Episode 48 Homes Under the Hammer


Episode 48

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Transcript


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We all know that the value of homes can go down as well as up.

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-So it pays to buy at the right price.

-And one way is to buy your home under the hammer.

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-If you decided to place a bet on property developing, try an auction.

-The atmosphere is electric.

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-The action is fast and furious.

-Let's take a look at the properties up for auction on today's show.

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'In Devon, there's loads of potential...and loads of problems.'

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But at the same time - wow! It's exciting.

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If it's a fabulous view and large property you're after, I've found the perfect spot.

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It's a bit of a Welsh wonderland.

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'And near Telford in Shropshire, it's a case of buyer beware.'

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If he didn't discover it before the auction, it could be big trouble.

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All these properties have been sold at auction. We'll find out who bought them under the hammer!

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Your lot, sir. Well done.

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Today I'm in the small village of Bickleigh, near Dartmoor in Devon,

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to look at a lot that's described in the auction catalogue as "a rare and interesting opportunity".

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I know people who'd spend the guide price of this lot - £120,000 -

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just on the 2.5 acres of land that it comes with.

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However, in this instance, as well as that you get a farmhouse, a barn and some outbuildings.

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Definitely worth a look.

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'But as you might imagine, for that sort of money you also get a fair number of problems.

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'The main house looks OK, but some of the outbuildings haven't been touched for years.

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'So what's it like inside?'

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A great sense of anticipation when you walk through the front door. Is it going to match the outside?

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Well...not too brilliant.

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Got a loo there. A kitchen that could be much grander than it is.

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It'll need time and money

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Not too bad, though, but as you move in, it gets a bit strange.

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Lots of stud partition walls, like somebody added them in at some stage.

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Yet the foundations, the basis for this property... Old beams.

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It could be so much grander than it is. I'm already thinking this is a "gut it and start again" job.

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It goes on, though.

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And this is where the layout really starts to get a bit odd.

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This room is an add-on to the main body of the house. It could be a lounge or maybe an office

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with the stairs leading to a separate bedroom. But it can only be reached by these stairs,

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making it almost a separate annex. The other two bedrooms, plus bathroom and toilet,

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are accessed by the central staircase in the main body of the house. A rejig of this is needed,

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particularly when you see what is attached to the side of this place.

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Because down at this end of the property it starts to get really, really interesting.

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That part of the house - fairly straightforward restoration.

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This is actually a barn that is attached to it. You start getting into restoring barns

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and it's serious building work. You need planning permission, architects, structural work,

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but at the same time - wow! It's exciting!

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'Oh, yes. This really has tremendous potential.

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'The floors are in place. There's a decent roof and it's connected to the main part of the house.

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'It could be easily integrated to add more living space. The possibilities are endless.

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'As if that wasn't enough, one outbuilding is converted to stables,

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'so at a guide price of 120 grand it all looks very promising.'

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So there is so much scope for this place, but there is one shocking problem I haven't told you about.

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Hear that crackling noise?

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That's not the rain.

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'No, that's the crackling of overhead power cables that cross right over the farmhouse and land.

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'This is not ideal and a big negative.

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'Just how much will these detract from the value of this property?

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'Let's hear from a local property expert.'

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Power lines are notorious. They're getting a bad press,

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so a lot of the marketplace will be put off by this,

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but always the odd person will take it with a pinch of salt and not read the headlines

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and just enjoy the beautiful place.

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The property needs a lot of refurbishment from top to bottom, including new kitchen, bathrooms,

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general decoration, but also the adjoining barns would make excellent additional accommodation.

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It's currently three bedrooms. Converting the existing accommodation could make five or six bedrooms,

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which obviously is a lot more desirable for a property this size

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and could fetch you in the region of 350-375.

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But if those power lines were removed or put underground, what value could we be looking at then?

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Without the power lines, I think you'd be looking at a figure closer to 450 or 475.

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It's a considerable difference.

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'That's nearly £100,000 wiped off the value to start with.

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'But even so, with valuations around the £350,000 mark,

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'this looks like an attractive investment proposition.'

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Well, you see this in the auction catalogue with a guide price of 120,000 quid

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and you've got to be interested.

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You come and take a look and this place is definitely a challenge.

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Not for the faint-hearted, but the potential - it's as big as your imagination wants it to be.

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It's a great one to go for. Of course, the big issue here, though, is something you can't change -

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those pylons. In this case it's more ohms under the hammer than Homes Under The Hammer.

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Let's go to the auction.

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44. That's a pretty little spot.

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100 viewings. What a chance to produce a fantastic home.

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Not going less than 100. So...thank you. 100 we've got.

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110. 120.

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130. 140.

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150. 160.

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170. 175. 175.

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Front row. OK, 175.

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175. 176.

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176.

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176 is at the back. Or halfway up, my left.

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176. Would 500 keep you in the game?

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176 and a half. 177. 177 and a half?

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177 and a half. The 177 and a half is here, in the front row.

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177 and a half once and twice. Third and last, here we go. At 177,500.

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Well done. Make a lovely home of it.

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At considerably over the guide price, for £177,500

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the new owners of the ramshackle Devon farmhouse and land are local couple Robin and Tracy.

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They bought it primarily as a home for Tracy and her daughter Sophie.

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-Tracy, Robin, lovely to meet you both.

-Lovely to meet you.

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-Hello.

-Hi! Now, listen, you've bought a really interesting property here.

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-Just a little, yes.

-Do you have any idea what you've taken on?

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-Yes!

-How would you describe that?

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-A large project.

-A large project.

-But it will be fun.

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-Tell me a bit about you two.

-I'm a builder.

-Right.

-This is ideal for me.

-OK.

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I'm a driving instructor in the local area.

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-This is a joint project or what?

-Yeah, definitely.

-Well, I'm doing all the hard work.

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I'll do the pretty stuff. Maybe a bit of sanding here and there!

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Robin's building experience means he's done barn conversions before

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so he's not fazed by the work that's needed here. Even so, where will he start with this one?

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I'm going to get the new bit, the bit that's been converted, done first so we can move in.

