenbelt.

0:13:340:13:40

The emphasis was on trees and open spaces everywhere.

0:13:400:13:44

In fact, only one tree was felled during the entire initial construction phase.

0:13:440:13:49

So it seems rather appropriate that I'm actually here in Letchworth today to see a garden.

0:13:490:13:54

But rather contrary to the town's founding principles,

0:13:540:13:58

this green space has planning permission to be built on.

0:13:580:14:03

In fact, plans have already been passed for a three-bedroom property to be built on the plot.

0:14:030:14:08

Access to the site is via a footpath and it's tucked away between two end-of-terrace houses.

0:14:080:14:14

So straightaway you can see access might be an issue and there's no parking with the plot.

0:14:140:14:20

Well, this is it.

0:14:200:14:23

First impressions, how on earth are you going to get a house on here?

0:14:230:14:27

It's really overgrown.

0:14:270:14:29

This fence line here divides the garden and it forms the boundary.

0:14:290:14:33

I know it's 0.047 acres and basically it's a flat, rectangular plot,

0:14:330:14:38

but it's really hard amongst all this undergrowth

0:14:380:14:41

to visualise a three-bedroomed house being built here.

0:14:410:14:45

So the first task would be to clear the site in order to get a good idea of what you've got.

0:14:470:14:53

One benefit of being so close to the other houses is that the access to the main services

0:14:530:14:59

like electricity and water should be pretty easy.

0:14:590:15:03

I've got the plans to this property so you can really visualise

0:15:030:15:06

the internal layout of it and it's quite interesting.

0:15:060:15:10

You've got the walkway through here.

0:15:100:15:12

Downstairs, there's a living/dining area,

0:15:120:15:14

a very small kitchen to the back and a toilet,

0:15:140:15:17

then you go up on to the first floor where you've got two bedrooms

0:15:170:15:22

and you've got a landing and a small bathroom in the middle.

0:15:220:15:26

And then, interestingly enough, they've made a bedroom out of the eaves.

0:15:260:15:30

So they've totally utilised every single bit of space in this house.

0:15:300:15:35

So the plot of land that went to auction guided at £25,000 might look small but it does seem sufficient.

0:15:350:15:42

It's got planning permission in place and the plans look OK.

0:15:420:15:46

So you might imagine it would be quite a straightforward build.

0:15:460:15:50

Oh, if only property developing was that simple.

0:15:500:15:52

The new-build here would be attached to the adjacent building, which is here.

0:15:520:15:57

This raises the issue of a party-wall agreement.

0:15:570:16:00

You may have heard of that.

0:16:000:16:02

So the new owner of the plot has to serve a written notice on the owners of the adjoining property

0:16:020:16:07

at least two months before work starts,

0:16:070:16:10

and then these guys here have to, in writing, give their consent or refusal.

0:16:100:16:15

And no work can begin until the neighbours have given the OK.

0:16:150:16:19

So it's a time-consuming process and one potentially fraught with difficulties.

0:16:190:16:24

At the moment, the neighbour's side door is in the wall

0:16:240:16:29

that would become the joint party wall between the two buildings.

0:16:290:16:32

So they could walk straight into your house. Not ideal.

0:16:320:16:35

The other problem is that the neighbouring house is currently empty

0:16:350:16:40

so finding the owner could prove tricky.

0:16:400:16:42

Also, it wouldn't be wise to make changes to the current plans.

0:16:420:16:45

Now, planning for his house was granted on appeal,

0:16:480:16:52

having initially been refused because of parking congestion in the area.

0:16:520:16:56

So it's probably best to be cautious about making any major changes to these,

0:16:560:17:01

because you don't want to go through planning again and risk rejection.

0:17:010:17:04

And of course, reapplying would mean more time, and time costs money in the property game.

0:17:040:17:10

It's got planning permission

0:17:100:17:12

but would it be financially worthwhile to build here?

0:17:120:17:15

I asked a local estate agent

0:17:150:17:18

to have a look at this plot of land that had a guide price of £25,000.

0:17:180:17:23

The frontage is very tight. You can't really see the new house

0:17:230:17:27

that's going to be built, unless you're on the path,

0:17:270:17:30

so a lot of potential buyers will drive past

0:17:300:17:33

and not really see the house for what it is.

0:17:330:17:35

When the house is built, what's the best plan, bearing in mind the current market conditions?

0:17:350:17:41

Should they hold on to it, let it out or sell?

0:17:410:17:43

If the house is built, it would be brand new.

0:17:430:17:46

By putting somebody into rent it, it'll then become second-hand, which may impact on the resale.

0:17:460:17:53

So depending on market conditions, it would be very tempting

0:17:530:17:57

just to clear the site and sell it off as a building plot.

0:17:570:18:00

If you opted for building, what would a three-bedroom house around here be worth?

0:18:000:18:05

Resale value for this property, once it's completed,

0:18:050:18:08

depending on specification, would be £175,000 to £180,000.

0:18:080:18:13

So if you did manage to get this near the guide price of 25,000, and kept build costs to about £100,000,

0:18:130:18:20

potentially, there's a £75,000 gross profit here.

0:18:200:18:25

The biggest selling point for this plot of land is that it already had planning permission,

0:18:250:18:30

albeit only for a very small three-bedroomed house.

0:18:300:18:34

The party wall agreement, I think, may cause some problems and delays.

0:18:340:18:38

But with a guide price of just 25,000, it was bound to cause some interest in the auction room.

0:18:380:18:44

Let's find out who made that winning bid.

0:18:440:18:47

158. Lot 160, which is a site, 25-27 Caslan Way,

0:18:470:18:54

freehold site with planning permission for a three-bed house.

0:18:540:18:58

Anybody start me at 15?

0:18:580:19:00

15 in the back? 16?

0:19:000:19:03

15 I have. 16 behind. 17?

0:19:030:19:06

17, 18? 18, 19? 19 I'm bid, then.

