Episode 36 Homes Under the Hammer

Hello. More and more people are building a property portfolio

and that doesn't have to be as grand as it sounds.

Even if you can manage to raise a small sum, you can usually find something to buy.

And that way, you get your foot on the property ladder.

One good way to do that is to buy at auction.

Buying at auction is a great way to get good value for money

and that's essential, especially if you're starting a business.

If you've done all your research and managed to get finances, you should make quite a success of it.

So here's what people invested in on today's show.

'This place is Derby looks quite foxy, so why the exceedingly low guide price?'

Aha! Looking at the auction catalogue, I can see why.

'This three-bed semi-detached in Kent gets me reflecting on its interior.'

There's loads of mirrors everywhere! Good if you need to check the hair.

'And I'm in Stratford in London where you'll need your property developer goggles for this one.'

Now, this is a classic case of first looks can be a little deceptive.

'All these properties are being sold at auction and we'll find out who bought them and what they paid

-'when they went under the hammer.'

-Sold.

'I'm in Derby, just a mile from the city centre and not far from the university.'

So, close to the city centre, great area for letting to students

and the guide price of the property I'm here to see was 50,000 quid

which for a three-bed mid terrace sound extraordinary.

Aha! Looking at the auction catalogue, I can see why

it had that low guide price. More of that later.

# Low, low, low, low

'The reason for the low guide price is because this property is unmortgageable. But why?

'Let's investigate.'

So fairly standard layout, straight off the pavement into the front room.

A few signs of damp but that's not the reason I know it's unmortgageable.

# Tell me why

# Tell me why

Through to the rear sitting room. A solid stone floor which might be a potential problem with damp.

That's not why it's not mortgageable. Some of the skirting boards are coming off

and a few cracks here and there, but that's not why it's not mortgageable.

Through to the rear of the property where you've got this extremely small and fairly sparse kitchen.

So, is that the reason it's not mortgageable?

Nope. It's outside.

# So tell me, what's the answer?

'The garden is a typical size for this sort of Victorian terrace

'and, like the inside, could do with some serious attention.'

Travel down the length of the garden

and at the end there is... an outside loo.

And it's the only one in the property.

Oh! That's why it's not mortgageable.

'To obtain a mortgage, a property has to be fit for habitation.

'Having no indoor bathroom or toilet means no mortgage.

'I certainly wouldn't fancy making a dash from my warm, cosy bed on a dark night to that outdoor loo.'

# Cos I don't wanna leave

# Ooh, girl, I gotta go right now

# I'll be back before you know it so hold that thought

Upstairs, I have to say, a real pleasant surprise. You've got two good size double bedrooms

and this at the rear of the property and I guess, in terms of that whole issue with the bathroom,

this is the obvious place to put it.

You are going to lose one of the bedrooms, which will have financial implications,

and to put it in here from scratch you'll have to think about soil pipes, water, electricity.

So it's not going to be cheap but it's what this property needs and at least you have space to do it.

'I reckon this rundown terrace will scrub up a treat.

'Strip and sand the floors and doors, restore the lovely original Victorian fireplaces,

'I even like this Bakelite light switches, while also renovating to ensure all modern comforts

'and this place could be a lovely house.

'If purchased for around the low guide price of 50 grand, this could earn the purchaser a pretty penny.'

# Low, low, low, low, low

'We invited the auctioneer who sold it to give us his opinion.'

This is a fantastic property. I love these sort of places.

Everything needs doing to it so it's a blank canvas.

It needs rewiring, a damp-proof course, new flooring,

it's got old-fashioned fireplaces.

Having said that, there are the original cast-iron fireplaces upstairs which is quite exciting.

It needs a bathroom. There's only one obvious place to put it so you have to sacrifice the back bedroom.

But it becomes a two-bedroom house. Most of them are. It's not problem.

'Once renovated, what could this achieve on the rental market?'

There's quite a lot of rented accommodation round here. It's a good first-time buyer area, too.

But it would rent out very readily once it was renovated

and I guess you'd be looking at something around £500 per calendar month.

'Not too bad at all. And sell-on value?'

Its sale value, once renovated, would be about £95,000.

So, a pretty solid little terrace in a good location but one big problem.

It doesn't have a bathroom. Did that put people off? Let's find out when it went under the hammer.

What am I saying for this one? 50,000? 48.

Start me where you like. 48,000. 48 is bid here. Thank you.

At 48. 49 I've got. 50, sir?

50,000, a fresh bidder. At 50,000. 51.

51. 52. 53.

54. 55.

55,000.

£55,000 I have. 56 somewhere else?

56 I've got here on the front row.

500 he says. 56,500. 57.

57.

57,500.

58. 58,000.

58,500. 58,500. 59.

59. At 59,000.

59,500. 60,000.

At £60,000 then for the first time.

For the second time. Third and last opportunity.

Any higher bid? 500.

