Episode 21 Homes Under the Hammer

Buying property at auction has become increasingly popular as it can

be a good way to get bargains and exchange contracts quickly.

But it can be risky, especially in the current climate.

So we're here to show you how other buyers got on and guide you through the process.

Buying and doing up property can be very rewarding, but also fraught with problems.

Some people take to it like a duck to water,

others, well, like a cat to water.

Well, which will our buyers be today,

will they be quacking mad or purring with pleasure?

You might feel rather confined in this ground floor flat in Wiltshire.

Let me out!

Remember this derelict woodland lodge in Kent?

In 2006, you could barely see the house for the trees.

Find out how it's been beautifully reinvented.

It seems this plot of land in Yorkshire is proving fruitful.

One of the perks of the job,

delicious raspberries!

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them when they went under the hammer.

Today, I'm in Swindon, Wiltshire.

Midway between Bristol and Reading, it's just within commuting distance of London.

I'm here to see a property that the auction catalogue describes as,

"A two bedroom ground floor flat in the heart of old town in need of modernisation and updating."

It does say something which is very interesting, but I'll not tell you about that quite yet.

Patience, our little property seeking cherubs, patience.

I bet you can't wait, but hold your horses, this house is on Western Street, so, is it good, bad or ugly?

I've seen my share of all three, this one falls into the "good" category.

However, I imagine you'd have to spend more than a fistful of dollars to improve its kerb appeal.

Here it is, 65,000 quid.

Let's see what's in store behind the door.

Well, straight into your lounge.

Never ideal, as you get noise and cold coming through the front door there, but it's not a bad size.

Laminate flooring, it doesn't look like it's been well laid, but it's OK.

The box room there so it's all not too bad so far.

Then you come into this area of the flat,

it's a dark, dingy corridor, getting even darker and dinger that way.

Bathroom and loo, no windows there, which isn't ideal.

You can live with that. What I cannot live with is this room here.

It's the main bedroom, it's even darker, even dingier, it's like a cell in here!

The reason is just this tiny window.

Let me out!

I knew it would only be a matter of time before things started going

wrong for this property on Western Street.

Tiny windows, no skirting boards, dodgy electrics and the windows are mouldy.

This place looks as though it should be on a wild western street,

but, partner, the viewing doesn't stop there, no siree!

Another dark, dingy corridor, this one's narrow to boot, but it leads to the kitchen.

I mean, really not ideal at all.

The kitchen is not a bad size but clearly the units will have to be replaced.

I did mention an interesting thing about the property that just could redeem itself.

It's here, it's a cellar. It's a big cellar as well.

In the Victorian times this would have been used for storing coal, doing laundry, whatever.

Nowadays that can be a very important addition to the flat.

It gives you extra space, which the flat needs.

It will need a specialist in to sort it out, it will need tanking

and discussions with the neighbours in case there are party walls that you need their permission to touch,

but all in all, that is the saving grace for the flat.

I'm not sure the same can be said about this outside area, though.

So, to check out those saving graces, I've invited a local estate agent around to have a look.

It is very tired.

It does offer an awful lot of potential

and believe it will make someone a fantastic home.

A fantastic home, but is that downstairs cellar a seller?

The cellar, because there is no natural light it can't, in my opinion,

be used as a an additional bedroom, but would make a great second reception room.

Converting the cellar into a bed or reception room creates extra accommodation, which would be useful.

The flat has a guide price of £65,000, so, would it be worth doing it up?

When renovated, in my opinion, I believe this

property should be on the market for in the region of £100,000.

Not bad, that's £35,000 above the guide price.

When you've finished you could always rent it out.

Per calendar month, we would expect to achieve in the region of £550.

That's good.

That's bad.

And, well, that's ugly.

Well, if the dark bedroom and the narrow corridor doesn't put you off,

that kitchen and the excuse for a garden just might.

Still, it is in a desirable area, so I'm sure somebody fancied it when it went under the hammer.

50 I've got, thank you very much, sir. £50,000 we're going to.

So, £50,000, 52. 54 to you, sir, 54.

56, 58.

£58,000, the gentleman sat down. £58,000. 60, I'll take.

59 if you like? Otherwise the £58,000.

59, 59, 60, sir? 60.

61 round the corner, 61. 62, sir?

62, 63. 64.

At 64, OK it's back to you sat down at £64,000.

Against you at the back, 500 if you like.

500, sir?

No, at £64,000 for the first time...

At £64,000 for the second time... At £64,000 for the third and last time.

Dan and Katrina bought it with help from Dan's dad.

The couple, who hope to become property developers, paid £64,000.

£1,000 under the guide price.

We looked around at a few places.

We were looking for a change in lifestyle.

We saw this one, went to the auction and went for a bit below

our target price and thought, "great opportunity."

You say change in lifestyle, tell me more?

