Episode 74 Homes Under the Hammer

The financial climate may have changed beyond all recognition,

but people are still buying property at auction

and there are still bargains to be had.

Yes, you may be in search of your dream home or an investment

for your pension pot for your future years.

Either way, there are things that will suit you perfectly

when you buy your home under the hammer.

You do need to know what you're doing when you buy at auction and there are lots of pitfalls.

You could well find yourself a little gem that's a great place to live and can even make you money.

So did today's buyers strike gold or did their dreams turn to dust?

Coming up, in Preston, is this two bedroom below a cash machine?

Strange hole in the wall.

In Chatham the property that's a true Hammer Horror.

Now this is like a house from a film set! I can't believe it!

And a three bed house in South Wales

where the problems aren't always visible.

You could have a very, very nasty shock coming.

All these properties have been sold at auction

and we'll find out who bought them and what they paid for them

when they went under the hammer.

Well, today I'm in Preston.

The place has certainly been ringing the changes since it was awarded city status in 2002.

It's also home to one of the longest continuous rows of old fashioned telephone boxes in the country.

# You can ring my bell

# Ring my bell. #

All eight of them, which line up neatly in Market Street.

The house I'm off to see the lies two miles from Preston.

It's interesting to note that when the planners came to name

the streets they had a theme in mind,

lakes in the Lake District.

There's Windermere, Buttermere, Grasmere

and some others further afield.

Finally, Coniston Road and whilst I can't give you breathtaking

scenery what I can bring you is a very reasonably priced bungalow.

It was guided at between 65,000 and 70,000.

A close look at the exterior gives you a good idea

why it had such a low price for the area.

Run down and worn out, everything about it cries out for attention.

So does the interior match the tired exterior?

Well, on first glance, yes.

Oh, dear. More than just tired, that's quite serious.

That looks a bit like subsidence,

but odd that it's on an internal wall. And look at this.

The floor is actually, well, it's like bowing.

It's like... Oh, that's odd. Anyway, bathroom there.

Obviously clearly in need of total refurbishment.

You've got a living there, bedroom there and second bedroom here.

I've kind of been mulling it over

to try and figure out what's going on and I think I've got the answer.

The clues are on the floor of one of the bedrooms here.

If you look what's happened

the concrete floor here has actually buckled.

I think what's happened is that there's an infill

underneath the concrete floor,

using all sorts of rubbish from local mines, whatever.

That's reacted with the concrete and it's pushing the concrete up.

Now that in turn is affecting the walls, so it's not subsidence,

it's something a bit more complicated, but let me explain.

Here we have the bungalow. Here's the roof.

It's actually independently

supported on the edge by the exterior walls of brick.

Inside the property you've got the internal walls, here.

Underneath the whole of the property is a concrete slab,

but underneath the actual internal walls

they've put an extra bit to add support.

What's happened is the bits in between here and here,

this rubbish I'm talking about, it's actually reacted with

the concrete causing the bubbling and causing

these walls here to crack at the top. That's the problem.

The answer is to dig out all the floors, I'm afraid.

No pun intended, but that could prove a real undertaking.

If the material was used in this room chances are that it can be

found throughout the house and the only way to solve that problem...

# Rip it up and start again

# Rip it up and start again. #

The rest of the house

carries on in the same vein and badly needs attention.

Cracks in every wall,

decay everywhere and the decor seems to be from another era.

But where you really feel like you're going back in time

is when you come into the kitchen.

Look at this fridge.

Absolutely fantastic!

Authentic 1950s gas powered, I think.

Have you ever seen anything like this before?

Absolutely perfect. Whatever happens that must not be just thrown away.

The kitchen itself is small, problems with the floor,

and this is a room that definitely needs sorting out.

Obviously all the units want to go.

Wait a minute, what's that?

A kind of strange hole in the wall.

How perfect, it's a milk hatch!

I can't see this lasting long because, as charming as it is,

I'm afraid that nowadays this milk hatch is a bit of a security issue.

While we're out here the garden is of a good size

and does offer a garage, so there are some positives to this place,

but the negatives are all inside. It's easy to see why it had that

pretty reasonable guide price of between 65,000 and 70,000.

I asked a local estate agent what he thought of this cracking bungalow.

The property definitely needs a lot of work.

It's in need of a complete refurbishment throughout,

from top to bottom, and there's quite a lot of work to undertake

over quite a period of time, I would imagine.

The positives with the property are that

it's in a good residential area, it has good facilities nearby,

including shops and schools.

It also has good access to the city centre and the motorway.

Let's talk figures. How much could someone make here?

When renovated, I think the property could come on to the market

at a figure in the region of £125,000.

The rental per calendar month for this property would be in the region

of about £500 to £525 per month.

This house may well be stuck in a time warp,

but it's going to take more than

a "jump to the left" and a "step to the right" to sort it out.

Let's see who fancied taking on the challenge at the auction.

Lot 129 is 160 Coniston Road in Ford.

Can we get going at 40? 40 anywhere. 40 I've got.

45,000 I'm looking for, then.

Further on my left 45 I've got. 50,000?

50 I've got. 55. And I've got it.

60,000, then. I've got it.

65. 65,000 in the room I've got.

70,000 at the back. 75,000, then. 80,000 I've got?

