0:00:02 > 0:00:04Hello. From first-time buyers to property veterans,
0:00:04 > 0:00:07people are buying their property at auction.
0:00:07 > 0:00:09So previous experience is required.
0:00:09 > 0:00:14The only necessity is you do have the finance to buy what you bid for.
0:00:14 > 0:00:17For sure. And then you can get down to your auction rooms
0:00:17 > 0:00:19and bag yourself a bargain.
0:00:44 > 0:00:48The important point to remember is that when you buy at auction
0:00:48 > 0:00:51and you win your bid, you have exchanged contracts.
0:00:51 > 0:00:55That's right. It's vital to know what you're letting yourself in for
0:00:55 > 0:00:56and to have the finance in place.
0:00:56 > 0:01:00So did today's winners find themselves well-prepared
0:01:00 > 0:01:01or ill-equipped?
0:01:02 > 0:01:03In Stoke-on-Trent,
0:01:03 > 0:01:06this three-bedroom house next to a commercial property
0:01:06 > 0:01:08could spell disaster.
0:01:08 > 0:01:11Trust me, it's happened to me - it's not good.
0:01:13 > 0:01:16In Epsom, Surrey, there's a small two-bed flat
0:01:16 > 0:01:18fit for a size zero supermodel.
0:01:18 > 0:01:21And this is incredibly small. Look.
0:01:22 > 0:01:27And there's something rather tantalising behind this hoarding in East London.
0:01:28 > 0:01:31All I've got to do is figure out how to get in.
0:01:34 > 0:01:36These properties have been sold at auction.
0:01:36 > 0:01:39We'll find out who bought them and what they paid for them
0:01:39 > 0:01:42- when they went under the hammer. - Sold.
0:01:46 > 0:01:49I'm in the Birches Head area of Stoke-on-Trent,
0:01:49 > 0:01:51a brisk walk from the centre of town.
0:01:51 > 0:01:54There's strong demand for student housing
0:01:54 > 0:02:00and in this central location, commercial and residential buildings exist side by side.
0:02:00 > 0:02:02The property I'm here to see is in Glover Street.
0:02:02 > 0:02:05Let's hope it's not as run down as the sign.
0:02:06 > 0:02:09Now here's a really important tip for you.
0:02:09 > 0:02:13When you're thinking about buying residential property on a street
0:02:13 > 0:02:16which includes commercial property like that,
0:02:16 > 0:02:19and even worse, when it's right next door to commercial property,
0:02:19 > 0:02:22you have to be very, very careful
0:02:22 > 0:02:24because a mortgage provider will possibly say,
0:02:24 > 0:02:29"That house isn't strictly residential and we're not going to lend on it."
0:02:29 > 0:02:33Trust me, it's happened to me. It's not good.
0:02:33 > 0:02:34What have we got here?
0:02:34 > 0:02:36£41,000 was the guide price.
0:02:36 > 0:02:39It's a three-bedroom terrace.
0:02:41 > 0:02:43The first step in the right direction
0:02:43 > 0:02:45would be to look at removing the stone cladding,
0:02:45 > 0:02:48not everyone's idea of kerb appeal.
0:02:48 > 0:02:50As for the commercial neighbours,
0:02:50 > 0:02:53there's a garage which renovates vintage cars
0:02:53 > 0:02:56and this storage unit for an ice-cream van.
0:03:00 > 0:03:04Huh! Nice bit of wood cladding. That's nice to see.
0:03:04 > 0:03:06And holy moly, what is going on there?
0:03:08 > 0:03:10Artex gone mad on the walls.
0:03:10 > 0:03:13Cor! Makes the corridor feel terribly cramped.
0:03:13 > 0:03:15Brr! Try and get over that.
0:03:15 > 0:03:18What have we got here? We've got a front room, there.
0:03:18 > 0:03:21A reasonable size. Gas fire. Have that checked out, of course.
0:03:21 > 0:03:23Then through to the kitchen.
0:03:24 > 0:03:29Not bad! Actually, very good. It's a lovely big space.
0:03:29 > 0:03:31It would make a perfect family kitchen.
0:03:31 > 0:03:36Yes, you're going to have to replace the units but you've got the area to do it in.
0:03:36 > 0:03:40And just off the kitchen, bathroom and toilet.
0:03:40 > 0:03:42And just to blend in with the rest of the house,
0:03:42 > 0:03:44there's more cladding in here.
0:03:44 > 0:03:46# I'm feeling
0:03:46 > 0:03:50# Glad all over Yes, I'm
0:03:50 > 0:03:52# Glad all over... #
0:03:52 > 0:03:56But the real issue with the bathroom is its location,
0:03:56 > 0:03:58as it's downstairs.
0:03:58 > 0:04:01The answer could be out back, where there's a lot of space
0:04:01 > 0:04:04that could be used for a two-storey extension.
0:04:04 > 0:04:08You could move the bathroom upstairs and have another reception room downstairs.
0:04:08 > 0:04:11However, there is a ceiling price in this area
0:04:11 > 0:04:15and I'm not sure whether it would make financial sense to do this.
0:04:15 > 0:04:17There may be more possible solutions upstairs.
0:04:19 > 0:04:23Well, upstairs, more attacks of the wood cladding - crikey.
0:04:23 > 0:04:25We've got three good-sized double bedrooms,
0:04:25 > 0:04:29one there, one here and one at the front down this corridor.
0:04:29 > 0:04:32Now, you didn't really want to move the bathroom and lose one of those,
0:04:32 > 0:04:34but if you wanted a loo upstairs,
0:04:34 > 0:04:39this master bedroom is big enough to have a shower cubicle and loo in the corner.
0:04:39 > 0:04:42That is how I would get a loo and bathroom upstairs.
0:04:42 > 0:04:44Apart from that, it's pretty good.
0:04:45 > 0:04:48Of course, the numbers would have to stack up to do this
0:04:48 > 0:04:52but at that £41,000 guide price, it seems a good, solid house.
0:04:52 > 0:04:57It's just that with the cladding and Artex, it doesn't look attractive.
0:04:59 > 0:05:01To find out its potential,
0:05:01 > 0:05:05I asked a local estate agent to tell me what he thought of this property.
0:05:07 > 0:05:11Generally speaking, the property requires a new kitchen,
0:05:11 > 0:05:14general updating inside, possibly new windows,
0:05:14 > 0:05:17general decor and cosmetic work.
0:05:17 > 0:05:21The bathroom, probably not too bad, recently fitted, I would imagine.
0:05:21 > 0:05:23Not surprising about the interior
0:05:23 > 0:05:26but could that back yard be used better?
0:05:28 > 0:05:32With regards to extending, there is quite a large rear yard area.
0:05:32 > 0:05:36I imagine that could be something that, subject to planning, is possible.
0:05:36 > 0:05:38You could make it quite a large place, really,
0:05:38 > 0:05:40quite a big family home if it was done.
0:05:40 > 0:05:43Whether it's viable remains to be seen.
0:05:43 > 0:05:46As it's in the middle of a commercial area,
0:05:46 > 0:05:49that could lower the ceiling price for residential properties.
0:05:49 > 0:05:53But if the house were spruced up, what sort of value could it reach?
0:05:53 > 0:05:58Once renovated, I would imagine the property would be worth
0:05:58 > 0:06:00somewhere in the region of £70-75,000.
0:06:01 > 0:06:02If placed on the rental market,
0:06:02 > 0:06:06I would suggest somewhere in the region of £450 per calendar month.
0:06:10 > 0:06:12Well, all in all, a decent enough house
0:06:12 > 0:06:15that isn't going to cost too much to sort out.
0:06:15 > 0:06:18Most of your budget's going to go on replastering the walls.
0:06:18 > 0:06:20Let's see who fancied it at the auction.
0:06:24 > 0:06:30Lot 45 is 3, Glover Street in Birches Head, Stoke-on-Trent.
0:06:30 > 0:06:32Where shall we start it? 35?
0:06:32 > 0:06:34Thank you, sir. 35,000. Seated left.
0:06:34 > 0:06:37£35,000. At 35,000.
0:06:37 > 0:06:4136, can I say? £36,000.
0:06:41 > 0:06:4437, 38.
0:06:45 > 0:06:4739, 40.
0:06:47 > 0:06:5141, 42, 43.
0:06:52 > 0:06:5544? 44, 45.
0:06:56 > 0:06:5946. 47.
0:07:01 > 0:07:0448. 49?
0:07:05 > 0:07:0748 and a half.
0:07:07 > 0:07:0949. 49.
0:07:09 > 0:07:12Another half. 49 and a half.
0:07:12 > 0:07:1550. Another half?
0:07:15 > 0:07:19No? At £50,000. The bid's right. At £50,000.
0:07:19 > 0:07:24For lot number 45. At £50,000, then, first time.
0:07:25 > 0:07:27£50,500 behind me.
0:07:27 > 0:07:29At £50,500.
0:07:29 > 0:07:3251? 51.
0:07:32 > 0:07:3351 and a half.
0:07:33 > 0:07:3652. 52 and a half.
0:07:36 > 0:07:4053. No? At £53,000. The bid's still here.
0:07:40 > 0:07:43At £53,000 I'm selling.
0:07:43 > 0:07:45First time at 53.