We both work for a big corporate company.

We got the offer of redundancy.

Redundant?

-Yes.

-How old are you?

-I'm 28.

I'm 28 as well.

-A bit of a shock, was it?

-We both had the option. We thought about it.

We thought we'd like to go travelling, take a bit of time off.

So we pounced on the opportunity, went travelling and got back and thought, "Well..."

Don't want to go back to the desk jobs.

We thought something like this would be a bit more exciting.

Wow! So a real change of lifestyle?

Yep, completely, no more nine to five.

# Working nine to five What a way to make a living... #

There's a lot of work to do on this property.

So their old nine to five jobs may seem like a breeze after the hours they'll need to put in here.

Luckily, they spent time travelling so should be well rested now.

So, where did you go travelling?

-South-east Asia, China, Australia.

-Everywhere!

-For how long?

-For five months.

-It was really fantastic.

Incredible scenery, just such a variety of people and cultures.

-We would definitely go back if we got the chance.

-Yes.

-If it all goes well maybe you will?

-Yeah, that's right.

It sounds as though they had a good time.

Before they go globe trotting again, they will have to get to grips with property development.

So, why this flat specifically, obviously there are other properties around here?

Partly the price. Partly cos it has a lot of stuff we could do ourselves

and the opportunity to make a bit of money from it.

It has the basement, which is a bit of an opportunity, and a great location.

Location is key to a good property purchase,

but I hope Dan and Katrina are prepared for the amount of hard graft

they are going to have to do here.

# Ready, set, go!

# Break up the pace and step on it

# Rip up the place if you want it

# Work, work You know you got to work, work. #

The most important thing is to give it a lick of paint, sort the floors out.

Give that good first impression so people walk through the door and get a great first impression.

We're also deciding what to do with the basement.

We thought maybe there's potential to create some space that maybe would add some value. So...

It's a very large space.

You know, we think that space is very important, particularly at this price range in the market.

So if we can turn that basement into usable space it would,

hopefully, increase the property value by quite a lot.

Converting basements and cellars is a bit of a specialist area, isn't it, tanking and...

-Yeah, it's something we wouldn't be able to do ourselves, we would need to get somebody in.

-Absolutely.

Have you looked through the costing of that, it's not necessarily cheap?

Will it add enough value to the property?

We understand that'll be expensive, we're getting a builder in to give us an estimate.

Right. Then make a decision on that?

Weigh up the pros and the cons of converting it.

Apart from that, what are you going to do, upstairs, for instance?

We are going to put a new kitchen in. The old one is quite dated.

We will put a newish kitchen in.

We'll do all the painting and decorating, potentially put

some new floors in cos these aren't the greatest floors.

I think we'll do all of the simple stuff ourselves.

We both own two houses in Newbury and we've done quite a lot of painting and decorating in those.

So all of that stuff we're completely comfortable with.

Dan might do some of the stuff in the cellar, but I'm not so keen on that.

I've installed a kitchen and a bathroom in my flat, so I may or may not have a go at that.

-But leave the specialist to the experts?

-Yes.

Have you got anybody lined up to do the work?

We've got some people coming in next week, builders, a plumber, electrician, got the works.

Everyone is coming next week. You're going to get lots of quotes?

-Absolutely.

-Yeah. At least three?

-At least three.

-Yeah.

Although the couple do have some experience, they're wise to leave

the specialist work to the specialists, it could be dangerous.

They're going to tidy up the garden and bring it back to life with a few flowers.

As they paid £1,000 under the guide price of £65,000, is the budget blooming too?

We would like to spend ten to £15,000 all in.

We'll see what happens when we start getting some estimates in.

Is that including the cellar or not?

That would include us cleaning it out, maybe making it look better,

tanking it and getting it sorted out, that would be an additional cost on top of that.

-A decision you'll make at the next stage?

-Yeah, when we get more information on the costs.

So, you've been made redundant, how are you financing this venture?

Primarily through a redundancy package and we're investing with my dad as well.

So you've put a lot of your savings into this?

-Indeed. A big risk.

-Are you nervous?

-Yeah.

-It's a big life decision.

I think it's natural to be nervous, so, yeah.

But potentially a good life decision?

We hope so. Absolutely.

# Good life, good life, good life Good life, good life, good life. #

With a three-month timescale they won't have much opportunity to enjoy the good life,

but this is their first development venture, so they're keen to make it a success.

If this goes well they're going to invest the money in another property.

They hope that in the future their portfolio will be big enough to allow them to go travelling again.

We wish Dan and Katrina all the best with their new venture,

but I am a little bit concerned as to whether or not they can really turn

the intrinsic problems with this flat around.

One bit of advice, though, for the flat in Western Street, watch out for cowboy builders.

Join me later in the show to see how they get on.

We now return to an auction lot we first showed you in June, 2006.

