Episode 17 Homes Under the Hammer

Hello. Now, like you, we're interested in property.

That means every aspect of it. We're always on the lookout for a bargain.

And one way you could get one is to go to your local auction.

There are property auctions held all over the country throughout the year, so you're spoilt for choice.

Let's take a look at the properties that made our buyers want to part with their cash on today's show.

'I'm in the Rhondda Valley, where problems begin as soon as you get through the front door.'

Not a particularly good start.

'I visit a gigantic empty shop in Kent which is very promising.'

The numbers look good, but you may need to look harder to actually see that cash.

'And is it love at first sight when I visit this bungalow on the outskirts of Derby?'

I'm liking what I'm seeing!

'All these properties have been sold at auction and we find out who bought them

-'and what they paid for them when they went under the hammer.'

-Twice, third time.

'I'm near Tonypandy in the Rhondda Valley,

'an area steeped in coal-mining history.

'Served by the South Wales Commuter Railway, the Rhondda line,

'it's within easy reach of Cardiff less than an hour away.'

I'm in the heart of the Valleys in Trealaw,

here to see an end terrace at a guide price of £26,000-plus.

This is it. Looks a little bit in need of care and attention from the outside.

Let's see what the inside has in store.

'Although this house looks a bit rundown, the rest of the street's in good order.

'The view to the other side of the valley is a lovely outlook,

'but inside, it's a different story.'

Oh, my word. Straight away, into the entrance corridor,

and, holy mackerel, that is a lot of damp.

This whole wall... Well, you can see it. It's not damp here,

damp all the way down there and all the way up there.

I'm not sure how bad it is. Here's a little tip for you.

I've got a car key. If you tap the wall, if it's really badly blown, you'll hear it go very hollow.

-That isn't too bad.

-HE TAPS THE WALL

So the wall is still pretty solid and that plaster, I reckon, isn't a lost hope.

So you could dry this wall out and not have to replaster.

The big thing is, what is causing that damp?

My guess, by the height here, is that it isn't coming up,

it's coming in, so you need to check out what's on the other side of that wall to find out what's causing it.

The other thing to consider is, how far has it gone into the floor? Is the floor solid or wooden?

Could it have possibly rotted some of the beams or the joists?

Lots to consider. So not a particularly good start.

Bit of a shame, really, because in terms of layouts, I like that idea of a corridor there.

It keeps the draughts away from the main living areas.

And in terms of the living areas, again, good size. You've got a front living room area there

and a rear one here. Obvious thing to do would be to take out this wall to make a big open-plan area.

Slightly unusual, through there is where the only loo and bathroom in the property is.

Then onwards through to the kitchen.

'And, like the rest of the property, this bathroom's seen better days.

'It's also the only one in the house, so anyone needing the loo in the night has quite a trek.'

# Hold on, hold on

Through to the kitchen, and interesting little feature here,

you've got this window, which is letting a little bit of light into the living room space.

Not much, though. It's very dark and dingy in there,

so maybe you could remove this wall, as well, or put a breakfast bar in there.

The kitchen is in a right old state.

All you've got is a sink and a couple of units underneath it.

So this needs work. And something structural that is worrying me slightly, the ceiling.

Polystyrene, look at the height of it, I think this is built into an extension.

Judging by the state of it, not in that good a condition.

So what are you going to do with this? Hm. I think that needs some thinking about.

'Off the kitchen, there's also this rather strange door

'and stairs running down to the rear.

'Out to the back, you can see the extension, which houses the kitchen,

'and there's a small garden out there with a big shed and a greenhouse.

'No clues about the source of the mystery damp. Let's head upstairs and check out the rest.'

At the moment, upstairs is configured as two bedrooms,

a big bedroom on the front and a smaller bedroom towards the rear,

but I reckon there's enough space up here to reconfigure the layout

to create maybe three bedrooms or at least two bedrooms and an upstairs bathroom.

That would definitely be worth doing.

'Remember, this had a guide price of just £26,000.

'But the mystery damp issue means it's not going to be just a straightforward redecoration job.'

# It's a mystery

'To find out more about the area and the property,

'it's time to consult a local estate agent.'

What's good about the Rhondda is obviously the scenery, I think.

The facilities are pretty good within the Rhondda.

You don't have to go too far for a sports centre, for instance.

There's a number of them within the Valleys. The property is surprisingly quite large,

because it could easily be transferred back to a three-bedroom.

The property itself just needs a full refurbishment,

a gut job, as we say.

Every wall has to be hacked off and replastered,

and once that's done, I think that would cure the damp anyway.

It's just generally within the walls,

not within the stone build, it's within the plaster.

'If he's right, that should be a relatively straightforward fix.

'I reckon this could be an ideal rental property.

'What sort of income could the new owner expect if they brought it up to modern standards?'

Rental on this property, if reverted back to a three-bedroom,

I would estimate to be in the region of £400 to £425 per calendar month.

'What about resale? Would it be worth all the effort to sort out the damp and renovate the place?'

Once renovated, and if it is reverted back to three bedrooms,

I would estimate this property would be worth in the region of £70,000 to £75,000.

Well, yes, there's work to be done to sort this place out.

