Episode 11 Homes Under the Hammer

It's hard to part with your hard-earned cash to buy property,

which used to be "safe as houses".

It can be daunting at the best of times, but even more so now.

But if you do your research, there are still bargains to be had buying your home under the hammer.

One man's trash is another man's treasure.

That's true in the property world.

Sometimes it needs imagination to see behind that dodgy decor.

What's in the treasure trove of properties today?

'This mid-terrace in Stoke-on-Trent was a classic two up, two down.'

A stud partition wall has created a useful extra room.

'In Kent, you'll need to spend a penny or two on this health spa.'

Lots of toilets round here, but it's all just a little bit grim.

'We go back to this chapel in Nottinghamshire,

'two years after we first visited.

'The conversion into a beautiful home is now finished.'

'All of these properties went to auction and we'll find out who bought them and what they paid

'when they went under the hammer.'

'This is Stoke-on-Trent, once home of the English pottery industry.

'Like many areas, it's recently seen a crack appear in house prices.

'The house I'm here to see is in a residential part of town.'

This is Smallthorne, where 90% of the properties are standard terraces

but the good news is it's a strong rental area.

What's up for auction?

This three-bedroom mid-terrace at a guide price of 50,000 quid.

Sounds good to look round!

I don't suppose too many surprises in store. Well, the red wall!

That's a bit striking.

You've got a fireplace, a gas fire.

I'd like to see that opened up, but a reasonable sized front room. Into the rear of the property.

Standard layout for this kind of house.

Rear sitting room with a fire.

Stick an open one in there. Then through to the kitchen.

'It doesn't look too bad at all.

'Plenty of cupboard space and, like so many terraces,

'behind the kitchen is the bathroom which is in pretty good condition.

'Keep the suite and concentrate your efforts on changing the paint!

'Outside, there's a decent sized patio area

'and rear access to the house, which is a bonus.

'Judging by the different cladding, there's been a few bits added over the years.

'Not bad at a guide price of 50,000.

'The area might have an abundance of terraces,

'but with its pebbledash exterior, this one stands out from the crowd.

'One thing I'm happy to see is double glazing already in place.

'That's a saving to start with.

'So, downstairs ticks all the boxes.

'In the front bedroom, it looks like the previous owner

'started to strip the wallpaper and gave up!'

A bit of redecoration required but nothing too major.

Nothing too unusual, until you step across the stairway

and come to what was the other bedroom.

Somebody's converted it into two. It's now a three-bedroom house.

Wouldn't have cost them very much. This is a stud partition wall.

It's created a really useful extra room for a family house.

I think, very imaginative use of space.

'Having the bathroom downstairs, you can make better use of upstairs,

'which is what's happened here, but it's a difficult decision to make.

'Some people like a bathroom on the first floor. For others, a bathroom downstairs is fine.

'To find out more,

'I invited a local estate agent to take a look at the property.

'How does it compare to terraced houses nearby?'

A typical terraced property that needs a bit of love and attention.

A bit of penetrating damp upstairs, possibly rising damp downstairs.

Wiring needs a bit of updating, other than that it's cosmetic.

'What would he advise?

'What are the best options here?'

Splitting the second bedroom, making the property a three-bedroom is a good move.

For people with two children, on a budget,

this fills a nice little niche market.

The rental market would look to pay £375 per calendar month.

'So it's not an astronomical sum.

'You'd have to balance that against the guide price of 50,000.

'I'd like to know what the property could be worth once refurbished.'

Once this property's improved, cosmetics are done,

at the moment, it's still only worth about £60,000.

'That's £10,000 over the auction guide price of £50,000,

'but a cautionary warning there for any investor.

'Fancy fittings and appliances can mean money down the drain

'if the market puts a ceiling on what people are prepared to pay.'

That third bedroom may be small but it does give this property

a competitive advantage over similar properties in the area.

For a £50,000 guide price, you can't go far wrong. Let's find out what happened at the auction.

Lot 35. Three-bedroom mid-terrace house.

40, can we say? 40 I'm bid. Thank you. At £40,000.

45 can I say now?

45, thank you. At £45,000.

50, can I say? I'll take one if it helps.

£46,000. At £46,000.

£47,000.

48? £48,000.

One to you? Yeah? £49,000.

£50,000. 51?

No. At £50,000. Bid's there and I'm selling it.

At £50,000.

New bidder. £50,500.

51? 51.

51 and a half.

52. 52 and a half?

52 and a half.