It was in the beautiful Kent town of Faversham

next to a rather colourful motel.

Wow, now this is a lovely location, look at the beautiful views

and you are only five minutes away from Faversham town centre.

As well as the motel, you have a gym here and a nursery.

I think the property I'm about to see is somewhere down there.

So, let's see what's in the woods today.

# If you go down in the woods today You're sure of a big surprise. #

Well, teddy bears may be a bit thin on the ground,

but this is definitely an example of somewhere you can't see the wood for the trees.

There's half an acre here, so you will have to be a keen gardener.

This is an amazing woodland setting.

Although, I have to say, it's a bit overgrown

and you would definitely need to do a lot of landscaping,

although I would like to keep some of these trees for the screening.

Now, the house, well, it's pink,

probably needs quite a lot of work

and there's a bush growing on the roof.

I'm going to go inside.

The house had a guide price of between £200,000 and £220,000.

It had lain vacant for many years and the woodland had been slowly

reclaiming it, making it a very eco-friendly house indeed.

Now, that's a big, old front door.

But the inside of this property is just like the outside, a bit of a shambles.

It really does smell damp and dank.

It's quite dark in here.

I think that's because of all of the bushes and trees are so overgrown outside. But it's not a bad space.

You've got gas central heating in here, but you would just need to totally and utterly start again.

Now this is a very long corridor with lots of little rooms going off it.

It's really dark in there, I would call it a small single.

It looks as if the Triffids are coming in through the window.

Just down the corridor is the second bedroom.

Like the rest of the rooms, it's rather boxy and needs a rethink.

Now look at this, we've got brown carpet climbing the walls.

I love it, but the size of this room, it's like a mini village hall.

With a rather dilapidated conservatory-cum-terrace area added on the back,

you can at least see the fantastic views that this site has to offer.

Perhaps that's how you should think of this lot, as a piece of land with potential to build?

I think this house needs to be demolished, but you must be careful how much you spend at auction.

Essentially, you'll be buying a building plot.

Let's see who bought it when it went over under the hammer.

113 now is Syndale Park Lodge.

Start me at 190, let's see where you want to start.

190 I've got on my right hand side.

190, I'm on the way.

200, it's against you.

200 it's with you.

210, it's against you now. 210 it's against you.

210 and 20. 220?

And 30? 230?

And 40 make it, 240. 250 make it?

250, it's still worth it, keep with it. 250 I have, 260 now.

260 and two. 262? It looks like a shake of the head.

If we're all done at £260,000 we're going to sell it for the first time...

£260,000 for the second...

Are you sure you're out? £260,000 for the third and final time.

It's yours, sir, for 260. Well done.

And your card number, please?

For £260,000, the new owners are David and his partner, Sally.

David ran a fashion company in London for 20 years.

Sally works as a university teacher.

Although David has done some property developing before,

he wasn't quite ready for what greeted him when he first saw Syndale Park Lodge.

When we first saw it, the first impression was, "My goodness, what a mess,"

but when we really looked into it we saw the roof looked good, the walls were solid.

When we came through the property and saw the view at the other side, then we got really excited about it.

-Sally, what was your gut feeling?

-I liked it, because when you walk into it it's like walking into a forest.

That part of the garden, it's so overgrown and then you suddenly find a little cottage tucked away.

So it felt quite magical, but of course coming in, it was such a mess inside, so dingy, but as David said,

as soon as you get outside there's that gorgeous view.

So I had mixed impressions, really.

Now they've got it, complete with all its mixed blessings, what are they going to do with it?

Plan A is to maybe take the roof off, keep the walls,

take everything out and strip the whole thing and build across it.

Still retain some of the walls.

If that does not work then plan B is to gut it, keep the roof on and do a few extensions to it as it is

and make it more of a small, pretty project.

What they really want to do is Plan C, a new-build kit home made of timber.

They could build it 60% bigger than the current footprint if they wanted.

Inspiration for the design and the construction of the new house comes from David's travels abroad.

From Canada we got a few ideas.

From that, I think importing various properties that I've

seen over there could be the way to do it, especially in cedar.

One of the companies in Canada I approached,

they've already done some pricing for us for delivering it,

it comes in four containers, delivered on site with two employees to help put it up.

What type of costings are you looking to erect a house like this?

We're working on a budget of no more than £150,000, which sounds

very, very low, but it looks like if we go that route it can be possible.

That's for a complete house?

It's a complete house but not the foundations, and not the surfaces,

we have to do that, put the plumbing in, the wiring and so on

and obviously the footings.

Subject to planning permission, the proposed house will have five bedrooms and four bathrooms.

There will be two wings, one of which is earmarked for David's father to live in.

Sally, how will the interior of the property be, will it reflect the outside?

The idea is that it's going to be big, but it's going to be open and light.