It needs stripping back and redecorating, for sure,

and whatever's causing that damp definitely needs to be investigated.

But the guide price was just £26,000-plus.

A great one to go for as a rental opportunity or a place to live. Let's see who went for it.

Near Tonypandy, it's a traditional-type terraced house.

Can I see 29 for this one? 28, then. 27. Let's get started.

5 is that? Thank you, sir. 25,000 I'm bid. This is no money for it.

A half, thank you. 25 and a half I'm bid.

At 25 and a half. 6 is it for you, sir? 26 I'm bid.

Half, thank you. At 26 and a half. At 26 and a half.

7 can I now? At 26,500. 7 if you like. Quick if you want it.

At 26,500. 7, thank you.

At 27 I'm bid. At 27. Half, thank you.

27 and a half. Make it 8 on my right.

8. 28 I'm bid. Where's yours? I've got him.

Thank you. 28 and a half. 9 will you now, sir, on my right? Thank you.

At 29 I'm bid. And another half, sir?

At 29. Half, thank you. 29 and a half. That's a bad place to stop.

It's difficult to work out the deposit. Let's make it 30, please.

30, thank you, sir. At £30,000. At 30.

And a half for you, sir. Thank you. 30 and a half.

You're still out. Give him a nudge, madam, he likes it.

30,500, he's been in all to way.

Tell him not to lose it. At 30,500. And 1 can I? Yes or no?

Quick if you want it. I'm not going to dwell. Have you done? 1.

Thank you. You saw it there. At 31.

Thank you, 31 and a half. Now wave that catalogue again. At 31 and a half.

You said no before, but keep trying. At 31 and a half.

Are you coming again, yes or no? At £31,500, then, in the back of the room.

# Smooth operator

'Smooth bidding won the day there and ensured that carpenter Rob

'and his business partner Mark snapped up the property for £31,500.

'I met Rob there to hear about their plans.'

-Rob!

-Hello.

-Congratulations.

-Thank you very much.

-Tell me why you wanted to buy the house.

Basically, to earn a bit of money, to cut it short.

I've always wanted to get into the property development side of it.

I've been a carpenter all my life, so it's just a matter of time,

of getting the money together and actually getting things kicked off and started, really.

-So, is this number one?

-This is number one. Numero uno.

'Rob and Mark will do most of the work themselves.

'They plan to get everything done within three months and use their carpentry skills

'to give the place a professional finish.'

-What's your business?

-Most of it is sanding floors these days.

We bring up parquet floors, restoration work to flooring, really.

-Are you going to do that here?

-I'll certainly have a look.

I'd rather do that than carpet, but then again,

you're always fighting that a lot of ladies want carpet upstairs.

I'll certainly be putting hard-wood flooring downstairs,

so that should make an impression.

'But there's little point in thinking about the finishing touches

-'till they've dealt with the mysterious damp problem.'

-Worst case scenario is

-that we have to get it injected, damp-proofed.

-That's not a bad worst case.

No, not really. Perhaps the render will have to come off the pine end, hopefully not. We'll have a look.

Until we get that off the inside of the walls, it's hard to tell.

-What kind of budget have you set aside?

-£11,000 for materials and labour.

I've kept £4,000 contingency for that damp issue, the big damp issue.

And that's about it. So it brings it up to about £15,000 to get it done, really.

'With a purchase price of £31,500,

'that'll bring the total spend to over £46,500

'if Rob and Mark don't get bogged down by those damp walls, of course.'

This end bit here, that's definitely coming down. I'm going to open it out a little bit.

Them steps coming down there are going to be open.

Basically, downstairs, I'm probably going to keep it similar.

Upstairs is going to be the change. We are going to split that big bedroom into two,

so you've got the double windows at the front. I've taken measurements, so we will get away with it.

-They'll be nice bedrooms for the size of the house.

-And leave the downstairs loo?

Unfortunately, yeah. It is the first house.

We want to try and get it turned around as quickly as we can.

So, unfortunately, it will be staying downstairs.

-And once you've done this one, what's the plan then?

-Get straight back to auction.

-Onto the next one?

-Onto the next one.

-Congratulations, good luck and we look forward to seeing how you get on.

-Thank you.

So, an interesting house for Rob to take on as his first property development project.

He seems to have everything pretty much in place,

although the big unknown is what is causing that damp.

And that could turn out to be a very expensive thing to fix.

Will his £4,000 contingency be enough?

You can find out later in the show.

'This is Snodland in Kent, which lies between Maidstone and Chatham,

'and a convenient couple of miles from the M20.

'It's not a big place, but it's due to expand

'due to a new development of over 1,000 homes in the Holborough area of town.

'So, with all that new investment, I reckon Snodland could be worth a look.'

So what does the centre of Snodland have to offer?

Well, you'll be excited to hear, quite a lot.

I'm here to see what was described in the catalogue as "substantial commercial property"

right here, just off the high street.

And substantial it is, with great big, massive display windows, which is always a plus.

Until recently, it was a plumbing, heating and bathroom centre.

With a guide price of £200,000 to £220,000,

let's get inside and see if it washes its face.

Ooh! First impressions, it's a very big space.

From the outside, you don't think it's going to be as deep as this.