60 and a half. 61? 61.

500, sir? No? First and last bid, was it? Well tried.

-£61,000 once. Twice. Third time.

-HAMMER BANGS

'It was Kerry and his husband Alan who made the final bid of £61,000.

'They have been married for one year.

'Kerry's a dog handler and Alan's a plasterer, so Kerry will be keeping a tight leash on the budget

'while Alan gets busy turning this dog's dinner into a prize-winner.'

# The dog days are over

# The dog days are all gone

-Kerry, Alan, good to meet you. Congratulations!

-Thank you.

-Why did you want to buy this place?

THEY LAUGH

-Why did we want to buy this place?

-Initially, it was because I'm a plasterer and my work went slack

so we thought we'd buy a house to use as a hospital job.

-A hospital job?

-Yeah. It's an emergency. When you've got no work, you can drop on it.

THEY LAUGH

We bought the house. My work's picked up again now

so we're waiting for it to go slack again.

Plastering - that is a great trade.

Electrics, you're not allowed to. Gas, you're not allowed to.

-Plastering, most people can't.

-Yeah, I've seen some of the plastering that people have attempted to do

and had to go and put it right. It is one of the finishing touches so it needs to look good.

-What is it about plastering that's so difficult?

-I'm not telling you. It's a trade secret.

THEY LAUGH

-What, you're really not?

-No. THEY LAUGH

-It's just practice, like anything else. It's not rocket science.

-But it is a great skill to have.

It's not being a TV presenter. THEY LAUGH

'Well, Alan described this property as a hospital job.

'It certainly does need major surgery

'but the couple have a healthy budget of £15,000

'and are allowing six months for Alan to play doctor and bring it back to life.'

-Have you done anything like this before?

-You've renovated your own properties, haven't you?

-Yeah.

Not as a business thing but just our own properties that we've lived in.

But nothing like this, no. We've never been to the auction before.

-How was it?

-It didn't quite go to plan, did it?

Somebody got auction fever. HE LAUGHS

Yeah. We did our research and the plan was to go to auction and not to buy.

We were just going for research purposes. But then this one came up

and it was in the price bracket that we were looking, so I got a bit carried away...

I hadn't actually seen inside the property.

I'd seen outside. But I trust my wife, obviously.

Went to see about 600 terraced houses and this is the one I hadn't seen.

So what did you think when you walked in?

Er, I think it's very good. I think it's a good property to start with.

I'm a plasterer so nothing really too bad that we can't do. So hopefully it's a good buy.

What was it that made you so excited about this particular house?

I like the character of the place. It's got nice old Victorian fireplaces upstairs

and it just had a nice feel about it.

Prime student rental area, so it just looked an all-round good investment.

'Alan will fit the renovation around his plastering job,

'so no weekends off until the work is done.

'If the couple can bring this project in on budget and within their six-month schedule,

'then it certainly would be a good investment.'

So what's the plan for the future if this goes well?

Hopefully, not divorce. THEY LAUGH

We might rent it out. We may see what it's like when it's ready

and see what we can do, maybe buy some more.

Yeah, if we can sell it for a reasonable profit, then we may buy another one and do it again,

-but we'll see how we get on with this one first.

-Yeah.

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

-Thank you.

So, a bit of a surprise for Alan that they ended up with this place

but he's certainly got the skills to sort the majority of it out.

And with Kerry's help, I'm sure they'll be all right.

However, he has only got weekends to do it so it could take a while.

How are they going to get on? You can find out later in the show.

'Ah, beautiful Ramsgate in Kent.

'Bobbing boats on the water and a thriving and bustling community.

'Perfect for tourists and locals alike.'

How much do you think a three-bedroom semi-detached period property

in a desirable part of town could be worth?

£250,000 perhaps?

200 grand maybe?

Well, no. How does a guide of £120,000 to £130,000 sound? Ooh!

'For a period property in such a prime location,

'it's definitely worth a look.'

Wow! You've got a really nicely decorated house.

What I love about these 30s properties are the little bits of intricate detailing.

You've got really high ceilings here.

Could do with a little bit of work, but a really good size lounge, a nice period fireplace.

There could possibly be enough room for an under-stairs loo here if you're really clever.

Walking round here into the second reception room.

This is a brilliant size.

I would think about knocking through, but actually, when you've got a kitchen placed here,

I think this space could make a fantastic kitchen/breakfast room.

So if you were to sort this kitchen out, because it's a complete wreck,

you could lead out here to the... I'd call it an open-air conservatory

because right now there is no glass up there at all.

But I actually think somebody has started work on an extension.

You can see all the brickwork has been put in. That's probably been there for quite some time.

You can see down here there's loads of old tiles stacked up.

'It's certainly a job worth finishing because there's a fair old drop down there to the large garden.

'Hm. The word railings springs to mind as an obvious solution.