85,000 then, sir.

Two. 82,000. 84,000.

86. 85 I'll take. 86, then.

87.

It's with you then, sir, at the back at 86,000, far left hand side.

Any more bids? That's 86,000.

I'm going to sell it at 86,000. Where are we pointing?

New bidder on my right, so 87,000 right at the far back.

We've got 88 there.

89,000. Looking for 90,000.

90,000 we've got. 91?

91 we've got. 92. It's back with you then, sir, at 91,000.

Are we all done at 91,000?

For the first time, then.

Second time. At 91,000 for the third and final time, then.

Sold to you, sir. Paddle number 474.

The buyer of the lot was local man, Anthony.

He got the bungalow for £91,000, £21,000 over the guide price.

I met him at the property to find out what his plans were.

-Anthony, very good to meet you.

-Nice to meet you.

-An interesting property?

-It's got its points.

Which points stood out for you?

Quaintness. The fact that it's aged.

The fridge, for want of a better word!

You'd almost like to leave it as an example of 1950s design.

You can tell it's aged, but there's no ageless character, is there?

-Correct. Apart from the kitchen.

-Apart from the kitchen.

-We might leave it exactly as it is, I don't know yet!

-You think so?

-No!

Well, there's one early victim of Anthony's renovation plans,

but I reckon the bungalow's in good hands as he runs a roofing business,

so the scale of the renovation needed here shouldn't faze him.

We do do properties up occasionally and with the modern day climate

a couple of lads are a bit quiet so rather than pay them to do nothing

I'll pay them to do this up and hopefully make a couple of shillings.

-Is this the kind of thing you've done before?

-A few times, yes.

Me and the missus, we've quite a few properties on rent so

it's a retirement thing, but I never seem to retire.

I'll retire when I'm 40 and I'm nearly 50, and I said I'm going

to retire when I'm 50, but I might get to 60 or 70 yet.

You obviously enjoy it because otherwise you wouldn't do it.

I do. When you get into them they're quite good, enjoyable, different.

-Few arguments with the missus over them.

-Arguments?

I wouldn't say we've come to blows, but we've had heated arguments

in the past over properties and what they should be left like

and what we're going to do and the setup and all that thing.

I seem to get my way eventually, but after a few arguments.

And sometimes she gets her way, as well.

With a portfolio of 14 properties under their belts,

it sounds like Anthony and his wife have the right chemistry

to build up their pension pot.

Anthony has spent some time in the army,

so should be qualified to get this place into fighting shape.

He plans to create a bigger kitchen by stealing space from the bathroom.

That will become a shower/wet room while the living room

and bedrooms will stay as they are.

That leaves the big battle with the floors.

This age of property they're probably on a thick piece of concrete

underneath the floor or the floor in one slab

and it's reacted and lifted and going then it's probably that.

That is why the walls have dropped because the roof is independently

supported and effectively the roof's not dipped.

The outside walls haven't dipped, just the inside,

which damn near crying out that that is the reason why,

but until you get the floor up you don't know for sure.

Anthony seems very relaxed about the potential problems

this floor could present.

If it all goes according to plan he thinks the renovation

will cost no more than £20,000

and that he'll have it turned round in two to three months.

I was keen to know what the future was for that retro fridge.

We're going to put it on eBay and see what we can get for it.

Because you couldn't buy one if you wanted one, effectively.

There's probably some film or drama company who's trying

to recreate a 1950s house that would go, wow, that is just perfect!

It probably is. You never know. There's always someone who wants it.

The art is matching the people who want it with the people who's got it.

Absolutely. And the milk hatch?

I'm afraid it's not long to live.

It's a real shame, but I bet in its day it was quite a thing, was it?

It was, apparently, I was talking to the old ladies next door,

It was an optional extra, an optional extra when they built the house.

Not all the houses in the row have them,

only the ones who wished to have them, you see?

I think it's going to go. It's on its last days, unfortunately.

# No milk today

# It wasn't always so. #

It looks like this milk hatch has finally exceeded its expiry date.

It's no wonder the condition of the bungalow

leaves a sour taste in the mouth

because, as Anthony discovered from the neighbours,

it's been empty for 46 years.

What do they think about the place being sorted out?

They're happy, because it is a little bit of an eyesore,

so they're happy that eventually, although they're going to have to

go through a bit of muck and rubbish before it's finished,

but that it's going to be sorted out, look a bit neater and brought back

into use because it's wasted as it is, isn't it?

Good luck with it. I hope you don't have too many arguments

with the wife over things, but do let us know how it all goes.

I'll try not to, but we'll see, we'll see.

Well, after a long wait

it looks like the bungalow is going to get a much needed makeover.

Sadly, the old milk hatch is going,

but the fridge will end up somewhere, probably in a museum.

Anthony's got his work cut out,

but I'm sure he's got the skills to make it happen,

but how's he going to get on in the arguments with his wife?

You can find out later in the show.

The next property is in Kent.

It's between the historic Medway towns of Chatham and Gillingham

on the busy Capstone Road. I'm keen to see if this is

going to be an ugly duckling or more of an elegant swan.

Now, the first thing I notice walking up to this house is the noise and the traffic.

You're just off the extremely busy A2 and I feel like I'm in

the middle of a roundabout because there's cars just whizzing past me!