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-And then start on this side. So turn it into what will be a five or six-bedroom house.

-Crikey.

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What about outside? We've obviously got barns

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-and the stable, which is in better condition than the house!

-It is!

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They spent more money on that. That's going to be stables for Tracy's horses.

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-And we've got the fields.

-Then the garages and a workshop.

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-What about the budget, then?

-Mm, budget.

-Yeah.

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Well, the section that's already been done, we're looking at £15,000-£20,000 to sort it out.

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-And this section we're thinking about £50,000-£60,000 to do this bit up.

-Right.

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-Still...sort of 75...

-75, yeah.

-Ish.

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For the whole project.

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'Although that may take their total investment to over £250,000,

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'they'll end up not only with stables and potentially a paddock, but also a workshop for Robin.

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'Then the house can be made into a large family home with room for Tracy's daughter Sophie

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'and eventually Robin's two boys to stay over. So it's ideal.'

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Now obviously one big issue with this property is the pylons.

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-Yes.

-The electricity cables. You can actually hear them crackling away.

-Yeah.

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-There's all sorts of thoughts about health issues, but certainly it reduces the price.

-It does.

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-What were your thoughts about that?

-Well, em...I think you just get used to something.

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You get used to that. I've got a friend who lives next to a railway.

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At first it kept him awake, but he soon got used to it. I hope we get used to the crackle.

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Eventually. Maybe one day they'll be taken away.

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'They don't seem particularly concerned about the pylons.

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'After all, they knew they were here and they have more pressing issues to deal with.'

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-Are you going to run your business at the same time?

-At the same time.

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How's that going to work? You won't want to come home and work.

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-I'll start again, yeah.

-Presumably you mean a team?

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-I've got friends I can call on, but most of it I'll do.

-Yourself?!

-Yeah.

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-What are you, Superman?!

-Yeah!

-Built with titanium with kryptonite inside!

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That's it.

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Have you seen him do this before?

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I've seen him work on the house we're in now.

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-And you're confident?

-Yes, definitely.

-Really?

-As long as I feed him enough cups of tea.

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-Listen, congratulations.

-Thank you.

-Good luck. We'll give you a good long time before we come back.

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-I'll need at least six months.

-Good luck with it.

-Thanks.

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'Well, Robin may not actually be Superman, but it's going to take one mighty big effort to turn this

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'from a dilapidated old farmhouse into an idyllic family home.'

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There's no getting away from it. This is a humungous project.

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And here's Robin talking about taking it on single-handed. I'm sure Tracy will help out.

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Wow! A lot of challenges ahead. But financially, probably worth it.

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They bought it at a good price and it will be worth a lot of money.

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How are they going to get on? Find out later in the show.

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It's off to the valleys for me today to investigate a rather unusual housing estate.

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I'm in Maesteg in Wales.

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It's Llynfi Court, just outside the main town.

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It's one of the more expensive parts of the area and that's because about five years ago

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somebody divided this land into individual plots with planning permission for grand houses.

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They appealed to those keen to self-build their dream home and the results speak for themselves.

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It's a bit of a Welsh wonderland.

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There's a whole mixture of sizes and shapes here, all at varying degrees of completion and all in pursuit

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of that elusive pot of gold at the end of the rainbow.

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But, inevitably, for some the dream ran out of steam and the lot I'm here to see is Plot 22,

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which is not a plot at all - it's a shell of a mansion!

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Crikey! Not the most appealing shell I've ever seen,

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but with a guide of only £70,000, it's certainly worth investigating.

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Dream spots deserve dream houses and this doesn't quite stack up. It's too big for the plot size,

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there's no front garden and not much at the back.

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But at a £70,000 guide price it does have its merits and the views aren't bad, either.

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I certainly didn't expect it to be like a show home in here.

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And it's not - it's plasterboard everywhere! It really is half done.

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I know it's in the first fix stages. You've got all the wiring hanging down, no light switches.

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But it's a big space. I think that's because what should be here are the stairs!

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That's the upstairs part there. You've got no stairs.

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But you've got this grand room here. I suppose this would be a lounge.

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Another big reception room through there. That could be an office.

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Reception room number two. Lots of little rooms. It's perhaps not as open-plan as I'd thought,

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but something that is slightly worrying is signs of damp up there.

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My guess is it's been empty for some time so it's really important somebody gets in here

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and cracks on with that. I'd really like to see what it looks like once done up.

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# Oh, we're halfway there

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# Oh, living on a prayer... #

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A house in this state is a mixed blessing.

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A lot of costs go sky high just getting the roof on and have the pipes been laid,

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was the wiring checked? Sometimes it's easier to rip it all out and start again.

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This would be the kitchen/breakfast room. Not a bad space. You've got a utility area here.

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There's a nice throughway into the dining room.

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Double doors could lead to the garden. You just have to use your imagination, though,

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and picture solid wood floors, shiny tiles and a high-gloss finish.

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These are top-end homes which should have no expense spared.

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Perhaps that's the sticking point - the market is top-end, but you could put in more than you get out.

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To work out the margins here, I invited a local estate agent.

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The development was originally sold

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off plot for self-build builders.

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This property has obviously been built to a first fix stage

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and then sold on. The garden might be a negative point. With such a large house and such a small garden,

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it might not appeal to families.

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That is a concern. A big family house without a big family garden.

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But even if it doesn't tick all the boxes, it still has market appeal. The question is how much.

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There's one currently on the market for £310,000.

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We've recently sold a property for 270.

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You might not be getting top dollar, but it was guided at just £70,000.

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So maybe it was worth shelling out for this new-build shell.

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I think you've got to imagine this rather unattractive box with all its fittings and finery.

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Then it will start to look like a decent investment. I'm still unconvinced it'll fly away,

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but with a guide of £70,000, I'm sure somebody went for it.

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We go on to another one that's attracted a great deal of interest.

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We've got a proxy bid on this.

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I have 90 from my proxy bidder. 90 from the proxy bidder. 95 can I see?

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95. 100 from my proxy bidder. 105, thank you.

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At 105. 110 from my proxy bidder.

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At 110.

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15, can I? 15.