53? No? Are you sure?

52,500, then, for the first time.

52,500 second time.

Third and final time at £52,500...

Your lot, sir.

'That successful bid of £52,500 was made by brothers Steve and Tony.

'It's their first development project together.

'I met with them back at the house to find out about their plans.'

-Steve, Tony, congratulations. Got a nice little place.

-Thank you.

-Tell me about yourselves. What do you do?

-I'm a builder by trade.

-Tony, what do you do?

-I'm a chef.

-A chef?

-Yeah.

-Is that going to be useful?

-Pop over chippy for his dinner.

Keep me eye on him, over his shoulder.

How did this venture, working together in property, come about?

It's something Steve's always thought about doing.

-We thought, how the market is, it's now or never.

-Right.

-Just take it one step at a time.

-It's the prices that are appealing?

-Yeah, seem to have hit rock bottom.

They can only go back up.

So, why this particular property?

We've looked at a few. A couple of them pulled out. Another wanted a bit too much money.

The ones that we went for had gone and this one was a shot in the blue.

We hadn't even looked at it. He just said, "We're having this one."

So what was going through your mind?

It was just total disbelief.

When he said, "Sold. It's yours." I was like, "Has that happened?"

'So, a spur-of-the-moment purchase for brothers with different skills.

'Steve's experience is going to be useful.

'They both fell for the place just from the photo.'

-You hadn't seen it?

-No.

-A little picture in the auction book.

-You hadn't visited it, then?

-No.

-What about the legal pack?

-I've not had time to see it, yet.

You have actually bought the house. It's probably a bit late.

'Steve's got plenty of experience.

'He's lived in Spain for four years, where he set up a pub.

'He's built property out there, one of which he's renting out.

'I doubt if this house will need pools or balconies.'

What's the priorities for jobs on this one?

There's a little bit of damp. Probably put a damp course in.

-What about the Artex gone mad?

-That is shocking Artex!

Talk me through what you're going to do.

Perhaps a new kitchen and bathroom and decorate it right through.

-It's not in bad order.

-We're happy with it.

-The bigger plan is to do what?

-Rent it for three or four years.

When the market goes back up again, perhaps think about selling it.

'Steve and Tony paid £52,500 for the house and will save money

'doing some work themselves.

'No doubt Steve's building mates will lend a hand.'

-What time scale have we got?

-I'd say two, three months.

-Any idea how much you'd get for rent?

-350, 400 a month.

Depends whether it's furnished.

-That'll bring a reasonable return.

-An income. That's what we want.

Congratulations and good luck. Look forward to seeing how you get on.

All right.

'The brothers are going 50-50 on their first joint development.

'I wish they'd had a look around before they bought it!'

So, Steve and Tony breaking all the rules when it comes to this place.

Not reading the legal pack. Not visiting the property before.

Makes me cross. Anyway, they have ended up with a reasonable property.

How will they get on splitting the workload? I don't know.

Have they worked together before? No.

Find out how they get on later in the show.

For the next property, I've headed south to Kent.

We're in historic Rochester today, one of the Medway towns in Kent.

Charles Dickens, the author, used to live nearby.

He based many of his novels in this area.

The town is enjoying investment.

A 74-acre brownfield site by the river is being developed

with approximately 1,000 residences being built.

Great news for the area.

I'm here to view a property on the High Street

in a local conservation area.

We're here to see a commercial property, this four-storey building.

Until recently, it was a health spa but, as you can see,

it's on a busy intersection so there's no parking.

But we are close to the station, just over there. Let's look inside.

Its guide price at auction was £160,000 to £170,000.

I was expecting a very clean and clinical reception area.

It's more like a run-down office with no character at all inside.

This is a conservation area so you are restricted with what you could do to the frontage,

with regards to the windows and putting signs up.

There's a couple of floors upstairs I've got to investigate.

First impressions down here aren't great.

The decoration's seen better days and needs freshening up.

Climb up one flight of stairs and there's a clue about the former use.

Up here on the first floor is the sauna and shower area.

The steam room through there, lots of toilets round here,

but it's all just a little bit grim, isn't it?

But forget what it looks like and think about what it could be.

It's a freehold commercial premises.

If you set up a business here, you have long-term security.

That is key for any investor.

You might need the steam from the sauna to clean up!

On the second floor, the decor's not much better.

The lilac room is a good size but it could be even bigger

if you removed the false ceiling.

As for the adjacent black room, well, that's just really strange.

