Episode 54 Homes Under the Hammer

Hello. People buy property for all sorts of different reasons.

-It could be as an investment or a place to live.

-And the main concern is getting value for money.

One way to do that is by buying under the hammer.

-You do need to do your homework if you buy at auction.

-But you could find a real diamond in the rough.

Here are the potential money spinners today.

'In Timperley, I find an arresting little number with its own police record.'

'ello, 'ello, what's going on?

'In this south London flat, there's an unexpected bonus.'

Even better, you've got that huge garden and it all belongs to this flat.

'And on the edge of the Peak District, there's a bungalow with really big ideas.'

It's also got planning permission to add another storey. That could make some money.

All these properties have been sold at auction. We'll find out who bought them and what they paid

when they went under the hammer.

'I'm in Timperley, Greater Manchester, seven miles from the city centre, five from the airport.

'It's a popular area and the lot I'm here to see sounds like it should be in a TV cop show.'

I'm here in Timperley to see a property sold on behalf of Greater Manchester Police Authority.

So is it a great big old police station with blue lights and cells?

Well, sadly not. It's this rather run-down three-bed semi,

actually used to house the local bobby. But it had a guide price of £120,000-£150,000.

Let's take a look inside.

'Apparently, the house has been empty for a while, hence its rather tatty exterior,

'but there's off-street parking, double-glazed UPVC windows and a large back garden,

'so there's already a few bonuses.'

'ello, 'ello, what's going on?

Well, it's not too bad. The thing about these houses is they're solid.

When you come through into it, you get that feeling.

It obviously is in need of a bit of tender, loving care,

but good-sized rooms. This goes from the front to the rear.

I'd like some patio doors, but apart from that I'm looking forward to seeing what else there is.

'No signs of police cells or interrogation rooms,

'buy beyond needing a revamp it all seems in pretty good nick.'

So into the kitchen and again a pretty decent-sized space.

Nice views onto the garden there, but again needs tender, loving care.

You need to replace all these units, but there's space for a dining table and to make it into a family space.

I'm much more excited about this area out the back.

It's a single-storey... What would you call this? A sort of extension.

You've got a storage area there, a downstairs loo

and here the only bit of the property that is vaguely something to do with its former life.

This is actually, believe it or not, the police office.

What this does give me is an idea that maybe an extension is the way to go with this.

Either single-storey or, even better, double-storey.

'You don't have to be an expert in police surveillance to see that a number of neighbouring properties

'have pretty elaborate extensions so the precedent is set with the local planners,

'but before we get carried away there's another floor to check out.'

So upstairs you've got the bathroom, two really good-sized double bedrooms and a single.

All that's good. What isn't so pleasant is this.

Serious...

..nasty...

..damp.

However, I think the reason for that is actually quite simple.

As I've said lots of times before, houses aren't that complicated when it comes down to it.

The first thing to look for if you see damp is something stopping the water going away.

Look up at the guttering. It's full of foliage. Bits of grass,

all this stuff growing up, this ivy. That'll be blocked, water will be cascading down.

It's probably the same throughout the entire house, the down pipe.

All in all, just do something, refurbish that lot and it goes away.

'How's that for a bit of detective work?

'OK, so he may not be wearing a Hawaiian shirt,

'but this is the auctioneer who sold the property.

'We gave him a light grilling to see what he could tell us about it.'

The property has lots of potential. It's been vacant for a while,

but there's potential for extension

to the side, where a ground and first floor would be appropriate,

and there seems to be other properties with second-floor extensions as well, so into the loft.

If it was mine, I'd look at those.

'What level of rental return might you expect after doing an extension

'or first off, just tidying up what's here?

It could be renovated as it stands and it would rent fairly easily.

If that was done, the rental value would probably be £650-£700 per calendar month.

If a side extension was put on or even a second-floor extension, that could increase to £750-£800.

'Bearing in mind that the guide price was for this property was £120,000-£150,000

'what might it fetch if it were put up for sale after being renovated?'

From a resale point of view, if renovated as it stands,

I would think the value could be £175,000-£200,000.

If a side extension was put on, or a second-floor extension, you could approach £250,000.

Well, this old police house isn't exactly a fair cop.

Lots of work to do to modernise it and you've got that damp problem,

but intrinsically it's a good property that could make money.

If somebody bought it for a steal, they're on to a winner. Let's see what happened under the hammer.