0:19:060:19:10

20, can I say? 20, 21? 21, 22, 23?

0:19:100:19:14

23 from you? 23, 24? 24, 25? 25, 26?

0:19:140:19:19

Either of you? 25, sitting down on my left.

0:19:190:19:22

Your bid at the moment, sir.

0:19:220:19:25

First time 25...

0:19:250:19:27

Second time 25. Any more?

0:19:270:19:30

Sold at 25.

0:19:300:19:33

That short but sweet bidding battle ended with the winning bid of 25,000 being made by Joseph.

0:19:330:19:40

So he now owns a garden plot in the garden city of Letchworth.

0:19:400:19:44

I met up with him there to hear about his plans.

0:19:440:19:48

-Joseph, congratulations.

-Thank you.

0:19:490:19:51

£25,000 spent on a plot of land.

0:19:510:19:54

-Yes.

-What do you know about the plot?

0:19:540:19:57

All I know about the plot is that it's got good potential.

0:19:570:20:01

It's got a full planning application, so in this case I think it's something worth going for.

0:20:010:20:08

Why did you want to buy this plot of land?

0:20:080:20:10

I intend to take a career break from my standard teaching work for about one year

0:20:100:20:15

and I need to do something to keep myself busy for a year.

0:20:150:20:22

-Have you ever built a house before?

-Yes, I have built a house before.

0:20:220:20:27

I built one for my parents back at home in Kenya.

0:20:270:20:30

In this case, building is nothing new to me, but as you know, you've a got different type

0:20:300:20:37

of building standards but, more or less, it's bricks and mortar.

0:20:370:20:42

What job have you been doing whilst you've been here in the UK?

0:20:420:20:45

I've been teaching high school,

0:20:450:20:48

comprehensive school, year 11 - 18.

0:20:480:20:52

-What subject?

-Science, specialising in all three sciences - physics, chemistry and biology.

0:20:520:20:59

It's going to be quite a challenge for you,

0:20:590:21:01

or quite a different type of job, teaching to building a house.

0:21:010:21:05

Yes, because I'm used to giving instructions to pupils, but now it will be to builders.

0:21:050:21:11

-I don't know how that will relate.

-What about teaching? Has that gone by the wayside?

0:21:110:21:15

It hasn't gone by the wayside, I've dropped it down to a day-and-a-half per week.

0:21:150:21:21

-Are you going to be physically involved in the build?

-Yes, I will.

0:21:210:21:24

In this case, around three or four days a week, I'll be here on a full-time basis.

0:21:240:21:29

Joseph wants to stick to the plans which have been passed, but because the house he hopes to build

0:21:310:21:36

will be attached to the neighbouring property,

0:21:360:21:40

he still has some issues to sort out, crucially that party wall agreement.

0:21:400:21:44

The interesting thing about the plans that we have for this plot is that there's going to be

0:21:440:21:50

a party wall agreement because the neighbour's door opens up into your land.

0:21:500:21:53

Yes, and also his gas supply is straight into my lounge.

0:21:530:21:59

In this case, I'll definitely need to have one end.

0:21:590:22:02

Also, for the insurance, they can't give me insurance without...the Party Wall Act.

0:22:020:22:08

You need permission from your neighbours. Have you had a chance to ask them?

0:22:080:22:13

As you can see, the place hasn't been occupied for the last three years.

0:22:130:22:19

I'm made to understand that the new place is having a new owner, and the completion was last week.

0:22:190:22:27

So I've written to the person, but he hasn't come back to me yet.

0:22:270:22:33

That's quite a worry for you, because you need to get everything in place,

0:22:330:22:37

-but you can't do any of this until you have permission from your neighbours.

-Yes, that's true.

0:22:370:22:42

So that is worrying.

0:22:420:22:44

It's quite worrying at the moment, but I'm asking my solicitor to try and chase people around.

0:22:440:22:50

Let's talk about the money. You paid £25,000 at auction.

0:22:500:22:53

-Yes.

-How much is it going to cost you to build this three-bedroomed house?

0:22:530:22:57

I'm budgeting in a range of 75,000 to 100,000 for the house.

0:22:570:23:03

So in that case...that's my budget. So long as it doesn't pass the 100,000, I'll be happy.

0:23:030:23:09

What do you think the end value of the property will be?

0:23:090:23:12

Between 140 to 150, I'd be happy with that.

0:23:120:23:18

Joseph has got a lot of work to do to make a gross profit of 25,000,

0:23:210:23:25

but he reckons he can do it... all in four to five months.

0:23:250:23:29

WHY are you building this house?

0:23:290:23:31

The reason is that, if it works out nicely, I'd like it to be my full-time career.

0:23:310:23:37

That's why I'm 50-50 - do I stick with education or do I move onto the building industry?

0:23:370:23:45

Do you think there's any chance you might want to live in this property once you've finished it?

0:23:450:23:50

The chances are around 15 to 20%.

0:23:500:23:52

If I like the place, I may come and move in.

0:23:520:23:56

If I really get good money, I may dispose of it straight away.

0:23:560:24:02

-English weather and all, let's hope the sun shines for you.

-Thank you.

-Good luck. Well done.

0:24:020:24:07

From science teacher to site manager, Joseph is definitely up for a challenge.

0:24:070:24:13

I've got a few concerns about Joseph's plans.

0:24:140:24:17

There's that party wall agreement with the absentee neighbour,

0:24:170:24:20

and I think his four- to five-month timescale seems a little ambitious,

0:24:200:24:25

especially for his first project in England.

0:24:250:24:28

And all this work for only £25,000 profit.

0:24:280:24:32

He's got to build a whole house.

0:24:320:24:34

Let's see how he tackles these challenges later on in the programme.

0:24:340:24:39

Coming up - with a flat upstairs, this Derby pub must have a sporting chance.

0:24:400:24:45

You could move in here, or at least come for a drink tomorrow.

0:24:450:24:49

Back in Letchworth, Joseph has made a discovery.