'But before you go ahead with the work, it would definitely be advisable

'to make sure that the odd space under the conservatory was safe.'

# Underneath the arches

# I dream my dreams away

'It's hard to imagine what you could use this area for. Handy for storing garden furniture, I suppose.

'But there's a more pressing issue inside.'

# Dee-dee-dah-dah-dah-dah

The one thing I have noticed about this property is there's no central heating

so you're going to have to factor that into your budget. Also, there's loads of mirrors everywhere!

Good if you need to check the hair. But, of course, they do reflect loads of light,

so that's always good to have in a property.

You've got one, two, three bedrooms, two doubles and a single.

And a really nice bathroom. Look at that. That's a really good size.

You've got a roll top bath and an original sink and those beautiful old-fashioned tiles.

I think you could restore those and it could look fantastic.

It would take a bit of cash but I think it would be definitely worth doing.

'The bare bones of this character property are all in place but there will be some hard graft ahead.

'Stripping the Artex off before you can reveal its true beauty.

'What does a local property expert think?

'We've asked one along to have a look and give us his opinion.'

I think this one's a bit of a doer-upper.

Having looked round, quite a lot to do, but once the work's done,

it's in a good location so should represent value for money.

The garden's quite large. It looks as if it needs quite a lot of work doing.

But I think, once it's done, it could look very pleasant indeed.

'Once this place is done up, would this be a good rental opportunity?'

I think this property would be ideal for letting

and if you were going to rent this property, you're looking at around about £700 per calendar month.

'How much could it be worth if the purchaser decided to sell it on?'

Once this property's renovated, you're going to realistically, in the current market

be looking at about £165,000.

A solid period property not far from the sea with scope to add value.

What's not to like? Somebody fancied it. Let's find out who that was as we go to auction.

Where are you going to start me on that? £120,000?

120 can I say? Should fly at 120.

Give me 110, then. 110. 110, I'm on the way.

115 now do I see?

115, I'm obliged. 120. And 5.

125. 5. And 30.

130. And 5. 135 if you like.

At £130,000 bid I've got.

2 I'll take if it will make the difference.

If not, I've got £130,000 and I will be selling for the first time.

£130,000 for lot 40 for the second time.

-Third and final time, if we're all done at £130,000.

-HAMMER BANGS

Madam, you've bought it. A441.

'Those happy faces belong to partners Colin and Steph

'who bought the property for £130,000.

'Just three days before the auction, they both gave up their jobs as comprehensive school art teachers

'to pursue new ventures.

'I met the couple back at their first investment property

'to find out how they plan to turn this place into a masterpiece.'

-Colin and Steph, congratulations.

-Thank you.

-What was it about this house that you liked so much?

The price.

It was within a budget that we could realistically afford, having just left work.

And we thought it was a modest way to start into property development.

Did you view this property prior to the auction?

Thereby hangs a tale.

We tried to view it twice and we looked at the outside but never saw the inside until yesterday.

-Oh. So did you just peer through the letterbox?

-Yes, literally.

-So you bought it on the strength of that?

-Yes.

-At any point did you think, "Oh, what have we done?"

-Yes.

I was in a kind of world of disbelief, anyway.

I'd just left school and the following Monday I'm there in an auction room.

Steph did the bidding and the hammer came down and I was just sort of... "Is that it? Do we own a house now?"

'You certainly do, Colin. And a very quick change of career,

'not quite overnight but almost. Why did they both give up teaching in the first place?'

The reason that we stopped teaching, although we loved it,

we want to make more art of our own.

But this is a project to make a bit of money to fund that luxury.

-Tell me about your work.

-I'm more of a landscape painter and photographer

and Steph is a portraitist. We've currently got a little exhibition going on in the town

and we're hoping things are going to take off.

But, as I say, it's early days for all of these ventures.

'On top of all of that, they also run classes back in their studio in Whitstable.'

# That old master painter from the faraway hills

# Painted the violets and the daffodils

# He put the purple in the twilight haze

# Then did a rainbow for the rainy days

'So what plans have they drawn up for this property?'

Well, in the brief time that we've had to look at it,

we think, especially this room here, we want to extend this room out

into this half-built conservatory that's here.

Erm, do the kitchen. That obviously needs to be done.

Improve the bathroom. And decorate the place.

How long do you think it's going to take to do this place up?

We've given ourselves six months but we're fairly new to this game

and we could... We're going to put a lot of effort and work into it.

We've always said if we put the same amount of effort into this as we did into the previous career,

it will be done pretty quickly,

but we think six months.

'With a budget of £20,000, they should be able to do a great job.

'Hopefully there will be no nasty surprises waiting for them.

'But remember, they paid £130,000 at auction, so if they spend all that budget,

'I'm a little worried they could hit the ceiling price for this kind of property in this area.

'Remember, the estate agent's valuation for it, once renovated, was £165,000.'

What do you think the top value on this will be?