We're hoping we can have some mezzanine floors so we've got more than one level.

At the moment it's just a box, really.

The idea is to make it more interesting and exciting and it'll be very much an open plan place.

Very much open plan living.

Lots of glass so you can really take in all the views?

At the front, yes, definitely, so we can really enjoy the view.

What a project it's been.

After my first visit in 2006, David and Sally did get permission for their Canadian new-build.

The project ended up a mixture of conservation,

demolition and restoration all rolled into one.

When we first returned, ten months later,

a white cedar log home had been constructed, but was just an empty shell.

Join us later in the programme to see how the completed house looks two ½ years on.

It's amazing.

Coming up, this plot of land in Yorkshire seems to have the perfect address for appearing on our show.

Valuation Lane, fantastic!

When we last visited this woodland spot in Kent, the owners had started building their wooden lodge.

Two years on, we see the fabulous end result.

It's looked like a building site for a long time.

First, have this Wiltshire couple got their property sussed?

It's got the basement, which is a bit of an opportunity and just a great location.

Dan and Katrina bought this two bedroom flat in Western Street, Swindon, at auction for 64 grand.

They had both been working at the same company when they were offered redundancy.

We pounced on the opportunity.

Went travelling, got back and felt...

We don't really want to go back to the desk job, so thought something like this would a bit more exciting.

Let's go travelling ourselves and take a trip

round the house to see if giving up the nine-to-five was a good decision.

The small window is still there, but it's amazing how some skirting boards and new paint

really freshens and brightens this room up.

The rest of the house is looking good as well.

The last month's been very different, but we've enjoyed being our own bosses.

Yeah, doing what we want when we want.

We've tried to treat it like a normal job so we come in at nine and we leave at six

so we wouldn't get too tired of it.

We were a little more flexible about giving ourselves a day off here and there,

but in the last few weeks we've realised we need to get it finished

and we've been a bit stricter and put in slightly longer days.

-A seven-day week.

-Yeah.

Nobody said property developing was easy.

The hours can be long, the work strenuous and sometimes you have to go to places you may not want to.

So, this is the basement. You would hardly recognise it from how it looked before.

This was just full of junk. It was rotting,

a little bit mouldy so we had a big job in on hands to lift it all out.

That was the first job, it took two van loads of stuff to get it all out.

Then we decided we wanted a bit more ceiling height. We decided to take the bricks up.

We're not sure if that was a good decision, it took two tonnes of bricks up and down those stairs.

But, yeah, we got the builder in, he sorted the damp proofing out,

put these walls up, put the plaster on the ceiling and the walls.

He left it for us and we did the rest of the declaration.

Painted it, put these wall lights in, the laminate floor and skirting.

We're pretty pleased with it now. We think it looks pretty good.

A nice space, it could be used as a little den or TV room, something like that.

They had this basement done by professionals.

It's really not worth taking this on yourself, if you don't know what you're doing.

There is so much that can go wrong.

# Get down, deeper on down

# Down, down, deeper on down

# Down, down, deeper on down

# Get down, deeper on down... #

-Well, that's the down done, let's take a look upstairs.

-This is the new kitchen.

We completely ripped the old one out because it was in such bad condition and so old.

This kitchen was actually here. The previous owner had bought it but not put it in.

So we put that straight in and it's made the room look so much bigger and nicer.

We also put new tiles, new floor, new worktop, new curtains, painted the whole thing.

Now it just looks really nice, I think.

What a stroke of luck. The new kitchen came with the property and just had to be installed.

The bathroom didn't need upgrading at all. So,

along with the basement renovation, that was the three main jobs covered.

Let's continue our tour of the rest of the house.

Some of the work was done by contractors, so how did that work out for these novice property developers?

It worked out fine for us.

I don't know if that's just luck or maybe we're good at it, but

it worked out well.

It's nice being in control of your own money and making decisions.

I've got a problem of wanting to buy nicer things that cost more money.

Dan's reined me in and made me realise it's not my house,

so we can only spend money on things that add value.

It's easy to get carried away and forget

you're not doing your own home, but one for rental or resale.

We've spent approximately £12,000, including all our anticipated selling fees and mortgage fees.

The basement cost us £3,800, which was a lot less than we thought at first. So that was a good bonus.

There's still a bit to do, but their original budget was

between ten and 15,000, excluding the basement.

To get it all done for £12,000 is really impressive.

To check how they've done, we invited two local estate agents to have a look.

The first impression when you walk in, a good sized lounge, nice, bright and airy.

As you come through the hallway it's slightly dark but into a fairly new, nice kitchen.

Overall, a good size, area wise very popular around here, so not too bad at all.

Nice property. I like the tall ceilings.

I like the downstairs basement room.

It could be a good cinema room or a good hobby room or even a good place for somebody if they work

from home, they can do music, photography, or something like that.

