Episode 22 Homes Under the Hammer

Welcome to Homes Under The Hammer.

Whether it's a plot, a home or a commercial opportunity...

There's always a huge variety on offer in an auction catalogue.

So, join us now as we follow some of the thousands of people who buy their home under the hammer.

The bidding process can be quite a nerve-racking experience.

But, if you've done your research and you've worked out your budget,

you could actually enjoy it.

So, let's see what today's bidders bought.

This house in Southampton's been extended.

There are plenty of rooms, but where will they end?

It's very long. It just goes on and on and on.

In London, I reckon this property had a remarkably low guide price.

Ching, ching!

Now, for that guide price, you really are getting your money's worth.

And this three-bedroom end-of-terrace in Nottinghamshire's

ideal for someone with a burning love of features.

A very small fireplace, but it is a feature.

All of these properties went to auction

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

That is yours, sir.

You don't have to be a property expert to know that property prices have gone south, recently.

South is exactly where I am, in the southern city of Southampton,

home to the Spitfire and from where the Titanic

sailed on its doomed maiden voyage.

So, two iconic periods of British history in one location.

But will today's property, which had a guide price of 115,000 to 120,000,

leave me on cloud nine or sinking in despair?

Well, it's an oddly shaped, detached house

with three or maybe four bedrooms,

depending on how you configure this rather higgledy-piggledy place behind the shop.

Now, here's a classic example of why you need to visit a property

before you think about buying it.

According to the auction catalogue,

this is a three-bedroom detached house.

Further down the particulars,

it says the commercial ground floor shop is not included with the freehold title.

That shop is this shop here. The property that's up for auction is adjoining the back of it.

What's very significant, is that one of the rooms of that property

actually comes right above this shop.

It's what they call a flying freehold.

That is significant and could give complications when it comes to the legal side of things.

It's another example of why it's really important

to look at the catalogue and to read the legal pack.

Let's take a look inside.

The property went to auction at a guide price of 115,000 to 120,000.

# Come fly with me Let's fly, let's fly away... #

Bearing that flying freehold in mind,

let's see if the inside hits the heights.

First impressions, well, a very steep staircase.

There's an immediate return there. We'll check that out in a minute.

The other thing I noticed is the fact we've got this concrete floor.

Obviously not original and, who knows how that's been put in.

In fact, what I'm seeing is, it looks to me like somebody

has already started doing some work on a damp problem.

If this floor wasn't put in right, that could well have been

a deciding factor in terms of creating a damp problem.

I'm a bit concerned about the huge great holes in the walls.

Not supported very well at all.

Obviously, some serious work going on there

to try and solve what was probably a serious problem with damp.

I'm puzzled. Did the previous owner start the renovation,

hit major problems and decide to give up and sell,

or has the new owner started work already?

More digging and brick removal in the rear sitting room.

Really serious amounts of the wall been taken away.

It's not a bad-sized space. The house itself is interesting.

It's very long. It just goes on, and on, and on.

The kitchen here, the units don't look like they're that old to me.

They're clearly very tired and you could definitely give this place

a bit of a spruce by sorting this room out. Then it carries on.

Down this corridor where you'll find the only loo and bathroom in the property.

That's not ideal. There's a separate door there which is interesting.

It gives you flexibility in terms of how you might actually use this place.

Especially when I tell you that there's yet another bedroom.

It's classed as a reception room at the moment.

I don't know why. It's a bedroom.

This property's had more extensions

than a footballer's wife's hair.

It just goes on and on.

And there's still this large back garden.

Time to view the top floor.

Here we have that staircase with the interesting return.

It could actually be the solution to our problems.

Up here there are problems.

Small landing. To the front you've got a bedroom which flies over the top

of the property downstairs.

That's your flying freehold. The problems, more seriously, are here.

Bedroom two here, but bedroom three can only be accessed

through bedroom two, so that isn't ideal.

The solution could be to swap around the the stairs to create a corridor.

It would then give you the individual access to each of these rooms.

That's what you need to do.

Although the property's large enough,

I would resist the temptation to convert it into two flats.

If you could sort out the stairs and create separate access to each bedroom,

renting out each individual room then becomes a more attractive proposition.

What will a local estate agent think

of this property with its flying freehold?

Remember, it went to auction with a guide price of 115,000 to 120,000.

It needs a fair bit of work doing to it. Work has probably started.

It's got a lot of bedrooms and a lot of reception rooms.

It has got the potential to become a good investment.

There is a fair amount of reworking that needs to be done

to the property to allow that.

Landlords around here would look at it as the bedrooms -

three bedrooms, two reception rooms, potentially a four or five-bedroom let.

When you've got rooms that go through from one to another,

obviously, it can't be accommodated for bedrooms along those lines.

And, of course, there's the issue of that flying freehold.

This is the property for an experienced developer.

How much could it be worth once completely renovated?

What rental income could be achieved as a single let?

Rental valuation for the property, as a whole property,

would probably be around £700 per calendar month.

Resale valuation for the property, once renovated, would be approximately £160,000.

# Come fly with me, let's fly let's fly away... #

Well, interesting one, this one.

A lot of property and good potential for a buy-to-let, I would say.

However, I am concerned about that flying freehold.