And there is loads of room. Also, it's incredibly light.

Once you take down all the brown paper from the windows and the boards, it'll be a lovely,

wide-open, light space.

# I need a wide-open space

# I'm standing

'But if that's not large enough for you, there's plenty more space out the back.'

# Space

'This place is massive, over 600 square feet, in fact, and that's just on the ground floor.

'Let's head upstairs.'

It's interesting. Up here, you can really see the old remnants of the bathroom showroom.

You've got a hot little radiator plumbed in.

There's hot tubs everywhere, doors leading to toilets.

There's just so much space up here! When you first walk into a room like this,

you just can't believe that it's actually going to have as much square-footage as this place has.

But what I like about this is that it offers different things to different people.

There's so much room. Endless opportunities here.

'In fact, there's so much space, I'm slightly bewildered about what you'd do with it.

'How many businesses require this much room?

'And, more to the point, how many can afford this much square footage?

'With that in mind, it's time to reveal a little secret.'

So, you've had the tour. Now for the surprise.

This lot was actually sold with planning permission

to split the ground floor into three separate commercial units

and turn the upper floors into three flats, two two-beds and one one-bed.

It's quite an interesting twist. It means the building turns from a large, empty space

most businesses would struggle to fill

into a potentially profitable proposition.

'I have to say, I'm excited, if not a little relieved,

'that there are more options than meet the eye.

'The area is a mix of commercial and residential properties,

'so maybe this could work.

'With all of this in mind, I'm going to take a second look around.'

So let's think about these commercial units. How good an investment would they be?

Each unit would have a large window facing the road and A1 usage,

so that would make them suitable for any number of businesses.

Dividing up the space into separate shops would be straightforward

and could increase your rent from 13 grand per annum for the one big space

to 18,000 per annum for three shops.

So, in theory, it adds up. It's just a matter of getting all of them let.

Little towns like this tend to struggle to support independent businesses

with larger shopping centres siphoning off lots of their trade.

The numbers look good, but you may need to work hard to actually see that cash.

'It's certainly worth some serious thought.

'A quick glance around town seems to suggest there's a decent amount of local trade,

'but there are empty units, so you must question the wisdom of adding more to the mix.

'What about the flats?'

These planned flats will have a lot going for them.

They're in the centre of town and you've got amenities coming out of your ears.

I think they'd probably rent out in a flash.

But when it comes to selling them, well, that is a different matter.

The first hurdle would be getting a mortgage,

since many companies won't lend on flats over commercial premises.

Then you may have to put up with the noise from the units below

and you don't have any idea what type of business is going to occupy those spaces.

The A1 usage would rule out takeaways, for example, but not funeral directors.

And who's to say the new tenants won't try for change of use, anyway?

So flats like this are always a bit of a gamble,

and while it may be worth the risk to some,

you need to remember that others won't touch them with a barge pole.

'So neither the commercial units nor the flats are dead certs to make instant cash.

'And after all the expense of conversion,

'you'd have to be prepared to see your lolly tied up in this lot for the foreseeable future.

'There are issues with all the units, especially considering there's no parking,

'which will put buyers off the flats and shoppers off the shops, so not ideal.

'I asked a local estate agent what he thought.'

My first thoughts in creating three residential units here

in the upper parts, I think that's a good idea, good use of the space.

I think there would be interest in the flats, particularly for renting.

Less so, in the current market, for purchase.

'What sort of rental return could the new owner expect on the flats?'

Well, I would put the rental value for the one-bed at £450 a month

and for the two-beds at £500 a month.

'That's a potential annual income of over £17,000 on the flats alone.

'Put together with the estimated £18,000 annual rent on the retail units,

'and it doesn't sound bad, if you can get the tenants.

'What if a developer bought, intending to sell it on?'

As a developed property, with the conversions done,

I would say the value is somewhere in the region of £450,000 to £500,000.

As it stands at the moment, I think there'd be interest at about £200,000 to £220,000.

This is a lot of property with a lot of options.

And with the planning passed, well, it's an exciting opportunity.

But getting this development to turn a profit will require a substantial amount of cash in the beginning

and you may have to work hard to make sure it makes you money at the end.

Let's see who thought it was worth it at the auction.

So, what are we going to say on that one?

It's got a guide of 200 to 220. Lots of building there, lots of potential.

Can I see £200,000 for it? £200,000 for it?

Give me 180, then. Start me at 180 if you wish.

180. 180 I've got from two places.

180. And 2. 182. And 5. 185. Thank you.

190, I'm obliged. 5. 200 if you like.

At £200,000 against you sitting down.

200 it's with you. And 5 now.

205 bid I have. 210 now do I see?

206. And 7.

207. We're down to ones.

£206,000 then I have. 207 I'm looking for.

Are we all done? 207. Can I say 8?

208. Still not big money. 208.

And 9. 209. It's easier in ones. 209.

209. You're not going to miss it for £1,000.

209 I'm bid.

210. It's against you, 210. 11 if you wish.

At £210,000. I've got it and I'm going to sell it for the first time.

£210,000 for the second time.

Third and final time, you're out of it on the right. Are we all done?

-HAMMER BANGS

-You've just bought Snodland, sir. 9931. Not the whole of Snodland.