If we could make £10,000 to £20,000, we'd be happy.

If we can get over 175 for it,

then that's roughly what the market is at the moment. That's what we're hoping for.

I think the way that we're looking at it, even if we don't make very much money on this one,

it's the first step and it's just...

As long as we don't lose money on it, that's fine I think.

It's a shame you're going to be renovating this throughout the winter months.

Cos this would be an amazing property to renovate throughout the summer

-because Ramsgate's great in the summer.

-Yes, that's right.

The sea's just two minutes down the road there.

You can see it from the bedroom. It's a lovely area.

But maybe it'll be finished at the right time of the year to show it off at its best.

You see, already she's looking at it through a developer's eyes. I like it, Steph! Way to go!

It's been brilliant meeting you both. I can't wait to see what you do.

-I'm sure it's going to be a huge success for you. Congratulations. Well done.

-Thank you.

-Thanks.

Giving up a steady job on the Friday and purchasing an investment property on the Monday.

Not a lot of us can say we've done that! Well, Colin and Steph can.

The artists have definitely taken a risk.

But will those teachers learn any lessons from this project?

You can find out what happens later on in the programme.

'Coming up, this rundown house in London isn't as bad as it looks.'

Looks like it's in need of tender loving care, but apart from that...

'This house on the Kent coast was covered in Artex.

'How have Colin and Steph got on chipping it away?'

Going round looking like snowmen.

'But first, husband and wife team Kerry and Alan

-'reveal the secret behind their successful relationship.'

-What the wife wants, she gets.

'Let's return to the terraced streets of Derby

'where I viewed this three-bedroom house with a low guide price of £50,000.

'"Why was that?" I hear you ask.

'Well, it wasn't just because of the dilapidated and damp interior.

'But also because the only loo was at the back of this rubbish-strewn garden.

'The property was bought at auction for £61,000 by plasterer Alan and dog handler Kerry

'who, caught up in the excitement of the auction,

'and much to Alan's surprise, started bidding for the house.'

-Have you done this before?

-No. We've never been to the auction before.

-How was it?

-Didn't quite go to plan, did it?

-Somebody got auction fever.

The plan was to go to auction and not to buy, we were just going for research purposes.

But then this one came up and I got a bit carried away.

'Well, their purchase price coupled with the amount of work needed

'meant they would need to keep a close eye on their 15 grand budget to ensure a profit.

'So, will Kerry's auction fever leave them in a sweat about their financial investment

'or will it earn them red-hot returns?

'Six months later, we've returned to find out.'

# Fever sure has got me good

# What do you do when fever takes hold?

# Don't you feel the fever like I do?

'The front reception room was rundown and damp-ridden.

'Now it's clean and fresh.'

Oh, the damp was a big issue in this house. The floors needed doing.

The skirting had all got wet rot and everything.

We just had to hack all the plaster off and redo it all.

So it was a major issue. All the wallpaper was falling off.

-Oh, it was terrible.

-Yeah. Particularly in the dining room,

the skirting boards were just hanging off, they were rotten,

-falling to pieces. So it was a big job that needed to be sorted out. But it's all done now.

-All good.

'Alan's fine touch with the trowel has left the walls and ceilings as smooth as glass.

'And in the kitchen, which had nothing but the kitchen sink,

'they've made the best use of a tight space.'

The kitchen was quite problematic because it's a very small space

and so we were very restricted with how we could lay it out.

The main solution we came up with was to knock the wall down between the kitchen and the dining room

just to allow a better flow of light through and give you the illusion of more space if nothing else.

I was very conscious of making sure there was enough cupboard space.

Depending on how many people live in the house, we need to make sure it's a practical, workable kitchen.

With the kitchen sink, we went for a smaller one so that we could just utilise the space a bit better.

I think it worked out well, particularly with knocking the wall down.

That was the main thing that just made it feel a bit more open.

'Alongside their excellent work in the kitchen,

'they've also installed a central heating system,

'new electrics and replaced all the windows and exterior doors.

'Out back, the wild garden has been tamed.

'And I'm glad to see the fox knocker from the front door has been given a new home,

'hanging on the door to the outside loo.'

I spotted the fox on the front door when we first bought the house

and I'm a bit of an animal lover and I thought it was a nice little feature.

-We had the ritual last night, didn't we?

-Yeah, when we finished the garden

and finished everything, we went and put Mr Fox on the toilet door in the garden

so he can remain... as just a little additional feature.

Might not be to everybody's taste, but I liked him.

'Now let's take a look upstairs.

'There were three bedrooms but the smallest has been transformed into the bathroom.'

Basically, this was the third bedroom. There was nothing in the room at all

so we got the plumber to put all the hot and cold feeds and the waste pipes in

and we managed to get the P-shaped bath in.

We've incorporated the shower. Rather than have a separate shower, we thought we'd keep it all in one area.