0:07:45 > 0:07:48Second time at 53.
0:07:48 > 0:07:51Third and final time. All done at 53, then...
0:07:51 > 0:07:53Are you back in, sir?
0:07:53 > 0:07:5553 and a half. 54.
0:07:56 > 0:07:59Definitely out? 54, bid's here.
0:07:59 > 0:08:01Not hanging about. 54 first time,
0:08:01 > 0:08:05second time, third and final time, at £54,000.
0:08:06 > 0:08:08That's your lot, sir. Well done.
0:08:10 > 0:08:13And the new owner of this lot is David,
0:08:13 > 0:08:18who got it for £54,000, £13,000 over the guide price.
0:08:18 > 0:08:23I met him and his son Alex to hear about their plans for it.
0:08:23 > 0:08:26Alex, David, good to meet you both. Congratulations.
0:08:26 > 0:08:28Why did you want to buy this place?
0:08:28 > 0:08:32Well, basically, Alex is at university here in Stoke
0:08:32 > 0:08:34and he's got another couple of years to go
0:08:34 > 0:08:37and I didn't want to pay rent to anybody else,
0:08:37 > 0:08:39so we bought the house for him and a friend.
0:08:39 > 0:08:43- I didn't want to pay rent to anyone. - You don't have to pay rent to Dad? - No!
0:08:43 > 0:08:47- Excellent!- I couldn't afford to if I wanted to.- Oh, wow.
0:08:47 > 0:08:50- So you get to live rent free? - Yes, it's a definite bonus.
0:08:50 > 0:08:53But you figure you'll end up paying in the long run?
0:08:53 > 0:08:55I'll end up paying in the long run.
0:08:55 > 0:08:58I paid for his rent while he was in halls,
0:08:58 > 0:09:00so this is another way of doing it.
0:09:00 > 0:09:03So what was it about this house particularly that attracted?
0:09:03 > 0:09:05Well, it wasn't its good looks!
0:09:05 > 0:09:09- You don't like the stone cladding?! - Not very much, no, no.
0:09:09 > 0:09:12It seemed a good price for a good-sized house
0:09:12 > 0:09:16in a fairly good location and close enough to the university.
0:09:16 > 0:09:19So apart from being very ugly, it ticked all the other boxes.
0:09:19 > 0:09:22Alex is on a photography course at the local university,
0:09:22 > 0:09:25so hopefully, he should have some ideas
0:09:25 > 0:09:28about how to develop this house.
0:09:28 > 0:09:31But then, an artistic streak runs in the family,
0:09:31 > 0:09:33as dad David used to be a graphic designer,
0:09:33 > 0:09:37before turning his hand to renovating and selling properties.
0:09:37 > 0:09:39As they both have an arty background,
0:09:39 > 0:09:43these two should have ideas about how to get this place picture perfect.
0:09:43 > 0:09:48There's not an awful lot that needs doing to it, structurally.
0:09:48 > 0:09:51The missing chimney breast here is a problem.
0:09:51 > 0:09:54I'm not sure that that's been sorted out properly
0:09:54 > 0:09:58but I'm not expecting to pay huge amounts of money sorting it out.
0:09:58 > 0:10:00I'm reasonably happy.
0:10:00 > 0:10:03How did you buy this? Did you take a mortgage out or was it cash?
0:10:03 > 0:10:04- It's cash.- Right.
0:10:04 > 0:10:08Because one of the issues could've been that it's next to a commercial unit.
0:10:08 > 0:10:11Some mortgage lenders don't like that
0:10:11 > 0:10:13- but that wasn't an issue to you. - No, no.
0:10:13 > 0:10:17It's worth bearing in mind when we decide what to do with it in the future.
0:10:17 > 0:10:21I think it's almost a bonus that we're next to a few businesses
0:10:21 > 0:10:23because we don't have to be as noise conscious
0:10:23 > 0:10:28as we would be if we were down a quiet street of neighbours.
0:10:28 > 0:10:32- For all those very few, very quiet parties...- Very!- ..you're planning.
0:10:32 > 0:10:34Yeah.
0:10:34 > 0:10:37Yes, I'm sure it'll be canapes and dry sherry all round,
0:10:37 > 0:10:39with maybe a foxtrot or two.
0:10:39 > 0:10:42But joking apart, since it will be Alex's home,
0:10:42 > 0:10:45I think he may suddenly become quite house proud.
0:10:45 > 0:10:48David has just three months to get the house ready
0:10:48 > 0:10:50before Alex starts the new term.
0:10:50 > 0:10:53How does he plan to make the house student proof
0:10:53 > 0:10:55with his five grand budget?
0:10:57 > 0:10:59I plan to do as little as possible, really
0:10:59 > 0:11:03I don't want to make it too nice and make the students uncomfortable.
0:11:03 > 0:11:06Basically, try and deal with the Artex,
0:11:06 > 0:11:09try and clean the place up and redecorate.
0:11:09 > 0:11:12We're probably going to have to take the kitchen out
0:11:12 > 0:11:14and put a new kitchen in.
0:11:14 > 0:11:17The bathroom looks OK as it is. I think that's usable.
0:11:17 > 0:11:20So more or less a tidy up and try and make it look more appealing.
0:11:20 > 0:11:24Long term, Alex is going to be here for a couple of years,
0:11:24 > 0:11:27so we'll think about what's going to happen at the end of that.
0:11:27 > 0:11:31We might investigate extending up into the attic space,
0:11:31 > 0:11:32perhaps extending out the back.
0:11:32 > 0:11:34We'll see about that later on.
0:11:34 > 0:11:36There's a great space out the back.
0:11:36 > 0:11:41It be a shame not to do something worthwhile with that area.
0:11:41 > 0:11:44It looks as though something's been there already,
0:11:44 > 0:11:45so we can do something with that.
0:11:45 > 0:11:48Looks like Alex is picking up developing tips from Dad.
0:11:48 > 0:11:52For now, David wants to get the renovation just right
0:11:52 > 0:11:56and aims to do most of the work with the help of Alex and his family.
0:11:56 > 0:11:58What level of finish is he aiming for?
0:11:58 > 0:12:01After all, even students have standards.
0:12:03 > 0:12:05It has got much better, definitely.
0:12:05 > 0:12:08I mean, a lot more money gets put into it that it used to
0:12:08 > 0:12:12and because students are paying a lot more to go to university,
0:12:12 > 0:12:14they expect a lot more as well.
0:12:14 > 0:12:18But I think the attitude of students hasn't changed,
0:12:18 > 0:12:22so the houses do end up looking the same anyway.
0:12:22 > 0:12:25- That's very honest. But not this one. - Not this one!
0:12:27 > 0:12:30Well, if David wasn't worried before - ahem - he might be now!
0:12:31 > 0:12:34So, Dave doing something for son Alex
0:12:34 > 0:12:37that many parents are doing for their offspring,
0:12:37 > 0:12:40buying them somewhere to live in while they're at university
0:12:40 > 0:12:43and it does make good financial sense.
0:12:43 > 0:12:47The question is will the house survive the onslaught of the students?
0:12:47 > 0:12:50You can find out later in the show.
0:12:54 > 0:12:57Over there is Epsom racecourse grandstand,
0:12:57 > 0:13:00where the runners and riders in the most prestigious of all races
0:13:00 > 0:13:03in the horse-racing calendar, the Derby,
0:13:03 > 0:13:05will cross the finishing line.
0:13:05 > 0:13:07Today's property is just around the corner
0:13:07 > 0:13:11but will it be a runaway favourite or fall at the first hurdle?
0:13:11 > 0:13:13Let's find out.
0:13:14 > 0:13:16And if you want to be in area that's a winner,
0:13:16 > 0:13:18you can't go far wrong with Epsom.
0:13:18 > 0:13:23In 2005, it was named as the best place to live in the UK.
0:13:23 > 0:13:25With its excellent schools, good shops,
0:13:25 > 0:13:29great transport links to London and rural feel,
0:13:29 > 0:13:32it's easy to see why.
0:13:32 > 0:13:35Right, so let's get back in the saddle
0:13:35 > 0:13:36and on to today's property.
0:13:36 > 0:13:39Well, it's a self-contained second-floor flat
0:13:39 > 0:13:42in this beautiful-looking detached house
0:13:42 > 0:13:45and it's just a few minutes from Epsom town centre.
0:13:45 > 0:13:50And that all-important guide price - £155,000 to £165,000.
0:13:50 > 0:13:54Which is exactly what it went for five years ago.
0:13:54 > 0:13:58That gives you some idea of how wobbly the property market is.
0:13:58 > 0:14:01From outside, the house looks well kept and tidy
0:14:01 > 0:14:03but what's it like inside?
0:14:04 > 0:14:06So you've got two flights of stairs to walk up
0:14:06 > 0:14:08or you could use the lift.
0:14:08 > 0:14:13Now, the flat seems as though it's in really good condition.
0:14:13 > 0:14:15My God, it's like it's just been painted,
0:14:15 > 0:14:18the carpets look like they're in good condition as well,
0:14:18 > 0:14:21although I would say it's a little bit on the small side.
0:14:21 > 0:14:23We've got a little bathroom there
0:14:23 > 0:14:26but a really good-sized lounge.