I can remember when you could've done, but it was a long time ago.

'That final bid of £210,000 was made by Micky, who's arrived looking very dabber.

'I want to know what such a smart gent wanted with this auction lot.'

So, Micky, tell me, why did you want to buy this?

Well, we've got a retail unit nearby

and we were looking to expand, go for bigger premises

and sell china, glassware, cutlery, all that fine dining experience.

# China in your hand

So where's your retail unit at the moment?

It's in Tunbridge Wells, which is about half an hour drive away.

The idea is to really pull people from across the Kent area

and get them to come out and buy high-end goods from us.

'So Micky's fairly confident he'll have the clientele.

'The question is, does he have the stock to fill this place?'

Micky, you have got an awful lot of space here.

Are you going to be using the bottom and the top floors to display all your stuff?

At first, we're just going to use the downstairs gallery,

but the potential is really for upstairs, as well,

as we expand, take on more and more companies.

So it's got a lot of potential, that's what I really like about this property,

we can just expand upwards and it's got all the potential there.

You could potentially let this place out, develop it,

turn it into something quite spectacular, get a bit of extra rent while you're at it.

We could do, although it's not really in the plan for the moment.

It's always nice to have a back-up, but currently,

we're just focusing on what we do best, which is selling fine goods to the public.

'There's no getting Micky away from his crystal and crockery,

'but the one thing that may keep his customers away is the lack of parking.'

The one big disadvantage with this unit is that we don't have anywhere to park your car easily.

There is nearby parking, about ten minutes away,

-but it is a slight disadvantage.

-You'll have to have a valet service.

-Yeah.

-That's what you need to do, offer a valet service.

-I think we'll be carrying a lot of china to people, yeah.

-I think you will be.

'Well, what this place lacks in parking Micky more than makes up for with drive and enthusiasm.

'He opened his first shop less than a year ago with his mum and dad

'and is keen for the empire to continue expanding.'

-So are you the driving force behind this?

-Yeah.

-I am a little bit.

-And how are mum and dad with that? Are they quite happy to give you the reins?

Yeah, pretty good. We all work very well together.

We're a good partnership and we discuss things through and we've had no falling out yet.

-How many years has the business been running?

-About ten months now.

-OK.

-So it's very exciting times for us.

Really faster than we ever expected things to be moving, but we're getting there.

'Micky and his parents have set aside £5,000 for the refurbishment

'and they also have a contingency fund.

'That's just as well, as Micky has concerns about the roof.

'He suspects it may need replacing at a cost of around nine grand.

'Other than that, though, it should be fairly straightforward.'

-How long is it going to take you to develop this?

-Probably about four months, I would imagine,

to get it from start to finish. But that's including getting all the products in

and really just doing the little fine jobs, as well.

-So you're not really in a hurry, are you, to get this place up and running?

-No.

I'd like to do it as quickly as possible but also want to do a good job.

Micky, hopefully, very exciting times ahead.

It'll be great to see what you do to this place and how spectacular it looks.

-Well done.

-Thanks a lot.

-Good luck with it.

Micky's got a lot of space to fill here and some grand old plans to go with it.

I am concerned about the location and the lack of parking.

And he's got to make the most of that infectious enthusiasm

to make this china business a smashing success.

Find out if those tills are ringing later in the programme.

'Coming up, you're going to have to splash the cash in Derby.'

It's very tired and dated, isn't it? I think money in here would be very well spent.

'Renovating this place isn't the only hurdle in Kent.'

Moving thousands of plates and breakable china is never going to be easy.

'But first, there's a pongy problem in Tonypandy.'

The house really did stink.

'We're back in the Rhondda Valley now to catch up with Rob.

'He paid £31,500 for this end-of-terrace.

'He bought it with his work mate Mark

'and they saw it as their chance to build a different future for themselves.'

I've always wanted to get into the property development side of it,

I've been a carpenter all my life, so it was just a matter of time,

of getting the money together and getting things kicked off and started.

-So is this number one?

-This is number one. Numero uno.

'The house needed total renovation and was riddled with damp.

'The bathroom was downstairs and needed to be ripped out altogether

'and the kitchen was in a similar state.

'The upstairs layout needed a rethink

'because of the gigantic main bedroom and tiny second room.

'Well, all that was eight months ago, so let's see how Rob and Mark have been getting on.

'The house has certainly come a long way since Rob and Mark took on the project.'

The house really did stink.

You could almost feel the damp, just walking through the house.

Basically, with the damp, when people have put boards and wallpaper and whatnot over it,

the damp seems to hold into these walls, you know?

And once you sort of let them breathe again, the damp can come out.

So once we had done that, we let the walls dry out for a week or two,

then we had them injected, then we rendered them, you could see the damp had gone from there,

so we carried on with boarding and plastering.

'The original kitchen in the property was basic to say the least,

'but Mark and Rob have spared no expense in bringing it up to

'and beyond the standard you might expect for a house like this.

'They chose to keep the bathroom in its original position on the ground floor

'but, again, they've transformed it to a very high specification.

'And in the living room, they've not just renovated and decorated to a basic standard

'but have been very creative to make the space as attractive as possible.'