Let's hope whoever bought it checked it out

before they paid their money at auction.

We're now going to go to lot 24,

This is a three-bedroom property with three separate reception rooms.

An ideal landlord or investment purchase.

I'm going to open the bidding on this.

Somebody wish to start at just £110,000? 110 we have. Thank you.

I now need £111,000.

111 with you, sir.

Back to you at 112. 112 we have got.

113? 113,000. 114?

Now, I need 115. 115. I need 116.

116,000 is bid.

117's on the telephone.

117 on the telephone.

The gentleman's back at 118.

119,000. I've got 119 here on the phone, we're looking for 120.

119,500.

120 is bid on the telephone.

Now looking for 120,500.

120,500 is now back in the room.

120,500.

No, a shake of the head from the telephone table.

To you, sir, for the first, at 120,500 for the second,

for the third and final time, sold to you, sir. Your number, please.

The final successful bid of 120,500 was made by Jason.

He's a bit of an expert at property restoration.

I met up with him at his new purchase to hear about his plans.

-Jason, good to meet you. Congratulations!

-Thank you.

-Why did you want to buy this place?

It was primarily to protect the shop

which I've worked on for about two years.

-You own the antiques shop at the front?

-I do, yes.

-Oh, great!

I wanted to protect it from unknown tenants and that sort of thing.

I spent about two years restoring it.

I went to endless lengths to try to do it the way a Victorian would do it.

Working on listed buildings is really what I'd like to do.

For the moment, I think this will have to do.

You've gone for something which is fairly straightforward here.

I guess you're interested in this because you own the building down below.

-Yes.

-That wasn't a problem.

Correct, yes.

-You know the bloke who owns the place above?

-I'm not going to sue myself.

What's the plan for the place?

I could knock it into five-bedroom lets.

I think it's a little bit cramped and I would limit

the kind of person that would want it.

I probably will make it a four bedroom let.

Before that happens, Jason's got to sort out the layout.

But judging by the attention to detail he has showed in his shop

that could prove pricey.

What are you going to do about the layout upstairs

cos it's not ideal, is it? You need a corridor up there.

Well, there's more than one way of doing this,

but my current thoughts, if I'm entirely honest,

are to take six steps off the landing

holding on to that wall there

and come in to the first room, the middle room.

-Oh.

-And have a dry line wall going into the end room

so that I have created three rooms instead of two lettable rooms.

So you can go up 90 degrees or you can go straight on to another six steps

which then lead into a corridor which connects up to the end room.

What about downstairs?

Well, I'm being a touch more practical with this building

than the one at the front.

Probably a new kitchen. The bathroom I may well leave alone.

Apart from the tiles. Then the carpets throughout.

-It's not that big a job.

-How much are you planning to spend?

I think it could cost, including interest payments to the bank,

about £16,000, but if it went to about £21,000

that wouldn't surprise me at all.

Who's doing the work?

Me and somebody I've known for a few years, he's very good.

We'll just use odd bits of labour here and there

bring in plumbers when we need them.

Jason's determined to do this property up to the highest standard.

But I'm worried he's losing touch with the limited potential here.

I feel his first love is renovation.

He showed me the major work that he's already started to tackle, the damp.

Well, tell me what an Earth you've started to do here?

Well...it had some appalling damp problems.

I've got all these meters and it was shooting right up to the top of the scale.

What we're doing is, you do it in small sections at a time...

You've taken massive amounts out of this wall. Won't it fall down?

No, it doesn't worry me, greatly.

This, this isn't the old Victorian plaster.

This is modern cement, you can see the grey colour.

It's very strong and it will hold it up.

You can do about a metre at a time quite safely.

Just build it up again with, I think, three damp courses.

The original one that's slate will then feed a plastic because

plastic you can bond together well with various things.

The top one will be lead and nothing will ever pass through lead.

-That's this here?

-Yes.

-You're literally putting a layer of lead all around here?

-Yes.

One thing's for sure, nobody can accuse you of not doing a proper job of it.

-That's very kind, thank you.

-It's true. Good luck with it all.

-Pleasure.

-We look forward to seeing how it turns out.

Good, so do I.

There are all sorts of reasons why people buy property

and, for Jason, guaranteeing he's not going to have nasty neighbours was a major one.

You certainly can't argue that he's going to

do a great job on sorting out the damp.

As to everything else, you can find out how he gets on later in the show.

For the next property that went under the hammer, I've come to Plumstead,

a suburb of the London Borough of Greenwich.

With transport links to the city centre, this could be a plumb place to find property bargains.

This is Vicarage Park.

It's an area that's predominantly Victorian houses.

Here's the property. It had a guide price of £200,000 to £225,000.

A small price to play for three flats in this four-storey house

with great links to the centre of town.

It's looking a little bit sad and grubby on the outside.

I'm going to have a look inside.

The run down exterior might explain why that guide price was so low.

And I don't you think it's a hopeful sign for the state of the interior either.

Now... this house has obviously been empty for long time

judging by the sea of newspapers and letters everywhere.

There's a few Christmas decorations thrown into the equation, as well.

But on first glance, it's looking rather tatty.

We've got wallpaper hanging off everywhere. There's a bathroom here.