I'm glad he likes the basement. Dan and Katrina paid £64,000 for this

property at auction and have spent £12,000 so far doing it up.

So, after putting in those seven days a week, what's it worth now?

I think somebody would be prepared to pay £100,000 for this property.

For resale purposes I would put a valuation of around £120,000.

£120,000?

Wow, that is really good, that's much higher than we thought.

That's fantastic.

That makes us really happy!

I'm not surprised they're happy.

Their outlay up to now has been £76,000.

They could make a pre-tax profit of between 24 and 44,000 quid.

They'd clean up if they sold it, but they could also rent it out.

I'd say rental figure you're looking between £525 and £550 a month.

I would set this to £500 per calendar month

for a two-bed in this area.

-That is good.

-That sounds about right.

-Yeah.

-That's good news, yeah.

-A bit higher than we expected, maybe.

Dan and Katrina took the risk of entering the property development world after being made redundant.

I think they've made a very healthy start.

# Let the good times roll...

Now that we've had the valuations, it has definitely been worthwhile.

-Yeah.

-It's gone to plan.

-I think it has gone to plan.

There has been no major issues that we didn't know about or any problems that

-we didn't know.

-We've learnt a tremendous amount.

-And I think it's gone really well.

Now we know the final figure, we can be really happy.

-Assuming it sells for that much.

-Yeah.

Boroughbridge is beside the A1(M) in North Yorkshire on the banks of the river Ure.

Equidistant between Edinburgh and London in the days of stagecoaches,

it was an important staging post.

The Crown alone had stabling for 100 horses.

In its heyday, Boroughbridge had 22 inns which served travellers who passed through by road or river.

The town is no longer as busy, but as it's just 30 minutes from Leeds, York and Harrogate,

it's popular for commuters and I'm here to see a plot of land.

Well, the plot is off one of the most unusual and aptly named lanes

I've come across in the history of Homes Under The Hammer.

Valuation Lane, fantastic.

It's hard to put a value on the lot I've come to see.

Yes, it's land and they don't make it any more, so, it's priceless, right?

Well, no, everything comes at a price and the guide for this was about £60,000.

So, off the lane, literally 30 seconds' walk from the centre of Boroughbridge is the plot of land.

It's a good size.

More importantly, it's got planning permission for the erection of a two to three bedroom bungalow.

That is very important.

The plot is relatively narrow and quite long, actually about 20 metres wide by 50 metres long.

That does throw up a few issues when it comes to placement of any building on the site,

but I don't think it's making the most of the space. A bungalow?

I'd be looking at terraces or at least semi-detached.

That way you are going to maximise potential and profit on the plot.

This is a conservation area, so, will the

planning authority permit a change from a bungalow to something bigger?

It's worth looking around to see if any precedent has been set.

Just down the road there's a plot with two houses being built on it.

Getting permission to do the same here could make this lot quite fruitful.

One of the perks of the job.

Delicious raspberries!

If you did buy this lot, what has the area got to offer?

I asked a local estate agent to find out more.

Boroughbridge is a popular market town.

It's got all the amenities you could wish for, supermarkets,

good local shops and close to the A1, so good transport.

If the new owners thought it was a bit of a waste to have

just one bungalow here, would it be possible to change the plans?

Planning permission has been difficult to obtain on the site.

I think the planners would be very cautious about any approach to alter the existing consent.

That's a bit of a thorn in the side of would-be developers with different

ideas for this land, but never say never, it's always worth asking.

If the plans can't be changed, how much could the end product be worth,

bearing in mind the guide price of 60,000 and around the same again to build.

The development is going to be for a three-bedroom chalet bungalow.

I think once it's completed it will attain somewhere around £200,000.

It should let for somewhere around £700 per calendar month.

Well a year or so ago this plot would have cost at least £80,000.

Reflecting the current market conditions, the guide price was set at £60,000. Did it still stack up?

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

So, a building plot

in Boroughbridge with the benefit of planning permission,

plans and planning permission will be included.

Who'll give me £40,000 for it?

Can we say £40,000 for the building plot? £40,000, are we bidding?

At 40, I don't think I can sell it to you, but it's nice to have the bid. At £40,000 only bid.

At 40 and two anywhere?

At £40,000, are we all done?

Nobody here to bid. At £40,000 and two. 42, 42 now.

At 44, 44 now bid.

At 44 and six is it now?

At 44,000 it's for nothing.

At 44,000, are you sure?

At £44,000... Are we going to miss it? Five.

45, 45 and six may you now?

46, some competition for you.

46,000 bid. At 46,000 are we all done?

At 46, I'll take seven. 47.

47, 48 will you now?

At 48,000, are you bidding? 48.

At £48,000, will you show some intent, sir?

At £48,000...

50 now. At £50,000 bid, at £50,000, building plot with planning permission for a detached bungalow.