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115 I'm bid. At 115.

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120 there.

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I have 123 from my proxy bid.

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125, either of you now? 125.

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30 now? 30, thank you. At 130, seated.

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You saw the catalogue go up. 130. Make it 2, will you, sir?

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At 132.

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I'll take them two at a time. 4.

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134. 136, if you like.

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6 is bid. 136.

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138, please. 8 is bid. At 138. And 40, if you like.

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40, thank you.

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Is that a bid, sir? 2, thank you.

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142. 144, if you like, please.

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Thank you. At 144. You're still out, sir.

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6 I'm bid. At 146. You're out.

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Another 2 is it, sir? 148. Thank you.

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50. 150. I thought you'd got it there.

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At 150. Are we going through the same process? Yes or no?

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-At 152.

-One. One.

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You've been in all the way. 152 with you, sir.

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151. 2, can I? Yes or no?

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They're going to get it, then. Make no mistake. At £151,000 on my left.

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Have you done? At £151,000.

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It's yours. Thank you very much. The lady was with you! I wasn't sure who was with who!

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At well over double the guide price, for £151,000 the new owners of the new-build in Maesteg

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are husband and wife Linda and Mohammed. They have five children between them. I joined Linda

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and son Omar at the Maesteg mansion.

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-Linda, congratulations!

-Thank you very much!

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-You've bought an empty shell!

-Yes!

-What were you thinking?

-Crazy.

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Yeah! Crazy. Adventure. Challenge.

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How well do you know this area?

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-Not at all.

-Not at all, really.

-What part of Wales are you from?

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-Cardiff.

-Cardiff.

-So that is a 50-minute journey to here?

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-Yes.

-So you don't know this neighbourhood terribly well, so you have taken a gamble.

-Yes.

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-Why did you want to buy this? What potential could you see?

-A lot.

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There's a lot of work. We'll all pull as a family, get a builder in, do the odd jobs.

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We'll pull together and save a lot of money.

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Their plan is to keep the current layout, fit out the house and sell it on.

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-Are you in the property world?

-Yes, we are. We finished building a villa in Portugal.

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So that took three years. Me and my husband learned a lot about that.

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So he's very good at designing, architectural... He's really good at that.

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So he's the main... He's the brain, we're the brawn!

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Linda's husband Mohammed works in the meat trade, so I think he could provide the brawn as well.

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But even if this is a team effort, there's no getting around there being an awful lot to do.

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-How much have you got to spend?

-We're looking at 70-80.

-£70,000-£80,000.

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As you can see, there's no floors, no nothing.

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And the garden and things will cost.

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-But the shell is up, so we're going to do it as...

-See what we can do.

-Yep.

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-For 70K, that's quite a tall order. I've got a huge feeling you might go over it.

-We probably will.

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-That'll eat into your profit.

-Yeah.

-Good luck.

-Thank you very much.

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-It's going to be really exciting.

-You'll have a shock! Thank you very much.

-Thank you.

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'I hope it's going to be a nice shock because this property needs a major shake-up.'

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Linda and her family have got this huge blank canvas, but it'll take more than a lick of paint

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and more than their 70 grand to make the palace they imagine.

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Join me later to see if it's fit for a queen.

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Coming up: not a good start at this semi in Shropshire.

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I don't need to go too far to see their first potential problem.

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Back in Maesteg in Mid-Glamorgan, has Linda's project been as straightforward as she hoped?

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It's been quite difficult.

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But first, has Robin and Tracy's renovation run out of energy?

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I'm going to sit down and collapse!

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In the small village of Bickleigh in Devon, a rather unusual lot came up for auction.

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A farmhouse with detached barns and outbuildings, with two acres.

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That's not the unusual bit. It was in a fairly sorry state and came with undesirable extras -

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electricity pylons and overhead cables. That was ironic

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as the property was disconnected.

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However, none of this deterred Robin and Tracy. They bought it for £177,500,

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initially for Tracy and her daughter Sophie.

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-Tell me what you're going to do.

-We're going to get the new bit that's been converted

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done first so that we can move in. And then start on this side.

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So turn it into what will be a five or six-bedroom house.

0:23:400:23:44

So nearly six months later, have they sparked the farmhouse back to life?

0:23:440:23:50

The skip suggests work's been going on inside.

0:23:530:23:57

The ground floor is designed around the kitchen first,

0:23:570:24:01

then we did the other rooms to suit.

0:24:010:24:04

They knocked the lounge and old kitchen into one,

0:24:040:24:08

creating a spacious farmhouse-style kitchen.

0:24:080:24:12

The back of the kitchen has been converted into a lounge-cum-diner.

0:24:200:24:25

Off that is the utility room and study.

0:24:260:24:30

And there's a completely revamped conservatory.

0:24:340:24:38

And then Sophie's little snug. We decided she was 13 and would be wanting her own private space.

0:24:380:24:46

So we thought it would be nice for her to have her own lounge.

0:24:460:24:51

So Tracy's daughter Sophie almost has her own separate wing

0:24:540:24:58

with a downstairs lounge and ensuite bedroom.

0:24:580:25:03

When I first saw it, I was like, "Oh, my God!" but because Robin is such a fast worker,

0:25:120:25:19

and he's really good at building and stuff, because he can do basically anything,

0:25:190:25:25

so, yeah, he's really good and it's just good watching it from that, the dump it was, to now!

0:25:250:25:33

Sophie's wing is nearly there, but what about the main body of the house?

0:25:330:25:39

Upstairs layout, we knocked the bathroom and toilet into one.

0:25:390:25:44

And then moved the bedrooms around because we moved the staircase to a different position

0:25:510:25:58

for more room upstairs. So we have two bigger bedrooms than were there.

0:25:580:26:02

One for the boys when they come and stay and one for us, temporarily.

0:26:030:26:08

So Robin's two boys, Freddie and Tom, have a great nest in here,

0:26:160:26:21

but it's the outside space that appeals to them most.

0:26:210:26:25

-It's really brilliant.

-Yeah, really brilliant.

0:26:250:26:29

He made us a rope swing.