Do you know what? It's not even rush hour at the moment.

It's not making a great first impression.

I've got my fingers crossed that Hopewell House,

with a guide price of £280,000 to £300,000 will make a better one.

Oh, my goodness!

Maybe not!

From the road it's obvious that this house really is in a terrible state.

The auction catalogue has an ominous warning,

"use extreme caution when viewing", so I'm going to do just that.

Now this is like a house from a film set.

I can't believe it, it's hilarious!

Talk about letting the daylight flood in!

There's no roof, no floors, nothing. If you look closely,

you can see signs that it may once have been a handsome home,

but all there is now is burnt timbers and rubble everywhere.

It's quite sad to see a house just destroyed in such a way,

but as a developer I've made my decision.

This isn't a renovation project, it's a demolition job.

# I'm going down, down, down, down

# I'm going down, down, down, down. #

It must have been quite a fire to destroy a house this size.

Restoring a building like this would definitely

burn a hole in your pocket.

Unfortunately, it could be the sort of project that would bring little

or no return on your investment, but it's not all doom and gloom.

Round the back, it's quite clear the opportunities

don't lie with the house itself.

It's the fact that this site is being sold

with planning permission to raze the existing house to the ground

and build a terrace of five three bedroom properties.

Now, that has got you listening, hasn't it?

With this fantastic quarter of an acre plot I'm much more hopeful about Hopewell House.

The garden may be overgrown and neglected, but it's easy to see

that it's great size does offer real potential for that new development.

Even if it could be rescued, it's highly unlikely anyone

would pay top dollar for a grand detached house on such a busy road.

So developing those five homes could prove the best way forward.

The plans show there's plenty of additional space

that could be used for a sixth home.

The big drawback is that in the currently troubled property market

investing in new builds can be a risky business.

With the lot guided at £280,000 to £300,000

it's time to ask a local estate agent

what she thinks of the site and its potential.

The plans that have been passed could be better developed.

There's an awful lot of space round the houses that is wasted.

In this current market I believe

it would be far better to build flats rather than houses,

especially retirement as people

are coming down into smaller units.

And also I think if the properties do stick

then rental is far better on flats than it is on the house market.

So let's talk figures.

What's the possible return here?

I believe, in the current market, for the three bedroom townhouses

we should be able to achieve somewhere in the region

of £200,000 and possibly a little more for the end ones.

That could make this five house development worth over £1 million.

What could the rental figures be?

I would have thought that we would

be looking at around 800 to 850 per calendar month.

With the plans all ready to go,

it's not hope value we've got here, but real potential profit.

This site isn't without its difficulties and the road will

always be an issue, but I think it's a good opportunity.

Let's see who got fired up at the auction.

Lot 103 now, which is Hopewell House at Capstone Road in Chatham.

Where are you going to start me, 270?

270? I'm on the way at the back. I think that's 260.

£260,000 I'm bid. 260.

At 265.

265. I'm obliged. 265. And 70.

And 70. And 75. And 75. And 80.

280. At £275,000 I'm bid and 280 I'm looking for.

Are we all done at £275,000?

278 I think that is at the back.

280 now, it's against you. 80 is with you. And two. 282. 282.

On my right hand side for the first time at £280,000.

For the second time at £280,000.

One more time. 282, just in time.

You can't give up there. 284. Michael, you've come all this way!

284? 284.

£282,000. It's with you gentlemen at £282,000 for the first time.

For the second time at 282.

At 282 for the third and final time.

The hammer's up. Yours, sir, at 282,000. Well done.

That successful bid of 282,000

was made by business partners Paul and, well, Paul.

Let's hope it doesn't get too confusing!

They've been friends for years and have dabbled in renovating

and selling small properties together.

Their plan is to redevelop this site

and it is by far their biggest project to date.

I met up with them to find out more. Guys, congratulations.

You must be so pleased that you bought this at auction.

We think we've done a good deal for this one, looking forward to it.

So why have you decided to buy Hopewell House?

I've been in the area for quite some years now and the place

has always been here in the state that it's in for at least 10 years,

so to see it come up on the auction was an opportunity not to be missed.

You paid £282,000 for this.

-How much more would you have paid on the day?

-We did go with a figure

and we turned round and said the max we'd pay is 350.

Do you enjoy buying in the auction process manner?

-I could do that for a living.

-Really?

-Yeah.

-Why?

-I think it's brilliant.

There is a fair bit of adrenaline that's there at the time and also

do you actually manage to get the product that you're going for

-at the end of the day?

-Ah, the thrill of the chase.

And, for the boys, what a great result on the price.

It comes with planning permission, which could

be tailor-made for this Paul. He's currently a planning manager,

but more importantly he has project managed building developments.

The other Paul runs a high tech manufacturing business

for the crash repair industry.

They both live locally, so know some of the background of this old house.

The guy that owned it, who was an old guy,

renovated it and shortly after there was a fault of some description

and it burned down. In between that the squatters came in.

-So it just wasn't meant to be?

-No.

It's quite sad. When do you plan getting the big bulldozer in?

-Another couple of weeks, I suppose.

-It's going to be quite sad.

Yes. As you can see, it can't be rebuilt

so it's not as if we're just taking something away.