0:14:26 > 0:14:29Now, where's that kitchen?
0:14:30 > 0:14:32Here's the kitchen.
0:14:32 > 0:14:33Come and have a look at this.
0:14:33 > 0:14:36Now this is incredibly small. Look.
0:14:36 > 0:14:38It's really pinched.
0:14:38 > 0:14:40You can barely open the oven.
0:14:40 > 0:14:42I think if I was to take this flat on,
0:14:42 > 0:14:45I would definitely look at ways of how you can improve this.
0:14:45 > 0:14:49Think about taking out these walls here, opening this space up.
0:14:49 > 0:14:53You could put some units along here, a nice breakfast bar, perhaps.
0:14:53 > 0:14:56At the moment, there's nowhere to sit down and eat.
0:14:56 > 0:14:58I think once you did those improvements,
0:14:58 > 0:15:01this flat would be so much more saleable
0:15:01 > 0:15:04and it would look a million times better.
0:15:04 > 0:15:08Because let's face it, that's a one-person kitchen at the moment.
0:15:08 > 0:15:11Making it open plan would not only make it more sociable
0:15:11 > 0:15:12when cooking up those meals,
0:15:12 > 0:15:15it would also create a more spacious living area.
0:15:15 > 0:15:18In general, there is an acute lack of space here.
0:15:18 > 0:15:22In the flat there's two bedrooms but two very small bedrooms.
0:15:22 > 0:15:25The main room next door is long and narrow.
0:15:25 > 0:15:29The only possible place to put a bed is right at the end.
0:15:29 > 0:15:32It would have to be a double bed, not a king-size
0:15:32 > 0:15:34and there would be a tiny gap to get out.
0:15:34 > 0:15:38You've got to think about your storage system in this flat.
0:15:38 > 0:15:41I would possibly use this bedroom, which is even smaller,
0:15:41 > 0:15:45as a sort of overspill room, to put some wardrobes in here.
0:15:45 > 0:15:48You could also use it as a guest bedroom.
0:15:48 > 0:15:50So there you have it. Two very small bedrooms.
0:15:50 > 0:15:55Something else I've noticed. There's lots of these storage heaters.
0:15:55 > 0:15:57Personally - they're not as economical -
0:15:57 > 0:15:59I don't really like them.
0:15:59 > 0:16:02I'd look at upgrading them to gas central heating if possible.
0:16:02 > 0:16:07But storage heaters aside, there's not a lot that needs changing in this mid-terrace.
0:16:07 > 0:16:09The bathroom's in good nick
0:16:09 > 0:16:12and though there's no window, it's clean and bright
0:16:12 > 0:16:14so there's no need to change it.
0:16:14 > 0:16:17It would make an ideal starter home for a couple on the property ladder
0:16:17 > 0:16:19and there's more.
0:16:19 > 0:16:23The plus here is that the owner would share the freehold with the other ten flats.
0:16:23 > 0:16:27That gives them a say in the upkeep of the place.
0:16:27 > 0:16:29Although that does not add value,
0:16:29 > 0:16:31it would definitely make the flat more saleable.
0:16:34 > 0:16:39So remembering the guide price of £155-166,000,
0:16:39 > 0:16:43it's time to find out what a local estate agent thinks of it.
0:16:44 > 0:16:48'This flat in my opinion is very well-presented throughout.
0:16:48 > 0:16:51'It's been, obviously, redecorated in recent years.'
0:16:51 > 0:16:53It's very clean and tidy
0:16:53 > 0:16:57and anybody who purchases it won't have to do too much to it at all.
0:16:57 > 0:16:59The room sizes leave a bit to be desired
0:16:59 > 0:17:02but what is the main positive here?
0:17:02 > 0:17:05Having a share of the freehold is a massive benefit.
0:17:05 > 0:17:09You'll be a leaseholder and a one-eleventh share of the freehold,
0:17:09 > 0:17:13which means you're not dictated to by freeholders
0:17:13 > 0:17:16and you have a greater say in what can be done in the upkeep
0:17:16 > 0:17:18and looking after of the main building.
0:17:19 > 0:17:22OK, so what are the rentals and resale numbers?
0:17:23 > 0:17:29Once renovated I believe the property on the open market would achieve around £215,000.
0:17:29 > 0:17:32In my opinion, the property would let very easily
0:17:32 > 0:17:34and would achieve £850 per calendar month.
0:17:37 > 0:17:41Small it may be but this flat has huge potential
0:17:41 > 0:17:43and there's not a lot to do here.
0:17:43 > 0:17:47There's a long lease and there's the share of the freehold as well
0:17:47 > 0:17:50that adds to this being a good one to go for.
0:17:50 > 0:17:52Who took a punt on it?
0:17:52 > 0:17:54Let's go to the auction and find out.
0:17:59 > 0:18:03Lot 238 takes us across to Epsom.
0:18:03 > 0:18:04Will somebody give me 140?
0:18:05 > 0:18:06Thank you. 140.
0:18:06 > 0:18:10142 and a half. 142 and a half. 45?
0:18:10 > 0:18:1347 and a half? 47 and a half.
0:18:13 > 0:18:17150. 150. 152 and a half.
0:18:17 > 0:18:2052 and a half. 155? 55.
0:18:20 > 0:18:2257 and a half?
0:18:22 > 0:18:27No. 155 in the aisle. Is there 156 anywhere else?
0:18:28 > 0:18:30156, 157.
0:18:30 > 0:18:3257, 58.
0:18:32 > 0:18:3459, 160.
0:18:35 > 0:18:38Yeah? 160. 61?
0:18:38 > 0:18:39It's against you both.
0:18:39 > 0:18:45It's with you, madam, sitting down on my right, at 160. 161 anywhere else?
0:18:45 > 0:18:47For the first time at 160.
0:18:47 > 0:18:49For the second time at 160.
0:18:49 > 0:18:53For the third and final time at £160,000...
0:18:53 > 0:18:57Selling now. Sold to the lady sat on my right at £160,000.
0:19:00 > 0:19:01You look in shock.
0:19:03 > 0:19:06The shocked-looking buyer of that lot was Rebecca
0:19:06 > 0:19:08and the reason she was nervous?
0:19:08 > 0:19:10It was her first ever auction
0:19:10 > 0:19:13and she was bidding on behalf of her partner Rod,
0:19:13 > 0:19:15who couldn't make it there on the day.
0:19:15 > 0:19:18But she got it. Not bad going for a first-timer!
0:19:18 > 0:19:22I met them both to find out more about their plans.
0:19:23 > 0:19:26What's the story behind you buying this flat
0:19:26 > 0:19:27and getting it for 160,000?
0:19:27 > 0:19:29Well, we had been to see it before.
0:19:29 > 0:19:33It was on the market and we put an offer in previously.
0:19:33 > 0:19:37And then we found out it was going to auction. Our offer was turned down.
0:19:37 > 0:19:39So we went to the auction instead.
0:19:39 > 0:19:42- So how much was your offer? - The same price, 160.
0:19:42 > 0:19:46- So pleased with that price? - Yeah, Rebecca did the business.
0:19:46 > 0:19:49- How much would you have gone up to on the day, Rebecca?- 165.
0:19:49 > 0:19:53So you had £5,000 to play with - you're well within budget.
0:19:53 > 0:19:56Yeah, and we're going to spend that money on the flat
0:19:56 > 0:19:58and try to spruce it up a little bit.
0:19:59 > 0:20:02Rod and Rebecca should know about correcting problems,
0:20:02 > 0:20:04as they both work in osteopathy.
0:20:04 > 0:20:06They've been together two and a half years.
0:20:06 > 0:20:09As Rod works full time as an osteopath,
0:20:09 > 0:20:10and Rebecca is still training,
0:20:10 > 0:20:13it was down to him to buy their first ever property.
0:20:13 > 0:20:17So what sort of treatment do they see this patient needing?
0:20:17 > 0:20:21Well, we're going to be knocking the walls through in the kitchen
0:20:21 > 0:20:25to make it open plan and putting a new kitchen in with help from my friends,
0:20:25 > 0:20:28who are going to come down and put the units in
0:20:28 > 0:20:29and tear everything else out.
0:20:29 > 0:20:34We need to do some plumbing as well because the washing machine is in the second bedroom,
0:20:34 > 0:20:37so we need to bring that through into the kitchen.
0:20:37 > 0:20:40We need to put together some new wardrobes for our bedroom
0:20:40 > 0:20:43but apart from that, there's not a great deal to do.
0:20:43 > 0:20:46Are you going to paint it? It doesn't need painting.
0:20:46 > 0:20:50It doesn't but I think it probably needs a lightening up.
0:20:50 > 0:20:55- It's magnolia, which is... - Not my favourite colour, either.
0:20:55 > 0:20:56I'm glad you said that.
0:20:56 > 0:20:59- What about carpets? - I think we're going to go light,
0:20:59 > 0:21:01open the space out a little bit,
0:21:01 > 0:21:04rather than this dark terracotta colour.
0:21:04 > 0:21:06It's not very nice.
0:21:06 > 0:21:10- So who's going to be around most to control the work?- I think I am.
0:21:10 > 0:21:13- Are you prepared for this? - I am prepared.