Tiled everything, all the floor and the walls, and we think it looks super. We're well happy with it.

'In the two remaining bedrooms, the couple have managed to restore the original Victorian fireplaces,

'and as they have with the rest of the house, stripped and varnished the doors.'

I love the original features. I'm a big fan of that sort of thing. I love the fireplaces and the doors.

I'm very pleased, cos we had the doors stripped. Rather than replace them with new, modern ones,

we thought we'd make use of what was already here and they've come up really nice. I'm really pleased.

'This renovation has been carried out on evenings and weekends

'as both Kerry and Alan have full-time jobs.

'However, they've managed to finish one month ahead of their six-month deadline.

'But they've spent £17,000, £2,000 more than they'd budgeted.

'That takes their total outlay to £78,000.

'Let's find out what two local property experts think

'of Kerry and Alan's handiwork.'

I'm really impressed. It's got a very clean, tidy, neat look to it.

I suppose if you paint everywhere white, you get that effect.

It's a bit clinical but it does impress you, certainly.

First impressions of the property are good.

You walk in, it's immediately apparent

that everything has been taken back to brick and rebuilt again.

'The experts are impressed.

'How much do they believe this place could achieve on the rental market?'

I think if you got a prospective tenant through the door here, they'd be impressed,

so I would say you'd probably achieve £500 per calendar month, but that might be optimistic.

The rental value on the property, I would expect, with it being brand new throughout,

to achieve around £475 per calendar month.

'Those figures are in line with Kerry and Alan's expectations

'and would earn them a rental yield of between 7% and 8%.

'But they hope to sell this property on, so how much do the experts believe this terrace could go for?'

Resale value of the property on today's market, which is not the best market we've had,

I would say would be £95,000 to £100,000.

Resale value, I would suggest between £95,000 and £100,000.

'Those valuations could earn Kerry and Alan a pre-tax profit of between £17,000 and £22,000.

'Not too bad at all.

'So, looking back at the auction, does Alan wish Kerry had kept her cool after all?'

I thought we were just going on a reconnaissance mission, but what the wife wants, the wife gets.

-Yeah, I think we're both agreed that it's been a good purchase.

-Yeah.

And we're really glad that we did it.

# Feel the fever

'Welcome to Stratford in East London, home of the Olympic village.

'There's a massive amount of development in both road and rail links here

'and with those comes a resurgence for the whole area.'

# I'm moving on up now

# Getting out of the darkness

Certainly this location in central Stratford, at first glance, doesn't look too bad.

The University of East London is quite close by,

so potential for student lets there.

And of course, the 2012 games. That's got to high jump prices for sure.

And this is what I'm here to see. Two-storey mid-terrace.

Had a guide price of 160,000 quid.

Doesn't look too bad from the outside. Let's take a look inside.

Hm, OK.

It's not a bad start. Nice high ceilings.

Looks like it's in need of a bit of tender loving care, but apart from that...

Right.

Now, this is a case of first looks can be a little deceptive.

As you can see, it is in a right old state.

But this is one of those classic examples of where you have to look through the clutter

to what this place could actually become. All in all, it's not a bad size room.

Hm.

'Most of this is just superficial, really.'

# I'm in a really big mess

'Nothing that a day's tidying up couldn't sort out.

'The actual fabric of the building looks generally OK

'and it's a pretty good size.'

So through to the very rear of the property where the kitchen is located.

It's actually not a bad size. Clearly you want to completely rip it out and start again.

But I love that fact that it's looking onto the garden. You could put French doors in there

to make this a really lovely, usable space. Oh.

You know what? I don't see why I should suffer this kind of thing alone. Cup of coffee, anybody?

'Urgh! No, thought you'd pass on that offer.

'But look beyond the dirt and grime and you'll see the kitchen's well proportioned.

'There's also a cellar and downstairs cloakroom, so plenty of food for thought here.

'And there's a good size bathroom and bedroom on the first level of a split landing.

'There are two further bedrooms at the top of the stairs.

'I'm beginning to wonder if this house could be turned into student lets or maybe a couple of flats.

'It's certainly not short of space here.'

Well, at the rear of the property, there is a reasonable sized garden.

Like the rest of the house, it is in a bit of a mess.

But when you come out here, you can see that at some stage

an extension has been built on the back. It mirrors the one next door.

It gives you a lot of extra space. Could you extend it even further?

I think you'd have to apply for planning permission, but maybe some kind of extra extension there,

maybe a conservatory. Either way, it's a way of adding value.

Just make sure you don't spend too much to get back what you put in.

'This is an interesting one because there are options.

'Clearly the easiest and cheapest approach would be to give it a thorough refurbishment

'and let it out or sell on.

'But I think either room-by-room lets or conversion into two flats might work.

'But it really depends on the demands of the market in the area.

'So we asked a local estate agent for his advice.'

I would actually keep it as a single dwelling.