Kitchen at the back, bedroom to the right

and a really nice sized lounge and high-ceiling.

Big bay window there.

It's got the bones of being a nice property.

But I just want to explore a bit more first.

At the back there's a drab and dingy yard which feels a bit oppressive.

But it does lead-up to a surprisingly large, overgrown garden

and that, I reckon, has real potential.

As for the house, there are another three floors

and two flats to see so it's onwards and upwards.

Now, this is the first floor flat.

You don't know what you're going to find every time you open a door.

There's lots of rooms. It's a bit of a maze in here.

A kitchen area, you've got a bedroom, a bathroom

and to the front of the property a rather large sitting room area.

You've got nice high ceilings in here.

I've got to say, it's quite a good space

with lots of light coming in.

But it feels like it's been carved up in a rather odd way.

I'd employ the skills of an architect to really have

a good, hard look at this building and think of a much better layout.

Sadly, you've got no beautiful original features.

You do have this rather big sash bay window.

But somebody's decided to stick some lead on the windows

to give you that sort of leaded light effect.

It's not really working for me, I have to say!

Let's go upstairs and see what's going on on the top floor.

Upstairs, there's a split level flat with three good-sized bedrooms.

It extends up into the attic space and has got me thinking,

did the original owner miss a trick here by only having three flats?

I think there's a lot of potential with this building

and here is why. I would divide this flat in to two separate dwellings

with its own front door just here.

I would also create a ground-floor extension and call that a two bed.

Making this property four separate units, not three as it's currently laid out.

Ching, ching!

Now for that guide price you are getting your money's worth.

Remember the property went to auction guided at £200,000 - £225,000.

Creating a fourth flat would require a further separate bathroom and kitchen.

But it could prove to be a very valuable option.

Time to ask a local estate agent

what he thinks is the best way ahead.

Is there any potential in converting it back into one family home?

I don't see the benefit of doing that, financially,

there's not the money in this area because

the prices in this area will be capped off

and you really wouldn't get the money back.

It's always best to split them into flats,

you'll get a lot more money back that way.

With a good renovation of the three flats costing about

£65,000 - £70,000, what sort of returns are we talking about?

For a one-bedroom you'd be looking at about 130,000 - 135,000.

For a two bedroom, you'd be looking at £150,000 - £160,000.

So with that current layout, the flats could fetch a total of £430,000.

And the rental returns offer a very healthy 9% yield.

So, definitely a great one to go for.

I think it's a fab rental property in an ideal area.

Let's see who took this on when it went under the hammer.

Lot 160.

Freehold mid-terraced building with two self-contained flats

and self-contained maisonettes. Where shall we start?

Someone give me 180. Thank you, sir.

180 sitting on my left. 182,500?

182,500. 185,000.

185,000. 187,500.

187,500 on the doorway.

190,000 over there. 192,500?

192,500. 195,00, 197,500?

200,000. 202,500. 205,000. 207,500.

210. 212,500.

215,000. 217,500.

220,00, 222,500. 225,000, 227,500.

230,000. 232,500. 235,000. 237,500.

240,000. 242,500? No?

It's your bid at 240,000. 242,500?

Thank you. 242,500. 245,000? 247,500?

Right behind you, 247,500. 250,000 sitting down.

252,500.

It's with you, sir, sitting down.

255,000. 257,500 anywhere else?

Back on the door. 257,500.

260,000. 262,500? No? Why not?

261,000. 262,000. 263,000.

No?

Still with you here, reservation sir, at 262,000 on my left.

The first time at 262,000, the second at 262,000

and for the third and final time at £262,000.

Are we all done? I think we are.

Sold to you sir at £260,000.

Well fought, sir.

That successful and really keen bidder

is Mayur and his wife Anjenna.

They bought these flats for £262,000

£47,000 over the top guide price of £225,000.

Guys, congratulations.

I've got to say, you looked very keen and very happy at the end of that auction.

I was indeed.

What's the story behind you keeping your hand up in the air?

I thought if my hand is up in the air, all the other bidders will realise this hand isn't going down.

And say, "OK, this guy's not going down, let's stop".

Fortunately everybody else put their hands down.

We couldn't see you because you were hiding behind somebody else. 262,000 is a good price.

It's a good price and during the auction I was thinking, don't keep your hand up, put your hand down.

But I didn't know what his game plan was.

Mayur's individual bidding strategy certainly paid off and that's not all.

They bought without viewing it first.

It was recommended by Suresh, a trusted friend who's also a property sourcer.

That was unusual, but the real surprise came when they told me why they had bought the house.

We've got another two properties that are rented out at the moment.

We want to go and live in India and work on a couple of projects.

One project is for underprivileged children and we want to run a school for them.

The other project is going from one village to another providing sanitation for them.

Fantastic. That's such an amazing cause.

You guys are working really hard to get this up and running so you can ultimately go out and help others?

-That's right.

-How involved have you been out in India with these projects?

We got married in the foothills of the Himalayas and they are running

some projects so we want to get involved with them.

So, Anjenna, how do you feel about the project in India?

I'm quite excited about it.

I love India, I love the weather, so I'm looking forward to it.

It's a completely different change of lifestyle, so I'm looking forward to it.