It's going to make the area look better, so in one sense it's sad

but in another sense it's going to move on and move up.

The guys are right, of course. They'll have to put sentiment aside

and think about the potential profit when developing this site.

It came with planning permission for five three bedroom houses,

but we're looking to probably change that and try

and get more smaller units on rather than three bedroom houses.

I've got to say, it's a really big site for five houses.

-It seems as though you could easily fit a few more on.

-It is, yeah.

It is. There was planning permission for six, but that was revised

with the five, so we're still trying to understand why.

It wasn't refused at six, so it might be a case of just having another

look back at it and say we're going to put in something else,

whether it be flats or retirement homes or it could be even

-possibly an old people's home.

-At this early stage in the project

I think it's a good idea to be flexible.

I do have reservations about building a large number of units

aimed at first time buyers in these difficult times.

But the boys do seem to have a relaxed attitude to what they've taken on.

How many business meetings a week do you guys have?

-We've had two so far.

-Yeah. One in the pub and one in Spain.

One before the auction I think, wasn't it?

-We had two before the auction.

-Yeah. That's about it.

We thought, right, it's a risk, but normally the ones you

think of less and just have a stab in the dark are the ones

that turn out for the best, so that's what we're going to hope.

It sounds a bit too laid back for me.

The two Pauls plan to develop the site in nine months

and have calculated a budget of £500,000.

If they project manage the work themselves

that could bring the cost down to 400,000,

but for big build novices such as them that 100,000 saving

could easily disappear if major problems arise.

The project could drag beyond that schedule

and the most important rule of developing is that time is money.

I think time is up for Hopewell House,

but Paul and Paul have got a great future in this exciting project,

but will it be flats, houses or even a nursing home?

Find out later on in the programme.

Still to come, in Mid Glamorgan

a three bedroom house that gets my seal of approval.

All in all,

yeah, not a bad start.

How often did the two Pauls

check on the progress of their first big development in Kent?

Not very often. Every couple of weeks or so.

But first, in Preston,

did Anthony manage to drag this 1950s bungalow

out of its time warp?

Oh, yeah, we went back in time

when we saw this two bedroom bungalow in Ford, near Preston.

It had an interior which hadn't changed since the 1950s.

Empty for 46 years,

it was riddled with cracks and had a serious floor problem.

It was a project that would frighten off most first time developers,

so enter local roofer, Anthony, who bought it for £91,000.

He's already renovated 14 properties as part of his pension plan

and seemed just the man to take this on.

It's been three months and the outside has had a good clean.

There's new double glazing and new guttering so so far, so good.

When you go inside the living room has had a great transformation,

but look behind you.

There's now a great open plan kitchen area

replacing that old, tired bathroom and kitchen.

Well, we've obviously completely revamped it, so to speak.

All walls down, all floors up, flooring, rewire, replastered,

new kitchen, everything, effectively, just everything really.

It had to be done, simple as that.

For Anthony the most pressing problem

was to remedy that ailing floor.

Well, this was the worst floor in the old house,

although we did all the floors and basically we just had to take

the old floor out, all the walls out, all the floors away,

dig it down until we got rid of all the ash and everything

then we decided, because we had to dig so much out

because of the big lumps of concrete underneath,

that we'd timber floor it and add a suspension to keep the heat in,

we could insulate it better. We just joisted out

to a central support wall, put the actual floorboards on top.

When we were finishing we thought before we put the skirtings on

we'd have a nice laminate floor all the way through the building

and then put the skirting boards on top so it looks integral,

part of the dirty deed, so to speak.

But once we've dug it all out and paid for the grab bags

and put the floor in here I worked it out it just cost me

just a touch less than a grand and I was very, very happy because

-I expected a lot more than that.

-That's incredible!

£1,000 to renew the whole floor!

But with those original internal walls removed it also gave Anthony

the chance to redesign the layout of the bungalow.

The two bedrooms have been put back in their original positions,

but the old hallway is now a modern stylish shower toilet area.

With the internal layout altered so much,

that has obviously meant things have also changed externally.

We've had to do a bit of work on this side. This is where

the milk hatch was and this is where the window was,

but both of them had to go, unfortunately,

The bricks here have come from inside, from the the internal walls,

so they should match in a few years time once they're weathered in.

This is where the original bathroom window was

and here's where the original front door was.

We've re-jigging inside so we had to re-jig outside a little bit.

Overall I'm pretty pleased, I think we've got it roughly spot on.

And I agree, though having the main entrance now opening

into the kitchen may not be everyone's cup of tea,

but at least it does create more space for the rest of the property.

Back outside that great makeover continues with a new patio,

French doors and double glazing. The roof's also had a good clean up.

And the garden and garage have been tidied

with gravel laid to hide the concrete drive.

It's almost as if it's a new bungalow,

but not all the fixtures and fittings went into the skip.

The fridge is still sat in the house, waiting to go to a good home.

I don't know if it works, but I'm not going to throw it out.

I'm going to either sell it on

or keep it as a bit of nostalgia or something like that.

One person who'll be glad to say goodbye to the old bungalow

is neighbour Joan, who's lived next door to this empty property

-for around 20 years.

-Not very nice.

It was a bit rough and it had been broken into.