What can you do to a square-roomed terraced house? It's very hard.

You've got to take a look at the place, see where the openings are

and try and see if you can put something in here, make a feature out of something that's not a feature.

We chucked a couple of ideas into it

and, obviously, we didn't want to stick to square shelving,

cos everyone does that, so we came up with that shape

and it was a winner.

'Upstairs is clean and, again, very well finished.

'Rob and Mark have made the obvious decision to maximise both the space

'and their profitability.'

We turned one room into two.

'The original master bedroom was too big for the size of the property

'so splitting it in two was a smart move.'

I took my calculator out, measured the square metres

and realised that, moving a couple of walls around up there, we could fit the third bedroom in.

All right, just a child's bedroom, but you can fit a single bed in there, so we went for it.

'Outside, they've removed the big shed,

're-rendered and repainted the whole house,

'as well as replacing the roof and the gutters.

'There's still a bit more to do, but surprisingly, their first renovation went pretty smoothly.

'Well, most of the time.'

Everything's been expected.

I said to Mark in the beginning, "There will be ups and downs,

"there will be times when we feel like throttling each other."

Them times did happen, but we got through it. You have to.

You just sit down and talk about it, you come to an agreement and you carry on.

'Rob and Mark originally had a budget of £11,000

'with an extra £4,000 to deal with the damp problems in the house.

'But judging by the standard of the finish,

'it's no surprise to hear they've actually spent a total of £18,000 on the work so far.'

There was no way I was going to do this house, get to the end and scrimp out on the fixtures and fittings,

on the standard of the fixtures and fittings.

It's worth doing in the end. If it sells that much quicker

just on spending a couple of extra quid on standard, then to me, that's what I'm going to do.

'That is a very admirable sentiment from Rob,

'but will it prove to be a good strategy?

'Time to get some expert opinion from two local estate agents.'

In comparison to my first visit, you cannot believe

once you walk in, that you're in the same property.

The quality of fittings in the bathroom and kitchen are first-class

and I think it would appeal to any family to come and live here.

I think he's done a great job. He's gone for a really high finish

which, in this market, is needed. It's definitely got the X factor.

It's exactly what any first-time buyer is looking for. Perfect.

'A glowing report.

'Remember, Rob and Mark purchased this terraced house for £31,500

'and have spent £18,000 doing it up, meaning their outlay so far is £49,500.

'How much value have they added?'

Currently, I would estimate an asking price of £75,000 to £80,000,

to achieve around about the £75,000.

I would put this on the market for £79,000, to achieve £75,000.

'If they achieve that, it could give the boys a pre-tax profit

'of just over £25,000, minus the usual selling expenses, of course.'

Happy with that. That's close to what we expected.

I didn't expect to break any ceiling price within the street,

no matter what was spent on fixtures and fittings.

It just doesn't happen. So, yeah, that's about right.

'If Rob and Mark decided to become landlords, the estate agents reckon this house

'could provide an income of around £400 per calendar month.

'That would mean an impressive yield of over nine percent.

'So, will they sell or rent?'

Not 100 percent on that one yet,

the reason being the way the market is now.

With the way things are, perhaps we may be better holding onto it, renting it out,

seeing what the market's like next year or in two years

and perhaps getting that extra money then.

'Now that Rob's first property's almost complete,

'does he see himself continuing to develop more properties?'

I would do it again, and I will be doing it again.

When, I do not know. We'll always have our eye open

and we'll still be going to the auctions, having a look.

If another like this comes along, I'd snap it up straight away, put it that way.

I'm in Mickleover, a very desirable part of Derby.

I'm here to see a bungalow. Some people have a bit of a thing about bungalows.

Uninspiring, unimaginative bits of architecture, they say. Not me!

I like them. I was brought up in one and I think they're fab!

# I always knew I was crazy for you

'We Brits usually tend to prefer two-storey houses,

'but bungalows are popular in other parts of the world, and rightly so, in my opinion.'

# It's fabulous

So will today's bungalow be the one that changes your opinion of single-storey structures?

You know what? I think it might.

It's got a garage, parking there for a couple of cars,

mature gardens front and back. I'm liking what I'm seeing!

'Yes, for that guide price of 160 grand, it looks promising.'

So, what does it hold across the threshold?

Actually, it looks all right. It's got a bit of a musty smell, like it hasn't been lived in for a while,

a little bit dated, but not a bad start.

Through into the kitchen straight away.

Well, it's very tired and dated, isn't it?

I think money in here would be very well spent,

cos it's not a bad space, lots of light pouring in through the window,

and really nice, high ceilings, which is lovely to have and not always the case in bungalows.

Little bit of a useful utility area out there,

somewhere to store your bikes and maybe have your washing machine. All in all, not bad.

Designs of bungalows tend to vary. Some have a large central area, which I quite like.

This one has a corridor which links all the different rooms, which can make it feel a bit claustrophobic,

although those high ceilings do counteract that slightly. But large living room there.

Bathroom and loo there. Bedroom one, bedroom two.

Third bedroom here. This is nice.

I like that you've got these patio doors out onto the garden. And then it continues on through there.

So, actually, you've got a lot of space in this place.