Lot 97. A vacant, three-bedroom residential property.

£100,000 do we see anywhere?

100? Straight in, I've got it. Gentleman sat down. 105 do we see?

105 I've got here. 110? I've got it. 115? I've got it.

120? I've got it. 125?

Take 2. Does that help you? It does. 122. 124?

OK, 122 with you. I'll take 1. Does that help anybody?

It does. Gentleman on my left. 123.

124 now? 124 I've got. 125?

Two bids at the same time. I'm going to take paddle 691 at 125.

There's a gentleman further back. I've got 125. Is that 126?

Yeah, 126. Gentleman in the dark top. 126 I've got. New bidder. 127. We've got 127 there. 128?

128 is back in. 129, then? I've got it.

130? 130 I've got.

131? I've got it. 132?

Yeah, 132 I've got. 133?

I've got it. 134? Yes.

135? And I've got it. 136?

Yes. 137. 138, then?

138 I've got. 139?

139 I've got. 140?

Yes, 140 I've got. 141, then?

141, we've got it. 142?

Is that a half, sir? You're out altogether? OK.

141, gentleman on the phone, sat on my left. Are we all finished? At £141,000.

First time at 141. Second time at 141. Third and final time.

Your paddle number, please... 629.

'The successful bid of £141,000 was made by Sean who attended the auction with his wife.

'He has had his finger in a number of pies over the years.

'Most recently he's sold the franchise of a well-known takeaway food chain.'

# When the moon hits your eye like a big pizza pie That's amore... #

'I met up with him to find out his plans for this old police house.'

# Like you've had too much wine That's amore... #

-Sean, good to meet you.

-Hi, Martin.

-Congratulations. Tell me why you wanted to buy this place.

Em, basically, I've just recently sold a company with my nephew

and we had some spare cash to invest.

I have some property already.

And now seemed like a good time with the dip in the market to reinvest and come back in.

Great. Was that company something to do with property?

-No, actually, it was a pizza company.

-Right.

-You owned a franchise?

-That's right.

-How long ago did you buy that?

Seven years ago we bought that. My nephew, who's based in Scotland,

has been running the business and I was a silent partner as I have another job

running a disaster recovery company. So, basically, that involves damaged properties.

So I've been involved with owning or renovating property or restoring properties following fire and floods

for about 15 years. It seemed a natural thing to do.

'Disaster recovery, eh? Sounds like we have a real, live Thunderbird.

'But Sean's background dealing with fire and flood damage means that this project

-'should be a walk in the park. He's aiming high.

-I have an architect. We've got some plans.

We'll apply for planning permission. I've got a two-pronged approach.

I can put an extension on within the permitted development scheme

and start work immediately, which I will do.

I'll put footings in for a double-storey extension, but build a single-storey one.

Hopefully, permission will come through for a double-storey and we'll carry on up.

If not, I may just stick.

'I like the sound of this two-pronged approach

'and, fingers crossed, the planners approve this double-storey scheme.

'But Sean also has designs on the existing accommodation.'

We'll take the walls out in here and turn this into the dining room,

-put some patio doors in to bring the garden into the house.

-Wow.

Refurbish the living room, take the chimney breast out, probably the chimney,

board the loft to allow whoever buys it to convert the loft. I won't do that.

We'll certainly do the extension. There's not enough living space for a family.

-Lots of work, then.

-Yeah, quite a bit of work.

-Have you got any idea of cost?

-I initially had a budget of around £30,000-£35,000,

but we did better than expected at the auction, so I've got a little bit of cash to play with,

-but I think around £40,000.

-That's quite a reasonable budget.

-Hopefully.

-What about timescales?

-We're hoping to complete it in four months,

so the market is buoyant again. It's a bit flat at the moment.

Then hopefully we'll sell it.

-So the plan is to do it up and sell it on?

-Absolutely. I don't think the rental yields

versus the value of the house are viable.

Congratulations. I look forward to seeing how you get on.

Well, from pizza to property. How do you top that?

Well, Sean's certainly got experience, but this is his first residential development.

So how is he going to get on and will he make any dough?

You can find out later in the show.

'I'm in Streatham, southwest London.

'Between the First and Second World Wars, it developed a reputation as a location for entertainment,

'which earned it the nickname the West End of south London.

'With a great mix of apartments and family houses, it also has excellent transport connections.'