We are all enjoying this now. Everybody in the road is enjoying it

because they all look after their properties, don't they?

A couple of new fantastic neighbours. Couldn't wish for better.

They put up with all the muck, noise dust, everything.

If you wanted a brew you just knock on the door

and they'll bring you one. Really good neighbours.

He's been very nice, yeah. They've been great, I have to say.

They've kept it tidy whilst they've been doing it.

Anthony did 90% of the renovation work and it took five weeks over

a three month period to turn this bungalow into a decent property.

He was called away on to other jobs which slowed his progress,

so did that also affect his 20 grand budget?

It was a lot cheaper than we thought, I officially thought about 20 grand.

I've just done me sums recently. Materials and a bit of labour

that I had to pay for has only cost me 12 and a half grand.

I think everything took less and was quicker than anticipated.

The first time I've been caught out that way,

it's usually other way where it's dearer!

It's good to see the figures going in Anthony's direction.

He bought the bungalow for £91,000,

so that budget of 12,500 will take his total spend to 103,500.

Time to ask two local estate agents what they think of this property's leap into the present.

I think the transformation is absolutely fantastic.

The bungalow originally was in very poor condition,

very dated and it's been transformed now into

a very contemporary modern bungalow that would suit all sorts of buyers.

The bungalow's been renovated to a really good standard,

really nice finish. Very contemporary, clean.

I like the fact that it's very contemporary, very plain.

Even though it's a bungalow it is still very modern.

The wooden floors are a really nice finish.

I think the most important and the best change is taking away

what was a very small enclosed kitchen and bring it into

the living area which not only increases the space

but the flexibility of the accommodation.

Remember, this bungalow is part of Anthony's pension plans,

-so what could he expect in rental?

-I would value the property

of a rental income of £550 per calendar month.

The rental income that I'd recommend for this property

would be about 550 to 575 a month.

I think that's about right, It's in line with what we've

already rented it out at, so I think we're right spot on-ish!

His total spend on the property was 103,500,

so how much could he achieve if he decided to sell?

Recommendation for resale value of the property

would be £135,000 to £140,000.

If I was to put this property on the market for sale

I would recommend an asking price of £140,000.

That's a little bit... Touch more than I'd anticipated, really.

Not much, but a little bit more than anticipated, so I'm happy with that.

I'm not surprised. That's a potential pre-tax profit

of 36,500 which must surely turn Anthony's focus away from rental.

It's part of my pension plan, so I can't see me selling it,

but never say never. You never know.

Our next property is in the former mining village of Llanharan in South Wales.

It's near Cardiff and has easy access to the M4, making it

an ideal location for the soon to be completed film studios there.

2,000 new homes will be built here and that's not all.

The local train station has just reopened after 40 years which

means that Cardiff is just 12 to 14 minutes' train ride away.

This is the property I'm here to see.

It had a guide price of 35,000 to 41,000 quid.

It looks all right from the outside.

The front could do with a spruce up, but you do get UPVC units and

the bonus of off-street parking, so there are some real positives

for that £35,000 to £41,000 guide price. Straight away it's nice

to have a downstairs loo, perfect for a family house,

and this little entrance hall area does seem to have lots of space.

It carries on when you come into the living room dining room area.

This is a good sized room. Nice to see it's got double glazing.

That's going to save you a few grand

in terms of having that put in if it didn't have it, which it does.

A nice set of sliding doors out on to the garden and then the kitchen.

Unfortunately, that's where it all starts to go a little bit wrong.

That is very, very, very tired,

but it's a good sized space and, all in all, yeah, not a bad start.

Upstairs the feeling of space continues.

You've got three good sized bedrooms. A box room here,

double room there, another double room at the front

and a bathroom and loo upstairs, too. So everything you want.

So, actually, it's looking pretty good.

However, there is a catch. Sadly, this is a repossession property

and as with many repossession properties the completion time

from buying it at the auction to actually having to pay

the entire amount of money is just 14 days as opposed to the usual 28,

so if you go to the auction and don't have your finances

in place you could have a very, very nasty shock coming.

However the tight completion deadline might be the least of the purchaser's worries.

If you step outside the back door into this rather small garden

you can see that the exterior is rather different from the neighbouring properties.

-Basically this house is one that

-many would choose to avoid.

It's of nonstandard construction.

It's a timber frame house, not unusual for modern builds,

but this one doesn't have a brick facia protecting the exterior.

That may make it difficult to mortgage and therefore to sell on.

Most of the neighbouring houses have already had the remedial work done

and a brick skin added.

That's definitely something I'd consider here, too,

so it's not without its share of problems,

but with a guide price of between £35,000 and £41,000

was it still a good buy?

I asked a local estate agent what she thought of it.

The pros and cons I feel in this particular property

is it's got three fantastic sized bedrooms

for a three bedroom in this area.

It's got a good sized bathroom, it's got a decent sized kitchen,

the garden is all fenced so it's nice and secure

and it's also got off-road parking.

Because it is timber framed you probably wouldn't be able

to get a mortgage on it.

However, for the rental market it's absolutely fine.

As the new train station makes Cardiff only 12 minutes away,

that rental option looks very appealing.

So, with the property guided at between 35,000 and 41,000

what sort of return could it generate?

The rental market in this area is very good,

so you'd probably get between £400 and £450 per calendar month.