There is possibility here to turn it into flats,

but this area at the moment is being redeveloped heavily

by large-scale developers who are building nothing other than one, two and three-bedroom flats.

So my estimation is that the market for houses

will be much stronger in the future.

'So it does seem that keeping this as a house may be the way forward.

'How would it fair on the rental market?'

For rental purposes, in good order, a property like this will achieve around £1,500 per calendar month.

'If a full refurbishment was done, how would this place,

'that was guided at £160,000, do on the resale market?'

In good order, I think you will be lucky to realise somewhere around about £375,000.

'Wow! That's a massive increase from the guide price of £160,000,

'even factoring in renovation costs.

'So scratch the surface and you might not have to be an Olympic athlete

'to strike gold in Stratford.'

Well, this is a classic case of the property where you have to see through the superficial mess

to what it could actually become, and I think a potentially lucrative venture.

Do you convert this into flats or keep this as it is. You need to do research on that.

But either way, I think there's money to be made. Let's see who bought it at the auction.

Right, lot six is a three-bed mid-terraced house.

Requires modernisation.

I don't know, start low? 150? 150 in the front.

155. 155. 160.

165. 170.

175. 180.

185. 190.

195. 200. I'll get there in the end.

205. 210.

210. 210 with you.

That's what I like. 215. 220.

225. 230, sir.

235. 240.

245. 250.

255. 260.

265. 270.

271. 272.

Have a think. 271 down here.

272 elsewhere? Anyone else coming or coming back in? 272?

If not, 271, first time.

Second time.

-Third and last time if you're all done.

-HAMMER BANGS

Sold 271 to you, sir.

'So, for a whopping £111,000 over the guide price at £271,000,

'the new owner of the three-bed property in Stratford is full-time developer Delawa.

'He joined me, along with his builder Amrik, to outline the plans.'

-Amrik, Delawa, lovely to meet you. Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-Well, it's mainly location.

Stratford is a coming up area, so we thought...

I bought over the odds, but I still like the area. I've got a few properties here.

Tell me a bit more about you and your background.

Well, I used to work for the railways at one time

and at the same time I was buying properties.

And then in 2000, we made a property company.

-And how many properties do you now have?

-A few.

-A few?

-More than ten, less than 100.

-Maybe. THEY LAUGH

So tell me about the relationship between you two.

Well, we are friends and he's my project manager.

We've been working for at least ten years, maybe more.

'Over the years, this successful business arrangement has worked on a number of projects.

'But I was intrigued to know what they had planned for this, their latest development.'

-Tell me what you're planning to do with this house.

-We're thinking of converting it into two flats.

-OK. And your job is going to be doing that, it is?

-Yeah. We'll be demolishing most of the walls.

-Wow.

-And on the first floor, hopefully, there will be a one-bedroom flat,

self-contained, so kitchen, bathroom, living room and one bedroom.

And downstairs, we're going to do an extension in the back for the kitchen

and then two bedrooms in the front and the living room, bathroom and the kitchen downstairs.

Why do flats over keeping it as a house?

By making it two flats, it's better, you get better income.

I know you have to spend. And also, if you want to sell it, there's two flats, you get more money for it.

'I think Delawa and Amrik may have trouble getting their plans approved.

'That's because, as we've already heard, a large number of flats are already being built in the area

'due to the 2012 Olympics

'and that could affect the planner's final decision.

'So keeping it as a house may end up being a better option.

'But they're determined to press ahead,

'not only with the conversion but also with building an extension.

'They paid £271,000 at auction, plus stamp duty of just over eight grand,

'and the costs are rising.'

What kind of budget have you got for doing the work?

We're thinking about £50,000 to do it up.

-So let's see if we can stick to it.

-And what kind of timescale?

It'll take us about five to six months because the planning permission...

-The planning permission will take about three months.

-It takes ten to 12 weeks.

-Listen, congratulations, and we look forward to seeing how you get on.

-Thank you very much.

Well, with so many properties under their belts, this team can certainly make a success of this project.

However, they did spend a lot of money over that guide price.

And is converting to flats the right thing to do? You can find out later in the show.

The big question is, have our buyers made the most of their investments or created a dream home?

Have their efforts at improving them paid off?

Well, time has passed. Let's go back and see what those properties look like now.

'Let's head back to the blue skies and sunshine of Ramsgate on the Kent coast.

'To this three-bedroom semi, a stone's throw from the harbour.

'It was in dire need of modernisation from the floorboards up.

'Also, the house was a horror show of every developer's nightmare - Artex!

'It's enough to drive you mad.

'Whoever purchased this dilapidated and dingy property

'would need not only a flair for decoration

'but a determination to get the job done.

'And that's exactly what Colin and Steph had by the bucketful.

'They'd packed in their jobs as art teachers at a local school,

'opened their own artist studio and invested all their savings

'into the £130,000 purchase of this semi.

'It was to be their first development.'