At £50,000 for the first time, then...

At £50,000 for the second, if there's no more.

Your bid, sir, you're happy with it, at 50.

Second and last time...

The property is sold at 50,000.

It was Shane who picked up the land for £50,000, £10,000 below the guide price.

I went to meet him at the plot on Valuation Lane.

Why did you want to buy the plot?

I looked at the local paper.

I saw it advertised. At the moment, in the current economic conditions, it looked a good buy.

Tell me a bit about you, is this something that you've done before?

Well, I run a building company, so.

So, yes!

How did you start out?

I started off as a general labourer.

One of my first jobs was building a bungalow, when

I was 16 when I first left school, for a jobbing builder, funnily, his nickname was Bungalow Bill.

So it's quite apt that we've got this plot to build a bungalow on.

Presumably this plot of land a year ago would have been a lot more than you paid for it.

-Definitely. I believe that they were asking well over £100,000 for the plot.

-Right.

The guide price at the auction was £60,000.

-Yes.

-Even at that price, that was a good price in the current market.

-Luckily, I got it a bit cheaper.

-I know.

It was a good price.

Remember, the completed new build could be worth less than it would have been a year or two ago.

With Shane's experience in the building trade, has he thought about putting more than one house here?

I do believe that the people I purchased it off who gained the planning permission

did try to get multiple dwellings on the site, but there was objections.

The local authority...

They've had to pay back what they were trying to get on it and ended up with the single bungalow.

Shane's hoping to get the planning permission changed so he can build a

bedroom in the loft space and put a small sunroom onto the kitchen.

This will increase the footprint by about 100 square feet.

How much do you think it'll be worth when it's finished?

It's difficult to say on the market conditions, but I would say at least up to £210,000.

210? So it's worth doing for you?

Those are good margins. Usually you're looking at a third.

Usually you buy a plot of land for a third of the value of the finished product.

Build for a third and make a third.

If all goes well, Shane would stand to make more than a third again in profit.

So he could be sitting pretty.

Did he learn these valuable tricks of the trade from his first employer,

Bungalow Bill, or has he always been this canny?

Like most builders, I was quite good with me hands at an early age and took on the usual woodwork and

technical drawing at secondary school.

My grandfather ran his own business in the village where we lived.

He needed some painting work doing on the exterior of the shop.

Instead of getting a local contractor in, I gave him a price to do the work

and that was my first sort of contract.

-Great. From your granddad?

-At 13, yeah.

How much was your contract for, do you remember?

I think it was something like £100.

He paid me a cheque, I didn't have a bank account at the time.

I had to get it counter-signed and cashed with the local butcher!

So, the spirit of Bungalow Bill lives on, but will Shane feel the pain of the current

housing market when he comes to build here? I guess he's bought it at a good price,

which is the main thing, but with things as they are, you never know.

The only way to find out is to join us later in the programme.

So, did thing goes swimmingly?

Did our buyers go in with their eyes open or tight shut?

There's no escape, we're coming back now, ready or not.

Back to Faversham in Kent and the property we first saw in 2006.

David and Sally had bought this bungalow for £260,000 and planned to build their dream home here.

The big question was whether they would salvage it or knock it down and start again?

When we first returned after ten months, there was a surprise waiting for us down in the woods.

# If you go down in the woods today, you're sure of a big surprise...

A stunning new house - and David and Sally had got married.

Well, since you were last here a lot's changed. The original building

has disappeared, more or less, although it's still here in spirit.

Some of it will be incorporated into the new house.

The new house has

sprung up very, very quickly.

After the auction, it took seven months to alter the planning permission

so they could build an annex. It took only four months to get to this stage.

Work then started to build the cedar wood house that had been shipped in

four stages from Canada, complete with builders to assemble it.

So, what's happening here, there's a wall going to go across here, the doorway, that goes into

the bedroom, another wall going along here and here

would be the open-plan kitchen with the satellite area there.

Here would be the open-plan dining area, coming to this part and then the living area over there.

It sounded fabulous.

The shell had gone up and David, along with some builder friends,

was going to do a lot of the interior work.

Once finished, this would be a marvellous five-bedroom, four-bathroom dream home

and Sally couldn't wait to get started on the inside.

I'm beginning to be able to imagine it being home.

It's looked like a building site for a long time.

There were moments when it seemed impossible that we'd ever be ready to move, but now it's

coming together and I'm really looking forward to living in it.

Now, two-and-a-half years later, the place is finally finished.

We've been invited back to see their beautiful new home.

From the outside the cedar house blends in so well with the

countryside, that it looks as though it's been here for years.

And inside, the annex that required that extra planning permission is huge.

It has its own separate kitchen, a bedroom and a bathroom, all finished to a very high standard.

In the main part of the house, a light open-plan

living area has been created, which is divided into two levels.