# It's fabulous

'And that third bedroom continues through to this other smaller room.

'That could be converted into a study, children's play room or en suite bathroom.'

Well, at the rear of the property, an absolutely humongous garden

split into three areas, really. Bit at the far back there,

that could be a nice vegetable plot, although the first time I saw it,

I thought, "Ooh, I wonder if you could get an access road in there".

Then it becomes a building plot. How exciting is that?

You've then got this middle area. The grass needs a bit of a mow, but a nice size, with a summer house.

And then as you move closer towards the house, you've got these nice mature shrubs

and then immediately adjoining the bungalow, this amenity area.

All in all, what you've got here is a fantastic asset to the property.

'And all this for a guide price of £160,000. What a bargain.

'Time to get the opinion of the auctioneer who sold it.'

First impressions are that it needs a bit of money spending on it.

It structurally seems all right. It's a bit tired,

it wants a refit in terms of bathroom, kitchen,

but lovely location, nice big garden, got a lot of potential.

'Talking of potential, if the new owner could get planning permission,

'is the bungalow worth extending?'

It actually calls for a better property than what is here.

By that, I mean you could improve it, you could add to it, extend it.

The ceiling value is greater than just renovating what is here,

so there are possibilities for extending backwards,

you could probably go up into the roof space, make further rooms up there.

'And if the new owner wanted to realise its potential, what could the completed property be worth?'

I think it's got to become a four-bedroom residence on two floors to do the best with it.

Having said that, if you renovate what is here without doing that,

I would say it's probably got an ultimate value of about £200,000.

If you go beyond that and add on extra bedrooms, rooms at the back and so on,

you could actually take its value to nearer £300,000.

'Definitely some profit to be made here, then.

'How would it square up as a rental investment?'

You'd only renovate what is here if you were going down the lettings route,

but assuming that you brought it up to a reasonably good standard,

it would have a rental income of probably about £650 per calendar month.

Well, it's a good, solid bungalow with loads of options in a lovely part of Derby.

I think it's an excellent one to go for. Let's see who fancied it when it went under the hammer.

It's a traditional detached bungalow. It's been extended.

It provides three or four-bedroomed accommodation.

Good residential area, ladies and gentlemen. Where do you want to be? Start me at 170.

165.

165. 160, where you like.

-150.

-150, thank you. 150, a spoken bid.

151 at the back. 151. 152.

153. 154.

55. 156.

157.

158. 159.

160. The bid is £160,000.

61. 162

163.

165. 165,000.

66. £166,000. All done with it? For the first time.

166,500.

167? 167.

167,000.

-Once. Twice. Third time.

-HAMMER BANGS

Sold at 167. Thank you.

'The bid that sealed the deal was placed by Miles.

'He bought the property for £167,000

'for himself, wife Helen and their baby, Hannah.

'Miles currently puts up for-sale signs for estate agents and Helen is an accountant.

'I caught up with them back at the bungalow to find out their plans.'

-Miles, Helen, lovely to meet you both.

-And you.

-Congratulations.

-Thank you.

-Why did you want to buy it?

-Cos we've been living down in Surrey or London for the last 12 years.

We moved down there for work and we've just started a family, it's time to come home.

With a young daughter, it seemed better to move closer rather than spend so much time on the M1.

-Right. So your grandparents are up this neck of the woods.

-Yeah.

-A great thing to have when you've got small children.

-Definitely.

-And they love it, too.

-That's my experience, anyway.

-That's the hope.

-Tell me exactly what you're going to do here.

-We're not exactly sure.

I mean, there is a case for just ripping out and starting again and just doing it up as a bungalow.

Alternatively, there's some space in the loft.

We could convert that.

-Or the other option is to actually stick another storey on top.

-A whole storey?

-Yes.

-Has anyone else in the area done that?

-I'm sure anybody's done this,

but all the other houses, bar next door, are two-storey already,

so, subject to planning, I don't see a problem for putting another storey on top of this.

And it'd fit quite nicely in the street. I don't think there'd be too much of an issue.

'Wow! That's certainly an ambitious plan.

'But it would increase the value and the living space here.'

# Just move on up

I'm quite confident that sticking another storey on might be the way forward.

-Right.

-Use a timber frame. Take the roof off, timber frame, put the roof back on and it's pretty much done.

Right. You make it sound remarkably easy. Have you done anything like that before?

Not quite as complicated as that, no.

Extension on the last house, but another storey is a whole new experience.

And would you be doing it?

Probably get somebody in to crane the timber framing on and put that together, but after that, yes.

-Wow!

-Give it a go.

-Bit of a challenge.

-Yeah. Why not?

'Whilst Miles and Helen have renovated a house before, this could be a whole different ball game.

'I hope they know what they're taking on

'as this kind of major structural work is usually best left to the professionals.'

When we bought in London, we bought a house in a similar condition to this and did it up.

Admittedly, it took us a long time, because we were both working full-time while we were doing it.

-You smirk when you say that. How long?

-Abut six years.

-Oops.

So what's going to influence your decision?

Cost, obviously, to start with, and what the house will be worth when it's done up.

'Fingers crossed they complete this property a little quicker than the last one.

'What sort of funds do they have?'