There's a kitchen on this floor,

plus an area for the boiler, full of pipes and hot water tanks.

The building has original Crittall metal windows

so you can really hear the traffic noise.

As it's a conservation area, you may have to keep them.

Three down and one floor to go.

The one right at the top is just two interconnecting rooms.

As a health and beauty spa, this had D2 business classing,

but it had a restriction so it's only been used as a spa

and not other D2 use such as cinema, dance venue or bingo hall.

Before that, it was a newsagent's with residential accommodation here.

Hopefully, it wouldn't be difficult to get permission to convert the other floors into residential.

I think it would be quite easy to convert this back into flats.

You would really have to think about internal layout.

This floor would be classed as a studio flat.

So we've got four rather shabby floors here but lots of potential.

There's also one very small bonus at the back of the property.

You can hardly call this outside space a garden

but the interesting thing is, if you do want to convert this into flats,

you've got a separate rear entrance, which gives you more options.

'I invited a local estate agent along to take a look

'and try to gauge the potential for this former spa.

'What options does this property expert see here?'

It's a really good property. It has a lot of uses.

I think, possibly, there won't be

any possibility of turning the ground floor to residential.

They will keep that as office use.

But I think that parts of the above could be made into a nice flat.

'Knowing the local area, how many flats could you fit upstairs?'

With the layout, you could possibly either have one very large flat

on two levels,

or alternatively, two one-bedroom flats on each level.

'One thing any buy-to-let investor wants to know is how much income the property could generate.

'What are the rental returns likely to be?'

The commercial rent, if you were to have the ground floor as an office,

you would be looking at £100 a week, probably about £5,200 a year.

For the flats, depending on how the accesses are,

the one-bedroom flats, if you had two of those, you'd get at least £550 per calendar month for those.

'The building went to auction at a guide price of £160,000 to £170,000.

'If renovated, what would its resale value be?'

The easiest thing for this property is to sell it as one block.

The access is probably too difficult to sell the flats off individually.

On a good market, once the work had been renovated and the flats done,

somewhere between £250,000 and £300,000 for it.

'Potential profits, then, but the work needed to convert this spa

'could get your budget in a bit of a sweat.'

This property is great for commuters, minutes from the station.

It offers plenty of options.

It could stay as a purely commercial premises,

or it could be converted completely into residential.

But did it attract the bidders at auction? Let's find out.

Let's move on, then, to lot 112.

Lots of potential here. Where are you going to start me?

Guided at 160, 170. Start me at 160? £160,000?

Start me at 150, then. At 150...

150, I'm on the way. 150.

£150,000 I've got on the left. 152, now.

152 I've got. 154?

154? 154 and six?

All those premises in Rochester and I'm looking for just £156,000.

156 I've got now. 158?

158? 158?

158 I've got. And 160 now, make it?

At 160?

All done at £158,000? No? We're a bit short. Come and talk to us.

'The rundown health spa in Rochester didn't reach its reserve

'and was withdrawn from the auction.

'Spencer, a local estate agent and property developer, made a deal.

'I met up with him back at the property to find out more.'

-I made a pre-auction offer.

-Of how much?

-£160,000. Which the vendor turned down.

Then, at the room, I could see the bidding slowing down to about 157.

The final bid was 158.

I approached the auctioneer after and tied up the deal at 160.

-Why did you want to buy this?

-My company is trading 300 metres away.

My lease runs out in six months.

Hopefully, by the time the work is done, I'll be ready to move.

-To use it as an estate agency requires A2 usage, doesn't it?

-Yes.

-Have you spoken to the planners?

-I have. It's a tricky situation.

Medway Council are reluctant to grant A2 use specifically.

But given this building's previous use, I'd like to think it's an upgrade.

'The building's D2 use allowed it to be a health spa.

'Spencer needs to change that to A2 use, a different category, to move his estate agent here.'

What if you don't get the usage? Do you have a Plan B?

The Plan B is to appeal!

Plan C would be, unfortunately, to rent out the commercial premises.

It used to have flats above. You're hoping to convert it into flats.

-What will you do in terms of layout? It's small in some spaces.

-Yes.

The floor we're on is going to be the bathroom,

the open-plan lounge-diner in an L-shape.

Upstairs, we'll create two double bedrooms.

The space will actually work really well.

'Squeezing two double bedrooms up here might be a challenge.

'Spencer's property portfolio includes very high-spec accommodation in London's Docklands.

'He's looking for a high quality finish here, too.