0:24:510:24:56

I did not know how long certain things are going to take.

0:24:560:25:00

But first, we return to our novice property developers in Telford.

0:25:010:25:05

-We're really pleased with it, the way it's turned out.

-Yes.

0:25:050:25:10

Back in the 18th century, the Shropshire town of Dawley

0:25:140:25:18

was at the heart of the Industrial Revolution.

0:25:180:25:20

Now, in the 21st century, engaged couple Louisa and Chris were undergoing their own revolution.

0:25:200:25:26

They hoped to wave goodbye to their former careers in commercial property and human resources

0:25:260:25:32

to become full-time property developers.

0:25:320:25:34

Their first step was the purchase of a non-standard construction 1960s three-bedroomed semi for £63,500.

0:25:340:25:42

Three months later, had their first property venture gone to plan?

0:25:420:25:47

There are encouraging signs on the outside.

0:25:480:25:52

Someone has been busy with the lawn mower.

0:25:520:25:54

Inside, it's definitely looking more modern with new carpets, decoration,

0:25:560:26:01

a contemporary gas fire, and the kitchen has been spruced up a little.

0:26:010:26:06

But what happened with those layout changes?

0:26:060:26:09

As you can see, we've pretty much kept the kitchen the same.

0:26:090:26:12

We were going to knock this wall down here, but decided against it

0:26:120:26:17

because it was going to cost too much and wasn't really going to be effective enough.

0:26:170:26:23

The electrics are in there, so it was going to be more expense and hassle to change round as well.

0:26:230:26:30

Also, we've got the radiator on this wall,

0:26:300:26:33

and on this side of the wall in the kitchen, we'd have lost the space of two cabinets,

0:26:330:26:38

so it just wouldn't have been practical.

0:26:380:26:41

We decided to keep this as a dining area.

0:26:410:26:43

In some ways I think it's a shame, but this is a rental property

0:26:430:26:48

so keeping costs down is the name of the game.

0:26:480:26:51

Have they been more radical upstairs?

0:26:510:26:55

The bedrooms have been freshened up and look ready to rent out.

0:26:570:27:01

What about that separate toilet and bathroom arrangement?

0:27:070:27:10

One of the initial first ideas with the bathroom was to knock the wall down

0:27:100:27:15

and make it into one big bathroom,

0:27:150:27:19

but we talked to some builders and, with the cost, it was going to be pointless.

0:27:190:27:25

We weren't going to get any extra rent for it.

0:27:250:27:28

Again, it was like the kitchen wall downstairs - it was spending money for the sake of it.

0:27:280:27:33

So they pulled back from their original plans and have opted for a makeover instead.

0:27:330:27:38

This was supposed to be the first of many houses in their property portfolio,

0:27:380:27:43

so how have they found the process so far?

0:27:430:27:45

It started off fine, but once we'd done the big room, this took quite a while to do,

0:27:450:27:52

I think once you start the initial thing, you just want to see the end product then.

0:27:520:27:58

I'm a bit impatient and I just wanted to see it like it is now.

0:27:580:28:01

I left Chris to do some of the hard work.

0:28:010:28:04

-Some of it, yeah(!)

-90%!

0:28:040:28:07

So, perhaps it hasn't gone quite as they hoped,

0:28:070:28:10

and this new business venture and partnership seems lopsided.

0:28:100:28:13

So has less input from Louisa and more from Chris altered their costs?

0:28:130:28:18

I've got a little bit of an idea.

0:28:180:28:20

I think it's pushing 7,000, which is...

0:28:200:28:23

-You're joking?!

-No.

-I didn't know that.

0:28:230:28:28

-..which is what we said initially.

-No, we said five.

-5,000 to 6,000.

0:28:280:28:33

But some things went wrong and we needed a bit of extra plastering doing and...

0:28:330:28:38

-But now she knows.

-I didn't know that.

0:28:400:28:43

That surprise budget of £7,000 now pushes their total spend

0:28:430:28:47

to over £71,000,

0:28:470:28:51

as they bought the house for £63,500 plus costs.

0:28:510:28:55

Although their plan is to rent it, does their property come up to the mark?

0:28:550:28:59

What do two local estate agents think?

0:28:590:29:01

First impressions - it's quite good. It's very neutral, clean, tidy.

0:29:050:29:09

So from a rental or selling point of view, it should be fine.

0:29:090:29:13

My first impressions are it's clean and tidy, the gardens have been done,

0:29:130:29:17

it's well presented,

0:29:170:29:19

which is all good for the property.

0:29:190:29:21

The finish could be better, perhaps a bit more care and attention to detail would have paid off in the end.

0:29:210:29:27

But if they're just looking for a quick turnaround, it's adequate.

0:29:270:29:31

The one thing that is missing is parking, and that could be a major concern.

0:29:310:29:36

So, with the non-standard construction and lack of parking,

0:29:360:29:40

what kind of current resale value would the experts put on the couple's £71,000 investment?

0:29:400:29:46

From the resale point of view, they will be looking at pretty much at what they paid for it.

0:29:480:29:53

Around the 60 mark. If they can get their money back, it would be good,

0:29:530:29:57

but they may well have to look at a small hit on the price.

0:29:570:30:00

There's a limited value to what we could get for this type of construction.

0:30:000:30:06

We've recently sold a property for 55,000. That had parking.

0:30:060:30:10

Therefore, I don't think we could ask any more than 55,000.

0:30:100:30:14

Oh, dear. So present values aren't great.

0:30:140:30:18

They could be looking at a 15 to £20,000 loss.

0:30:180:30:22

What do they make of those valuations?

0:30:220:30:24

-I'm shocked at that.

-A bit disappointed.

0:30:240:30:27

We were told a different figure the first time round.

0:30:270:30:30

A bit disappointed with that.

0:30:300:30:32

-Not really, because we're not selling it.

-No, we're not selling it,

0:30:320:30:36

but I was expecting a bit more.

