Episode 48 Homes Under the Hammer

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

-So it pays to buy at the right price.

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

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

-The atmosphere is electric.

-The action is fast and furious.

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

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

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

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

It's a bit of a Welsh wonderland.

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

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

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

Your lot, sir. Well done.

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

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

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

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

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

Definitely worth a look.

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

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

'So what's it like inside?'

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

Well...not too brilliant.

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

It'll need time and money

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

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

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

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

It goes on, though.

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

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

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

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

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

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

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

That part of the house - fairly straightforward restoration.

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

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

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

'Oh, yes. This really has tremendous potential.

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

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

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

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

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

Hear that crackling noise?

That's not the rain.

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

'This is not ideal and a big negative.

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

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

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

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

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

and just enjoy the beautiful place.

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

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

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

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

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

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

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

It's a considerable difference.

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

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

'this looks like an attractive investment proposition.'

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

and you've got to be interested.

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

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

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

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

Let's go to the auction.

44. That's a pretty little spot.

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

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

110. 120.

130. 140.

150. 160.

170. 175. 175.

Front row. OK, 175.

175. 176.

176.

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

176. Would 500 keep you in the game?

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

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

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

Well done. Make a lovely home of it.

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

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

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

-Tracy, Robin, lovely to meet you both.

-Lovely to meet you.

-Hello.

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

-Just a little, yes.

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

-Yes!

-How would you describe that?

-A large project.

-A large project.

-But it will be fun.

-Tell me a bit about you two.

-I'm a builder.

-Right.

-This is ideal for me.

-OK.

I'm a driving instructor in the local area.

-This is a joint project or what?

-Yeah, definitely.

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

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

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

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

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

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

-Crikey.

What about outside? We've obviously got barns

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

-It is!

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

-And we've got the fields.

-Then the garages and a workshop.

-What about the budget, then?

-Mm, budget.

-Yeah.

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

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

-Right.

-Still...sort of 75...

-75, yeah.

-Ish.

For the whole project.

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

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

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

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

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

-Yes.

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

-Yeah.

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

-It does.

-What were your thoughts about that?

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

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

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

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

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

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

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

-At the same time.

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

-I'll start again, yeah.

-Presumably you mean a team?

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

-Yourself?!

-Yeah.

-What are you, Superman?!

-Yeah!

-Built with titanium with kryptonite inside!

That's it.

Have you seen him do this before?

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

-And you're confident?

-Yes, definitely.

-Really?

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

-Listen, congratulations.

-Thank you.

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

-I'll need at least six months.

-Good luck with it.

-Thanks.

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

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

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

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

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

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

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

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

I'm in Maesteg in Wales.

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

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

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

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

It's a bit of a Welsh wonderland.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

# Oh, we're halfway there

# Oh, living on a prayer... #

A house in this state is a mixed blessing.

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

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

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

There's a nice throughway into the dining room.

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

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

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

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

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

The development was originally sold

off plot for self-build builders.

This property has obviously been built to a first fix stage

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

it might not appeal to families.

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

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

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

We've recently sold a property for 270.

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

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

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

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

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

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

We've got a proxy bid on this.

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

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

At 105. 110 from my proxy bidder.

At 110.

15, can I? 15.

115 I'm bid. At 115.

120 there.

I have 123 from my proxy bid.

125, either of you now? 125.

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

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

At 132.

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

134. 136, if you like.

6 is bid. 136.

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

40, thank you.

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

142. 144, if you like, please.

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

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

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

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

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

-At 152.

-One. One.

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

151. 2, can I? Yes or no?

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

Have you done? At £151,000.

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

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

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

and son Omar at the Maesteg mansion.

-Linda, congratulations!

-Thank you very much!

-You've bought an empty shell!

-Yes!

-What were you thinking?

-Crazy.

Yeah! Crazy. Adventure. Challenge.

How well do you know this area?

-Not at all.

-Not at all, really.

-What part of Wales are you from?

-Cardiff.

-Cardiff.

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

-Yes.

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

-Yes.

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

-A lot.

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

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

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

-Are you in the property world?

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

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

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

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

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

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

-How much have you got to spend?

-We're looking at 70-80.

-£70,000-£80,000.

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

And the garden and things will cost.

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

-See what we can do.

-Yep.

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

-We probably will.

-That'll eat into your profit.

-Yeah.

-Good luck.

-Thank you very much.

-It's going to be really exciting.

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

-Thank you.

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

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

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

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

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

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

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

It's been quite difficult.

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

I'm going to sit down and collapse!

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

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

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

electricity pylons and overhead cables. That was ironic

as the property was disconnected.

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

initially for Tracy and her daughter Sophie.

-Tell me what you're going to do.

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

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

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

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

The skip suggests work's been going on inside.

The ground floor is designed around the kitchen first,

then we did the other rooms to suit.

They knocked the lounge and old kitchen into one,

creating a spacious farmhouse-style kitchen.

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

Off that is the utility room and study.

And there's a completely revamped conservatory.

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

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

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

with a downstairs lounge and ensuite bedroom.

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

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

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

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

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

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

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

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

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

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

-It's really brilliant.

-Yeah, really brilliant.

He made us a rope swing.

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

and he had a very long ladder.

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

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

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

It's taken quite a lot of doing.

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

Outbuildings. One is the stable block

-for Tracy's horses.

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

-New roof.

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

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

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

-If we're allowed to.

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

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

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

the master bedroom, the lounge and games room.

That will mean eventually a five-bedroom house

with plenty of reception rooms and extra living space.

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

I moved in Christmas Eve about five months ago.

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

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

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

-You did.

-It was quite funny.

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

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

At first, it was a little bit odd,

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

it goes into the background really.