0:21:13 > 0:21:16I reckon Rod's got himself a little gem here -
0:21:16 > 0:21:17that's Rebecca I'm talking about.
0:21:17 > 0:21:20# Every little thing she does is magic
0:21:20 > 0:21:23# Everything she does just turns me on... #
0:21:23 > 0:21:26Not only did she go through that auction process for him,
0:21:26 > 0:21:30she seems to be project managing the refurbishment as well.
0:21:30 > 0:21:33But Rod hasn't been entirely hands-off.
0:21:33 > 0:21:37Rod's actually drawn out a small plan so everything fits in.
0:21:37 > 0:21:39- He's drawn out a small plan?- Yes.
0:21:39 > 0:21:43- Good one, Rod. - I thought I'd do that before we went to the auction just in case.
0:21:43 > 0:21:45Yeah, everything fits in
0:21:45 > 0:21:51and we can always use the second bedroom as extra storage space if we needed it.
0:21:51 > 0:21:54Originally it was one bedroom and they put a partition in,
0:21:54 > 0:21:57so we can always take that wall down if we decided to do that.
0:21:57 > 0:21:59That option does seem more practical,
0:21:59 > 0:22:02though losing a bedroom wouldn't be a value-adder.
0:22:03 > 0:22:07But opening out the kitchen would definitely get a big tick from me.
0:22:07 > 0:22:11They plan to do the changes in six to eight weeks.
0:22:11 > 0:22:14Rod wouldn't need permission from the other freeholders,
0:22:14 > 0:22:17it would be polite to warn them about the works planned.
0:22:17 > 0:22:20So how does he feel about having a share in the freehold?
0:22:20 > 0:22:22I don't know a great deal.
0:22:22 > 0:22:25I know that as a result of having a share,
0:22:25 > 0:22:27we don't pay a large ground rent on the property
0:22:27 > 0:22:32and it would give me the opportunity to have an influence on any changes
0:22:32 > 0:22:34that are made to the actual building itself,
0:22:34 > 0:22:36so it's definitely an advantage.
0:22:36 > 0:22:40When we were first looking, we weren't looking for a freehold.
0:22:40 > 0:22:43That was a bonus, so we were pleased to get a share of it
0:22:43 > 0:22:45but it wasn't an absolute necessity
0:22:45 > 0:22:48but I think it's a good thing that we've got it.
0:22:48 > 0:22:50They seem to have fallen on their feet here
0:22:50 > 0:22:54and apart from the bedroom sizes, seem pleased with what they've got.
0:22:54 > 0:22:57It all seems too good to be true.
0:22:57 > 0:22:59I can't think of any negatives at all.
0:22:59 > 0:23:03We're in a nice location. It's five minutes up to the downs,
0:23:03 > 0:23:0610 or 15 minutes to the station, so you can into London,
0:23:06 > 0:23:09so I think we've got the best of both worlds, really.
0:23:09 > 0:23:12It was meant to be, wasn't it? You didn't get it first off,
0:23:12 > 0:23:14- followed it to auction... - Persistence.
0:23:14 > 0:23:17..and you won the property - persistence, exactly.
0:23:17 > 0:23:19Congratulations. I'm pleased for you.
0:23:19 > 0:23:22It's going to be lovely to see what you do to this flat.
0:23:27 > 0:23:30I think Rod and Rebecca have bought well here
0:23:30 > 0:23:33but the flat is on the small side, so storage will be an issue.
0:23:33 > 0:23:37But they have got some good ideas, though, to open up the space.
0:23:37 > 0:23:40But is their timescale of four weeks realistic
0:23:40 > 0:23:43and will they finish the work before they have to move in?
0:23:43 > 0:23:45You can find out later on in the show.
0:23:47 > 0:23:51Still to come. In Walthamstow, East London, will this plot of land
0:23:51 > 0:23:52be a sight for sore eyes?
0:23:54 > 0:23:56Bit of a mess, actually.
0:23:57 > 0:24:00Did this small two-bed flat in Epsom, Surrey,
0:24:00 > 0:24:04give Rod and Rebecca big problems?
0:24:04 > 0:24:07Getting people in, because we were relying on friends a lot,
0:24:07 > 0:24:08it has been stressful.
0:24:09 > 0:24:12But first, in Stoke-on-Trent,
0:24:12 > 0:24:16did David manage to make this three-bedroom house student proof?
0:24:20 > 0:24:24Earlier, we were in the Birches Head area of Stoke-on-Trent,
0:24:24 > 0:24:28where this three-bedroom, clad all over house
0:24:28 > 0:24:30was sold for 54 grand.
0:24:30 > 0:24:33It was bought by former graphic designer David
0:24:33 > 0:24:35as student digs for his son, Alex,
0:24:35 > 0:24:38and to save himself a few bob on Alex's rent bill.
0:24:38 > 0:24:40Although the house was in good shape,
0:24:40 > 0:24:42it was dated and tired
0:24:42 > 0:24:48but David's big quandary was whether to give his son a tasteful contemporary home
0:24:48 > 0:24:51or something sturdy enough for those fabled student parties.
0:24:51 > 0:24:55Well, now it's four months later, term time for Alex.
0:24:55 > 0:25:00The house is still standing and the cladding has been cleaned up.
0:25:01 > 0:25:04Inside, the living room's been given a lick of paint.
0:25:06 > 0:25:09But it's the kitchen that has seen some real changes.
0:25:11 > 0:25:14It looks like David has given Alex a stylish new kitchen
0:25:14 > 0:25:17to prepare some culinary delights.
0:25:17 > 0:25:20The kitchen, initially, I'd hoped to leave much as it was.
0:25:20 > 0:25:23A lot of the house I'd hoped to leave much as it was,
0:25:23 > 0:25:25without spending too much money,
0:25:25 > 0:25:28because it is, basically, just a student let.
0:25:28 > 0:25:30But when we investigated further,
0:25:30 > 0:25:34I decided I needed to strip all the kitchen units out.
0:25:34 > 0:25:35They weren't serviceable.
0:25:35 > 0:25:38Well, the units may have been past their sell-by date
0:25:38 > 0:25:41but the real problem was that missing chimney breast
0:25:41 > 0:25:45because nothing was supporting the brickwork upstairs.
0:25:45 > 0:25:49So that was quite a pressing issue, to do something to stabilise that
0:25:49 > 0:25:51because it could've been dangerous.
0:25:51 > 0:25:53We considered a number of options,
0:25:53 > 0:25:58maybe putting steel beams in, maybe removing the whole chimney breast.
0:25:58 > 0:26:02In the end I decided to rebuild the missing chimney breast back in
0:26:02 > 0:26:05and so support the weight above it.
0:26:05 > 0:26:07I reckon that may have been a blessing in disguise
0:26:07 > 0:26:11because that brickwork gives the kitchen extra character.
0:26:11 > 0:26:13And talking of character,
0:26:13 > 0:26:16the bathroom is now a very different proposition.
0:26:16 > 0:26:20That oppressive wood cladding has been painted and totally transformed.
0:26:22 > 0:26:26So far, so good and it's not all down to just David's efforts.
0:26:26 > 0:26:30Alex and his fellow lodger Mikey did a few jobs here and there.
0:26:31 > 0:26:35This room is my creation alone.
0:26:35 > 0:26:37And towards the start of the house,
0:26:37 > 0:26:40I did a lot of the demolition-y things
0:26:40 > 0:26:42that are a bit more enjoyable than the rest.
0:26:42 > 0:26:44They've been great, though. They've helped.
0:26:44 > 0:26:48They've done some of the work. A lot of the painting they've done.
0:26:48 > 0:26:52They even managed to draft their girlfriends in to help.
0:26:52 > 0:26:56The other two bedrooms seem to have had modest transformations
0:26:56 > 0:27:02but those just hide the work David did to combat some damp problems he encountered.
0:27:03 > 0:27:06And the hall isn't the result of some wild party
0:27:06 > 0:27:07but a job in progress.
0:27:09 > 0:27:12But downstairs is a different matter.
0:27:12 > 0:27:15Originally, all the walls here in the hall, stairs and landing
0:27:15 > 0:27:17were covered in a dark wall board.
0:27:17 > 0:27:21There was a false ceiling in both areas that was covered with tongue and groove.
0:27:21 > 0:27:25We pulled all that out and discovered the arch here
0:27:25 > 0:27:27but the corbels were missing,
0:27:27 > 0:27:29so I had to replace the corbels there.
0:27:29 > 0:27:31Some of the detail on the wall here was all boxed in,
0:27:31 > 0:27:33so I uncovered that.
0:27:33 > 0:27:35There was just a plain concrete floor,
0:27:35 > 0:27:38so I've tiled the entrance hall here
0:27:38 > 0:27:41and I've yet to put a new stained-glass front door in.
0:27:41 > 0:27:46That hard surface will be handy when it comes to the party season.
0:27:46 > 0:27:50But then I reckon that Alex and Mikey might now be a little wary
0:27:50 > 0:27:52of inviting too many people round.
0:27:54 > 0:27:56I think they really like it.
0:27:56 > 0:28:00I think one of the positive features to come from it,
0:28:00 > 0:28:02because they've invested time and everything in it,
0:28:02 > 0:28:04they feel a sense of ownership
0:28:04 > 0:28:07and I think they're, hopefully, going to look after it
0:28:07 > 0:28:12rather more than they would than normal students living in somebody else's house.