0:30:360:30:38

Let's hope there's better news on the rental front.

0:30:380:30:41

At the moment, I'd probably ask around 525 per calendar month,

0:30:430:30:47

probably achieving about £500 per calendar month.

0:30:470:30:50

This would make the price of about £525 per calendar month.

0:30:500:30:55

-Yeah, that's what we expected.

-Yeah, that's good.

0:30:550:31:00

-If we can get 500, that's great.

-Yeah.

0:31:000:31:02

OK, this might not work on the resale market,

0:31:020:31:05

but £500 a month, or £6,000 a year, should see them clean up nicely on the rental market.

0:31:050:31:12

That represents a return of around 8%, much better than leaving their money in a bank.

0:31:120:31:17

But their plans to become full-time property developers are now on hold.

0:31:170:31:22

I miss not being in an office, if I'm honest. I really do.

0:31:220:31:25

And I'm quite bored just... I miss having people around me.

0:31:250:31:29

So, it's back to the Office for Louisa, but what about Chris?

0:31:300:31:34

I've just signed up on a course to be a driving instructor,

0:31:380:31:42

so it's a very big career change.

0:31:420:31:46

Driving instructor, eh?

0:31:460:31:49

That IS a big change of direction.

0:31:490:31:51

But Chris and Louisa haven't given up on their dreams.

0:31:510:31:54

They've learnt a lot here and have already bought their second property,

0:31:540:31:59

so their portfolio IS expanding.

0:31:590:32:01

I'm in the old Derbyshire mining village of Codnor, about 12 miles outside Derby itself.

0:32:050:32:11

I'm not here to see a traditional two-bedroomed terrace for a change.

0:32:110:32:14

I'm here to see something much more interesting - the Sportsman pub.

0:32:140:32:19

A few years ago, this was sold for £220,000,

0:32:190:32:22

but when it went to auction just recently, it had a guide price of 58,000.

0:32:220:32:28

It sounds as if it has a sporting chance of being a very interesting lot.

0:32:280:32:33

Both coal and ironstone have been mined in the area for hundreds of years,

0:32:330:32:37

and the village grew up around that. But today,

0:32:370:32:41

there are no miners' thirsts to quench, so what does the Sportsman inn have to offer now?

0:32:410:32:47

Whoa! That is incredible! It doesn't smell, I'm not sticking to the carpet,

0:32:470:32:54

it looks pretty much like it was closed up last night.

0:32:540:32:59

Reasonable furniture, it looks like that has recently been redone.

0:32:590:33:03

The bar has even got glasses on it.

0:33:030:33:06

It's a bit spooky in some ways.

0:33:060:33:08

A good-sized space. It's dark and dingy, but that's partly because of the colour scheme.

0:33:080:33:12

All in all, you could move in here or come here for a drink tomorrow.

0:33:120:33:16

It's all rather ghostly. You half expect to see the staff appear behind the bar to take your order.

0:33:160:33:23

But what we've got here is a big pub with a central serving point and pumps on each side.

0:33:230:33:28

You could easily imagine the noise and atmosphere on a busy Friday night.

0:33:280:33:33

Apart from alcohol, something else every pub needs is loos.

0:33:330:33:37

They're at the back of the property, along with a small area that could optimistically be called a kitchen.

0:33:370:33:43

Realistically, it's more like a cleaning area. Outside at the back,

0:33:430:33:47

there's a really decent-sized beer garden and there's even a long-alley skittle pitch,

0:33:470:33:53

a traditional game that requires quite a bit of skill.

0:33:530:33:56

Down the alley at the side, there's a door leading upstairs.

0:33:560:34:00

The real useful addition to this property is the fact that above the pub, you've got this flat.

0:34:000:34:05

Again, it's in pretty good condition. You could almost move into it like it is.

0:34:050:34:10

There you've got a loo and a shower, there's a small room there. Kitchen?

0:34:100:34:15

It's tiny, but at least it's in serviceable condition.

0:34:150:34:18

Living room there and through to the main bedroom.

0:34:180:34:21

The reality is, this will probably be used by the person who owns and operates the pub.

0:34:210:34:26

On the other hand, you could let it out,

0:34:260:34:28

but most people would have an issue about living above a pub.

0:34:280:34:31

Either way, for the guide price, it's real nice to have.

0:34:310:34:36

It seems a bit of a bargain considering that guide price of £58,000 for the flat AND the pub.

0:34:360:34:42

Two-bedroomed flats around here normally go for around 50,000 just for the flat.

0:34:420:34:48

So, OK, you fancy having a go at running this pub.

0:34:510:34:53

There are a few things you're going to have to think about before you take it on.

0:34:530:34:57

First of all, there's licensing regulations to consider.

0:34:570:35:01

Then you need to think about, why did this place close in the first place?

0:35:010:35:05

If it was such a profitable venture. It didn't work for somebody.

0:35:050:35:08

These are without doubt very tough economic times.

0:35:080:35:13

I mean, the statistics when it comes to pubs are quite scary.

0:35:130:35:16

2,000 pubs closed last year, that's almost 40 a week.

0:35:160:35:21

So, before you take this on, you've got to do your research on the local area...

0:35:210:35:25

you know, what is required around here?

0:35:250:35:27

Is it really worth taking it on?

0:35:270:35:29

And then consider it very carefully, because the guide price may be low,

0:35:290:35:33

but if it's a business that's losing money, it's going to be a noose around your neck.

0:35:330:35:37

It's a sobering thought, and a quick drive around the village

0:35:420:35:45

reveals there are no fewer than five other pubs.

0:35:450:35:48

I reckon that any prospective publican is going to need

0:35:480:35:52

a strategy and a lot of bottle.

0:35:520:35:53

So, with all that in mind,

0:35:530:35:55

I asked the auctioneer who sold it what he thinks.

0:35:550:35:58

We had a lot of people looking at it, but that was probably

0:36:010:36:05

more because of the guide price, which on paper seemed very enticing.