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

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

on the first phase of the work here.

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

making their total spend to date around 190,000.

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

What a transformation!

They've done an amazing job so far.

What they've done is to quality standard.

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

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

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

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

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

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

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

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

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

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

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

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

that could push that price upwards to around 350.

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

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

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

depending on standard of finish.

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

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

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

-No.

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

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

so what's next?

I'm going to sit down and collapse.

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

which I haven't done a lot lately.

Get back into all our hobbies that we really love.

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

to carry on creating their dream family home.

# We'll always be together

# Together in electric dreams

# We'll always be together

# However far it seems... #

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

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

the first man to swim the English Channel.

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

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

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

a lot of these houses built after the Second World War

to replace homes that were damaged during the war years.

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

In 2010? That sounds cheap.

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

The outside gives me no clues.

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

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

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

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

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

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

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

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

which means it's starting to bubble up.

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

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

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

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

# Uh-oh, we're in trouble

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

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

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

Let's hope upstairs has no more nasty surprises.

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

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

especially if you've got young children.

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

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

but obviously in need of finishing off or completely refurbishing,

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

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

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

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

But before I get too excited about this property,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That risk scares off mortgage companies.

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

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

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

The problem with this type of non-standard construction

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

The property itself needs some cosmetic work done.

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

There also looks like a fairly recently fitted combination boiler.

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

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

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

what could this place be worth after a thorough facelift?

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

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

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

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

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

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

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

but the biggest issue is that non-standard construction.

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

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

Lot number 3, we move to Telford, Shropshire.

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

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

31.

32?

32.

33.

34. 35?

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

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

Right at the back at 35. And a half?

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

36. At 36 then for the first time.

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

Third and final time at £36,000...

Your lot, sir.

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

'the successful bid came from local man Jonathan.

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

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

It meets all the criteria we're looking for -

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

a long-term investment with a good return.

So how does it work between you two?

-We're brothers.

-Oh, great.

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

-You don't look old enough.

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

You were 16 and you were 18?

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

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

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

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

-About 15.

Some of that includes land and some commercial properties.

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

'Jonathan graduated from university with a degree in Structural Management

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

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

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

-Obviously, with a property like this,

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

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

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

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

-No, I viewed it prior to the auction.

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

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

-Hmm, yes.

-Any ideas?

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

-What are you going to do?

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

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

-Round about £2,500 to £3,000.

-What?!

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

-We'll see.

-Leave him at his desk.

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

-Yeah, and decoration.

I think five grand will suffice.

'With a potential rental value of £500 per month

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

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

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

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

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

-Does he get involved at all?

-He'll come round at the end

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

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

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

Whether they're taken...

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

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

Anthony and Jonathan know what they're doing

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

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

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

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

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

The moment of reckoning has arrived.

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

-Let's find out.

# Somewhere over the rainbow

# Way up high

# And the dreams that you dare to...

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

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

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

seemed a great chance to reach their pot of gold.

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

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

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

That's what Linda and Mohammed hoped

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

It's yours. Thank you very much.

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

From the outside, it does look less derelict

and much more cared for.

And there's promising progress at the back.

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

but how is fitting out the inside going?

Hooray! At last there are some stairs in place

and you can now get up to the five bedrooms.

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

Shower room.

Rear reception room.

And of course, the kitchen.

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

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

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

But the creme de la creme is the cooker.

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

so a lot of cooking on that.

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

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

The kitchen is really taking shape at last.

While upstairs, there are those five bedrooms.

A large master bedroom

which is en-suite.

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

Plus a fantastic master bathroom.

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

for enjoying those fabulous views.

But one of the heaviest jobs was certainly the garden.

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

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

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

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

And put some shrubs and fence that area down there.

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

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

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

they must have had some challenges along the way.

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

You're investing money in the property

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

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

As Linda lives nearly an hour away in Cardiff,

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

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

So we come down, we have a look.

About once a week, something like that.

You know, the family... Especially Omar.

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

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

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

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

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

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

so we're budgeting about 20 for that.

An extra 20,000 will push their costs up

to between around 100,000 and 105,000.

Their purchase price was £151,000,

so their total spend is heading towards 260,000.

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

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

since I last saw the property.

I think it's come up very well.

It's a big, big property.

The layout of the rooms is excellent,

a lot of circulation space,

I love the gallery landing.

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

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

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

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

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

I thought it would be a bit more than that,

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

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

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

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

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

Probably circa 875, 900 per calendar month.

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

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

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

What is Linda's take on this project?

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

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

So, for Linda and her family, the search continues

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

'In the Telford suburb of Dawley, Shropshire,

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

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

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

'and this makes them more or less unmortgageable.

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

-Why did you want to buy this place?

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

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

a long-term investment with a good return.

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

so they have experience beyond their years.

But two months after my first visit,

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

Well, yes, they have.

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

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

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

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

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

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

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

They took the same practical approach upstairs.

With the three bedrooms

and a much improved bathroom suite.

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

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

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

and just rearranged it and made it minimalistic.

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

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

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

It seems it's not a moment too soon.

The tenants move in in a week's time.

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

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

It's Jonathan who deserves much of the credit.

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

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

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

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

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

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

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

Anthony was a little bit optimistic at 2,500.

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

how to get value for money.

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

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

I think the change is very good.

He's redecorated and refurbished the bathroom and kitchen.

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

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

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

They are hard to get mortgages on.

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

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

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

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

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

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

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

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

In the current market, which is very strong,

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

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

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

represents a whopping 16% yield.

Amazing!

Clearly, they learnt the trade well from their dad.

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

Useful cheap labour force!

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

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

They might have had an early start in property development,

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

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

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

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

-Goodbye.

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