What a fantastic reason for getting into property developing.

Although this purchase is but a step to even bigger things beyond, what have they planned here?

At the moment on the ground floor we've got a one-bedroom flat.

We're going to turn that into a two-bedroom flat.

On the ground floor there's going to be an extension at the back as well.

The first floor at the moment is a one-bedroom flat.

We're going to turn that into a two-bedroom flat as well.

The second and the third floor are a three-bedroom flat. We'll change the second floor into a two-bedroom flat.

And the top, we'll turn into a one-bedroom flat.

I reckon adding that fourth flat on the top floor is the best way to take this place forward,

but to achieve that the couple have given their team of builders

a pretty hectic renovation schedule of three to four months.

Mayur has bags of confidence, but little in the way of project managing experience.

I expect that timescale might prove a bit tight.

What's your budget for the work here?

The budget is 75,000 all in, 65,000 for the builders and 10,000 for the expenses.

How are you going to finance that?

Greenwich council have got this regeneration scheme at the moment,

whereby if there's a property that has been empty for more than six months, which this building has been,

they'll pay up to 75% of the renovation costs.

If I let it out to the council again.

-So are you going to let it out to council tenants?

-Yes, we are.

What happens if you then decide to sell on?

You can't sell it for five years. We have to rent it out for five years.

But we don't, this is a long-term project for us.

While the council will part-fund the refurbishment, the money to buy on auction day came from Anjenna.

Mayur has certainly got the property bug, but what's her favourite aspect of property development?

-I don't like anything about it.

-Charming!

Why are you doing this?

Is this to support your husband?

Yes, it's a good investment. I'm not going to get my hands dirty, but the potential is good.

OK, she's telling you fair and square and straight here and now, she's not going to be helping.

I'm financing the properties. All the money is coming from me.

He's just doing all the hard work. He's working for me really.

What's the one thing that you're worried about with this?

Maybe I'm just a little bit naive, but at the moment I'm not worried about anything.

You're very positive.

Look at that big grin. Have you ever seen such a big grin on a guy?

That's what worries me.

-Is he always this happy?

-Yes, he is.

Very much so. It's contagious.

-Good luck with this project. I hope you manage to finish in four months.

-I hope so too. Thank you.

-Well done. Anjenna.

-Thank you.

-Thank you very much.

So Mayur and Anjenna are taking on a mammoth project with,

not a lot of experience behind them.

I've got doubts about their timescale.

Just three to four months.

Mayur is just so laid back.

Will they make it to the foothills of the Himalayas to start the next chapter of their lives?

I really hope so. You can find out what happens later on in the programme.

Coming up: I unearth a plus point behind this end-of-terrace house in Nottinghamshire.

If it's going to be a family home, it's a nice bit of space for the kids to play in.

We return to this property in London where Anjenna hasn't just provided

the finance, she's been busy getting everyone working.

Yes, definitely I've been cracking the whip. It's been fun.

But first in Southampton hindsight is a wonderful thing.

If I hadn't had the shop attached to this building, I'd have taken one look at it and walked out again.

Back to Southampton where early in the programme Jason paid £120,500 for this building.

It was behind the antique shop he already owned and he planned to rent out individual rooms.

But there were problems.

The property suffered from damp and although it was very long,

access to the third upstairs bedroom was through the second bedroom.

So he plans to move the stairs and create a new corridor.

18 months later we've returned and Jason's Antiques stock seems to have expanded.

While at the back, the garden needs a bit of attention.

Heading inside, the downstairs room right at the back of the property is

now a bedroom with some character furniture that Jason has obviously found through his antiques contacts.

There's now lovely parquet flooring too.

The modern bathroom suite has also been replaced with period pieces and beautiful reclaimed tiles.

Although a wall has been moved in the kitchen and it's had a makeover,

the rest of the downstairs is still to be finished.

So, how has the top floor fared?

Jason took us up there on his new staircase to find out.

This was the Victorian staircase that was originally there.

As part of the plan that was originally for bedsits.

I knocked all this down and put some stairs in.

But the problem that I realised was essentially this was like going into a cell. It was extremely dingy.

With interest rates low I realised a flat was financially possible,

so the compromise I came up with was to knock this through and make a kitchen there,

so there will be a butler sink by the window,

the bedroom over there, and the bathroom there.

The joists will have to be altered in the kitchen but that's about it.

So in the end Jason decided to convert the property into two

flats and let them out, rather than the three individual rooms.

But after 18 months, progress has been a bit slow,

although Jason seems resigned to the time it's taking.

When I first bought the property I realised that dampness was the biggest issue here.

The dampness went on and on and on.

The floors had to be dug up because of rats pulling up all the plastic PVC, the dampness going everywhere.

After a lot of back-breaking work the damp has now been cured.

How much has all this cost?

My initial budget was 16,000.

I was going to do what a lot of people do, a slap of paint etc.

It's just tipping over 60,000 and will come in about 70,000.

Ouch! That's over four times his predicted budget.

OK, he's had the added expense of separate meters for the two flats but this property is turning into

a money pit and it's still not finished.

To keep the two flats separate, one of the downstairs rooms needs to be divided.

Jason intends to put in a Victorian French window to add character.