0:28:12 > 0:28:17I really care about this place now, probably more than my dad expected.
0:28:17 > 0:28:19I think he feels a little bit safer now,
0:28:19 > 0:28:23knowing that I've put a lot of work into particularly this room
0:28:23 > 0:28:24but the house itself.
0:28:24 > 0:28:27I don't want to see it get destroyed by students.
0:28:27 > 0:28:30Maybe that was David's cunning plan all along.
0:28:30 > 0:28:33But before he can call time on the house,
0:28:33 > 0:28:35there's still plenty to be done.
0:28:35 > 0:28:37That'll include clearing out the courtyard,
0:28:37 > 0:28:40which now resembles a building site.
0:28:40 > 0:28:42But with the end drawing closer,
0:28:42 > 0:28:47how much will be added to the £54,000 purchase price?
0:28:47 > 0:28:49We originally set the budget at £5,000.
0:28:49 > 0:28:52I didn't want to spend more than 5,000 doing it up.
0:28:52 > 0:28:55As of last week when I totted the figures up,
0:28:55 > 0:28:57we're at the £4,000 mark.
0:28:57 > 0:28:59There are still some things to finish off,
0:28:59 > 0:29:01so I expect it will creep up
0:29:01 > 0:29:04but I think we'll end up under the £5,000.
0:29:04 > 0:29:07That will take David's investment to £59,000
0:29:07 > 0:29:09but he has two very happy tenants.
0:29:09 > 0:29:13Time now to see what two professionals think of the house.
0:29:26 > 0:29:30'My first impressions are the owner's making a nice job of the property.'
0:29:30 > 0:29:34The entrance hall is a nice feature as you walk in
0:29:34 > 0:29:37and he's put a nice kitchen in also.
0:29:37 > 0:29:39I think they've done a reasonable refit.
0:29:39 > 0:29:42The kitchen's had some attention, as has the bathroom.
0:29:42 > 0:29:43It's a pretty good job.
0:29:43 > 0:29:48Do the estate agents think David has tapped into the right market?
0:29:49 > 0:29:54It's possibly a little bit too far away from the university
0:29:54 > 0:29:56to appeal to all students, I would imagine.
0:29:56 > 0:29:58We are close to the town centre
0:29:58 > 0:30:02and the majority of buyers in this area are first-time buyers.
0:30:02 > 0:30:05With the students well and truly bedded in,
0:30:05 > 0:30:07what could David charge as rent?
0:30:09 > 0:30:14If he puts this property up for rent, I would say £400 per calendar month.
0:30:14 > 0:30:19If it was let to students, it would be around £35 per room per week.
0:30:19 > 0:30:22This property would achieve £395 per calendar month.
0:30:22 > 0:30:25If it was let to students, £35 per week per student.
0:30:25 > 0:30:29That sounds a bit cheap from what I'm told other students are paying.
0:30:29 > 0:30:32Most students in the area are paying at least 50
0:30:32 > 0:30:34for their rented accommodation.
0:30:36 > 0:30:40Even at £50 per week, that would be a yield of just under 4%
0:30:40 > 0:30:44because David is not getting any income from his son, Alex.
0:30:45 > 0:30:47If rented to all non-students,
0:30:47 > 0:30:49the yield could be a pretty healthy 8%.
0:30:49 > 0:30:52But would a resale figure be tempting?
0:30:52 > 0:30:55If I was going to put it on the market in a finished state,
0:30:55 > 0:30:58it would be somewhere around the £80,000 mark.
0:30:58 > 0:31:01I would put this property on the market at £74,950.
0:31:03 > 0:31:07That could mean a possible pre-tax profit of 21 grand.
0:31:07 > 0:31:09That would be something to propose a toast to
0:31:09 > 0:31:13but that may not happen, as Alex has taken quite a shine
0:31:13 > 0:31:15to the responsibilities of running a home.
0:31:15 > 0:31:18I reckon he knows which side his bread is buttered.
0:31:18 > 0:31:23When his student days are over, he even expects to continue living here.
0:31:23 > 0:31:27So more partying opportunities, Alex?
0:31:27 > 0:31:28Interestingly enough,
0:31:28 > 0:31:32they were worried about what would happen to their property if they had parties,
0:31:32 > 0:31:35rather than me saying anything, so, as I say, I think...
0:31:35 > 0:31:37We're not proper students.
0:31:37 > 0:31:40They've invested in it and they want it to stay as it is.
0:31:40 > 0:31:42That's true. We've put a lot of work into it.
0:31:42 > 0:31:45We wouldn't want to see it tarnished, really.
0:31:49 > 0:31:53I'm in East London, E17, to be precise,
0:31:53 > 0:31:57well known for its high density of residential housing.
0:31:57 > 0:32:00So to hear that something's up for auction, a plot of land,
0:32:00 > 0:32:01that's a bit of a rarity.
0:32:01 > 0:32:04£195,000 was the guide price.
0:32:05 > 0:32:09All I've got to do is figure out... how to get in.
0:32:10 > 0:32:14Well, it may look like a fortress but at least it's well situated.
0:32:14 > 0:32:17It's on Forest Road, which is a main thoroughfare,
0:32:17 > 0:32:19so it has good bus links,
0:32:19 > 0:32:23with a short ride to both over and underground rail links.
0:32:23 > 0:32:26Closer to home, there are plenty of shops and services
0:32:26 > 0:32:27right on your doorstep.
0:32:29 > 0:32:30Oh!
0:32:30 > 0:32:32Well, I eventually managed to get in.
0:32:32 > 0:32:33So what have we got?
0:32:36 > 0:32:37A bit of a mess, actually.
0:32:37 > 0:32:42In fact, it's a fairly typical scene when it comes to disused plots.
0:32:42 > 0:32:45People seem to treat them as a dumping ground
0:32:45 > 0:32:48and you need to be pretty careful where you tread.
0:32:48 > 0:32:51But the plot itself is large
0:32:51 > 0:32:53and looking at the neighbours either side,
0:32:53 > 0:32:55you can get an idea of what could be built here.
0:32:55 > 0:32:58But take a look at the low-profile terraces at the rear
0:32:58 > 0:33:02and you'll see that some sort of height restriction will play a part.
0:33:02 > 0:33:07Now, the plot has a history and it's all to do with planning.
0:33:07 > 0:33:09Previously, it has had planning permission
0:33:09 > 0:33:12for the building of seven flats,
0:33:12 > 0:33:14six one-bedrooms and one two-bedroom.
0:33:14 > 0:33:16That's great news.
0:33:16 > 0:33:20The bad news is the planning's lapsed.
0:33:21 > 0:33:23That is not great news.
0:33:23 > 0:33:27Planning consents on any plot of land can be fraught
0:33:27 > 0:33:30and even more so when in a built-up area such as this.
0:33:30 > 0:33:34While permission was previously granted to create a three-storey building
0:33:34 > 0:33:39to accommodate seven self-contained flats, that was in 2005
0:33:39 > 0:33:41and a lot can change in four years.
0:33:41 > 0:33:45As I'm not sure how the council would react to a new planning application,
0:33:45 > 0:33:48I thought it best to ask a local estate agent
0:33:48 > 0:33:51whether this was one to watch or walk away from.
0:33:53 > 0:33:56The council is very proactive in making derelict sites into housing.
0:33:56 > 0:33:59There is a shortage in Waltham Forest.
0:33:59 > 0:34:03A positive start, because where there's a shortage, there's a demand.
0:34:04 > 0:34:07As councils are under more pressure than ever to build houses,
0:34:07 > 0:34:10the estate agent thinks that the planners would be receptive
0:34:10 > 0:34:13to turning this site into a useful asset.
0:34:13 > 0:34:16You need to put in a new planning application
0:34:16 > 0:34:18and see what you can build on it.
0:34:18 > 0:34:21Mainly it would be one-bedroom or two-bedroom flats.
0:34:21 > 0:34:23That's the need in this area.
0:34:23 > 0:34:28In fact, the estate agent thinks you could largely go with the plans that were passed previously.
0:34:28 > 0:34:32But with the build costs and the currently tougher market,
0:34:32 > 0:34:34the return won't be what it used to be.
0:34:34 > 0:34:37For a one-bed, you're looking at sort of 165,
0:34:37 > 0:34:41for a two-bed about 195, but it would be a tough market.
0:34:41 > 0:34:43And the potential rent?
0:34:43 > 0:34:44For a two-bedroom flat,
0:34:44 > 0:34:48you should be looking at 900 to 950 per calendar month.
0:34:48 > 0:34:53On a one-bed, you should be looking at £725 per calendar month.
0:34:54 > 0:34:57That's an annual rental income of over £60,000.
0:34:57 > 0:35:01Even if the total cost of buying and developing the site
0:35:01 > 0:35:03reached three quarters of a million,
0:35:03 > 0:35:05you'd still get an 8% return on your investment.
0:35:05 > 0:35:08Not bad but there are risks.
0:35:09 > 0:35:13So a decent enough plot in a reasonable location,
0:35:13 > 0:35:14apart from the parking.
0:35:14 > 0:35:17But the big issue here, of course, is that lapsed planning.