'This is his biggest refurbishment project so far.

'Of course, it will all depend on the planners.'

How long do you think it will take?

Optimistically, I'd say three months.

Knowing what builders are like, and we've got to work with the planners

and the local council who are quoting a 12-week turnaround, three months is possibly optimistic.

Have you got a budget? It's in disrepair.

I'd like to keep it between 30 and 35.

But I'm sure we'll go over budget.

It's a conservation area, so you've got to be careful with the windows.

That's right. They're keen on us retaining the Crittall windows.

The architect has mentioned that we'll have to have a sound engineer

to cool the sound from the road.

That will necessitate some modification of the windows.

Crittall do double-glazed windows with original frames. That's a possible expense.

-You'll need that soundproofing.

-Yes.

Those original single-glazed Crittall windows with metal frames

aren't just draughty, they let in noise and can be costly to replace.

Good luck. Let's hope you can turn downstairs into an estate agency.

-Good luck with the A2 usage.

-Thank you.

-Well done.

I hope Spencer's finances don't vaporise when renovating this former health spa.

There's an awful lot of work to do.

I think Spencer did really well to restrain himself at the auction.

He's got a great location for his business.

Let's hope he gets that A2 change of use so he can move his agency here before his lease runs out.

Find out how the negotiations go later in the programme.

'Coming up, two and a half years after our first visit,

'we can finally show you the fabulous conversion of this chapel.'

'We go back to Kent, where Spencer's a bit cheesed off.'

There were holes in the walls, in the floors, holes in the holes.

'First, we return to the tiny terrace with its extra bedroom.'

It's quite spacious, as far as third bedrooms go.

'We're back in Smallthorne in Stoke-on-Trent,

'where Tony and his brother Steve paid £52,500 for this mid-terrace.

'Steve's a builder. Tony's a chef.

'They hoped their purchase would cook up a nice income.

'It's a year since we first visited.

'We've returned to see how the brothers got on.

'From the road, after 12 months, there's not a lot of difference.

'Inside, however, there have been structural changes.

'The wall dividing the downstairs rooms has been removed,

'creating a lovely large living area.

'A new staircase has been built and relocated to the side

'to give valuable space.'

These are the main changes. This is a brand new staircase.

We put it this way to maximise space downstairs.

If the old staircase was here, that was the master bedroom.

We changed that into two smaller bedrooms.

Now this one is the master bedroom.

'So there are still three bedrooms but they have been reconfigured.'

We got windows from a salvage yard, which worked out quite cheap.

'The house had been converted into three bedrooms

'by dividing the rear bedroom into two.

'Thanks to the new staircase, there is one large bedroom at the back.

'The spacious front-facing bedroom has been divided into two bedrooms.

'Progress has been slow, as Steve needed to go to Spain to sort out a property he owns there.

'The brothers also bought another house together for renovation.

'Despite these distractions, Steve and Tony have done really well.'

We got one in Manchester at the same time,

so we've been jumping between the two to get them both finished.

-We're nearly there on this one.

-It took us four and a half months.

We thought, "What do you think about this?"

We did it as we were going along. It's turned out all right, I think.

'The hardest work has been completed.

'There's the decorating and the final touches still to do.

'As Steve discovered, that can take longer than expected.'

We put a new bathroom in. Finished tiling it 3 o'clock last night.

A new kitchen, combi boiler.

The kitchen we managed to get a good deal on with the cooker.

It comes to less than £1,000.

We need to tile under there, tile this side.

A bit of touching up and we're done.

'I bet Tony, being a chef, can't wait till the kitchen's finished.

'But who's been doing all the work?'

Compared to my day job as a chef, I've enjoyed it.

It's been really challenging.

We've had a couple of friends helping us, brothers-in-law

helping on the finishing stage, but we've done most the work ourselves.

'They paid £52,500 on auction day

'but how much have they spent on refurbishment?

'Have their bargains in the kitchen kept them on budget?'

A lot we got from a salvage yard which works out loads cheaper.

The new window upstairs, which was £15.

Then we got two RSJs for £60 each.

Originally, we were under.

Then Steve decides to put a combi boiler in, so that took us to touching point.

The carpet will take us a little bit over.

With the carpets, we're coming in at £5,300.

'Once the carpet's laid and the house decorated, what's the plan?

'To sell or look for tenants?'

I think we're just going to rent, get someone in,

hold selling till the market picks up again.

In 12 months', two years' time, have a look at it again.

'Time to see how two local experts rate the prospects for the house.'