0:26:290:26:32

And...it was right up there, the wood,

0:26:330:26:38

and he had a very long ladder.

0:26:380:26:42

The two acres of land don't just offer a fabulous space to play in,

0:26:540:26:59

but there's also a paddock area for Tracy's two horses.

0:26:590:27:04

All the field was covered in brambles. It took a long time to get out there and clear it all.

0:27:050:27:12

It's taken quite a lot of doing.

0:27:120:27:14

The two horses don't just have a paddock, of course. They also have somewhere to shelter.

0:27:180:27:24

Outbuildings. One is the stable block

0:27:240:27:27

-for Tracy's horses.

-We're going to put a new roof on that.

-New roof.

0:27:270:27:32

The other one's going to be a garage with a small little workshop for myself.

0:27:320:27:39

And the other one's going to be, hopefully, a holiday let, eventually,

0:27:390:27:44

-so that we can have an income from it, but that depends on planning permission.

-If we're allowed to.

0:27:440:27:51

If not, it'll be another dwelling for relatives coming to stay.

0:27:510:27:55

There's still lots to do, outside and in.

0:27:550:27:59

The other half we haven't started yet, but it'll be two more bedrooms,

0:27:590:28:04

the master bedroom, the lounge and games room.

0:28:040:28:09

That will mean eventually a five-bedroom house

0:28:090:28:14

with plenty of reception rooms and extra living space.

0:28:140:28:19

And for Tracy, it's starting to become a home.

0:28:190:28:23

I moved in Christmas Eve about five months ago.

0:28:230:28:27

It wasn't really ready to move into, but I had everyone coming over for Christmas dinner,

0:28:270:28:32

so you had to make me a makeshift tap because I didn't have a sink at the time.

0:28:320:28:37

-We've got the utility sink now. I washed up in a bucket.

-You did.

-It was quite funny.

0:28:370:28:42

Robin is still living in his old house which he is keen to sell, so that he can move in here too.

0:28:420:28:49

But how do they feel about those ever crackling power lines now?

0:28:490:28:53

At first, it was a little bit odd,

0:28:530:28:56

but with everything else that's around here, the beautiful fields and trees,

0:28:560:29:01

it goes into the background really.

0:29:010:29:03

Background or not, unfortunately, it still affects the end value.

0:29:090:29:15

So far, Robin and Tracy have only spent £10,000

0:29:150:29:18

on the first phase of the work here.

0:29:180:29:21

They purchased the property at auction for £177,500,

0:29:210:29:26

making their total spend to date around 190,000.

0:29:260:29:29

So, is it on track to be a good investment for them? What do two local property experts think?

0:29:290:29:35

What a transformation!

0:29:360:29:38

They've done an amazing job so far.

0:29:380:29:41

What they've done is to quality standard.

0:29:410:29:44

It's finished well. There's an awful lot of work to do.

0:29:440:29:48

Certainly, it's better to go slow and do it properly,

0:29:480:29:51

so it's done once, rather than repeating a DIY job.

0:29:510:29:55

What they've done to the land is completely cultivated it and cleared it because it was overgrown.

0:29:550:30:01

They've created paddock space, garden space and general useful space which is what this property needs.

0:30:010:30:07

As far as the pylon is concerned, it's definitely a negative because there is bad press.

0:30:070:30:13

A doctor lives just down the road. She's not put off by it.

0:30:130:30:17

It just depends on people's views. Some people will be, some won't be.

0:30:170:30:21

However, the pylons and overhead wires are likely to reduce the value by up to £100,000.

0:30:210:30:28

But with only £190,000 spent on this land and building, surely there's some return here?

0:30:280:30:35

If the owners put the property on the market in its current state, it could fetch in the region of £325,000,

0:30:350:30:41

but if they incorporate the barn adjacent to the main dwelling,

0:30:410:30:44

that could push that price upwards to around 350.

0:30:440:30:48

In its current form as a three-bed, it'll be worth £250,000 through to £300,000 really as a maximum.

0:30:480:30:54

Going into next door as a five-bed unit, it's a different ball game completely.

0:30:540:30:59

It will be massively more saleable and will be comfortably £350,000 through to £400,000,

0:30:590:31:05

depending on standard of finish.

0:31:050:31:08

The value as it stands I'm quite surprised at because that's quite a high figure.

0:31:080:31:13

There's still a lot of work to be done, so I'm very pleased.

0:31:130:31:17

-Yeah, we could sell it tomorrow and move on.

-No.

0:31:170:31:21

They kept their overheads down thanks to Robin's efforts.

0:31:210:31:24

Despite the electrical wires overhead, there's a potential profit of between £60,000 and £135,000,

0:31:240:31:31

so what's next?

0:31:310:31:33

I'm going to sit down and collapse.

0:31:330:31:35

I'm going to go out riding a lot more and play my guitar a lot more,

0:31:350:31:39

which I haven't done a lot lately.

0:31:390:31:42

Get back into all our hobbies that we really love.

0:31:420:31:45

So, after a bit of rest and relaxation, it will be back to the task at hand

0:31:450:31:51

to carry on creating their dream family home.

0:31:510:31:54

# We'll always be together

0:31:560:31:58

# Together in electric dreams

0:31:580:32:02

# We'll always be together

0:32:030:32:05

# However far it seems... #

0:32:050:32:08

I'm in Dawley, Shropshire, a pleasant suburb and one of the oldest parts of Telford.

0:32:110:32:17

Although it's mainly industrial round here, its most famous son was Captain Webb,

0:32:170:32:23

the first man to swim the English Channel.

0:32:230:32:25

So, in the current property climate, I'm hoping this is an area swimming against the tide.

0:32:250:32:31

So, I'm on an ex-local authority housing estate,

0:32:310:32:35

well known for the affordability and size of the houses here, actually,

0:32:350:32:39

a lot of these houses built after the Second World War

0:32:390:32:43

to replace homes that were damaged during the war years.

0:32:430:32:47

This is what I'm here to see - a three-bedroomed semi-detached, had a guide price of 35,000 quid.

0:32:470:32:53

In 2010? That sounds cheap.