The house has a wonderful smell from the Canadian cedar that was used in its construction.

The kitchen is located a few steps up on a higher level.

Plus there's this relaxation area with a real fire overlooking the lower level.

The house has a total of five bedrooms.

Two are self contained for guests with en-suites.

Everywhere the fixtures and the finish are superb, including that beautiful marble in the bathrooms.

David and Sally have been living in the house for two years, slowly doing all the necessary work.

When you were here last time this was just a shell.

We were describing what we were going to do here.

Basically we said we'd put a wall here, which is now here

and the kitchen is all done. We're really pleased with it.

On that side over there, we're going to put the dining table, but we got this lovely big dining table which

happens to be huge, it didn't quite fit, so we changed it and put it further down, as you can see.

We made this area very cosy by putting a nice wood burner and a few comfortable sofas

so we can relax whilst doing the cooking and entertaining.

All the wood in the house really makes it feel cosy here.

It's a great place for friends and family to meet.

To match the Canadian cedar they laid solid

Canadian oak flooring throughout, but it's not all been hard graft.

We had a huge party here before we put the oak flooring down and so on, but once that was out of the way

it's been full on to get it finished.

The moving-in party was great fun because it's a lovely house to have a party in.

Just celebrating, really, that we got to the point we could live in it.

We started living in it, really we slept here the night

of the party, that was the first night that we slept in the house.

It was camping, basically, for the first few months.

It didn't matter, the thing is it gradually got better and better all the time.

It was a lovely experience.

Sally and David only recently got married.

The extra two bedrooms they've created on the first floor

are ideal when their children or friends come to visit.

For all David and Sally's guests this home in the country provides

a perfect place to chill out and relax.

It does feel really calm here

which could be down to the environmentally friendly Canadian white cedar that's all around.

The accommodation doesn't end there, because above the detached garage

there was enough space to add a studio flat as well.

They have created a fantastic new property, replacing that tired old bungalow that once stood here.

The spectacular view remains the same and the couple are keen to make the most of it.

When we were building the property all this was an open veranda.

Basically this part here up to here

was just the outside, so we're coming outside quite often, but because of the wind, because

it's south-west facing, you can see the view and so on, we decided what

would be a good idea is to put glass in as we have done here, with double-glazed glassing and

just an added little bonus to the concept of living, we spend most of our time out here.

It's very simple, it's simplistic.

It seems quite a magic place.

They originally paid £260,000 at auction for the bungalow, which they

then demolished and replaced with this wonderful new house.

They'd hoped that their final costs would be

about £525,000 for the build and to complete the interior design.

Well, the place is now finished, so, what about that budget, did they manage to stay on track?

We certainly went over budget, but we did make a conscious decision to do that because we realised that it

was the right thing to do with the house, it was no point cutting corners or skimping on things.

The whole place needed to be upmarket.

And it is, with marble in the bathrooms and oak flooring throughout.

-Any idea how much it has cost?

-I suppose

the actual house itself,

somewhere around about £200,000 for the shell and the top, but then

you have to do the foundations, put the electrics in, the plumbing, so you can double that

and even go higher, but it is considerably more than 525, I can tell you that.

Time to see what two local estate agents make of the house and its fabulous far-reaching views.

They last saw it when it had just been built.

So they're in for a very pleasant surprise.

Well, what can I say?

It's just, wow! It's a fantastic house, absolutely stunning.

I can't believe the change that's gone on since I last saw the property.

I couldn't have imagined when we first came along here, when it was the derelict bungalow,

that something as substantial and fantastic as this could have been built.

The property's been finished to a very high standard,

using all good-quality materials and the finish is exceptional.

I think it's the attention to detail that really stands out for me.

It's an imposing property anyway, but the thought put into it for the bathrooms and the light fittings,

the amount of light that comes into the property is sensational.

Well, these two experts seem sold on this family home, but will that be reflected in their valuations?

Remember, Dave and Sally paid £260,000 on auction day and all we know is

that their budget is well above 525,000,

taking their total spend to considerably more than £785,000.

If I was marketing the property at the moment, I would anticipate a figure in the region of £900,000.

If you put it on the market at £975,000, you should be achieving around the 950.

-Fantastic.

-Wow!

That's pretty good.

-Great news.

-Hmm, very good news.

Interestingly, two years ago, when the two estate agents first

saw the shell of the building, they both agreed on a figure of 750,000.

Now they've agreed on a much higher figure, so, how does that make David feel?

Well, I feel amazing.

There is a recession on where we are at the moment, so

to go up that much finished, it just shows what we've managed to achieve.

It's great. The value of the property must reflect on

a lot of the work we've put into it, the marbled bathrooms and bespoke kitchen, etc.

We were a bit nervous at the beginning, but putting all this in, especially the oak flooring,

which was above our budget, but obviously it made sense and we're very happy with it.