The standard of work seems high.

I believe the purchasers have done quite a bit themselves.

They've stripped it back to brick and done the whole house.

Creating a through-lounge is a good idea and the staircase is a feature.

The stairs have been moved, creating more room upstairs

and also, a nice big reception room downstairs.

One or two corners have been cut.

Generally, it's reasonable quality.

The only other potential is paying attention outside in the yard area.

'OK, so how much could the house be worth once completed?

'The brothers paid £52,500 at auction and £5,300 on the work.

'Almost £58,000 in total. Could they make any profit here?'

From a resale figure point of view,

I'd suggest somewhere around the £75,000 mark.

I'd put the property on the market for £74,950.

'Is that £17,000 gross profit in line with expectations?'

What we expected. I'm quite happy with that.

'Or are they still looking for a tenant?'

I think we plan to rent. We have someone in mind.

'So how much is the typical rent in this part of town?'

I would put a rental value of £395 per calendar month.

Somewhere around £400 to £425 per calendar month.

Well, the person we have in mind, we arranged at 425,

so that's about right.

'That's £5,100 a year, nearly a 9% return on their investment.

'Renting does look like the best bet.'

Oh, yeah. Definitely.

In the current climate, you've got to sit on your investment.

'What's next for bricklayer Steve and Tony the chef?

'It looks like they've caught the property bug.'

We've got one in Manchester to finish, then we'll buy another one.

Auction time again.

'We're now going back to a property I visited in...

'Love WAS in the air.'

I like to think there's a romantic property developer in all of us.

The project that's up for auction could be absolutely ideal.

I'm in a village called Wigsley, just outside Lincoln, but actually in Nottinghamshire.

On offer is a former Methodist chapel.

That's got to get you excited.

It could be brilliant. However, look what you find when you walk up.

A huge green door.

Look like it's not so much St Stephen's as Shakin' Stevens.

# Green door

# What's that secret you're keeping? #

'The chapel went to auction at a guide price of £100,000.

'I'm excited about the construction of the place. Look at the detail!

'It looks like a big property,

'plus, there are two extra green doors at the back of the building.'

Whoever owned this place got a job lot of green paint.

Through another green door, through to this rear area.

It's really unusual, a kind of kitchen up to a little bathroom.

Then through into this which, I imagine,

was sort of the ancillary area of the Methodist chapel.

Not a bad size space. Nice wood panelling. Very cold.

Obviously, no central heating. A few nice features.

Nice fireplace, but I get a feeling

there's more elsewhere.

That's nice to have, but what you're buying really is this,

the main part of the old chapel.

Imagine the pews here, the pulpit there, a few things on the wall.

If you're doing a restoration, there are things you need to take into consideration.

Often, one of the biggest things is the roof trusses.

See this massive piece of wood going across?

That forms the main structural part of the roof.

In an ideal world, you'd want to create another floor.

To get an idea of the problems,

the minimum height of a ceiling is above my head height there,

eight or so feet, up to there.

By the time you've got a floor with the joists and the soundproofing,

you can add about that much on.

That takes us up another rung or two on the ladder.

You won't have enough head height underneath these cross-members.

You've got major constructional work

but once you're over those issues, you've got a very nice space.

'This former Methodist chapel shows signs of its religious past,

'but the services have long since ceased.

'The building has been used as a garage,

'so at least some "servicing" continued

'as the mechanic's pit is still here.'

So, a property with potential, as they say,

but a lot of work and you haven't got any land with this,

which I think will be an issue once it's finished.

Let's find out who bought it at the auction.

We move on now to lot number 25, a substantial and attractive

former Methodist chapel in the village of Wigsley.

Start me at 90,000 for it. 90?

Well, 80, if you like.

Thank you. I've got you, sir. I don't know how I missed you.

At £80,000. 82, also at the back of the room.

84. 86.

88. 90,000.

92. 94, three of you.

Both of you out now. The bid is seated at £94,000.

96.

98.

100,000. At £100,000.

At 102. 104. At 104.

106. 106.

108.

At £108,000.

110. At 110.

Lady's bid seated at 110. Both of you at the back are out.

-112.

-And 112. Thank you.

Mr Walter. At £112,000.

14, may I say? 114.

114.

116. 116.

At 116. 118.

120. At £120,000. Are you sure? I'll give you a minute to think.

Bid is on my left at £120,000.

One, if you like. At £120,000.

Selling once at £120,000.

Going twice at £120,000.