0:32:540:32:56

# Tell me why-y-y Tell me why...#

0:32:560:33:01

The outside gives me no clues.

0:33:010:33:03

It looks in reasonable shape. The roof's intact and there's a decently maintained frontage.

0:33:030:33:09

The back garden is a mess, but it looks like a pleasant family home.

0:33:090:33:13

What have we got? A fairly standard layout into a little hallway here,

0:33:130:33:18

stairs up to the bedrooms, living room there, then through into the kitchen.

0:33:180:33:23

But I have to say, I don't need to go too much further in this house to see the first potential problem.

0:33:230:33:29

On this floor here, this bit has raised up. It's almost like it's bubbled.

0:33:290:33:34

Now, I don't think that's just a case of shoddy tiling.

0:33:340:33:39

The biggest fear would be that the concrete underneath has got something going on

0:33:390:33:44

which means it's starting to bubble up.

0:33:440:33:46

The only way to find out what's going on is to dig down

0:33:460:33:50

and maybe get a structural engineer in to make sure nothing horrible is happening.

0:33:500:33:56

The kitchen isn't a bad sized space, fairly dated units,

0:33:560:33:59

so you'd want to replace these, but not before dealing with the floor.

0:33:590:34:03

# Uh-oh, we're in trouble

0:34:030:34:07

# Something's come along and it's burst our bubble, yeah, yeah... #

0:34:070:34:11

Oh, dear. Just when things were looking so promising!

0:34:110:34:15

At least there are no signs of bubbling floors in the lounge and it's a decent size.

0:34:150:34:20

Let's hope upstairs has no more nasty surprises.

0:34:200:34:24

So, upstairs, three bedrooms, but before I talk about those, just a brief safety message.

0:34:240:34:29

If you've got these in your house, make sure that you've got them tied up to the window frame,

0:34:290:34:35

especially if you've got young children.

0:34:350:34:38

There have been horrific accidents with children playing with those and getting entangled.

0:34:380:34:44

What have we got? Bathroom, not a bad size,

0:34:440:34:47

but obviously in need of finishing off or completely refurbishing,

0:34:470:34:51

but I love the fact that the bedrooms are a really good size.

0:34:510:34:55

That's why somebody will buy this place. It's a really good sized family house.

0:34:550:35:00

Two huge double bedrooms, a boxroom, everything you could really need,

0:35:000:35:05

so, all in all, yeah, a positive house.

0:35:050:35:08

But before I get too excited about this property,

0:35:100:35:14

a guide price of £35,000 sounds to me just too good to be true.

0:35:140:35:19

So, what is the catch? Well, in case you haven't guessed already,

0:35:190:35:23

it's the fact that the house is made of non-standard construction,

0:35:230:35:27

which means when it comes to getting a mortgage, you're going to have all sorts of potential problems.

0:35:270:35:33

Spotting that it's non-standard construction is really important.

0:35:330:35:37

You've got to see the property as it's not always mentioned in the auction catalogue.

0:35:370:35:43

What are some of the real giveaways? The stuff on the walls is the first giveaway.

0:35:430:35:48

Can you hear that? Sounds kind of hollow? That's because it is.

0:35:480:35:52

If you look down at the bottom here, you can see that this is an outer layer - again sounds really hollow -

0:35:520:35:58

on top of the concrete blocks which the house is made of.

0:35:580:36:02

If that doesn't convince you, find a place where there's something going through the walls,

0:36:020:36:08

like the pipework coming out here. If I fiddled with that, it would come out.

0:36:080:36:13

If you peer through that one, you can see concrete blocks underneath.

0:36:130:36:17

Either way, what you've discovered is non-standard construction and that sets alarm bells ringing.

0:36:170:36:23

This needs to be a cash purchase. If you didn't discover it before the auction, you're in big trouble.

0:36:230:36:29

The main concern with this type of construction is concrete cancer.

0:36:300:36:34

The solid, reinforced concrete blocks that the semi is made of are literally crumbling to dust.

0:36:340:36:41

That risk scares off mortgage companies.

0:36:410:36:44

It can be solved by putting an outer brick shell around the entire house,

0:36:440:36:48

but that's not cheap, so what are the options here?

0:36:480:36:51

I asked along a local estate agent to tell me more.

0:36:510:36:55

The problem with this type of non-standard construction

0:36:550:36:59

is that it's got a very limited life expectancy.

0:36:590:37:03

The property itself needs some cosmetic work done.

0:37:030:37:07

I did note, however, there is double glazing in the property.

0:37:070:37:10

There also looks like a fairly recently fitted combination boiler.

0:37:100:37:14

The electrics have been updated. It's got a modern consumer unit.

0:37:140:37:19

But the usual things - decor, new carpets, that type of thing.

0:37:190:37:22

So, let's talk money. With a guide price of what was £35,000,

0:37:220:37:27

what could this place be worth after a thorough facelift?

0:37:270:37:31

Once the works have been carried out to this property, the updating,

0:37:310:37:35

I would recommend an asking price of £59,950.

0:37:350:37:40

For rental values, once all the works and everything has been updated,

0:37:400:37:44

I would recommend a rental value of £550 per month.

0:37:440:37:47

So there may be a danger that this house will crumble away,

0:37:470:37:51

although as an investment, it looks pretty solid to me.

0:37:510:37:55

So, not a bad little house. It needs a bit of work and I would investigate that kitchen floor,

0:37:560:38:02

but the biggest issue is that non-standard construction.

0:38:020:38:06

But if you've got the cash to buy it, a good rental property.

0:38:060:38:10

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

0:38:100:38:13

Lot number 3, we move to Telford, Shropshire.

0:38:150:38:18

This is a three-bed, semi-detached house, so what shall we say for lot number 3?

0:38:180:38:23

Who's going to start me here? £30,000. At 30,000. 31?

0:38:230:38:27

31.

0:38:270:38:29

32?

0:38:290:38:31

32.

0:38:310:38:33

33.

0:38:330:38:35

34. 35?

0:38:350:38:38

34. I'll take a half if it helps. 34 and a half.

0:38:400:38:43

At 34 and a half, standing right. A new bidder at the back, 35,000.