We are really close to the train station. It's just behind here

and we're a mile from the Tube, which is Balham. So for a guide price of just £295,000

there's not one, but two properties as this building has already been divided up into two flats.

You'd normally pay that for just one flat around here.

First impressions are good. It's a substantial property, three storeys, and the windows and roof are redone.

That's a bonus. I'm going to go inside for a look.

'Both the flats have separate entrances on the side

'so let's start with flat number one on the ground floor.'

This is flat number one. It seems to veer off in different directions.

You've got a kitchen there, a big long corridor towards the front

and then a sitting room and around here is a bathroom with white suite

and the only bedroom in the property. It has space.

You've got lovely high ceilings, but what I really like to see are these.

New wooden double-glazed windows. They look so nice on this property.

And, even better, you've got that huge garden and it all belongs to this flat.

'The flat has yet another attractive feature - a very large sitting room at the front.

'So there's spacious accommodation and the flat doesn't even need much doing to it.

'A little sprucing up, some redecoration and this place is ready to go.

'What about the other half of this auction lot? Flat number two, upstairs.'

This is a lot bigger. It feels a lot more spacious.

You've got a long corridor, a big sitting room. It kind of mirrors downstairs.

It does need a lot of work doing. We've got a separate toilet, a bathroom and a bedroom.

There's a few more bedrooms upstairs. I'm going to investigate.

'There's a rather dated kitchen on this floor which needs a complete refit.

'I might be tempted to knock through into the neighbouring sitting room for an open-plan living area.

'Carrying on up to the third floor, we find two double bedrooms.

'The first one in particular is a really good size,

'but there's potential to add even more space and value by claiming back some roof space.'

Here is a little piece of information. In October, 2008,

the planning rules changed so you can now make improvements without getting planning permission.

You can do a loft conversion if it doesn't exceed the cubic content of the original roof space

by more than 50 metres.

So good news, you'd think. However, the rules only apply to houses, not flats.

So for this property, you'd still have to go through the whole planning process

to go up into that loft. 'However, since developing that loft space will add value,

'it would probably be worth someone's time and energy to get permission sorted.

'That's still not the end of the story here.'

If you planned to sell these flats on separately, there's a problem.

They are currently registered as one dwelling, one house.

So you've got a few legal hoops to jump through. You'd have to register them as two separate flats

and hopefully the fact that you've got established use will mean no issues with the planners.

Once that's done, you can then create a separate lease for each and sell them individually.

It is a bit of hassle and it will cost in legal fees, but it's definitely worth it.

'To discover a bit more about the opportunity here,

'we asked a local estate agent for his take on it.

'It had a guide price of £295,000.

'How could you maximise the potential here?'

The important thing here is that you apply for planning to go into the loft and the rear.

This is a great area for rental, so I would anticipate getting

£1,000 per calendar month for the ground floor flat

and perhaps £1,500-£1,600 for the upstairs flat.

'What about selling the flats once renovated?'

Doing the flats up for resale, you're probably looking at values

of the ground-floor, one-bedroom garden flat achieving towards £250,000.

If you were to extend the property, making a two-bedroom flat, you'd increase the value

and that would fetch in the region of £325,000 or so.

The upper flat could fetch as much as £375,000.

So two flats - one that you could rent straight away and the other one needs some work.

Let's find out who fancied these at the auction.

Lot 70. Well-located semi-detached house.

Two self-contained flats.

I don't know - 300?

-If not, you tell me.

-270.

-OK, we'll start there. 270 I've got.

How much? OK, 280.

285? 285. 290?

295. 300.

315? 330?

345. 350.

375?

380 at the back. 385.

385. 390.

'With a lot of interest in this property, we rejoin the auction at £420,000 -

'already a massive £125,000 over the guide price.'

420, sir. 421.

No?

420 for the first... 421 in a new place.

Nearly. 422.

423. 424.

425.

One more?

425, back in.

426. 427?

You said that last time. 426 for the first.

426 for the second.

426 for the third and final time.

All done. Sold. 426, well bought.

'Well, that bidding battle was eventually won by London developer Paul.

'Not so long ago he worked in sales and marketing. He has a couple of properties already,

'but this is quite a big project for somebody relatively new.

'I met Paul back at his purchase to find out more.'

You've got so much space in this room. Now, Paul, cast your mind back to auction day.

Tell me how you came to buy these.