Guys, what is the grand plan now for you both?

The reason that we stopped teaching, although we loved it,

we want to make more art of our own.

But this is a project to make a bit of money to fund that luxury.

'We returned after six months to find out how they'd got on.

'Well, it's more mess than masterpiece.

'Let's see what Colin and Steph have been up to inside.'

# Could you be the one to see the masterpiece in me?

'Well, what a transformation from dank and dreary

'to a simply stunning open-plan living and kitchen area.

'That leads onto this wonderful conservatory with sliding patio doors.

'It bathes the room in seaside sunshine. Really lovely!

'So how did the couple enjoy doing the renovation?'

Great! We've really enjoyed doing it.

I mean, it's very satisfying, turning what was a bit of an old wreck into something quite nice.

'The kitchen is sleek and stylish.

'The couple's artistic eye is evident in the aquatic hues of the tiles and the bold splash back.

'The living room, once drowned in a sea of Artex,

'now has clean, crisp lines.'

The Artex was a nightmare to get away,

scraping and getting covered in dust.

We were going round looking like snowmen.

'Let's head on upstairs.

'The bedrooms have been given a splash of colour

'with the skirting and architrave painted in sea blues and greens.

'The renovation has been hard work and far from plain sailing.

'Colin broke his leg at their own home four months into the makeover.'

I was going down into the studio before going to bed to have a look at some work,

stepped with my left leg and the cat was on the next step down

so I moved my left leg to avoid him and that went slipping on down the stairs

and this broken one stayed behind on the top step.

I didn't think it was broken at the time. I did scream a bit.

# I slipped, I stumbled, I fell

# I slipped, I stumbled, I fell

'Colin's broken leg has slowed down their progress.

'They've still to tackle the rear garden and have some finishing touches to do inside.

'And I wonder, have they also broken the bank by overspending on their £20,000 budget?'

It's 25ish. I haven't got a final figure, but it's around 25.

We put good quality stuff in, so it's just edged up a little bit.

'That quality is evident in the bathroom.

'I'm sorry to see the roll top bath has gone, but the couple have chosen a clean and tidy contemporary look.'

I'm actually standing where the bath was.

The bath was going this way and we thought it would make the bathroom look bigger to turn it round.

But we've just left it very simple.

I mean, I love these seaside colours.

Because we're so close to the sea here, we wanted to make it fairly seaside-y.

'Steph and Colin have undergone a dramatic lifestyle change

'from school teachers to property developers, working alongside each other day in, day out.'

It's been lovely working on these things together.

Colin leaves design stuff to me

and I leave all the heavy work to him.

We know what our strengths and weaknesses are.

We've found a very...a very good place for us to work together.

And more recently, when I've had a little mishap and broken my ankle,

she's taken over and done all of the jobs just seamlessly.

She's finished the tiling and things like that. So we work very well together.

# Oh, you could say it was a work of art

# Like someone took a brush

# And painted their hearts

# Together they've made such a beautiful thing

'The couple have invested all their savings in this property

'and so far they've spent a total of £155,000.'

# Love is a masterpiece

'We invited two local estate agents

'to tell us whether Colin and Steph's investment

'is a money-maker or a money pit.'

They've really made a good job. It's really light, good colours.

The conservatory on the back's fantastic.

I think that's going to make a big difference to its saleability.

Having has a look round, I think it's been done to a very good standard.

Obviously, central heating's been put in, double glazing throughout.

Very nice, neutral colours. I think they've done a very good job.

'Colin and Steph plan to sell this property,

'releasing the capital to fund their next renovation.

'So what do the estate agents believe this property could achieve,

'bearing in mind their total outlay of £155,000 so far?'

I think this property's been done up to a really nice standard

and you're going to be looking at around about £170,000.

In the current climate, I would estimate putting this on at around £175,000.

Erm... They're slightly lower than we had hoped.

I think the house is worth what somebody's willing to pay for it

and we've been looking at house prices around here

and seen that houses like this have been selling for 185 or upwards.

So we think we might stick out for a little bit more.

'This has been the couple's first foray into property development. Are they keen to give it another crack?'

It's been good fun. And it's very satisfying, isn't it,

seeing it like this now and thinking what it was like.

To be honest, at the beginning I had no confidence

to do some of the things that now I'm quite proud of what we've achieved.

And I feel really eager to take my skills forward into the next project.

# Nothing but blue skies

# From now on

'With the Olympic Games right on its doorstep, Stratford in the East End of London is undergoing big changes

'and property prices here are on the up.

'So when a three-bed terraced house came up for auction at a guide price of £160,000,

'it wasn't surprising that there was a lot of interest.

'It exceeded that guide price by a whopping £111,000.'

Sold, 271, to you, sir.

'It was property developer Delawa who paid that £271,000.

'Along with his builder Amrik, he saw it as a golden opportunity

'to turn this house into a rent machine.'