0:35:17 > 0:35:21Without it, it really isn't worth that much money at all.
0:35:21 > 0:35:24Now, it has had planning in the past so a precedent has been set
0:35:24 > 0:35:27but there's no guarantee you're going to get that planning again
0:35:27 > 0:35:29and that's a big risk.
0:35:29 > 0:35:32Let's find out who decided to take it on when it went to auction.
0:35:35 > 0:35:41It's lot 22, the site on Forest Road, Walthamstow, E17.
0:35:41 > 0:35:44Where do you want to start? 170 with you.
0:35:44 > 0:35:46170.
0:35:46 > 0:35:48175 with you.
0:35:49 > 0:35:52180. 185.
0:35:53 > 0:35:56190, 195.
0:35:57 > 0:35:59195, 200.
0:36:00 > 0:36:03205? 205.
0:36:04 > 0:36:05210?
0:36:05 > 0:36:07215?
0:36:08 > 0:36:10220?
0:36:10 > 0:36:11221?
0:36:11 > 0:36:13222?
0:36:13 > 0:36:15223?
0:36:15 > 0:36:17224? 225?
0:36:17 > 0:36:19226?
0:36:19 > 0:36:21227?
0:36:21 > 0:36:23228? 229?
0:36:23 > 0:36:25230?
0:36:27 > 0:36:29230. 231?
0:36:29 > 0:36:31232?
0:36:31 > 0:36:33231.
0:36:33 > 0:36:35232 back here?
0:36:35 > 0:36:38If not, 231 on my right.
0:36:38 > 0:36:40231, first time.
0:36:40 > 0:36:42Second time.
0:36:42 > 0:36:44Third and last time. Have you all done?
0:36:45 > 0:36:47Sold. 231.
0:36:49 > 0:36:52The buyer of that lot was Prashant,
0:36:52 > 0:36:56a property developer who originally started out as a pharmacist.
0:36:56 > 0:36:57Intriguing!
0:36:57 > 0:36:59I met him back at the site to find out more.
0:37:00 > 0:37:03- Prashant, lovely to meet you. - Pleased to meet you, as well.
0:37:03 > 0:37:05Congratulations.
0:37:05 > 0:37:10So how did you go from pharmacy into property development?
0:37:10 > 0:37:12- What was that link? - It just worked out
0:37:12 > 0:37:15in the sense that some of the pharmacies that I bought
0:37:15 > 0:37:17actually I bought freehold
0:37:17 > 0:37:21and there was some development potential in some of them,
0:37:21 > 0:37:24mainly putting in extra mansards,
0:37:24 > 0:37:27extra houses in land at the back, that sort of thing.
0:37:27 > 0:37:30So how long ago did you start this?
0:37:30 > 0:37:33It's been the best part of 25 years now.
0:37:33 > 0:37:37- And where? Always in this area? - Always in Hackney. I started off in Hackney,
0:37:37 > 0:37:42been brought up in Hackney, so a good old East End boy, really.
0:37:43 > 0:37:48And like many East End boys, Prashant is pretty shrewd when it comes to doing business.
0:37:48 > 0:37:53Before the auction he discovered that the site had planning permission.
0:37:53 > 0:37:56But he also unearthed a priceless nugget of information
0:37:56 > 0:37:59that left him with one very big ace up his sleeve.
0:37:59 > 0:38:02We made a couple of phone calls to the council
0:38:02 > 0:38:05and found out that the planning in fact had not lapsed.
0:38:05 > 0:38:09- It hasn't lapsed? - It hasn't lapsed, no, no.
0:38:09 > 0:38:10I think what happened was
0:38:10 > 0:38:15the planning for this particular plot was done
0:38:15 > 0:38:20at a particular date in 2005 before the new rules came in
0:38:20 > 0:38:22which said you only get planning for three years.
0:38:22 > 0:38:25When the planning for this particular plot came through,
0:38:25 > 0:38:27it was valid for five years.
0:38:27 > 0:38:30So we're OK as long as we build to 2010.
0:38:30 > 0:38:35- So you go to this auction and you've got a bit of information...- Yeah.
0:38:35 > 0:38:37..that nobody else has got.
0:38:37 > 0:38:38You must be like...
0:38:38 > 0:38:42Erm, we weren't sure that no-one else had got the information,
0:38:42 > 0:38:45because obviously the council wouldn't tell us.
0:38:45 > 0:38:49- We did try to make and enquiries and say...- "Who have you told?"
0:38:49 > 0:38:52"Has anyone else been asking these questions?"
0:38:52 > 0:38:55It just goes to show the value of doing your own research.
0:38:55 > 0:38:59Prashant has turned a development plot fraught with difficulties
0:38:59 > 0:39:02into a project he could start next week.
0:39:02 > 0:39:05Suddenly, it isn't so ugly after all.
0:39:05 > 0:39:10# Everything is beautiful
0:39:10 > 0:39:14# In its own way... #
0:39:15 > 0:39:18Are you going to stick to the plans that have been passed?
0:39:18 > 0:39:21Yes. I've got a couple of things I might try and do.
0:39:22 > 0:39:26- Such as?- Such as trying to get an extra floor.
0:39:26 > 0:39:28- An extra floor?- Yeah, yeah.
0:39:28 > 0:39:31- That's not exactly a subtle change, is it?- No, no,
0:39:31 > 0:39:34but we have been successful in this sort of thing before.
0:39:34 > 0:39:39If you can actually do something with the roof structures,
0:39:39 > 0:39:41change the roof structure slightly,
0:39:41 > 0:39:44now you don't need to get planning permission.
0:39:44 > 0:39:48- This is with the recent relaxation of planning rules.- That's right.
0:39:48 > 0:39:51There might be a way of creating a little bit of extra value on this.
0:39:51 > 0:39:55Again, this story highlights the advantages of research.
0:39:55 > 0:39:58Noting the changes in the law has given Prashant the potential
0:39:58 > 0:40:01to increase the size of his development.
0:40:01 > 0:40:07I'm not surprised to hear that he also has investigated how to build it, too.
0:40:07 > 0:40:11We were thinking that probably we will do this in a way to make it very, very quick.
0:40:11 > 0:40:14The building is very straightforward,
0:40:14 > 0:40:18- so maybe we can some prefabricated blocks coming in...- Right.
0:40:18 > 0:40:20..or maybe a steel frame.
0:40:20 > 0:40:22- Steel frame?- A steel-framed building.
0:40:22 > 0:40:26It's just like a Meccano set, very quick to do.
0:40:26 > 0:40:30How much is it going to cost to do it and the return you're going to get?
0:40:30 > 0:40:37The most that it will cost to do will be round about £500,000.
0:40:37 > 0:40:41We're going to try and get that down to about £300,000.
0:40:41 > 0:40:44That's a massive reduction in building cost,
0:40:44 > 0:40:48yet the 40% saving doesn't just come from construction methods.
0:40:48 > 0:40:52Prashant is currently looking into grants from the local council
0:40:52 > 0:40:54and even EU funding.
0:40:54 > 0:41:00That's because this development is going to be for a rather specialised kind of rental accommodation.
0:41:00 > 0:41:02So this is a kind of a halfway house,
0:41:02 > 0:41:05a special needs building, really,
0:41:05 > 0:41:09- for people who have been addicted to drugs.- Right.
0:41:09 > 0:41:12And then they've got to actually find a place to live
0:41:12 > 0:41:14after they've had their programme.
0:41:14 > 0:41:18That's a very specialist rental scenario.
0:41:18 > 0:41:22Does it pay well in terms of rent, to rent these things out?
0:41:22 > 0:41:24- Well...- Is it financially good?
0:41:24 > 0:41:28Generally, rents are about between three and four times
0:41:28 > 0:41:32what you'd get on the open market for a similar flat.
0:41:32 > 0:41:34- Three and four times?- Yeah.
0:41:34 > 0:41:38For special needs accommodation, the rental is incredibly high, yeah.
0:41:38 > 0:41:42Remember, the rental return on a one-bedroom flat
0:41:42 > 0:41:44could be £725 a month.
0:41:44 > 0:41:49But a flat for people in need could be more like £600 per week.
0:41:49 > 0:41:54Prashant could nearly pay his build cost off in a year and a half.
0:41:54 > 0:41:58But while the returns can be incredibly high, so is the risk.
0:41:58 > 0:42:03So are there any special things you need to consider with this kind of project?
0:42:03 > 0:42:06Apart from the fact that we have to provide a flat for a warden,
0:42:06 > 0:42:13we'll probably be putting in some CCTV cameras just to be sure
0:42:13 > 0:42:15- and probably an alarm system.- Right.
0:42:15 > 0:42:17Just in case someone has an event.
0:42:17 > 0:42:21- Well, listen, what a great story. Congratulations.- Thank you very much.
0:42:21 > 0:42:25- And it all comes down to research, you see.- Yeah, yeah.
0:42:25 > 0:42:30- And luck.- A little bit of luck, a lot of research. Well done.- OK.
0:42:35 > 0:42:38Well, there you go, if that isn't an advert for doing your research
0:42:38 > 0:42:41before you buy at auction, I don't know what is.
0:42:41 > 0:42:44Prashant has got himself a fantastic opportunity here.