0:36:050:36:10

It's a lot of property for £58,000 plus.

0:36:100:36:13

Most people, I think, were looking at it

0:36:130:36:16

from a point of view of converting it to residential accommodation,

0:36:160:36:19

which I suppose it has some potential for.

0:36:190:36:23

Clearly, to continue to run it as a pub is very much an unknown quantity.

0:36:230:36:29

If you convert it fully to residential, assuming you've planning consent,

0:36:290:36:33

you're really into enormous cost.

0:36:330:36:35

But as upstairs is already a flat, what about converting the pub into a second flat?

0:36:350:36:40

Then, what would the chance be of selling both?

0:36:400:36:44

I think if you converted it into two flats, you'd probably retain it as an investment property.

0:36:440:36:49

Prospect for selling each flat, leasehold, in this location,

0:36:490:36:55

has to be very, very limited indeed.

0:36:550:36:57

So I think you're looking at it really from an investment point of view.

0:36:570:37:01

I would say each would have a rental value of probably around £475 to £500 a calendar month.

0:37:010:37:07

And what would the potential value be if the existing flat was refurbished and the pub reopened?

0:37:070:37:14

My thoughts would be that if this was an operating pub,

0:37:140:37:17

with a reasonable amount of trade,

0:37:170:37:20

together with the flat above,

0:37:200:37:22

I suppose it could be worth over £100,000.

0:37:220:37:25

But it will depend on the level of business.

0:37:250:37:28

So, is this pub a great opportunity or the dregs of the barrel?

0:37:280:37:33

Well, pubs like this are part of our British heritage.

0:37:340:37:39

And taking them on as a business, that's an appealing thing

0:37:390:37:42

but really it is a challenge which is not for the faint-hearted.

0:37:420:37:46

You're going to have to pull those punters in.

0:37:460:37:49

The question is, did this brew up a storm at the auction? Let's find out.

0:37:490:37:53

Lot number 19 is the Sportsman inn, Jessop Street in Codnor.

0:37:530:37:57

A freehold, double-fronted former public house,

0:37:570:38:00

with a two-bedroomed gas centrally heated flat above.

0:38:000:38:03

Where do you want to be on this, ladies and gentlemen? Start me where you like. 60,000? 55?

0:38:030:38:09

55 I have, thank you.

0:38:090:38:11

At 55,000. At £60,000.

0:38:110:38:13

At £60,000. Pub with a two-bedroomed flat at £60,000. 61 quickly?

0:38:130:38:18

61, thank you, I have. 61. 62 now.

0:38:180:38:22

63, sir? 63. At 63,000.

0:38:220:38:25

64. 64 is bid.

0:38:250:38:29

65. At 65,000.

0:38:290:38:31

66 is bid.

0:38:310:38:33

At £66,000...

0:38:330:38:34

67, 68. 68 is bid.

0:38:340:38:37

At 68, nine, 69.

0:38:370:38:40

70, may I say 70,000? At 70, 71?

0:38:400:38:45

71? 71.

0:38:450:38:47

72? 72.

0:38:470:38:49

72. I have taken the lady's bid.

0:38:490:38:51

73 in that corner. 73, 74?

0:38:510:38:56

74? 74, thank you.

0:38:560:38:58

At 75.

0:38:580:39:00

75, bid again? 76?

0:39:000:39:02

76.

0:39:020:39:04

76, wave your hand again at me, sir.

0:39:040:39:07

Walks away at 76,000 once...

0:39:070:39:09

77. 77.

0:39:090:39:11

78? Another thousand could buy it.

0:39:110:39:14

£77,000 once...

0:39:140:39:17

77,000 twice.

0:39:170:39:19

Third opportunity, any higher bid?

0:39:190:39:22

We're selling at £77,000.

0:39:220:39:25

Sold at the back at 77. 277.

0:39:250:39:26

And that last order bid of 77,000 for the Sportsman Inn was made by Ken.

0:39:260:39:32

Originally from Nottingham, he's lived in Derby for three years.

0:39:320:39:36

He's brought numerous properties over the last 25 years,

0:39:360:39:39

many residential, but also some commercial and workshops.

0:39:390:39:43

This is his first ever pub.

0:39:430:39:45

I met up with him at the bar to find out his plans. Ken, congratulations.

0:39:450:39:50

-Thank you.

-Good to meet you. You've got yourself a pub!

0:39:500:39:53

-Mmm!

-Why did you want to buy it?

0:39:530:39:55

Well, I've always been interested in pubs, you know, basically on this side of the bar, not the other.

0:39:550:40:00

But I did fancy opening a pub years ago, but erm...

0:40:000:40:04

I just like the idea. If I see something, I go for it.

0:40:040:40:09

And this appealed to me, especially at the price it went for.

0:40:090:40:13

Why not? Try something different, life's short.

0:40:130:40:15

Great attitude! Have you got any experience of running a pub?

0:40:150:40:18

I have worked in a pub, no, I've not run a pub before, no.

0:40:180:40:21

I've only worked behind the bar,

0:40:210:40:24

but I do hope to get somebody experienced in who will occupy the flat upstairs.

0:40:240:40:30

And then run it.

0:40:300:40:31

But I will be here on a day-to-day basis, but I won't be living here.

0:40:310:40:35

The reason is simple - Ken has a farm to run plus five flats

0:40:350:40:39

and a couple of commercial properties to manage.

0:40:390:40:42

He's a busy chap! I hope he did some research into the pub

0:40:420:40:45

before be brought it at the auction, because, with our changing habits,

0:40:450:40:49

this watering hole, like so many others,

0:40:490:40:51

may have struggled to find regular customers.

0:40:510:40:55

# For the times

0:40:550:40:58

# They are a-changing... #

0:40:580:41:00

So the pub has had its problems in the past, but you're hoping to create a new future for it.

0:41:000:41:06

-Yeah.