Are we all done at £120,000...?

Sold to Mr Edward Walter on behalf of a client. £120,000.

'That bidder who paid 20% over the guide price isn't the new owner.

'He was bidding on behalf of Eric,

'who has strong associations with the village.

'Eric's been in the building trade all his life

'and owns his own company constructing new homes.

'I met him at the chapel to hear about his plans.'

-Why did you want to buy this?

-Memories from being a boy.

-Really?

-I was born in the house next door.

-Oh, wow!

Then, when it was sold on as an industrial...home sort of thing,

to an Irishman,

I spent a lot of hours in there watching him repairing vehicles.

He moved on and the last person that had it was a signwriter.

He then left and it went up for sale.

So, having been born in the village, I thought, "I ought to keep that."

-Do you remember it as a chapel?

-I can't remember it being a chapel where people came to pray.

But I remember it being a chapel in 1953, at the coronation.

We went in... I was eight years old.

We went into there and all got our mugs and had a coronation party.

With long tables?

Yeah.

Well, this was the room which was laid out for that type of thing.

How does it feel to own it? You've known it for all your life.

Well, it feels as though I've got a lot of work to do.

-Talk me through what you'll do.

-We'll put a mezzanine floor in.

The main area will probably be bedrooms with a passage down.

A nice porch at the front, and make it possibly a four-bedroom property.

'Eric's well qualified. He started as a joiner when he was 15.

'His house building company has won awards for high quality.'

It doesn't have any land with it. We're in next door's garden here.

-Is that going to be a problem for resale?

-No, I don't think so.

The house next door and the blacksmith's shop

-belong to myself and my sister.

-Right!

If the planners allow us, we could incorporate some of that land

into this building so that it made it a much more saleable prospect.

-Do it up and sell it on?

-Yeah.

-How long is it going to take?

-I'd think, probably over 12 months,

from now, before it'll be finished.

-How much is it going to cost?

-Between 100,000 and 150,000.

-To do the work?

-To do the work.

'Local lad Eric and his family are taking over the village!

'His building company has just completed an impressive development

'around an old barn opposite the chapel.'

-We can expect the same level of quality?

-Yeah. It'll be done right. It will be nice.

'Later in the show, you can discover why, when we first returned,

'Eric was getting very cross with all the delays.'

I've only had the one meeting with the planners.

I just wish they would make decisions a lot quicker.

'Eric's prayers for the chapel have been answered.

'Later, we'll show you the beautiful conversion he finally achieved

'over two years after the hammer fell.'

When it comes to property, you never know what's going to happen.

Peel off wallpaper and plaster may follow.

It's important to have time on your side and a contingency budget.

What happened to the plucky purchasers on today's show?

'We're returning to this busy junction in Rochester, Kent,

'where this commercial property was bought for 160,000

'by estate agent Spencer.

'The property had been a health spa.

'Spencer planned to relocate his estate agency to the ground and first floors,

'converting the rest of the building into a two-bedroom flat.

'18 months later, we've come back.

'I know there's been a property slump, but the estate agent's window

'hasn't got any houses in it!

'The offices of the former health spa

'look more like a builder's supply shop than an estate agency.

'On the first floor, the sauna, showers and cubicles have gone,

'and one large, light open space has been created.

'Right at the top, the attic room has been scrubbed clean

'and refurbished.

'It all looks great, but what happened to Spencer's plans?

'Didn't he want to create a two-bedroom flat

'above the estate agent's?'

Originally, we felt the size of the property warranted two bedrooms.

That idea wasn't looked upon favourably.

It's become a one-bedroom property which I'm really happy with.

The layout works really well.

'The floor above the shop

'is going to be an office for the estate agent's.

'The flat, accessed from the rear,

'occupies the two top floors above.'

This is the first floor of the flat.

The bathroom and the stairs up to the bedroom.

This is the main living room. We've still got the floor covering to do.

In the kitchen, there's going to be laminate flooring and some tiles.

It's turned out really well.

It's much bigger than I'd hoped and it's really light.

'Replacing the original metal windows wasn't straightforward

'because of the conservation area.

'This meant using modern Crittall versions with double glazing.

'It wasn't just the noise from the traffic Spencer tried to keep out.'

Because of the location fairly close to a main road and busy junction,

it falls in an "air quality management area".

We've had to adhere to guidelines to ensure the tenants are safe

in the air they're breathing.

That's involved installing a specialist air extraction machine.

It's something for developers to look out for.