0:42:44 > 0:42:46Planning, for goodness sake!
0:42:46 > 0:42:48It's going to save him months, loads of money
0:42:48 > 0:42:51and on top of that, he might even get a grant
0:42:51 > 0:42:56for half of what it's going to cost to do these flats. Brilliant story.
0:42:56 > 0:42:59Find out how he gets on, and if his luck continues, later in the show.
0:43:03 > 0:43:06As the saying goes, Martin, you win some, you lose some.
0:43:06 > 0:43:10So did today's buyers' gamble pay off or not?
0:43:10 > 0:43:11Let's see how they got on.
0:43:13 > 0:43:15Time to go back to Surrey now,
0:43:15 > 0:43:19where Rod, an osteopath, and Rebecca paid 160,000
0:43:19 > 0:43:21for this two-bed flat in Epsom.
0:43:23 > 0:43:25It was their first step on the property ladder.
0:43:25 > 0:43:28The only trouble was it was a bit small.
0:43:28 > 0:43:33In fact, so small that Rod decided not to take any chances
0:43:33 > 0:43:35when it came to their furniture.
0:43:35 > 0:43:39Rod's actually drawn out a small plan, so everything fits in.
0:43:39 > 0:43:42- He's drawn out a small plan?- Yes. - Good one, Rod.
0:43:42 > 0:43:45I did that before the auction, just in case.
0:43:45 > 0:43:46But with some redecoration
0:43:46 > 0:43:50and rejigging of the living room and kitchen layout,
0:43:50 > 0:43:52they did have some hope of creating some space.
0:43:54 > 0:43:58We returned two months later to find out how they'd got on
0:43:58 > 0:44:00and whether Rod's plans were accurate.
0:44:03 > 0:44:06Well, on first glance it definitely seems to have paid off.
0:44:06 > 0:44:11The cramped, one-person kitchen is now a far more sociable area.
0:44:13 > 0:44:17So in the kitchen and lounge area, we've taken down a partition wall,
0:44:17 > 0:44:20which came from this wall out to the corner here
0:44:20 > 0:44:22and back down into this wall here.
0:44:22 > 0:44:26Put in brand new kitchen units, brand new appliances.
0:44:26 > 0:44:29In the lounge, it's had a lick of paint and new carpets.
0:44:29 > 0:44:31We're quite pleased with it.
0:44:32 > 0:44:34It may be an optical illusion
0:44:34 > 0:44:39but it's amazing what a fresh lick of paint and lighter carpets can do.
0:44:39 > 0:44:42The flat may not have increased its footprint
0:44:42 > 0:44:44but does at least seem more spacious.
0:44:44 > 0:44:46However, as Rebecca explains,
0:44:46 > 0:44:50they had to think of ways round the lack of space.
0:44:50 > 0:44:53There was quite limited storage before,
0:44:53 > 0:44:55so we've utilised the roof space.
0:44:55 > 0:44:57We've put some floorboards down up there.
0:44:57 > 0:45:00We've added some wardrobes and things like this
0:45:00 > 0:45:02to add more storage.
0:45:02 > 0:45:05We've just had to really try to declutter our old place
0:45:05 > 0:45:07and try to fit everything in.
0:45:07 > 0:45:09As it is, I think we're doing fine.
0:45:09 > 0:45:13We've got everything in we needed to get in with a bit of space to spare.
0:45:14 > 0:45:19Nothing motivates getting rid of those unwanted presents like teasmades and foot spas
0:45:19 > 0:45:20more than moving into a snug flat.
0:45:21 > 0:45:23That bathroom was fine.
0:45:23 > 0:45:24It was in good condition
0:45:24 > 0:45:27and just needed a bit of redecoration to get it into shape.
0:45:27 > 0:45:30It seems that Rebecca was the person for the job.
0:45:30 > 0:45:34I've been really hands on during this renovation.
0:45:34 > 0:45:37I've done a lot of the DIY. I've learnt a few skills along the way.
0:45:37 > 0:45:40Tiling, for one, was quite difficult
0:45:40 > 0:45:42but I managed to live up to the challenge.
0:45:42 > 0:45:44She's very, very handy.
0:45:44 > 0:45:47Her DIY skills are definitely better than mine.
0:45:47 > 0:45:50She's done incredibly well, getting everything done.
0:45:50 > 0:45:53She's made a really good job of the kitchen
0:45:53 > 0:45:55and, really, everything she's put together.
0:45:56 > 0:45:59# I'm every woman
0:45:59 > 0:46:01# It's all in me... #
0:46:01 > 0:46:03But it's not all down to Rebecca.
0:46:03 > 0:46:05With the help of some friends,
0:46:05 > 0:46:08Rod did the kitchen demolition and reconstruction.
0:46:08 > 0:46:11The only person they contracted in was a plumber.
0:46:11 > 0:46:14While everything did go according to Rod's plans,
0:46:14 > 0:46:17there was one minor hiccup.
0:46:17 > 0:46:19When we were putting the kitchen in,
0:46:19 > 0:46:23we had to change a lot of the electrics after some of the units had been put up,
0:46:23 > 0:46:24which was stressful.
0:46:24 > 0:46:28But luckily I know a very good electrician who helped us with that.
0:46:28 > 0:46:30Apart from that, we've been quite fortunate.
0:46:30 > 0:46:35Everything, through luck rather than judgement, I think, has fitted in quite nicely.
0:46:35 > 0:46:39It helped that the flat was already in good condition
0:46:39 > 0:46:42but it still took some clever ideas and planning from Rod and Rebecca
0:46:42 > 0:46:44to make this into a home.
0:46:44 > 0:46:46With their friends' help,
0:46:46 > 0:46:50they managed to keep the budget to about £2,300
0:46:50 > 0:46:52and did it all within four weeks.
0:46:52 > 0:46:54There are some minor details left to complete
0:46:54 > 0:46:57but they're very relieved that the end is in sight.
0:46:57 > 0:47:02It's been quite a stressful time trying to get everything done
0:47:02 > 0:47:07because I work full time, Rebecca works as well
0:47:07 > 0:47:11and getting people in, and because we were relying on friends a lot,
0:47:11 > 0:47:13it has been stressful.
0:47:13 > 0:47:17It's a huge relief that I've got a lot more time on my hands,
0:47:17 > 0:47:20not having to spend my whole time on this flat.
0:47:20 > 0:47:23Even though I've enjoyed it, it's taken up my whole life
0:47:23 > 0:47:27and it will be nice to sort of have a bit of me time.
0:47:32 > 0:47:35As Rod and Rebecca bought the flat for 160,000,
0:47:35 > 0:47:40their renovation bill of £2,300 takes their total outlay so far
0:47:40 > 0:47:44to just under £162,500.
0:47:44 > 0:47:47Time to find out from two local estate agents
0:47:47 > 0:47:49if their efforts have paid off.
0:47:49 > 0:47:54I like the way the owners have redecorated the property in lighter colours,
0:47:54 > 0:47:56which has made the smaller rooms feel larger.
0:47:56 > 0:47:59Taking down the wall between the kitchen and the lounge
0:47:59 > 0:48:01has given it a sense of space
0:48:01 > 0:48:05and made the property feel larger than it originally was.
0:48:06 > 0:48:09'I think they've done a lovely job. They've kept it nice and neutral.'
0:48:09 > 0:48:12There's a few bits and pieces they could change,
0:48:12 > 0:48:14just to give it a bit more of a wow factor
0:48:14 > 0:48:18but as it is, I would say they've done a good job.
0:48:18 > 0:48:21So positive feedback for Rod and Rebecca, there.
0:48:21 > 0:48:24But could the flat be improved in any way?
0:48:24 > 0:48:30I don't think that there's anything I would particularly want to change.
0:48:30 > 0:48:33The rooms are still a bit on the narrow side
0:48:33 > 0:48:34but we can't do anything about that.
0:48:34 > 0:48:37I think the property is presented as well as it can be.
0:48:37 > 0:48:39They have maximised the space.
0:48:39 > 0:48:42It lacks a little bit of storage but equally, there's still space
0:48:42 > 0:48:45to put a few more built-in units around.
0:48:46 > 0:48:51Remember, the couple have invested about £162,500 in the flat.
0:48:51 > 0:48:53So what could they get if they sold it?
0:48:54 > 0:48:58The property would currently resale for around £230,000.
0:48:58 > 0:49:03The property would resale for between £240,000 and £250,000.
0:49:03 > 0:49:07- Wow.- That's a lot. That's more than we were expecting,
0:49:07 > 0:49:10so we're really pleased about that.
0:49:10 > 0:49:11It's really good.
0:49:11 > 0:49:16That top estimate could give them an £87,500 pre-tax profit.
0:49:16 > 0:49:21For a first step on the property ladder, that's pretty amazing.
0:49:21 > 0:49:24The estate agents reckon they could expect a rental income
0:49:24 > 0:49:26of up to £1,000 a month,
0:49:26 > 0:49:29which would give them a yield of about 7%.
0:49:29 > 0:49:32All round, it's been a job very well done.
0:49:32 > 0:49:35So one day, when they decide to upgrade to something bigger,
0:49:35 > 0:49:38will Rod and Rebecca venture back into the auction rooms?