-How are you going to do it?

0:41:060:41:07

I think people want a traditional pub.

0:41:070:41:10

A real ale pub where they can come and have a decent drink and conversation. That's what I like.

0:41:100:41:15

And the pubs I go to are all doing well, and good beer!

0:41:150:41:19

-It's got to be good beer.

-Are you a beer fan?

0:41:190:41:22

-I am. I belong to CAMRA.

-The Campaign for Real Ale.

-Yeah.

-Fantastic!

0:41:220:41:25

If the beer's not good, then I won't go again. It's as simple as that.

0:41:250:41:29

Tell me what you're going to do with the internal layout because,

0:41:290:41:33

theoretically, you could open it tomorrow.

0:41:330:41:35

-Yeah, yeah.

-But are you going to do something inside?

0:41:350:41:38

I am, yeah, I'm going to brighten it up a bit.

0:41:380:41:41

The ceiling, the walls.

0:41:410:41:43

You know, I think these colours have been put in

0:41:430:41:47

because of smokers.

0:41:470:41:49

But now, I don't think you've got to worry about that any more.

0:41:490:41:52

So I think you can brighten it up a little bit.

0:41:520:41:54

How much have you set aside for doing the restoration works?

0:41:540:41:58

I don't think there's a lot to spend on this place.

0:41:580:42:01

I think there's more to spend up in the flat. Right.

0:42:010:42:04

It probably needs a new boiler up there.

0:42:040:42:07

New central heating boiler, combi.

0:42:070:42:10

The toilet and the sink wants replacing, bit of tiling.

0:42:100:42:13

It needs re-carpeting and it wants decorating.

0:42:130:42:16

The Artex wants taking off the walls.

0:42:160:42:18

How much are you planning to spend down here and how much on the flat?

0:42:180:42:22

I've not really thought of it, to be honest with you.

0:42:220:42:26

I just thought, probably about £4,000 at the most, altogether.

0:42:260:42:29

All in all, what do you feel about what you paid for it?

0:42:290:42:32

Oh, yeah, I think it's a good price I paid for it, you know.

0:42:320:42:36

It went for £220,000, I think it was October 2006. I can't fully understand why it went so cheap.

0:42:360:42:42

I can't. There might be some reason, I don't know!

0:42:420:42:45

Maybe I'll find that out later, but...

0:42:450:42:48

If it don't work out, I can always put it back into auction.

0:42:480:42:51

# For the times

0:42:510:42:53

# They are a-changing... #

0:42:530:42:56

Reversing the fortunes of a place like this would be a challenge for anybody, but for somebody

0:42:560:43:01

with no experience, like Ken, well, those challenges are intensified.

0:43:010:43:06

But will his secret weapon, real ale, come to the rescue?

0:43:060:43:09

You can find out later in the show.

0:43:090:43:11

So months have gone by and we have high hopes of our purchasers.

0:43:140:43:18

Did they do what they intended?

0:43:180:43:20

-Or have there been unforeseen problems?

-Let's find out.

0:43:200:43:24

Spotting an opportunity is often the key to property developing and that

0:43:240:43:28

is exactly what Joseph hoped he'd done in Letchworth, Hertfordshire.

0:43:280:43:32

Originally from Kenya, he's a science teacher

0:43:320:43:35

and he paid £25,000 for this piece of land

0:43:350:43:38

with planning permission to build a new semi-detached house.

0:43:380:43:43

Access wasn't going to be easy as it was tucked away between two corner properties.

0:43:440:43:50

But 11 months later, the house is built.

0:43:500:43:53

And the large plot of land at the back now just needs to be cleared.

0:43:560:44:00

Inside, the three-bedroomed semi is plastered and the second fit has gone in.

0:44:030:44:09

So, this squeezed-in house is just waiting for a paint brush and some carpets.

0:44:090:44:13

You may remember the party wall issue that needed resolving

0:44:130:44:17

as this new house is attached to the neighbouring property.

0:44:170:44:21

Unfortunately, that one had been sold, so did tracking down the new owner cause delays?

0:44:210:44:27

Yes, it did slow me down because I couldn't start working on the wall

0:44:270:44:34

before speaking to the owners and agreeing on what we really need to do.

0:44:340:44:39

Bearing in mind that his gas was coming from my plot,

0:44:390:44:44

we needed to move that out first before we could start.

0:44:440:44:47

As we've seen many times, when it comes to rerouting

0:44:470:44:50

any of the utilities, you need to allow quite a bit of time.

0:44:500:44:54

But it was the highways department that gave Joseph the real problem.

0:44:540:44:58

I spoke to the people who are responsible for the land around here.

0:44:580:45:03

I asked them if I could drive through,

0:45:030:45:06

bringing the materials on to the site.

0:45:060:45:10

They categorically refused.

0:45:100:45:12

I asked them if I could put a skip on the verge

0:45:120:45:16

and they said as long as it is not there for more than two weeks.

0:45:160:45:19

So, in this case, they were not helpful either way.

0:45:190:45:22

In order to get the building materials on site, Joseph hired a forklift truck.

0:45:220:45:28

But it was a slow process. To speed things up,

0:45:280:45:31

he decided to get well and truly stuck in.

0:45:310:45:33

I physically carried about 20 tons of material.

0:45:340:45:39

So that was tough!

0:45:390:45:41

Blimey, I hope the builders helped!

0:45:420:45:45

So, Joseph had paid £25,000 at the auction for the plot of land with planning permission.

0:45:450:45:50

But then he discovered that squeezing in the three bedrooms

0:45:500:45:53

meant some of the room heights didn't meet the regulations.

0:45:530:45:57

This is the room that really caused us a lot of trouble.

0:45:570:46:00

Because when we went in the detail planning, we couldn't attain the head room and so in this case,

0:46:000:46:07

we had to lower the floor, redesign the stairwell, and in this case it all cost money and time.