Of course, if you did this property up to sell it,

as long as you did the required brickwork,

then you would probably get between £80,000 and £87,000.

Well, there's a bit of sorting out to do,

but overall this is a great little family house.

Yes, I'd spend some money on the kitchen and the bathroom

and certainly outside needs figuring out.

Apart from that, it's a good one to go for.

Let's see who fancied it at the auction.

Lot number six, then, ladies and gentlemen.

Who's going to bid me bid £40,000 to start?

It's got to be worth more than that, surely.

40? 38 then, let's get started.

38. Thank you, sir. At 38 I'm bid.

Thank you. 38. 40 can I now...

Nine then, all right. 39, then I'm bid. Thank you. 40 on my left.

At £40,000. This is no money.

You're out over there. There is my...

And one in the back. Thank you. At 41 I'm bid. Two will you, sir? At two.

Thank you. At 42 I'm bid here. Out by the steps at 42,000.

At 42. Shout if I'm missing you.

At 43. 44 can I now, then?

At 43,000, thank you sir.

At 43. Four can I now? At 43 I'm going to sell it, make no mistake.

At £43,000 are you all done?

The hammer's up, then. It's going to be sold at £43,000.

Yours, sir. Thank you.

The man who won the property was Cardiff based former painter and decorator, Mike.

He's roped in his son Mark to help him with this project.

I met them both back at Parkview to find out more.

So, congratulations. Why did you want to buy this place?

I think it was the price and the area that really got me interested in it.

Have you got experience of property developing,

-is it something you do?

-This is my fifth one.

-Right.

What had happened to me, I got to retirement age

from painting and decorating and I suddenly realised my

pension was somewhat inadequate, so I decided to go on a course

of buy-to-let properties. It's my intention to have between

-10 and 12 and that will be perfectly adequate for my pension.

-Right.

This is number five. There's two more lined up at the present time.

I also look after one or two properties for friends

and clients of mine as well, so it's going quite well.

Mike started this type of pension plan two and a half ago.

He's hoping to have his portfolio fully built up

in another three years. Now he's retired he devotes

a lot of time to studying the property market, but he's going to

leave devoting time to getting this place renovated to his son, Mark.

We worked together on a previous property. That went quite well.

Personally, I run my own property maintenance business.

-Ah!

-Specialising in kitchens, bathrooms and my father's asked

me to come and do the work here.

That fits in quite well, then.

Well, for him it does, yeah!

But are you entering this as a joint venture?

-No, this one's purely for my father.

-So, he's going to pay you, then?

We'll be hoping so, yeah.

Well, what's the use of having a family if you can't exploit them?

But, joking aside, Mike is happy to take a hands-off role

and leave Mark to oversee a basic renovation. At present,

Mike can't see any problems on the horizon for this house,

which is not how things were at the auction.

I thought I knew my way around the auction room.

I suddenly discovered it was a repossession,

which means that you complete within 14 days, not the normal 28 days.

Not in every repossession, but on some, for sure.

And then, because it was the day after a bank holiday,

the completion date was brought forward to the Friday prior,

so I really had an 11 day completion to try and complete.

I couldn't get the mortgage through in time, so I sort of pooled all my

-deposits for future houses together and paid cash.

-Really?

I was still a few days late, though.

It must have been a bit of a worrying time.

It was certainly a very interesting time and I had

a few hours less sleep than I normally do.

At what point did you discover the 14 day completion period?

-When I was paying the deposit at the auction!

-Right.

Mike had read the legal pack, but the details of buying

a repossession were in the small print, which he missed.

It just shows how important it is to check all of that

when buying at auction. Fortunately, Mike was able to pool his funds

to come up with that £43,000 purchase price,

otherwise he'd have faced losing his deposit,

so now the plan is to get this house earning and quick.

Give me an idea of how long this will take to get sorted?

-We've had a look around and we think 10 days...

-Wow!

It'll all be done, no problem.

-How many people have you working on it?

-Two of us.

-Two in 10 days!

-Yeah.

-Including the kitchen and a bathroom?

-Definitely.

You're not going to put new kitchens and bathrooms in?

No, the bath will be moved, shower screen put in, generally cleaned up.

It's all been tiled recently. The kitchen, same thing.

A couple of units replaced. A lick of paint, replace the hob,

the cooker, the extractor, it'll be nice.

Right, and the cost you've worked out?

Including fees for the cost,

the whole cost to my father will be about £7,000.

Right. And how do you feel about that?

Very adequate. Very happy about it. I don't want to cut any corners,

but I don't want to waste any money and with my experience with Mark

on previous properties I'm very happy to hand my credit card

and the keys over to him and go on holiday for a couple of weeks.

-That's a great way to do it if you can, isn't it?

-Yes, it certainly is.

If all goes according to plan,

Mike's renovation budget of £7,000, plus the purchase price of 43,000,

will mean a total spend of 50,000 quid and, as the house

is purely for rental purposes, he's not concerned that it's of nonstandard construction.

Mike and Mark make a good team to take on this project

and help Mike create his portfolio of properties

to help him in his retirement. However, I am a bit concerned

about their timescales. Can they really sort this out in 10 days?

And I don't think they're doing the right thing

by not completely replacing the kitchen.