Once that's done, will the upstairs flat be finished? What's left to do?

On the first-floor flat there's a bathroom to fit.

Some electrical work.

We'll probably change all the doors upstairs because I don't like these fire doors, with old Victorian doors.

Sand the floorboards, fit the kitchen.

Although the ground floor flat is still very much work in progress,

Jason has already let it out to a friend who runs the antiques shop.

And he's got somebody in mind for the top-floor flat as well.

Time to discover what two local estate agents

think of Jason's buy-to-let.

How much do they reckon he could rent the two flats for once finished?

I think the conversion is looking good.

If I was to buy the property, I'd be doing the same thing.

The previous layout of the property was slightly unusual so it did need to be rectified.

I think what they're doing at the moment works quite well.

The ground floor flat conversion works very well.

I think it's been a good investment.

I'd have liked to have seen a finished product a lot sooner.

I think the conversion is taking a long time.

Jason has already let out the downstairs flat for £525 per calendar month.

He anticipates a similar figure from his top floor tenant.

How much would the experts suggest?

For the rental market I would visualise the downstairs flat

going on the market in the region of 550 per calendar month.

With the upstairs flat, 575 - 595.

For one-bedroom flats in this local area

you're probably looking at around £500 per calendar month per flat.

A touch low. I thought they had, if I wanted to go for the absolute full money, about 550 each.

The average between the two does seem to be not a million miles away from it.

What about a resale valuation for the two flats once they're completed?

Jason paid £120,500 at the auction and his budget is heading towards £70,000.

It makes a total of around £191,000.

In terms of selling, once renovated and fully

completed you're probably looking at around £85,000 per property.

I could see the ground-floor property on the market for 120,000.

The upstairs flat, I would like to think we could achieve in the region of £125,000.

What does Jason think of that?

There's a huge difference between the two.

I'd have thought the ground floor one because it has the garden

about 100,000 and this one about 85,000 - maybe 90.

On those figures he'd just about break even.

Would he consider selling?

No, because I might eventually do other projects and sell them,

but this one I'll keep because it's attached to the shop.

Jason has definitely learnt a lot doing this project.

Long term I reckon he can't wait to tackle a really grand old property that needs lots of work. Am I right?

I'd love to renovate a listed building.

They cost a lot to do up.

With the current market, I don't think I can do that.

I think I'm stuck doing rental properties for the foreseeable future.

Anything wonderful is cancelled.

Now, where can you get a three-bedroom semi-detached house for a guide price of 45,000 quid?

Mansfield in Nottinghamshire.

It doesn't look too brilliant from the outside but look at this.

Amidst the mess and the chaos -

beauty flourishes.... Let's take a look inside.

# Sunflower

# Good morning

# You sure make it like a sunny day... #

Unfortunately the house itself isn't looking so pretty.

There are broken windows, missing roof tiles and that's just the outside.

With a classic British summer,

let's hope that the property is slightly more sunny.

No! What have we got?

We've got a loo there, a room there, I can't imagine what that is.

It's obviously in a right old state. It smells pretty damp. That's not surprising today, I guess.

The kitchen needs total refurbishment. It's not a bad-sized space, I have to say.

Through to the living room, again not a bad-sized space.

First thing I'd want to see are French doors out onto the garden.

I'm delighted to announce it does have a feature fireplace.

It's a very small fireplace, but it is a feature.

Remember that small feature is matched by a small guide price of just £45,000.

Not bad for a three-bedroomed semi.

OK, so the downstairs needs a lot of work, but what about up there?

Upstairs and you know what? I'm starting to really like this house.

It changes my opinion completely. What have we got?

Three reasonable-sized bedrooms.

You've already got the bathroom and the loo upstairs and

bearing in mind that guide price, you're not going far wrong, are you?

But now time for an interesting fact.

You may be wondering why the light fitting in the bedrooms

is towards this end of the bedroom rather than in the middle.

The reason is, allegedly, to maintain the modesty of the people in the room.

If you imagine you have a net curtain up here,

if the light fitting was here, then anything you'd be doing here would be silhouetted against the window.

If it's there, the only place you can get a silhouette is by standing here.

So you can be doing whatever you want here and nobody outside can see what you're up to.

That's the reason it's there. Of course it's true. It's true...

# I know this much is true... #

The sad truth here is that all three bedrooms are tired and shabby and in desperate need of a wake-up call.

The dated bathroom is looking pretty washed up too.

Let's head outside.

The plus point of the property is the garden. A reasonable size.

If you're thinking about renting this place out, you probably want to put low-maintenance stuff down,

so either shingle or some kind of a patio.

Either way if it's a family home, it's a nice bit of space for the kids to play in.

Now, that's a feature which makes this place extremely marketable.

People really value outside space and there's a lot here.

At the back it's clear there are roof issues and it may be worth

changing the windows for double glazed ones.

I invited a local estate agent to give me his opinion of the house

and find out what the area offers potential buyers.

I think Mansfield is unsung as an area because of its transport links.

We have good access to junctions 28 and 29 of the M1.

It does have its own train station and I think it's very well positioned in the centre of the country.

'Sounds good so far, but what about the house itself?

'What work is necessary?'

The property needs new double glazing.