We thought around about £20,000 if we were just going to renovate the property as it stands.

In terms of the other two options, we haven't really looked at the costings as yet.

And in terms of inside, things like the kitchen,

how will that vary depending on what you decide to do?

The kitchen is a nice size as a kitchen at the moment, but I think we need a dining area somewhere,

so we're not quite sure how we'll play around with the layout to get that.

It very much depends on where we go with the place.

If we can use the loft, then obviously it frees up one of the bedrooms on the ground floor

to be used as a dining or entertaining area,

and maybe we can knock the kitchen through into the living room and make it a larger space.

But I don't know at the moment. I'm going to go away and think about it, suck it and see.

'Sounds like it's all still up for grabs.

'But, of course, what happens inside is only half the story.

'They've also got to tame that massive garden.'

I think that's probably where I come in. I'm quite a keen gardener.

My mother's a very good gardener, so she'll have to help me.

You can see that probably the top quarter of the garden is sectioned off

and, at the moment, it's just got old trees stacked in it.

I think, if we clear that, I'd still leave it sectioned off and have a vegetable garden up there

and then use the rest of the area as a family and entertaining garden,

have some decking and a nice barbecue area. There's so much space, it could be fantastic.

-Congratulations. Good luck with it.

-Thanks very much.

-We look forward to seeing how you get on.

So, what will Helen and Miles do to this place?

Restore it as it is, put a dormer in, create a two-storey structure here?

And will the budget hold up?

You can find out later in the show.

There's been plenty of time for our buyers to start work on their properties.

But have they actually done anything or have they been beset by problems?

-Time is money. Have they made any or have they lost any?

-Let's go back and find out.

'We're back in Snodland, which used to be Kent's largest village.

'Micky was hoping its residents would welcome his new business.

'He bought this former bathroom showroom at auction

'for £210,000, well within the guide price range.

'Although it was sold with planning permission for three retail units and three residential flats,

'Micky planned to keep things largely as they were.

'He was going to use it as a second premises for his business, selling china and glassware.

'He hoped to attract customers from all over Kent, but there was one problem.'

It is the one big disadvantage with this unit,

you don't have anywhere to just park your car easily.

-You're going to have to have a valet service.

-Yeah.

-That's what you need to do. Offer a valet service.

-I think we'll be carrying a lot of china to people.

-I think you will be.

'As a shop, every day it was closed, it was costing money.

'So Micky wanted to have it all ready for business in just four months.

'So, four months later, we're back.

'Is he ready to open his doors to the public?'

# I'm blue, dab-a-dee, dab-a-dah

# Dab-a-dee, dab-a-dah

'Well, you can't miss it, that's for sure.'

We totally repainted the shop. We're now the big blue building in Snodland, so that's good,

and you can see us from the other side of Snodland, which is nice.

And it gets people to know who you are and where you are.

'I'm sure the residents of, and visitors to, Snodland do.

'Four months ago, the interior was a huge empty space.

'Now it's an ideal showroom for Micky's growing business.'

# It's just tea for two and two for tea

# Me for you and you for me

# Can't you see how happy we could be?

We've totally redone the place. We've put in cabinets and flooring

and repainted all of the gallery

and moved all out stock in there.

There's still some work to do on our first floor, but the number one priority is opening up the store

and letting customers back in again.

'The showroom's only days away from its grand opening

'and Micky's thrilled with his new premises.'

Yeah, I'm really happy with it, actually.

It's really worked out quite nicely.

We didn't have a huge budget for things, but we seem to have done a good job

and it looks all nice and clean and brand new.

'Carpets and cabinets weren't the only new additions here.

'As Micky suspected, the roof needed to be replaced. That meant his nine grand contingency,

'on top of his £5,000 budget, did have to be spent.

'But the roof wasn't his biggest problem.'

Obviously, moving hundreds, thousands of plates and breakable china,

glassware around is never going to be easy.

But we've managed it with, I think, two broken plates so far,

so we did a pretty good job in the end.

'Micky bought the premises for £210,000

'and has spent a further £15,000 refitting it and replacing the roof.

'This gave him a total outlay of £225,000 plus legal costs.

'Quite an investment for a business that was formed just over a year ago.

'Let's see if two local estate agents think this place

'will give Micky a solid return.'

My first impressions were very good.

They've worked very hard achieving what they've done so far.

A very large showroom which looks very enterprising.

I must say, I was incredibly surprised. I had a feeling

from the outside, because it does look different and really nice,

but you walk in, you think you're in a London store. Very impressive.

'Sounds as though he's got at least two new customers.

'Although Micky has no intention of selling or renting out any of the floor space,

'I'm interested to know if the premises have increased in value.

'Remember, the total spend here was £225,000.'

I would think, in the way it's been set up, they should manage to get about £250,000, maybe £300,000,

depending on what planning they've got to do to the upstairs.

'That resale valuation is based on selling it as a leasehold

'and keeping hold of the freehold, but that would be pretty difficult to do here.

'So what difference would it make if it was sold as it is with the freehold?'

Should they choose to sell on the freehold of the property,

completed as a whole, they should achieve £360,000.

'So even before the first customer walks through the door,

'Micky's potentially added value of between £25,000 and £135,000,

'depending on whether or not it was sold with the freehold.'