0:46:070:46:13

Joseph had taken a year off from his teaching job for this very ambitious project.

0:46:130:46:18

Yes, he'd built a house before in his native Kenya,

0:46:180:46:22

but with the weather here in the UK, this house needed another approach.

0:46:220:46:27

Totally different in that the sense that in Kenya,

0:46:270:46:30

it is a single skin.

0:46:300:46:33

The design is geared towards cooling the house,

0:46:330:46:36

unlike here where the design is geared towards keeping it warm.

0:46:360:46:41

Also, British bureaucracy came as another big surprise for Joseph.

0:46:420:46:47

I did not know how long certain things are going to take.

0:46:470:46:52

For example, when I took the drawings for our building rates.

0:46:530:46:59

I didn't know they were going to take eight weeks.

0:46:590:47:01

At that time I had more or less contracted the guys to come in.

0:47:010:47:05

Considering he'd had so many regulations to get his head around, it's all credit to Joseph

0:47:050:47:10

that he's achieved his new build in the relatively short period of 11 months. But at what cost?

0:47:100:47:16

You'll recall he set a budget of £75,000 to a maximum of 100 grand.

0:47:160:47:22

Towards the end, I'm expecting to spend between 110 and 115.

0:47:220:47:28

£15,000 over his upper limit.

0:47:280:47:31

So, why the overspend?

0:47:310:47:33

The main reason for being over budget is I expected to get all my utilities from next door.

0:47:330:47:39

But this did not happen and the company has asked me to get them from the street.

0:47:390:47:45

This did incur an over budget of approximately £5,000.

0:47:450:47:50

There's still money to be spent as Joseph's going to employ a kitchen fitter and carpet layer.

0:47:500:47:56

But he plans to do the decorating himself and make it home.

0:47:560:47:59

Me and my family, we are going to move in here.

0:47:590:48:02

Where I'm living at the moment, I've got planning permission to redo the house.

0:48:020:48:07

In this case, I need to move into somewhere and this is my place now.

0:48:070:48:11

My wife will be going to college not far from here.

0:48:110:48:14

It's an ideal situation, it's convenient for both of us.

0:48:140:48:20

Let's see how two local estate agents value Joseph's new build.

0:48:220:48:26

When I saw the plans, I thought the building plot was tight

0:48:290:48:32

and the footprint of the new build was limited.

0:48:320:48:34

But I must admit, I've been pleasantly surprised.

0:48:340:48:37

I've come back and quite a lot of house for the money.

0:48:370:48:40

First impressions are a really nice property tucked away in a nice position, being end of terrace.

0:48:400:48:45

There are quite a few new builds going up around the town centre,

0:48:450:48:49

so the finish and to what spec he does it to is very important.

0:48:490:48:53

It is tight. The family moving in here might struggle to find storage

0:48:530:48:57

space and get the all beds in the correct positioning.

0:48:570:49:00

But ultimately it is three bedrooms and it's a brand-new house.

0:49:000:49:04

In terms of saleability, I would find it easier to sell a two-bedroom double in this location,

0:49:040:49:11

rather than having two smaller bedrooms and one double bedroom.

0:49:110:49:14

Although Joseph and his wife plan to make this their home,

0:49:140:49:18

long term he's still thinking about selling or even renting.

0:49:180:49:22

But how much could the house now be worth?

0:49:220:49:24

Remember, he paid £25,000 at the auction.

0:49:240:49:28

His budget is heading towards £110,000-making a total of £135,000.

0:49:280:49:34

A property like this would be popular because it's brand new and people can move straight in.

0:49:340:49:40

I'd be looking to get about 160.

0:49:400:49:42

In my opinion, in doing my current market research, having a look at what is on the market at the moment,

0:49:420:49:49

I would estimate at putting it on the market at between 160 and 165.

0:49:490:49:53

Personally I'm expecting a little bit more than that, bearing in mind

0:49:530:49:58

that the garden is still big, the rooms are not that small. With three beds, it should be OK for 175.

0:49:580:50:05

Joseph's in no immediate rush to sell. But what about his career?

0:50:050:50:10

Don't forget, he'd taken a year off from teaching to see if property development could be his future.

0:50:100:50:15

So, what has this science teacher learned?

0:50:150:50:19

The heart says, do the building.

0:50:190:50:22

But the head says, be realistic.

0:50:220:50:26

If it's not working, then play safe,

0:50:260:50:30

and that's being back in class.

0:50:300:50:33

We're going back to the Derbyshire village of Codnor, where Ken paid £77,000 for this traditional pub,

0:50:370:50:43

which, like so many others across the UK, had sadly closed.

0:50:430:50:48

Six months later, we're back to check on progress.

0:50:530:50:56

Outside, it's only the name that's changed.

0:50:570:51:01

Inside, though, it's a different story.

0:51:010:51:04

The tobacco yellow colour scheme has gone.

0:51:040:51:08

It's been replaced by a rather less than atmospheric cream.

0:51:080:51:13

Meanwhile, the optics behind the bar may remain empty,

0:51:130:51:16

but work has started in the rear kitchen.

0:51:160:51:20

Upstairs, the kitchen and the flat looks pretty much the same,

0:51:210:51:25

though decoration has started in the living room and bedroom.

0:51:250:51:27

I'm sure putting up all that coving has worked up a thirst!

0:51:270:51:31

As you can see, I've had five real ale pumps installed.

0:51:340:51:38

I've had the cellar altered to accommodate this.

0:51:380:51:41

One half is the keg cellar and the other half is the real ale cellar.

0:51:410:51:46

But there's one crucial thing missing - the beer.

0:51:470:51:51

As a free house, Ken will be buying it from small micro-breweries.

0:51:510:51:55

So, has he decided on his first five real ales yet?

0:51:550:51:59

I've got two lined up. I've phoned up two suppliers and they'll be able to supply me.

0:51:590:52:04

What about the customers who aren't real ale fans? What will they drink?