I've been in the business for 15 years, I was unaware of it.

# All I need is the air that I breathe... #

'And the issues didn't stop there.

'Spencer's using the shop for his estate agency and an office.

'That meant meeting strict regulations

'to deaden sound and heat transfer between the business and the flat.'

This is the ground floor.

We're going to have a reception area here,

with funky contemporary furniture.

It's going to be a nice environment.

Often, people are daunted about coming in.

We're going to make this as welcoming as possible.

'It's 18 months since we saw the property.

'Spencer paid 160,000 for the building.

'With planning delays, air quality issues and the soundproofing,

'has he managed to keep to his budget?'

I originally said 30 to 35 for the budget.

We're currently at the early 50s.

The reason, in main, due to the cost of the extra windows,

the air extraction system and sound deadening.

I'm actually really glad, in the end,

that we didn't divide it up as a studio.

I don't think there'll be any problem reselling it.

'Spencer's one local estate agent. Time to see what two others make

'of his office and one-bed flat.'

They've got a very good shop front. That will look really professional.

Prime location for commercial business. It's a very busy road.

Not many flats round here are on different levels,

so maybe a bit of an advantage, something different.

'Different indeed, and I'm sure it would get a lot of interest being so close to the town centre.

'How much could this property expect to achieve on the rental market?'

Rental for the one-bedroom flat would be £550 to £575 per calendar month.

I would think we'd be looking round about £650 per calendar month.

The agent that said 650 is pretty much on the money.

The other agent is way out.

'The flat isn't finished, so maybe that's why there's a disparity

'between what the estate agents and Spencer think.

'Remember, Spencer is an estate agent, too.

'What's the value of the whole property, the commercial space and the flat?

'Spencer paid £160,000 for the building and, so far,

'he's spent just over £50,000 doing it up.'

In today's market, I would estimate it at £250,000.

In this current market, to sell the whole building as it stood,

I'd be looking at somewhere around about £250,000 to £275,000.

'Potentially, around £40,000 to £65,000 gross profit,

'minus the usual expenses.

'How does that sound?'

I'm quite happy with the valuation.

It's a little bit less than I'd expect for it as a whole.

Yeah, it's more or less in keeping with where I see it.

'The refurbishment's taking longer than anticipated,

'but what a transformation!

'Has he got any tips for anyone planning a similar refurbishment?'

The best advice I could give to developers is do your homework,

do your homework, do your homework.

There's stuff that I've encountered that I had never encountered.

You can never research too much.

'Good advice for any would-be developers,

'buying under the hammer or not.'

'Earlier in the programme, we showed you how, back in 2007,

'Eric bought this former chapel in Nottinghamshire for 120,000.

'He hoped to convert it into a luxury home.

'Eight months later,

'not much had changed.

'Where the worshippers once prayed, they'd just moved a ladder!

'No matter how hard we looked,

'we couldn't see any difference in the back room...

'or the tiny kitchen area.'

# ..You saw me crying in the chapel... #

'Just what had Eric achieved?'

Very little since you were here.

We've had meetings with planners.

We've worked with the architect,

trying to get drawings they'll agree to - they haven't agreed to any.

We're on our third or fourth set.

'Eric's initial idea was to add an extension and convert the chapel into a four-bedroom house.

'Two of the beams would be removed and a mezzanine floor added.

'That was rejected by the planners.

'It's not in a conservation area,

'but a conservation officer insisted that all four beams be retained.

'It's resulted in changes to Eric's plans.

'He hopes he's found a solution.'

This is the fourth layout that we have for the chapel.

This is the one that we're proposing to submit to the planners.

We've got the porch on the front.

That is the only new piece.

We're going to retain the beams,

those two, at the front, above the lounge.

There will be three bedrooms and a bathroom on the first floor.

On the ground floor, a lounge, dining room, kitchen.

If they aren't acceptable, we shall go to appeal.

'Eric was confident that he would get planning permission.

'The council agreed that it could be converted into a dwelling.

'The issue was the size of the conversion

'and the retention of those beams.

'18 months later and the waiting's paid off.

'Eric's revised plans were passed and the former chapel is now

'a beautiful three-bedroom home.

'On a cold day like this,

'that new porch is a godsend.

'Inside, the room where the worshippers once prayed

'has been divided into two.

'It's produced a large living room at the front.

'The rear is now a kitchen finished, appropriately for today,

'in Arctic white.

'The large meeting hall at the back has, again, been divided into two.