Tell me what you're planning to do with this house.

-We're thinking of converting it into two flats.

-On the first floor,

hopefully there will be a one-bedroom flat

and downstairs will be an extension in the back for the kitchen

and then two bedrooms in the front.

'With so many new flats being built in the area,

'I thought keeping the building as a house might have been a better option.

'But undeterred and armed with a £50,000 budget,

'the pair decided to press ahead, submit their plans to the local authority and hope for the best.

'Six months later, we return to see how they got on.

'Well, the outside's certainly much improved. Gone is the boarded up door

'and single-glazed sash windows

'to be replaced by a UPVC door and double glazing.

'And the exterior plaster work has been given a lick of paint.

'Inside, how's it going converting this into two flats?'

Unfortunately, we couldn't get the planning permission

so we had to replan everything to convert it back into a house.

We wasted two or three months, as well, plus the money.

'It seems they fell at the first hurdle.

'In the end, the planners rejected it

'on the grounds that the building was too small for a two-flat conversion.

'So it was out with plan A and in with plan B,

'renovate the house for the rental market and make the most of the living space.

'The front reception room is no longer open plan,

'with the wall reinstated to make two separate reception rooms.

'And the kitchen? Well, that's moved back a bit.'

This is the single-storey extension to create a bigger kitchen.

We have a couple more extra units and then the opening into the dining room

to create a nice kitchen for a nice big family.

'Because of the size of the extension, it didn't require planning permission.

'So they avoided any further delays and have maximised the space as much as possible.

'They put a shower in the downstairs toilet area.

'And completely altered the dark, dingy cellar.'

This was the old big cellar full of junk and rubbish and stuff.

We plastered all the walls, put in a couple of windows for the light,

air bricks for ventilation and put the new ceiling up

and a partition to make two rooms for storage or whatever they're used for.

'Although the two rooms in the cellar can't be used as bedrooms due to building regulations,

'they do offer a fantastic bonus to an already decent-sized house.

'Upstairs on the half landing, the bathroom and bedroom have been refurbished and redecorated.

'Whilst at the top of the stairs, the two other bedrooms have been given a similar neutral finish.

'New carpet has been laid and there are new curtains.

'So the house is looking spick and span and ready to let.'

Actually, it's been let already. I've got two offers. I have to decide.

'It's great to hear there's competition for tenancy here.

'But having spent £271,000 already on buying the property,

'how much has it cost to get this three-bed house ready to rent out?'

If there was two flats, we would've spent about £50,000.

But as it is now, we've spent about £35,000.

'£35,000 on top of that £271,000 purchase price,

'plus stamp duty at three percent,

'takes Delawa's total outlay to around £315,000, not including fees.

'Has keeping this as a single dwelling paid off?

'What do two local estate agents think?'

First impressions are that the house is a very good size

and the bedrooms are brilliant, three doubles.

And the best thing about the house is having an upstairs bathroom.

In this area, a lot of properties have downstairs bathrooms, which many families don't like.

The property has undergone a vast transformation

from what it was before previously.

It looks as if the property has been done to a budget

and has been done up for rental purposes.

'At present, Delawa's only interested in renting this house out.

'But how could his £315,000 investment fair if sold?'

If I was to put this on the resale market today, I would market it for £350,000.

I would place this property on the market at approximately £395,000.

'So there's quite a large difference between the figures there,

'with a potential pre-tax profit of between £35,000 and £80,000 to be made.

'What do Delawa and Amrik think of that?'

-Whoo!

-THEY LAUGH

We done well, I think!

I think it will be between 350 and 395.

-That's what we think about it, yeah.

-Very nice.

'So, happy with the resale values, then.

'But what do the estate agents reckon the house could make on the rental market

'and will that match what the pair have been offered?'

If we were to rent this as a single dwelling,

we'd place it onto the market for £1,700 per calendar month.

As a single dwelling, you'd rent this for approximately £1,800 per calendar month.

'So come on, then, what are the two offers they've had?'

One was £2,100 a month.

The other one is £2,000 a month.

So we're going to check on the references, et cetera, and decide.

'It looks as though they've struck gold with those offers

'which could see them with a rental yield of between 7.5% and 8%.

'So this partnership shows once again how well they operate as a team.'

Well, we both depend on each other.

I depend more on him than he depends on me, actually.

-No, I depend on you more.

-THEY LAUGH

-He's the man with the chequebook!

-THEY LAUGH

-I'm the one with the wheelbarrow.

-THEY LAUGH

# Oh, yeah

# In sweet harmony

'They might not have got what they originally wanted

'but with Amrik and Delawa's skills in perfect harmony,

'they've managed to overcome all the hurdles with this property

'and delivered yet another successful project.'

Well, we hope you've enjoyed the programme

and perhaps got a bit of inspiration from our buyers.

Join us next time for more properties on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd

E-mail [email protected]

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