0:52:040:52:08

I need a bit of advice, to be honest with you, on that -

0:52:080:52:12

what best to put behind the bar,

0:52:120:52:14

what people will specifically need to drink.

0:52:140:52:17

What's the most common?

0:52:170:52:19

Obviously wine, beer, soft drinks.

0:52:190:52:23

-I could do with a little bit of help now.

-Ken's wise to seek advice.

0:52:230:52:27

Running a pub is quite a business

0:52:270:52:30

and getting the right selection of drinks and atmosphere is crucial to entice customers.

0:52:300:52:34

But outside, Ken and his wife are turning their attention to the beer garden.

0:52:340:52:40

What we've had to do here is take all the slabs up and re-bed them,

0:52:410:52:47

which, you know, saves us a lot of money, really.

0:52:470:52:49

Then we put the two smoking areas up. The wife's put some flowers in

0:52:490:52:53

to make it more pleasant for people out here.

0:52:530:52:57

She's put hanging some baskets up. I'm quite happy with it now.

0:52:570:53:00

I've just got to finish off the coping stones

0:53:000:53:03

and get the barbecue going and we can have something to eat!

0:53:030:53:08

And hopefully something to wash it down.

0:53:080:53:11

Ken plans to employ a manager to run the place.

0:53:110:53:14

Maybe his daughter, who is currently getting experience in a Nottingham pub.

0:53:140:53:19

As for that first-floor flat, perhaps the pub manager could live upstairs.

0:53:210:53:25

But what's he got in mind for the refurbishment?

0:53:250:53:28

The plan upstairs is to completely renovate the flat.

0:53:280:53:32

I've already started, we've took all the old old carpet out.

0:53:320:53:36

We've been rubbing the windows down. I want to keep the sash windows, they very nice on the outside.

0:53:360:53:43

The electrics have been done. The electrician's been in and put new sockets in.

0:53:430:53:48

It'll look good. It'll be top-notch when it's done.

0:53:480:53:52

Remember, Ken paid £77,000 for the property and so far down in the pub,

0:53:520:53:57

the main change is the colour scheme. So, how much has he spent to date?

0:53:570:54:02

I should imagine I've spent about £3,500.

0:54:040:54:06

Probably got to spend another £1,000.

0:54:060:54:09

There's not a lot now to spend. It's just manual work mainly that's got to be done.

0:54:090:54:13

And how long before he pulls his first pint for a customer?

0:54:150:54:19

Basically, I could open it up next week.

0:54:190:54:21

It's ready to be opened. It just needs the beer putting down in the cellar.

0:54:210:54:26

It's ready to go, really.

0:54:260:54:28

Time to get the opinions of two local property experts,

0:54:280:54:33

but we can't offer them a drink, unless they want a cuppa!

0:54:330:54:36

Great sized bath, really good size outside, but it's the area. It's the spot it's in.

0:54:390:54:43

It's unlikely to attract the type of market that will make it pay.

0:54:430:54:47

Hence, it was closed in the first place.

0:54:470:54:49

The truth is that if he was going to keep it as a real ale pub, he didn't

0:54:490:54:53

have to do very much to it, apart from just freshen it up.

0:54:530:54:56

It was left as if it had stopped trading the night before they locked the door.

0:54:560:54:59

With so many pubs becoming empty, people do have a choice as buyers.

0:54:590:55:04

There are pubs on every street corner that seem to be vacant.

0:55:040:55:07

Here, the only other opportunity is really to start afresh.

0:55:070:55:10

To knock it down or redevelop it into something different.

0:55:100:55:13

That would be a very expensive option, and Ken would have to get

0:55:130:55:17

expert advice on the financial viability of such a scheme.

0:55:170:55:21

But what if he just wants to get income from the first-floor flat? How much could that produce?

0:55:210:55:26

The flat on its own works well.

0:55:260:55:28

It needs a bit of TLC, it needs money spent, but once it's done,

0:55:280:55:31

per calendar month, it's likely to fetch between £350 and £400.

0:55:310:55:36

Your flat upstairs is going to be pretty good quality accommodation.

0:55:360:55:40

It'll attract good rent, probably around £450 per calendar month.

0:55:400:55:44

Of course, Ken's ideal scenario is for a pub

0:55:440:55:46

full of regulars quaffing real ale with a manager living up in the flat.

0:55:460:55:51

So, how much would it then be worth?

0:55:510:55:54

The key to getting the best price back for this is to set up a trade here.

0:55:550:55:59

If you then sold as a going concern and you got a rental income from upstairs,

0:55:590:56:04

you could probably sell it for around £100,000, assuming the market is no better than it is now.

0:56:040:56:09

In terms of value, it's just been through an open market auction.

0:56:090:56:12

It's reached 77,000. That's kind of where it will sit for the building.

0:56:120:56:17

The future valuation will purely depend on the business return.

0:56:170:56:20

When it's all done...when it's all done, when the flat's done

0:56:200:56:23

and the kitchen's done, basically it'll be immaculate...

0:56:230:56:28

..I think it would probably be worth 120.

0:56:310:56:33

Well, that would certainly be worth a toast.

0:56:330:56:36

But with the beer yet to flow, what are Ken's plans for the future?

0:56:360:56:40

If this does start trading well and it's paying its way, I might even look at another one.

0:56:400:56:46

As long as they're cheap!

0:56:460:56:48

That's all we've got time for today, but we hope we've armed you

0:56:500:56:54

with some facts and figures from the world of buying property at auction.

0:56:540:56:57

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

-We will see you then.

-Goodbye.

-Bye.

0:56:570:57:02

Subtitles by Red Bee Media Ltd

0:57:230:57:26

E-mail [email protected]

0:57:260:57:29

Martin Roberts and Lucy Alexander visit a semi in Telford with a strange layout, a difficult piece of land in Letchworth and a former pub in Derby.

All of these properties went to auction, and Martin and Lucy find out who bought them and what they paid when they went under the hammer.