0:38:430:38:48

Right at the back at 35. And a half?

0:38:480:38:51

Back in, 35 and a half. 36, sir?

0:38:510:38:54

36. At 36 then for the first time.

0:38:540:38:58

Another half anywhere else? At 36 for the second time.

0:38:580:39:03

Third and final time at £36,000...

0:39:030:39:06

Your lot, sir.

0:39:060:39:08

'For £36,000, just £1,000 over the guide price,

0:39:080:39:13

'the successful bid came from local man Jonathan.

0:39:130:39:16

'I met up with him and his business partner Anthony.'

0:39:160:39:20

Anthony, Jonathan, lovely to meet you both. Congratulations. Tell me why you wanted to buy this place.

0:39:200:39:26

It meets all the criteria we're looking for -

0:39:260:39:29

a three-bedroomed house, very suitable for the rental market,

0:39:290:39:33

a long-term investment with a good return.

0:39:330:39:36

So how does it work between you two?

0:39:360:39:39

-We're brothers.

-Oh, great.

0:39:390:39:42

Basically, we've been in property for ten years.

0:39:420:39:47

-You don't look old enough.

-I'm 26, he's a good 28.

0:39:470:39:51

You were 16 and you were 18?

0:39:510:39:54

Yeah. We were brought up in a building family. My father was a builder with a property portfolio.

0:39:540:40:01

And he kindly lent us some money to buy our first house,

0:40:010:40:05

a similar condition to this, and here we are now.

0:40:050:40:09

-How many properties have you built up during that period?

-About 15.

0:40:090:40:14

Some of that includes land and some commercial properties.

0:40:140:40:19

'Initially, property developing was a hobby for the brothers as they continued their education.

0:40:190:40:24

'Jonathan graduated from university with a degree in Structural Management

0:40:240:40:29

'and Anthony is a building surveyor who now works in London.

0:40:290:40:33

'Jonathan manages their property portfolio and project-manages the work.'

0:40:330:40:38

-When you're buying places, what do you look for?

-Obviously, with a property like this,

0:40:380:40:43

because it's of non-traditional construction, it's extremely hard,

0:40:430:40:47

if not impossible, to get a mortgage, but we're in it long-term.

0:40:470:40:52

Therefore, as long as the return's good, we're making a return on the property, then we're satisfied.

0:40:520:40:58

-So, no surprises that this was non-standard construction?

-No, I viewed it prior to the auction.

0:40:580:41:05

We bought one a couple of months back just down the road from here of exactly the same property.

0:41:050:41:12

Now, the kitchen floor is a bit undulating. Any thoughts on that?

0:41:120:41:16

-Hmm, yes.

-Any ideas?

0:41:160:41:18

There's probably a little bit of subsidence going on there with the floor.

0:41:180:41:23

-What are you going to do?

-Knock it out and level it out. I'm sure it'll be fine.

0:41:230:41:29

How much have you got to spend to sort this place out?

0:41:290:41:33

-Round about £2,500 to £3,000.

-What?!

-I'd say 5. I'd say 5.

0:41:330:41:38

-We'll see.

-Leave him at his desk.

0:41:380:41:41

-Even 5 sounds a bit tight, putting in a new kitchen and a new bathroom?

-Yeah, and decoration.

0:41:410:41:46

I think five grand will suffice.

0:41:460:41:49

'With a potential rental value of £500 per month

0:41:490:41:53

'or £6,000 a year, on a £40,000 investment, that could mean a phenomenal return of 15%.

0:41:530:41:58

'These boys certainly know a good investment when they see one.'

0:41:580:42:03

-So what does your dad think about what you've achieved?

-I think he's very proud in a way.

0:42:030:42:09

He's... He's been in the game for a long, long time.

0:42:090:42:13

-Does he get involved at all?

-He'll come round at the end

0:42:130:42:17

and he'll point out the faults and the fact the doors don't close, little things like that.

0:42:170:42:23

But he's welcome to come and help in the next couple of weeks.

0:42:230:42:27

He likes to pop round just to check we're doing it right and offer suggestions.

0:42:270:42:32

Whether they're taken...

0:42:320:42:34

'They might not always listen to Dad's advice now,

0:42:340:42:38

'but judging by their progress so far, the brothers must be glad they listened to him ten years ago.'

0:42:380:42:45

Anthony and Jonathan know what they're doing

0:42:450:42:48

and their strategy of buying these kind of properties works well,

0:42:480:42:52

as long as you've got the cash to buy the property.

0:42:520:42:55

In terms of how much they'll spend doing this place up,

0:42:550:42:59

they may find that the kitchen floor blows the budget a bit.

0:42:590:43:02

You can see how they get on later in the show.

0:43:020:43:05

The moment of reckoning has arrived.

0:43:080:43:11

-Have those property gambles paid off or have our buyers backed the wrong horse?

-Let's find out.

0:43:110:43:17

# Somewhere over the rainbow

0:43:170:43:22

# Way up high

0:43:230:43:27

# And the dreams that you dare to...

0:43:280:43:32

# Oh, why, oh, why can't I...? #

0:43:320:43:37

Maesteg in Mid Glamorgan appears to be a pretty good spot to build a house.

0:43:370:43:42

For some self-builders, the prospect of creating their own home with stunning views across the valley

0:43:420:43:48

seemed a great chance to reach their pot of gold.

0:43:480:43:51

But unfortunately, it's not always easy to find Rainbow's End.

0:43:510:43:56

For some developers here, their dream house became a nightmare,

0:43:560:44:00

but one person's misfortune can be another person's happiness.

0:44:000:44:04

That's what Linda and Mohammed hoped

0:44:040:44:07

when they bought this five-bedroomed, detached shell of a property for 151,000.

0:44:070:44:12

It's yours. Thank you very much.

0:44:120:44:15

Six months on, have they reached the end of the rainbow at last?

0:44:150:44:19

From the outside, it does look less derelict

0:44:190:44:23

and much more cared for.

0:44:230:44:26

And there's promising progress at the back.