It's great to hear that it's gone up by so much.

Hopefully, we'll find trade is really good round here and we'll progress.

We've got a load more manufacturers to take on board

and hopefully we can be selling china to people throughout Kent and beyond.

'It's time to go back to Mickleover, Derby, now.

'Miles and Helen bought this three-bed bungalow at auction for £167,000.

'Miles planned to do all the renovation work himself

'and was even considering putting a whole new storey on top of the existing structure.

'The place also had a huge garden that needed sorting.

'But it was OK, as the couple had renovated a property before,

'although it had taken them a while to complete it.'

We bought a house in a similar condition to this and did it up.

Admittedly, it took us quite a long time.

-You smirked. How quite?

-About six years.

-Oops.

'It's now over 12 months since we last saw the property. So let's see what they decided to do.

'Well, it's still a bungalow,

'and apart from all the building materials, it hasn't changed that much out front.

'But inside, it's in the middle of a complete transformation.

'And the back of the house is unrecognisable, too.'

We can see at the back that we've extended the bedroom out all the way to the boundary

and done away with the passageway down the side, which makes the bedroom and the garage wider

and bigger rooms, and then we've put a big extension for the living room on the back,

double doors into the garden, nice big windows to make it nice and light.

We decided to extend out rather than up based on the advice of local agents.

They suggested that people like bungalows and there's a market for them

and not to mess about with it too much.

'It took four months to get the planning permission and Miles has been hard at work ever since.

'Gone are the dated rooms and awkward layout.

'Now the living spaces are on one side of the house

'with the original kitchen extended to a kitchen-diner

'and a spacious living area stretching out to the garden.'

The property previously was a bit of a mish-mash

It was bits and pieces everywhere, nothing seemed to flow in the right place.

I think, by moving some of the bits and bobs around,

we've created something that works as a living space

rather than something that was just somewhere to live.

'The other side of the house contains the property's three bedrooms,

'a new bathroom, complete with a run-away washing machine at the moment,

'and a master bedroom, which will have an en suite bathroom.

'The family have been living in rented accommodation while Miles does the work.

'He's done the majority himself, but his dad's been keen to lend a helping hand.'

I've learnt an awful lot about some aspects of building that I haven't dealt with before.

I've never cast a concrete floor or installed windows before.

There's always something new. But it's interesting. I enjoy it.

'Helen's returned to work in London after her maternity leave,

'so Miles has had to juggle the renovation with looking after their daughter, Hannah.

'They had an original budget of £20,000,

'but have actually spent around £29,000 so far on the work,

'with an estimated £10,000 needed to finish off.

'But at least things are taking shape and the end is now in sight.'

We both feel quite good about it at the moment.

Now that you can finally see something happening

and the end seems to be quite near, we're feeling much better about it than we did a couple of months ago.

'With a purchase price of £167,000 and a projected renovation budget of £39,000,

'Miles and Helen's total outlay will be around 206 grand.

'But has their hard work been worth it?

'Time to hear from two local estate agents.'

First impression, there's still quite a lot of work to be done.

The layout seems quite good,

and if it's done to a good standard, it will sell very well.

I like the use of space and I like the extension.

putting an extension on the back of the property

has certainly increased the space inside. I think the decision to keep the property

as a single-storey dwelling was probably the best decision.

A dormer bungalow has uses,

but generally, it does mean you still get a downstairs bathroom,

which, unfortunately, can go against you in resale.

'It sounds good so far, but what price would this bungalow fetch once all of Miles' hard graft is done,

'at a total cost of around £206,000?'

If I put this property on the market, once completed and assuming it's done to a very good standard,

I'd expect it to achieve in the region of £230,000 to £240,000.

I would expect to achieve on this property, once finished to a high specification,

between £230,000 and £240,000.

'Those valuations could give Miles and Helen a pre-tax profit

'of between £24,000 and £34,000.'

Sounds fair enough. I know the market's slightly depressed at the moment,

so, yeah, sounds about right. It's what we expected.

'If Miles and Helen decided they wanted to rent it out,

'what kind of rental income could the bungalow provide?'

If I put this property up for rent, once completed, I'd expect it to achieve £850 per calendar month.

I believe the property would receive, once completed,

a rent of between £700 and £750 per calendar month.

Great. I'm paying £650 at the moment for a three-bedroom house, so sounds good to me.

'Miles may have learned some hard lessons here, but he hasn't been put off.

'He's not only added more space to the bungalow, he's also added value.

'How does he feel about the project now that he can see the light at the end of the tunnel?'

I'd definitely take on a project like this again. On the other hand, I might change what we did slightly.

We might look to buy something that we could actually live in while we maybe extended it,

rather than having to pay out a mortgage and also rental money,

which makes things quite tight.

'Miles is confident that he will be finished within a couple of months

'and Helen now has a new job in the local area.

'So the family are finally looking forward to spending more time together

'in their lovely new bungalow.'

I'm very pleased to be in our own home again as a family.

It'll be great to be living as one, as it were.

See you next time when we have more auction stories to inspire you.

-Yes, more stories from Homes Under The Hammer.

-See you then.

-Goodbye.

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