I'd suggest an upgrade of the central heating system, refitting

of kitchen and bathroom and perhaps an updating of the wiring as well.

'With a guide price of £45,000, could buy-to-let be the best option here after renovation?'

The local rental market is always very strong and I could see this achieving £450 per calendar month.

'What could the resale value be?'

This property when renovated, I'd expect to be achieving in the region of £75,000.

It may not be in the best of areas and the house itself

needs a bit of sorting out, but the rental in this area is strong and it's a solid little place

that I think makes a great investment opportunity and that's what counts.

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

Peel Crescent in Mansfield, 45?

£45,000 I have.

At 45,000, it's the opening bid.

46 is bid.

47, 48, 49 at the back.

50,000, £50,000. 51?

50 and a half.

51? 51.

51.500. 52,000, 52,500.

53. 53.500.

54, 55,000?

54 and a half against you.

Standing by the bar at £54,500.

55, a fresh bidder.

At £55,000, anyone else?

At £55,000 once. Five.

55,500. 56?

No?

At 55 and a half by the back wall, first time, second time, third and last opportunity.

Sold at 55 and a half.

Steve, a self-employed electrician, paid £55,500.

He bought it without even seeing it.

He plans to do the renovation work himself in his spare time

with his father Mick and sister Samantha, happy to lend a hand.

I met up with them while Steve was out on his day job.

So, why did Steve buy it?

Solely to renovate it all and in six months' time, hopefully, he'll pass it and sell it on,

then he's hoping to buy a couple more terraced houses and do them up and do the same.

Basically make some money out of it, I think.

Ah, yes! Making money is the name of the game.

What do they make of the job in hand?

It needs a lot of work.

So far! But it's got potential.

I think he's planning to look for a family to move in,

so there's local schools... so the area will suit families.

-He's checked the area. Yeah.

-Yeah.

What you think of it, Mick?

It wants a lot of work doing to it.

There has been a lot of mining subsidence here but that was about 20 years ago and he's looked into that.

-It's been underpinned and everything.

-As far as you're concerned, what are the big jobs going to be?

Mainly the kitchen and the bathroom.

I think they're one of the selling points of any house, really.

They have to put new windows in

and tile everywhere through.

He should do a good job. Doors, everything really. A complete refurb.

'So, quite a lot of work to do, but Mick's son Steve has grander plans for this three-bedroomed semi.'

-He's hoping to build an extension on to the back room somehow.

-Is he?

Yes and make a four bedroom, plus extend that.

Has he looked into the value around here because I'm not sure that's going to stack up, is it?

Well, he has looked at them. He's going to keep it for at least six months if not more,

and then hopefully the market will pick up and he'll sell it.

He's thinking about £90,000, but...

Right, but that's going to cost quite a lot to put the extension on, isn't it?

-He is going to do it himself anyway.

-Right.

-I'm doing the labouring. Helping.

-Oh, right. OK.

So we'll not paying any builders or anything to come and do it.

Roughly how much do you think it'll to cost to put the extension on?

He's worked it out at something like £4,500.

He was only going to do a breeze block thingy then render it, I think.

-That's what he's hoping.

-We're not talking about double-storey extension here?

Yes, hopefully to put another bedroom up there as well.

-For £4,500?

-Mmm.

Building a two-storey extension for £4,500 seems a little unrealistic to me.

Steve paid £55,000 at auction so what's his total budget for the refurbishment AND that extension?

I think it's £15,000 he's got.

He's hoping not to spend that amount but obviously that's what he's got.

That's his limit. It will, definitely, I think take six months.

What are you two going to get out of it?

You're doing all this work and I know it's family and all that...

For me it's just seeing it's all right, you know?

And I'll be on an hourly rate.

-Will you? Excellent!

-Or a daily rate, as he said.

-Really?

Samantha could be onto a winner with that daily rate as it could take

a very long time to remove all that wallpaper and woodchip.

But this isn't their first dip into the world of property development.

-I bought a bar five years ago in Tenerife.

-A bar in Tenerife? Oh!

And it needed a complete renovation, which we did, and that was quite an interesting project.

-Both of you were there?

-Yes, she went out before me and then I came out a few months later.

-Three or four months later.

-And ran a bar in Tenerife? Wow, what a thing. How was that?

Fantastic.

Yes, lovely. Better weather than this.

They sailed through that development in sunnier climbs and made a great success of it.

That bodes well for this property.

So the renovation of this house turning into a real family affair.

My only concern is that Steve listens to the advice and doesn't build that extension

which would put this property above the ceiling price of similar properties in the area.

You can find out how he gets on later in the show.

So we've left our buyers to their own devices.

I wonder what they've been up to?

Let's go back and find out.

Earlier in the programme in Plumstead, south-east London Mayur and his wife Anjenna

paid £262,000 for this mid-terrace property that was divided into three separate flats.

Anjenna had provided the financial investment

and she and Mayur plan to convert it into four flats which they hope to rent out.

They intended to use the income to provide help for a charity

in India and were going to move there to help with the work.

# Got to love The sweet taste of India... #

Four and a half months later the conversion has progressed very well.

On the ground floor, the kitchen is now a second bedroom,

while the original lounge has become the master bedroom.