0:49:42 > 0:49:45Yeah, I definitely would like to bid at auction again.
0:49:45 > 0:49:50It was an experience and I feel like I could do it again
0:49:50 > 0:49:52and get another good result.
0:49:55 > 0:49:59# Everything is beautiful
0:49:59 > 0:50:03# In its own way... #
0:50:03 > 0:50:07Yes, even this piece of wasteland in Walthamstow, East London.
0:50:07 > 0:50:10It went to auction and Prashant, a local developer, bought it
0:50:10 > 0:50:14for £231,000.
0:50:14 > 0:50:18He did some research and discovered that this plot did still have planning permission.
0:50:18 > 0:50:21It hadn't lapsed, as the catalogue stated.
0:50:21 > 0:50:25The proposed development was for flats for people with special needs.
0:50:25 > 0:50:29These would be partly funded by local authorities and the EU,
0:50:29 > 0:50:32a very worthwhile development.
0:50:33 > 0:50:37But nine months later, the hoarding remains up
0:50:37 > 0:50:39and the wasteland is still a dumping ground.
0:50:39 > 0:50:42The only things developing here are the weeds.
0:50:42 > 0:50:44We asked Prashant what's been happening.
0:50:47 > 0:50:53We contacted some of the local authority services people
0:50:53 > 0:50:56and unfortunately, because of the recession,
0:50:56 > 0:50:59they've cut funding for lots of projects.
0:50:59 > 0:51:01So we took a separate tack.
0:51:01 > 0:51:05We thought we'd finish the complete planning permission,
0:51:05 > 0:51:08including all the buildings control notices etc.
0:51:08 > 0:51:11We did that and then we contacted a few agents
0:51:11 > 0:51:16and they said that they can get a lot more money for us for this particular project.
0:51:17 > 0:51:20As the recession has affected Prashant's plans,
0:51:20 > 0:51:24he now aims to sell the plot with detailed planning permission.
0:51:24 > 0:51:27That would make this site a far more attractive package to investors
0:51:27 > 0:51:30and is an arrangement that suits him.
0:51:30 > 0:51:32This is a really good idea
0:51:32 > 0:51:35because we're taking a lot of the tears out of it,
0:51:35 > 0:51:39in the sense that we don't have to overlook the project ourselves.
0:51:39 > 0:51:41We've done all the, if you like, easy bits,
0:51:41 > 0:51:45which is getting all the planning and everything, the paperwork.
0:51:45 > 0:51:48It's ready for someone to start building.
0:51:48 > 0:51:51So with that nine-month delay and full planning permission in place,
0:51:51 > 0:51:55would the development still be housing for those in need?
0:51:55 > 0:51:58The planning permissions haven't changed from that,
0:51:58 > 0:52:00so the project will still be for people in need
0:52:00 > 0:52:03who can't get accommodation elsewhere.
0:52:03 > 0:52:05It will just be done by someone else.
0:52:05 > 0:52:07No, we don't regret it.
0:52:07 > 0:52:09I think it's a good outcome for us.
0:52:09 > 0:52:13We can move on to possibly a different, better project somewhere else,
0:52:13 > 0:52:14a bigger one, maybe.
0:52:14 > 0:52:18Sounds like Prashant's already casting his eye about
0:52:18 > 0:52:20for an alternative project to this.
0:52:20 > 0:52:24He paid £231,000 for the plot of land,
0:52:24 > 0:52:27so how much more did it cost to get this package ready to sell?
0:52:29 > 0:52:33We've spent 25 grand so far, including everything.
0:52:33 > 0:52:35That includes everything, really -
0:52:35 > 0:52:37architect's fees, building control,
0:52:37 > 0:52:43for the salaries for people who work for me, etc.
0:52:43 > 0:52:47And we're getting offers in the region of about £450,000 now
0:52:47 > 0:52:49for this site,
0:52:49 > 0:52:52so it's a healthy profit if we can actually move it on now.
0:52:52 > 0:52:54If Prashant can get that buyer,
0:52:54 > 0:52:57he's hoping the whole venture could make him
0:52:57 > 0:53:02a possible pre-tax profit of around £194,000 -
0:53:02 > 0:53:04all without one brick being laid.
0:53:04 > 0:53:08But time and planning permission wait for no developer,
0:53:08 > 0:53:13so should plan B fail, Prashant already has plan C lined up.
0:53:14 > 0:53:18Well, if we don't sell, our planning permission runs out in four months,
0:53:18 > 0:53:21so we'll start building at that point.
0:53:21 > 0:53:25We'll put in our building control notices
0:53:25 > 0:53:29and start laying the foundations and hopefully, it will be a quick job.
0:53:36 > 0:53:40As Prashant has invested £256,000 in the site,
0:53:40 > 0:53:42it's time to ask two local estate agents
0:53:42 > 0:53:45whether he should cut and run from this project
0:53:45 > 0:53:46or go for the build.
0:53:47 > 0:53:51In my opinion, the idea of selling the land on is a great idea.
0:53:51 > 0:53:53That way, he doesn't have to do the work.
0:53:53 > 0:53:56If he's made his profit at the front end, then fantastic.
0:53:56 > 0:53:59Selling on the plans is a good idea because it gives you cash flow.
0:53:59 > 0:54:01However, if he was to build it,
0:54:01 > 0:54:04then obviously, there's a greater profit margin.
0:54:04 > 0:54:06He could make more money from building
0:54:06 > 0:54:09but once you've committed your money,
0:54:09 > 0:54:13the longer it's out there, the more risk factor is involved.
0:54:13 > 0:54:17Far better in this market place, take the money and run.
0:54:17 > 0:54:19Once built, because it's quite a niche market,
0:54:19 > 0:54:22it would take longer than normal to sell it
0:54:22 > 0:54:25but there is a higher profit margin in that
0:54:25 > 0:54:27because special needs properties
0:54:27 > 0:54:29do sell for 15 to 20% higher than market value.
0:54:29 > 0:54:33The agents have differing opinions about the best way forward
0:54:33 > 0:54:35but let's get down to the nitty-gritty.
0:54:35 > 0:54:40As Prashant has already invested £256,000 in the project,
0:54:40 > 0:54:43what could he get if he sold the site with planning permission?
0:54:44 > 0:54:47If the land was sold with the planning permission,
0:54:47 > 0:54:50it would sell between £400,000 and £550,000.
0:54:51 > 0:54:55I think this plot of land is worth, with the planning, around 400,000.
0:54:55 > 0:54:58I think that's about right, really, yeah,
0:54:58 > 0:55:02because we're talking to a couple of people, as I said earlier,
0:55:02 > 0:55:04about 450,000.
0:55:04 > 0:55:07That would be about right, with planning permission.
0:55:07 > 0:55:11Working on that figure could give Prashant a pre-tax profit
0:55:11 > 0:55:13of up to 194 grand.
0:55:13 > 0:55:16But would selling on a completed development
0:55:16 > 0:55:18be more attractive?
0:55:18 > 0:55:21Remember, nine months ago, the build here was quoted at 500,000.
0:55:21 > 0:55:27Add this to his spend so far, and the total would be 756 grand.
0:55:27 > 0:55:29So what could he get if he sold?
0:55:32 > 0:55:35If the owner was to build the flats that have been approved here,
0:55:35 > 0:55:37six one-beds and one two-bed,
0:55:37 > 0:55:41you're looking at around 1.2 or 1.25 million collectively to achieve.
0:55:41 > 0:55:46If the building was completed, it could be worth up to £1.5 million.
0:55:46 > 0:55:51I think those values are absolutely at the top.
0:55:51 > 0:55:55They're beyond what I thought the place would be worth
0:55:55 > 0:55:56once it was built.
0:55:56 > 0:56:00I thought nearer about 900, 950.
0:56:00 > 0:56:04But 1.25 might actually tempt me to build.
0:56:04 > 0:56:08Even at that lower value, Prashant could be looking at pre-tax profit
0:56:08 > 0:56:11of about half a million pounds.
0:56:11 > 0:56:13So how does he feel about that?
0:56:13 > 0:56:15I feel very, very happy.
0:56:15 > 0:56:17Much happier than I was earlier.
0:56:17 > 0:56:21Suddenly, Prashant can see the benefits of staying the course
0:56:21 > 0:56:22on this one
0:56:22 > 0:56:25but he's not going to rush into it because, as we know,
0:56:25 > 0:56:28until he's done his research, Prashant won't make a move.
0:56:30 > 0:56:33I'll have to sit down and think about this.
0:56:33 > 0:56:35There are two things, aren't there?
0:56:35 > 0:56:37One is always take your profits quickly
0:56:37 > 0:56:41because you don't know what's going to happen later on
0:56:41 > 0:56:43but I'll have to sit down and think about it
0:56:43 > 0:56:46before I make up my mind exactly what to do.
0:56:49 > 0:56:53We hope you've picked up plenty of useful hints and tips on the show.
0:56:53 > 0:56:57And we'll have plenty more handy home-buyer advice next time on Homes Under The Hammer.
0:56:57 > 0:56:59- See you then.- Goodbye.- Goodbye.
0:57:19 > 0:57:21Subtitles by Red Bee Media Ltd
0:57:21 > 0:57:23E-mail subtitling@bbc.co.uk