0:44:260:44:29

It's started to be prepared for a bit of landscaping,

0:44:290:44:32

but how is fitting out the inside going?

0:44:320:44:35

Hooray! At last there are some stairs in place

0:44:360:44:40

and you can now get up to the five bedrooms.

0:44:400:44:44

And a lot of the rooms have moved from first fix to the final fix stage.

0:44:460:44:52

Shower room.

0:44:540:44:56

Rear reception room.

0:45:000:45:03

And of course, the kitchen.

0:45:120:45:14

Well, as you can see, we've had the kitchen fitted, partly fitted.

0:45:200:45:25

As you can see, we've gone for a high spec

0:45:250:45:28

and, you know, the worktops and sinks and that, it's all put in.

0:45:280:45:33

But the creme de la creme is the cooker.

0:45:330:45:36

It's every woman's dream to have a good cooker, a nice oven and things like that,

0:45:360:45:42

so a lot of cooking on that.

0:45:420:45:44

So, yeah, as you can see, we're basically getting to the top end of it now

0:45:440:45:49

and it will be really nice when it's finished.

0:45:490:45:53

The kitchen is really taking shape at last.

0:45:570:46:01

While upstairs, there are those five bedrooms.

0:46:070:46:11

A large master bedroom

0:46:120:46:14

which is en-suite.

0:46:140:46:17

And four other bedrooms, one of which is also en-suite.

0:46:240:46:29

Plus a fantastic master bathroom.

0:46:310:46:34

It also comes with a gallery landing and doors which will lead out to a balcony

0:46:370:46:42

for enjoying those fabulous views.

0:46:420:46:45

But one of the heaviest jobs was certainly the garden.

0:46:450:46:48

As you can see, it's all paved here now.

0:46:480:46:52

It's all been levelled up because it was quite a drop before.

0:46:520:46:56

If you look down there, we've gone up two tiers.

0:46:560:47:00

We're going to put trees on the top and hopefully do a barbecue area down there.

0:47:000:47:04

And put some shrubs and fence that area down there.

0:47:040:47:08

It's a big difference here. It is a big difference.

0:47:080:47:11

They've done their best to maximise what little space there is here.

0:47:110:47:16

Just getting it level was no easy task and judging by the six months it's taken,

0:47:160:47:21

they must have had some challenges along the way.

0:47:210:47:24

It's been quite difficult, to be honest, because you want to get the job done.

0:47:240:47:29

You're investing money in the property

0:47:290:47:32

and then you're finding stuff, more expense which you didn't anticipate on.

0:47:320:47:38

You know, like the services, for instance. We thought they were connected and they're not.

0:47:380:47:43

As Linda lives nearly an hour away in Cardiff,

0:47:430:47:47

project-managing this property can't have been easy either.

0:47:470:47:51

The builders would say, "We need tiles, we need to look for doors."

0:47:510:47:55

So we come down, we have a look.

0:47:550:47:58

About once a week, something like that.

0:47:580:48:01

You know, the family... Especially Omar.

0:48:010:48:05

As you notice, he's not here. He's too busy in another project.

0:48:050:48:09

Linda's husband Mohammed helped with some of the re-design

0:48:090:48:13

and they used a builder they'd worked with before,

0:48:130:48:16

but with less family input and more work than anticipated, it was likely to put pressure on the budget.

0:48:160:48:23

To date, we've spent about 85,000 on it. Yes, to date.

0:48:230:48:28

And obviously now, we've got flooring left to do and the work outside,

0:48:280:48:33

so we're budgeting about 20 for that.

0:48:330:48:35

An extra 20,000 will push their costs up

0:48:360:48:40

to between around 100,000 and 105,000.

0:48:400:48:43

Their purchase price was £151,000,

0:48:430:48:46

so their total spend is heading towards 260,000.

0:48:460:48:50

Is there any profit here? What do two local estate agents think?

0:48:500:48:55

I think they've done a very good job on it

0:48:550:48:59

since I last saw the property.

0:48:590:49:01

I think it's come up very well.

0:49:010:49:04

It's a big, big property.

0:49:040:49:06

The layout of the rooms is excellent,

0:49:060:49:09

a lot of circulation space,

0:49:090:49:11

I love the gallery landing.

0:49:110:49:14

But the garden I do feel is disproportionately small for the size of the property on offer.

0:49:140:49:20

That's a real concern. This is a family-sized house without a family-sized garden.

0:49:200:49:26

So just how much will that affect its value, bearing in mind they've invested nearly £260,000 here?

0:49:260:49:32

I would market this property in the region of £285,000.

0:49:320:49:36

I would expect to achieve, given current market conditions, around about £275,000 to £280,000.

0:49:360:49:42

I thought it would be a bit more than that,

0:49:420:49:45

but this present climate, things have only got to go up now,

0:49:450:49:49

so obviously, we're in the dark stages here.

0:49:490:49:53

Well, at least there's some profit, even if it's only £20,000.

0:49:530:49:58

Although the plan is to sell, rental might have to be an option until the market picks up a bit.

0:49:580:50:04

If I was to value it for rental, it would be around £900 a month.

0:50:040:50:08

Probably circa 875, 900 per calendar month.

0:50:080:50:12

Rental? For this area, yeah, I think it's quite good.

0:50:120:50:16

£900 a month would represent around £11,000 a year,

0:50:160:50:20

just over a 4% yield, so at present, this isn't a big money-spinner.

0:50:200:50:25

What is Linda's take on this project?

0:50:250:50:28

We've had other projects on the go and they've been completed. We're now in the process of selling one,

0:50:280:50:34

so finish off this venture, then speculate to accumulate on other properties.

0:50:340:50:39

So, for Linda and her family, the search continues

0:50:390:50:43

to find that pot of gold at the end of the rainbow.

0:50:430:50:47

'In the Telford suburb of Dawley, Shropshire,

0:50:570:51:00

'post-war demand for housing meant new construction methods were employed,

0:51:000:51:05

'using concrete blocks laid on top of metal reinforced rods.

0:51:050:51:10

'These non-standard constructions can suffer from cracking and deterioration called concrete cancer

0:51:100:51:16

'and this makes them more or less unmortgageable.