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

The months have rolled by and it's time now to see how our developers have been getting on.

Yes, did they unearth treasures or just uncover a load of rubbish?

Let's find out.

Earlier, in Chatham, we met Paul and Paul

who bought this derelict house for 282,000.

That's a lot for a burnt out shell,

but it looked like it had definitely reached the end of the line.

# I'm going down, down, down, down

# I'm going down, down, down, down. #

With it came planning permission for a new development of five houses.

For the two Pauls moving from renovating properties

to developing a large site was a big jump and they also had

the risk of developing a new build in the current property market.

One year later,

we returned to see if what was on the plans is now on the land.

There it is, big, loud and proud and all

five townhouses still in progress.

On the front of the property is where you see the steel columns.

We're going to have a small balcony on each property

just to give enough room for a table and chairs for people to sit out on.

Each property has got a garage, so again there's nice off-road parking.

We're going to have block paving going down towards the gates.

Over on this side we're going to have a recreation area

to let kids play and maybe a set of swings or a slide,

and then on the entrance. we're going to have electric gates,

probably just with a zapper to block it into its own community.

The build seems to be following the original five house plan,

but with the quarter acre site

they had considered expanding the development.

Originally we wanted to get six houses on here

and there is enough room with the total size of the plot,

but the council were a little bit reluctant to change the plans,

so we just run with the plans as they were.

But they did get some joy when planning permission was granted

to allow the three bedroom houses an extra fourth bedroom.

OK, this is the four bedroom house. The difference between this one and

the middle house is that it's a three bedroom in the middle

and all the difference is a petition wall down the middle.

Otherwise exactly the same layout. Master bedroom, there,

and on the right hand side there's an en suite.

The detail that we quite like with the bedrooms in the upper floor

is that the roof doesn't cut through too deeply into the actual room.

They're quite high, over six feet,

so anyone can walk underneath them and still not bump their head.

OK, this brings us to the middle floor, the second floor.

We've got a double bedroom on the right hand side, bathroom, main bathroom, toilet and sink.

On the left hand side we've got the living room. Large hallway

and a good bit of storage at the back with double doors on.

The design of the properties we're quite pleased with.

They're 1,500 square foot and usually a four bedroom's

round about 1,100, 1,200 mark, so we feel that they're pretty good value.

And, finally, on the ground floor, the kitchen looks on to a small garden.

So far this development is coming together well,

but I can't help feeling that a big downside is its location.

The fact that it backs on to a busy road might put some buyers off.

But inside, with the electrics and plumbing currently being installed,

the finish line is now only six weeks away.

Developments this size can throw up problems,

but it seems this has been a pain free experience for the two Pauls.

To be honest, we haven't really even project managed.

The developers have done that.

We've literally looked at the prices, signed a contract

and left them with it, so it's been fairly easy.

At the end of the day, it's a turnkey operation.

We pay the money and that's it. So it's all down to them.

As long as we get the five sets of keys back we'll be all right!

This is the first time I've been here

for about two months.

The option of project managing a development like this in order to save money can appear attractive.

I reckon that two Pauls have done the right thing

in leaving this larger build to experienced developers.

Hold ups would have cost money which might have affected their budget.

Speaking of which...

We'd planned to spend sort of up to 350 grand for the land

and we actually got that for 282, and then the build costs we were expecting about 500,

but we've actually run up to about 575,

so it's not bundles over when you're looking at five dwellings.

That means their projected total spend will be 857,000.

It's a big investment for their first major development.

In the current troubled property market, new builds like this can prove a risky venture.

If you've got a decent... You know, a property that you want to sell...

they're all going to be brand new, all fitted out,

kitchens, fully carpeted,

so we're spending a few quid as regards to making them look right,

so we feel that that will actually help us sell them.

With the boys' bank accounts lighter to the tune of 857,000,

it's time to find out if two local estate agents

think this new development has what it takes to catch the market's eye.

The first impressions are that the houses

are being extremely well built

and I think the finish when it is done is going to be quite something.

My first impressions are that it's got a great entrance as you drive or walk in.

They're nice to look at, they've got lots of light from obviously the windows and French doors

and the balconies, so they've got a good attractive appeal to them.

When you first look at the houses they do look fairly narrow,

but when you go into them you can see

that they've got a good amount of space.

All the rooms are great sizes.

There's no denying there will be a lot of space here,

but could the location prove a bit of a drawback?

I think the main negatives, as you can probably hear,

is the heavy traffic and probably in the morning

is when commuters who live here are going to have the main problem,

getting out into the traffic, getting down into Chatham or Gillingham where the stations are

you have to drive, it is not walkable.

There's not much you can do about that, so what could the houses sell for?

Price-wise, I think we're really going to be looking somewhere round about the 180,000 to the 210 mark.

Once the properties are completed, I would expect to achieve anywhere between £190,000 and £210,000.

I think they're OK. I mean, it's not far from where we thought they were going to be.

We've got one estate agent that's doing them at 229, so 19k difference,

it's not bundles of money so, no, I'm quite happy.

So, with the five houses, given their 857,000 spent,

that could leave them with a possible pre tax profit of £193,000.

What could they achieve in rentals?

I would suggest placing them on the rental market at between 850 and 950 per calendar month.