A new bathroom has been installed.

Up on the first floor, that one-bedroom flat has also gained a second bedroom

and the lounge has been transformed into a main bedroom.

What became of the original bedroom?

When we first came, this used to be a bedroom.

What we did here was the kitchen used to be in that other room there which is now the second bedroom.

We turned this into a kitchen-diner/lounge-area and the space works out great.

You've got a kitchen here and you've got your living space here.

I'm really pleased with the way this has worked out.

There's been the same layout change on the second floor

where originally the third flat had continued up into the roof space.

Mayur and Anjenna are now waiting for planning permission

to convert the attic into a fourth one-bedroom flat.

That would take the property from three flats with five bedrooms to four flats with seven bedrooms.

Anjenna's particularly pleased with the ground-floor conversion.

This was the bedroom before and it was quite dark so what we decided to do was open up the, there was a

window here, so we opened up the wall and created an extension and turned this into the kitchen.

Now what we've got is a kitchen/lounge.

I really like this space. This is my favourite room in the whole house.

Now the ground floor flat opens out into its own patio.

All the flats will share the garden and decking area, once completed.

Of course, if the fourth flat does get the go-ahead, rental income on the property will increase.

That's something Anjenna would like as she's looking after the money!

But who's been responsible for all the work here?

I've got a fantastic set of builders. Sonny and Sabby.

They've worked hard. They've also worked long hours as well.

Till about 9 o'clock at night. They've been great.

With the changes to the layout, new doors have been put into some of the flats

and extensive soundproofing was needed, as well.

Remember, they paid £262,000 at auction for the property.

How much has the refurbishment cost?

We've ended up spending altogether about £85,000, which is still not too bad.

It's still 10,000 more than we budgeted. Not that bad. That includes all the fees as well.

I'm very pleased with how my money's been spent.

Considering what we bought the property for and the work we've done. I'm very pleased.

The council had agreed to pay me either 50% or 75% of the cost of

certain things like double glazing the kitchens, the bathroom.

That's now going to be 50%, as I'm not going to let it out

to council tenants, I'm going to let it out to private tenants.

That does mean that Mayur will have to find tenants himself.

Remember, he and Anjenna plan to move to India to give

their time and effort to support a charity helping local villages.

Time to see what two local property experts think of this conversion

and their chances of letting out the flats.

The standard of finish in the flat so far

is of a fairly good standard.

The properties are all double-glazed and centrally heated.

The walls have been plastered.

Everywhere has been rewired and re-plumbed.

I think the way he's created the four flats is a good thing

because he's now got properties he can either sell or rent.

He's created the top floor one-bedroomed flat, which is a small

flat, but he's going to get a decent income for either sale or rental.

I believe the space here has been maximised to its full potential.

Getting four flats from this property was the right thing for the current owner to do.

I don't like open-plan lounges and kitchens

but a lot of builders do that these days to maximise the space.

So, from a business perspective, he's done the right thing.

Assuming the fourth flat does get the necessary planning consent,

how much could the flats be worth once the work's completed?

Remember, they paid £262,000 at auction and Anjenna has managed

to keep the budget to £85,000 making a total of £347,000.

I believe the ground-floor flat is worth in the region of £155,000 - £160,000.

The first-floor flat at £155,000

and the same price for the second-floor flat.

And the small one-bed on the top floor at £115,000.

The ground-floor flat I believe to be worth £155,000 - £160,000.

The first-floor and second-floor flat, we're looking at about £150,000.

And the top-floor flat, between £115,000- £125,000.

They're good retail figures.

That makes the whole building worth £575,000 - £600,000. That's good.

Yes, very good! That valuation of £575,000 would represent

a pre-tax profit of about £228,000 over their total outlay of £347,000.

But don't forget, once the flats are rented out, the council will pay 50% of some of the costs.

Mayur's expecting about £10,000 for that, so the profit will be even more before the usual deductions.

Are they tempted to sell?

At the moment, I don't think so.

I'd rather wait for about three or four years until the prices pick up and then sell them.

How much could the flats generate in rent?

For the ground-floor flat for rental, £800-£825 per calendar month.

For the first floor flat, £775-£800 and the same price for the second floor flat.

The rental values of the properties are, for the ground floor flat, we can achieve £825 per calendar month.

The first floor and second floor flat, we would be looking to achieve £800 per calendar month.

Good. Good. That's the same figure that we had in mind.

Between £800 and £825 for the ground floor flat.

And the fourth flat?

For the top floor I would value this property at £625 per calendar month.

The top-floor flat, we would be looking to achieve £650 per calendar month.

We had a figure of 625, so yes.

We are very pleased about that as well, yes.

As soon as the property's rented out, Mayur and Anjenna will head off to India for eight months

to help the charity provide sanitation and water facilities for 51 villages.

So they'll be working together again.

Do they make a good team?

I think we do. We make a very good team.

She orders, I obey. A fantastic team. It can't go wrong.

The way it should be.

We're back in Mansfield in Nottinghamshire.

Steve had bought this three-bedroomed house in need of modernisation for £55,500.

He hadn't even seen it beforehand.

A self-employed electrician, he planned to renovate it himself

in his spare time with the help of his dad Mick and sister Samantha.