So, a dream new home for these newlyweds.

I sometimes wake up and think does this place really exist?

Are we really living in it? So it still has a magical feel to it.

We're still madly in love with each other, after all!

Yes, even after all this!

This mature garden plot in Valuation Lane, Boroughbridge was bought at auction for £50,000.

The plot's in a conservation area and came with planning consent and architect's drawings.

The new owner, Shane, hoped to be able to modify the planning consent slightly.

The footprint for the building is roughly about 850 square feet of bungalow.

We're going to try and amend that, slightly.

So, did Shane manage to get the plans changed?

Yes, he did. Now he's got a bungalow that's out of this world.

The graffitied walls have gone, a brand-new garage put in its place.

There's an impressive 30-foot kitchen as well as a spacious front room.

There are also three bedrooms, one en suite.

Did altering the plans hold him up at all?

I wanted to increase the size of the property. So what we did is dug out,

basically, two sets of footings, one for the original scheme and one for the scheme that I required.

I knew with the timings, by the time I got the concrete

poured and started building up to damp-proof level, hopefully we'd

have a decision from the planner and I knew which size building we'd be taking out of the ground.

Luckily enough, it was down to the wire, but that's what happened and we was passed the larger scheme.

So we just discontinued the footings from the original scheme

and concreted over them.

Part of the planning process stipulates, because it's in a conservation area, obviously

the materials have got to blend in with the area and...

the historical element of the town, etc.

So, that in mind, also minded of what I wanted the property to look like, I went out and

found the materials that I think would suit best to the area.

Brick, tile, etc, but also with stone sills and timber windows.

So it's a traditional effect

but finished to a modern standard.

This modern but traditional effect has been carried on throughout the property.

There are high skirting boards...

..dado rails...

..and the architraving.

Clever use of oak in the doors and some of the floors

has given the whole house a lovely warm feel about it.

Well the kitchen's the room where we benefited most from the planning permission that we received.

Obviously with the garden room added on to the kitchen,

we were able to give over a nice large kitchen/diner

which works very well and it's very fashionable at the moment.

The kitchen, we used a nice cream type unit,

neutral colours, in framed units

with an old dresser so it gives a two-tone effect and the oak

compliments the oak flooring and the oak internal doors that we used.

I'm looking at the space now, it's really worked out well for

the property and completed the whole project.

Finished it off nicely.

It's not just the kitchen that's been finished off beautifully.

The three bedrooms and two bathrooms have also been done to the same high specification.

And when you go outside, the high standards continue in the very private garden.

As you can see, we decided to fully landscape the rear of the property.

Decking, just to the rear of the garden room.

To suit the orientation of the garden, the south-facing aspect and the walled garden aspect,

we decided to landscape and put the flowers in and the turfing, so that

people could fully appreciate the final property.

The garden's looking great, as is the bungalow.

Just to make any buyer feel safe, there are electric gates and other security measures.

But this couldn't have been cheap.

Well, obviously, the budget's increased because of the increase of the property size and also

because of the upspeccing of it and completely finishing everything.

I would estimate it to be somewhere in the region of 130 to 150 on the spend.

The property is going to be put on the market.

We'll seek out somebody to buy it.

Added to the original £50,000 Shane spent at auction, he's now spent between 180 and £200,000.

So, to check that the value of this plot on Valuation Lane is going in

the right direction, we invited along two local property experts.

I saw the plot before the property was built.

The plot itself was quite tight.

So I'm amazed to see what he's managed to get on.

The property has been constructed to a high standard.

I'm very impressed the way it's fitted out.

The first impression is one of quality.

The builder has given great attention to detail

which is fairly unusual in modern building terms today,

from the lovely deep skirting boards, the

kitchen and bathroom fittings, the landscaping of the garden is things you don't normally see.

It's a finished product.

That is going to be a number of key selling points that will appeal to the target market.

The outside space is delightful.

He's walled the garden, it's catching the sun.

It's beautifully laid out and easy maintenance.

Good property, good garden with easy maintenance so a promising valuation?

If I had to put this property on the market, I'd be looking for a figure of around £300,000.

My opinion, I will price the property on the market, at an asking price of £345,000.

I suggest that the £345,000 valuation is more in line with the true value of the property.

The lower valuation of £300,000 is a conservative valuation

and I've actually received an offer far in excess of the lower valuation.

Shane took a risk buying this plot, but he's likely to make a pre-tax

profit of between 100 and £165,000, minus normal reductions.

It's in line with what you'd expect for a high-risk development.

Risk equals reward.

Not everyone who takes risks gets reward, but it's certainly worked for Shane and he's done really well here.

Well, that's all for now, but we'll have plenty more for you next time.

-See you soon for more Homes Under the Hammer.

-Goodbye.

-Goodbye.

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