I think we'd be looking somewhere between the £850 to £900 per calendar month.

-That's about...

-About right.

I was thinking around 900, 950, so not much difference to what we was thinking.

Six weeks later photos show that the development is now finally completed.

Both Pauls are so happy with how it went that when their next build goes

ahead they'll leave it to the professionals again.

It's about turnover more than anything.

If you tie yourself down to one project, then that's it.

This way, if you've got a contractor that's going to do it for you,

you can do half a dozen jobs in one year if you wanted to.

That's sort of financially better off really doing it that way.

When retired painter-decorator Mike decided that his pension needed a boost,

he felt that a property portfolio was the way forward.

With four houses already earning, number five was to be this

three-bedroom house in Llanharan near Cardiff.

Mike had paid £43,000 at auction and it only needed superficial work to get it into rentable shape,

but when Mike says he's retired he means retired, so that's where son Mark comes in.

With my experience on previous properties I'm happy

to hand my credit card and the keys over to him and go on holiday for a couple of weeks.

Mark reckoned he could do a basic refurbishment in 10 days

and on a budget of 7,000, so two months later we returned

to see whether Mike's credit card has taken a hammering or his pension pot has had a welcome boost.

The outside has had a fresh coat of paint and certainly looks more appealing, and inside?

Well, it's amazing what some redecoration and new carpeting can achieve.

It's a very functional style, which is just what Mike wants for that rental market.

This room's changed quite considerably.

The first task was to remove about two skip-loads of rubbish.

Painted the ceiling, the walls and your skirting boards

and your architraves and refurbished the doors.

In the kitchen we've decided to keep as much as possible. Replaced some of the cupboards,

cleaned it, cleaned the tiles, complete redecoration and we've put a new cooker, hob and extractor fan in.

And it just goes to show that if it ain't broke, don't fix it.

All this kitchen needed was a little attention and it's as good as new,

all for minimal cost, and that principle has been carried on through the rest of the house.

And here, upstairs, it was a bit garish the old paper.

What we have done is all the walls are of magnolia, all the paintwork is white.

We've re-carpeted the whole of this, installed mains smoke and heat alarms.

And in the bathroom here, we've had to move the bath back about six to 10 inches.

It was fitted away from the wall and had caused a lot of problems with dripping water.

This has completely solved this problem.

We've installed a new shower, made good the tiles and repainted the cupboards here.

The bedrooms have also had a basic makeover with the same carpeting and neutral colour scheme.

New cupboard doors have been added in the bedrooms and windows installed, so, all in all,

it seems an efficient conversion which went even easier than Mike could have wished for.

It was in better condition than I thought.

It was very superficial, the random mess in the property,

but once we'd got a few skip loads out began to take shape

and I was very pleased at what we found.

The man behind the renovation was son Mark.

He oversaw every aspect from the tiling to redecoration,

something his dad, Mike, used to do professionally.

I've had a look at the painting finish and I probably retired at the right time.

It's better than I could have done!

Nothing like a father's pride!

As Mike has bought another two properties for his portfolio already,

I reckon he'll be calling on Mark to do the refurbishments on those soon, at the going rate, of course!

But was the renovation on this house done in that predicted timescale?

Well, my son said 10 days.

In fact, he took - according to our records 12-and-a-half days - so it's not too bad!

But we didn't realise how little work was required.

We just did what had to be done.

Keeping the refurbishment simple meant they managed to keep just under their budget of 7,000.

At present Mike thinks that upgrading the property will cost around £25,000,

so it's not an option he's considering at the moment.

With that renovation spend just shy of £7,000

and the purchase price of 43,000,

their total costs so far are just under 50 grand.

Time to find out now if it has what it takes to give Mike's pension plan a boost.

They've done a very nice job renovating the property

and upgrading it since the first time I came to see it.

The standard of finish for the renovation work is quite good.

It's not, you know, a palace,

but the renovation standard is very good for the rental market.

My first impressions on the property is that it's been well decorated and tidied nicely.

It's presented in good condition and should suit well for a family or first time buyer.

Remember, Mike's total outlay so far is nearly 50,000,

so if he decides to sell, upgrading the house would cost £25,000, making a total possible spend of 75,000.

So, what could an upgraded property achieve as a resale?

I think the property would probably sell for around about £87,000.

If the property was to be re-bricked,

I would be expecting to achieve around about the £80,000 mark.

That could give Mike a possible pre tax profit of 12,000, so will he go ahead with the upgrade?

If it's going to make that much difference, in years to come I think I'd consider re-bricking it.

As Mike is keeping the property for his pension pot, what could he expect in rentals?

I think the rental valuation of the property now would be £475 per calendar month.

For rental purposes, I would value this property between £425 and £450 per calendar month.

Well, the 475 would give a return of 11.4%,

but I've already let the property at 500 a month which will give me a 12% return.

So, it looks like property number five out of 13 is already paying its way, so with six and seven waiting

for the paint brush treatment has Mike got any plans about where he'll get the rest of his pension plan?

I certainly will go back to auction.

I don't think you could keep me away from them!

Lots of things to think about there.

Did those stories whet your appetite and leave you wanting more?

We'll have lots more tales from the auction rooms next time.

-We'll see you then.

-Goodbye.

-Goodbye.