A family project, then. But what were they getting out of it?

For me it's just to see that they're all right.

I'll be on an hourly rate.

Will you? Excellent.

-Or a daily rate, as I said.

-Oh, really?

With Steve busy at work, he's left it to Dad and sister

to show us how the house is looking now, seven months later.

Ah, it seems to have taken a step or ten backwards.

This potential nest egg has turned into an empty shell.

The current state of the property is reflected in Mick and Samantha's headgear.

I've been involved quite a lot

because with Steve having to work as well

it's very hard to find the time to pull it in.

I've been doing a bit here and a bit there.

The kitchen was in a bit of a sorry state before, so how did they get on with that?

Ah, not great.

As you can see, this used to be the kitchen. It was in a mess,

but we've stripped the kitchen all out.

We're going to brick this window up here and take the window out and put a new window in.

That'll make it a bit more private.

The units are all lined out to go all around the room.

It's a nice square room, so it's a good place to put them in.

This wall is a bit different.

It was a horrible brown sort of wallpaper, which took a lot of getting off really.

We've took the boiler out.

We've got a new gas boiler already bought but not installed yet.

You know that saying - when you start one job, you create another?

This house is living proof of that.

Stripping the wallpaper off uncovered a damp patch, which then revealed a leaking roof.

That had caused some of the timber joists in the loft to rot.

This meant ripping down the ceiling upstairs and the easiest way

of getting at that ceiling was to remove the internal walls.

Soon you could sit in the bath and look up at the roof,

or you could have if the bath had still been there.

Will they put all those internal walls back?

We'll put them back in, making it a three-bedroomed house.

Where this wall was, it'll go back to there, which will make this room a lot bigger.

It'll make the boxroom a bit smaller, but big enough to get a bed in and a wardrobe, etc.

At the moment, the three upstairs bedrooms look more like

one large, open-plan bedroom with a splendid view up to the rafters.

But the water problems didn't stop there.

You could hear water leaking in the toilet,

we couldn't find where it was,

so we had to dig the concrete floor up and then we find a pipe

that had been broken off the tap and it was leaking there.

It had probably been leaking for possibly five years or more.

We had to trace it back and dig a hole in the garden and we found it,

but nicked the lead pipe and it caused water to spurt up.

What a nightmare!

The unplanned fountain in the garden meant the next-door-but-one neighbour's water supply

was switched off and the water board called in to do the repairs.

It's taken seven months to get this far, so how long now?

Hopefully six to seven months, I'd think.

The biggest problem is the roof. As you can see, it's going to be a major job to get that done.

That's one of the things, when we bought it,

we didn't realise there was a lot of water coming in.

That's one of the problems of not looking at the property before you buy it.

Buying properties unseen can be risky, not to mention expensive.

They originally had a budget of £12,000 to £15,000,

including the cost of an extension.

Have these problems blown a hole in that?

We thought it would be £12,000.

That was the budget we allowed for. But I'm thinking now possibly 15.

Hopefully it'll be under that. Because we're doing a lot of the work ourselves,

it should keep it down a lot.

Mick's son Stephen bought the property at auction for £55,500.

With the help of his dad and sister it's slowly being refurbished.

We asked two local estate agents to have a look around.

I'm very surprised with the extent of the modernisation on this one.

I did look at it in the summer of 2009

and I knew it was going to be a big project, but even I'm surprised

just how much work has been done and still has to be done to it.

It's a work in progress.

It needs a lot doing to it still.

The upstairs has been completely opened up

and needs to be re-closed and put into bedrooms again.

But if Steve and his family want to wave goodbye to this problem property right now,

would they recoup their £67,000 investment?

If this property were to be sold in its current state,

unfortunately I think the owner may have lost rather than made money on it.

For auction purposes we'd be looking at a guide price of £45,000 to £50,000.

Without an upstairs bathroom, the property isn't mortgageable.

And without a kitchen as well.

Therefore, I'd have thought that we're looking at about £50,000.

-That's not bad.

-That's quite good, that.

A positive mental attitude. Vital to success in property developing.

But how much could it be worth after they've completed the renovation?

Once renovated, I can see this property achieving in the region

of £85,000, perhaps suggesting an initial asking price of £89,950.

Once brought up to scratch, the property would go on the market at around £80,000.

We thought on the lines of 84, so it's in between there really.

-It's quite good, really.

-Yeah.

-We'd be happy at that.

If they stick to their budget, that could mean a pre-tax profit of

between £12,500 and £17,500, minus the usual deductions.

What about the rental market?

For rental purposes I can see the property

achieving £450 per calendar month, or perhaps even £475 per calendar month

if the modernisation is to a high standard.

For rental, I'd expect them to receive £425 per calendar month.

-Quite reasonable.

-I think that's quite good for this type of property.

So, what are Steve's plans for this house?

Stephen is hoping to live in it for a while, then he'll probably look for a another project.

This place could look amazing by the time they have all finished

and I'm sure Steve's hard work here will reap rewards.

I hope the bargain hunter in you has picked up a few tips on today's show.

And maybe next time it'll be you buying your home under the hammer.

-Looking forward to seeing you then.

-Goodbye.

-Goodbye.

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