0:51:160:51:20

'But for brothers Jonathan and Anthony, non-standard didn't have to mean non-profitable.'

0:51:200:51:27

-Why did you want to buy this place?

-I think it meets all the criteria that we're looking for -

0:51:270:51:32

a three-bedroomed house, very suitable for the rental market,

0:51:320:51:36

a long-term investment with a good return.

0:51:360:51:40

When they were teenagers, Jonathan and Anthony were encouraged by their dad to buy properties,

0:51:400:51:46

so they have experience beyond their years.

0:51:460:51:49

But two months after my first visit,

0:51:490:51:51

had they been able to turn this from a non-standard into a more regular money-making machine?

0:51:510:51:57

Well, yes, they have.

0:52:020:52:04

This is now much as you would expect from a good rental property -

0:52:040:52:09

clean, fresh, bright and functional and that bubbly kitchen floor is now sorted.

0:52:090:52:14

Since your last visit in here, we've ripped out the old kitchen, put in the new fitted kitchen,

0:52:140:52:20

ripped up the ceramic floor tiles and replaced it with a vinyl floor covering.

0:52:200:52:25

New tiles, new decoration and a new cooker and extractor fan.

0:52:250:52:30

And I think... It does the job, it's minimalistic, it's basic.

0:52:300:52:35

It's easy to keep tidy for the tenants and it looks good.

0:52:350:52:39

They took the same practical approach upstairs.

0:52:420:52:45

With the three bedrooms

0:52:470:52:50

and a much improved bathroom suite.

0:52:500:52:53

There's also a significant improvement with the outside space as Jonathan explains.

0:52:570:53:03

In the garden, what we've done is we've stripped everything back.

0:53:030:53:07

There was decking down here which we've carted away in a skip, a lot of rubbish down the bottom,

0:53:070:53:13

and just rearranged it and made it minimalistic.

0:53:130:53:17

Basic, what the tenants want, they can do what they want with it,

0:53:170:53:21

but it's tidied it up and made the house a lot tidier around the back.

0:53:210:53:25

So, with the garden ready just to be grassed over, the house is ready for the rental market.

0:53:250:53:31

It seems it's not a moment too soon.

0:53:310:53:34

The tenants move in in a week's time.

0:53:340:53:38

There's a few snagging little bits, a bath panel and a gas check.

0:53:380:53:43

Talk about job done! Refurbished and rented out in under ten weeks, that's impressive.

0:53:430:53:49

It's Jonathan who deserves much of the credit.

0:53:490:53:52

I've been in charge of both this property and the one we bought at the same time.

0:53:520:53:57

Anthony, who was here last time, works down in London,

0:53:570:54:01

so he's been in contact via email and phone,

0:54:010:54:04

but it's on my shoulders to get these houses renovated and let out.

0:54:040:54:09

Jonathan appears to get the short straw, but he earns a wage for the refurbishment work

0:54:090:54:14

and for acting as letting agent, as well as his share of the investment.

0:54:140:54:19

In total, on this, we've gone a little bit over budget. It's about £5,200.

0:54:190:54:24

Anthony was a little bit optimistic at 2,500.

0:54:240:54:28

Goodness, just £5,000 on this house! They really do know

0:54:290:54:33

how to get value for money.

0:54:330:54:36

They paid £36,000 for it, so for just over £40,000, they've got a very decent three-bed semi.

0:54:360:54:43

But its non-standard construction restricts the value. The question is, by how much?

0:54:430:54:49

I think the change is very good.

0:54:490:54:51

He's redecorated and refurbished the bathroom and kitchen.

0:54:510:54:55

He's also made some provision for extra off-road parking at the front.

0:54:550:55:00

It's a tidy refurb of this style of house, ideal for the rental market.

0:55:000:55:05

The property doesn't lend itself to the residential sales market because of its nature of construction.

0:55:050:55:11

They are hard to get mortgages on.

0:55:110:55:14

But with their spend of just over 40,000, surely they have a solid investment?

0:55:140:55:19

I would put this on the open market at a recommended asking price of £65,000.

0:55:190:55:24

It would achieve between £60,000 and £65,000.

0:55:240:55:27

It's good to know that there's some money to be made from it,

0:55:270:55:31

but like I said before, it's a rental property for the rental portfolio.

0:55:310:55:36

So, they're quids in on the resale market, but this is all about rental for the brothers.

0:55:360:55:41

They've already found a tenant. Did they get a reasonable deal?

0:55:410:55:45

I would expect to achieve, in rental terms, £550 per calendar month.

0:55:450:55:51

In the current market, which is very strong,

0:55:510:55:54

it should achieve between £550 and £575 per calendar month.

0:55:540:55:59

That's spot-on. We've let it out for 550.

0:55:590:56:02

Wow! A rental return of £550 a month on an investment of just £40,000

0:56:030:56:09

represents a whopping 16% yield.

0:56:090:56:11

Amazing!

0:56:110:56:14

Clearly, they learnt the trade well from their dad.

0:56:140:56:17

My dad, I think he's pleased with it. He's been helping here and there when he can.

0:56:170:56:22

Useful cheap labour force!

0:56:220:56:24

But no, I think he'll be proud of this one

0:56:240:56:27

and I think he's proud of both of us for building up the portfolio.

0:56:270:56:32

They might have had an early start in property development,

0:56:320:56:36

but they have certainly done an impressive job here and I'm sure there are many more to come.

0:56:360:56:42

Well, whether you're a property novice or an old hand,

0:56:440:56:48

make sure you join us next time for more stories from the auction rooms.

0:56:480:56:52

-Tune in to more Homes Under The Hammer. Goodbye.

-Goodbye.

0:56:520:56:56

Subtitles by Subtext for Red Bee Media Ltd 2010

0:57:120:57:16

Email [email protected]

0:57:160:57:19

Martin Roberts and Lucy Alexander visit somewhere with lots of potential in Devon, a large property in Wales and a house in Telford, Shropshire.

All of these properties were sold at auction; Martin and Lucy find out who bought them and what they paid when they went under the hammer.


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