'And a lovely bathroom's been installed.

'The planners eventually agreed

'that Eric could remove some of the beams,

'allowing three bedrooms and a bathroom to be built upstairs.

'How long did it all take?'

We had to wait possibly a year before we got the final planning.

We had a meeting with the planners and the conservation officer.

They gave us their views and, eventually, through my architect,

we managed to come to a compromise and finished up with a three-bedroom property.

'It took four sets of drawings, but Eric's perseverance paid off.

'The former chapel's now been rewired.

'There's a new roof

'and wooden windows matching the style of the original building.

'Upstairs, three bedrooms and a second bathroom have been built.

'There had been an issue with head height, but Eric found a solution.'

This was the room where it started.

When we constructed the two walls at the end,

we decided to build two RSJs in and put the Velux rooflights in.

So, with the Velux rooflights needing to take off the slates,

we decided to re-roof the whole place, then put the Velux in.

It suddenly struck us that we could make this a nice room

by raising the ceiling, which was only just above head height.

We gained probably about 600mm by removing the ceiling joists

and putting them higher.

As you see, it's made a lovely room.

'The property's beautifully finished.

'Attention to detail is obvious.

'How much has it cost on top of that £120,000 that Eric paid

'on auction day?'

I hoped, originally,

that I could get all the work carried out for 120 to 130.

I think it's cost me nearer 150.

But that is a cost figure, without any finance

and the cost of the finance.

'Once planning had been obtained, it took ten months to complete.

'Eric seems happy with the result.'

It's turned out much better than what I anticipated.

I knew I could make it nice.

Through one or two things that we've done, it's made it really nice.

'The building's been used for vehicle repair

'and as a signwriter's studio.

'Eric's made sure its origins as a chapel are still visible.'

When we came, you couldn't actually see the writing on them.

On the top it was, not emulsion, it was distemper.

We carefully scraped it off

and all the words came out with the gold lettering.

We thought we could save that.

So it was all cleaned with warm water and then we varnished them.

And you see the result.

'Who's been involved in the restoration of the former chapel?'

Most of the workmen are a similar age to me -

all close to retirement.

They've worked for me for 15 or 20 years, most of them,

and so we work together as a team.

Everyone has their views and we look at everybody's ideas.

That enables us, with all the experience, to come up with the goods.

'Eric's friend Barbara has been responsible for the interior design.

'Now it's finished, is Eric tempted to move in and make it home?'

I could possibly live in it, but it's not what my wife would like.

She likes the property,

but with having no garden, it's not everybody's cup of tea.

'On a cold day, any warm drink would be nice.

'Time to discover what two local estate agents think

'of the renovation.

'Eric wants to sell, so how much could it be worth?'

When I came through that door,

I couldn't believe what he's done to it.

I really like it.

It's a good design. It's been well executed. I saw it before.

It was obviously in quite a state back then.

The overall finish is fantastic.

People like the open plan.

You've got the lounge and the kitchen.

You've got a dining room, a study,

three bedrooms and a bathroom upstairs.

I'm really into these chapel conversions and this is a good one.

It does have its drawbacks, such as the tight plot it sits on.

It lacks a garden.

Things are changing and people don't want so much garden,

but depending on what price we put on it, that could be a factor.

'A lot of busy professionals don't want the hassle of a garden

'so it could prove a plus if Eric fancied renting.'

To rent, £700 per calendar month.

I would put this on the rental market at £750 per calendar month.

Yeah, I'm not looking to rent it. I want to sell it if I can.

'So, how much could the chapel sell for?

'Eric paid £120,000 on auction day

'and has spent £150,000 on sorting it out.

'He'll have to add in legal expenses and finance fees as well.'

Realistically, you can put this on the market for £270,000.

I would put it on the market for £265,000.

'No profit for Eric on those valuations.'

I feel that's just a bit too low, really.

I've had another valuation and he valued it at 280.

So, I think it would be good value for money at 280.

'Eric's achieved an impressive result with this former chapel.

'He's created a fabulous new house next door to where he was born.

'He must be very pleased.'

I think we've more or less got what we want.

We wanted to make it still look like a chapel,

but be nice and comfortable for somebody to live in.

It's made the village look better. It's stood empty for so long.

It's got to be used for something

and I think it's turned out to be a really nice property.

We hope you've enjoyed today's tales from the auction room.

Join us next time for more Homes Under The Hammer.

-See you then.

-Goodbye.

Subtitles by Red Bee Media Ltd