I suppose I'd been going to auctions for a little while.

I'd been looking from afar. I'd gone to bid on a couple of occasions,

but been totally outbid very quickly.

And I took the view that it would be interesting to do a development that perhaps had

more than one property within it. It might appeal to just developers, not owner occupiers.

-Is your background in property?

-Only recently. It's a relatively new change of career.

I've got a corporate background

and just decided I'd finally do something I really loved.

What was it about property?

I think I'm a wannabe architect.

I just would have loved... I like changing things around, improving old properties.

I've lived in old properties.

'So did Paul follow the advice we always give to do your research properly?'

It was an odd one.

I normally do a fair amount of research, a lot of online data for finding out street prices.

I have a place just round the corner, so I'm familiar with prices here,

but it was an odd one on the day. I only saw the upper flat.

The lower flat, there was some confusion over access.

'It's never ideal if you don't see all of the property.

'Luckily for Paul, downstairs doesn't need as much work.'

-Ok, so you're a wannabe architect.

-I am.

Paul's vision. What did you see when you walked in? Let's start with downstairs.

Howe can you change it? There's lots of space, but one little bedroom.

Exactly. And it felt such a waste. There's a big garden at the back.

Lovely living space, high ceilings.

I imagine that being opened up into the kitchen. I like the thought of it being split level,

so I'm going to steal a bedroom from the upper flat, put a staircase in and have a two-bedroom flat

-on a split level.

-Wow! Stairs.

-Stairs will go in, yeah.

Where will you put the stairs?

We've got partition walling at the back, so it shouldn't be a problem to drop those walls fairly easily.

We'll eat away at the bathroom, take away the room in the bedroom, then reconfigure the bedrooms.

-Between the bedroom and bathroom, really.

-That's right, yeah.

'So a new staircase from the ground floor flat will give access to the rear bedroom,

'which will then be part of the downstairs accommodation.

'But Paul will keep three bedrooms in the top flat by converting the loft into a new third bedroom.'

Where does that leave flat number two? How will you jig it around?

This one's more difficult. There's practical issues.

The bathrooms are quite low down, we may need new boilers.

In terms of the layout, we've still got plenty of space.

So the fact that there are not two separate leases didn't worry you?

No, I've already spoken to my solicitor about splitting the lease.

How long do you foresee this taking?

Planning's the big issue. If we can get through the planning,

-then I think the build for both flats within six months.

-And budget?

Er, flexible.

Dependent on what we're given, really. We have to sit down and keep totting up the figures.

I suspect £100,000.

-Paul, it's been lovely meeting you.

-And you.

-Good luck. It'll be very interesting.

-I look forward to it.

Paul is still relatively new to the developing game, but that is not going to stop him.

He's got great plans for these flats. He's checked out the economics and is raring to go.

But will he get planning permission? You can find out what happens later on in the programme.

'Coming up: there's some dated decor in this Duffield bungalow.'

What's on offer? A nice bit of parquet flooring for a start(!)

'In Streatham, Paul has a big decision to make.'

This is what I do as a living, but there is also an element of a labour of love.

'But first we track down that ex-police house near Manchester to see if it's a reformed character.'

Nothing has been left untouched.

'We've returned to Timperley on the outskirts of Manchester.

'After the police had no further use for the house, it lay empty for a couple of years until Sean booked it

'for £141,000 at auction.

'He'd set aside £40,000 to refurbish it and was planning to build big and build high.'

I can put an extension on within the permitted development scheme

and can start work immediately. What I'll do is put footings in the extension

for a double-storey extension, but build single-storey.

Hopefully, planning permission will come through for a double-storey.

'We've come back six months later to see how Sean got on.

'He's got that double height extension all right

'and the house is now huge.

'What was once a series of small, cramped rooms is now big, bright and beautiful.'

We've completely gutted the house.

We basically took it back to the bricks and just two walls.

We took all the internal walls out. We've added a two-storey extension.

We've replumbed, we've rewired. Nothing has been left untouched.

We're in the new part now.

What we've done is move from where the old kitchen was. We have a brand-new kitchen, open-plan.

In this part of the building, we've built a utility room to house the washing machine and the boiler.

We've also managed to squeeze in a downstairs toilet.

'The old enclosed staircase has been ripped out for solid wooden treads.

'Glass panels will be fitted as banisters.'

So, basically, what we've done is move the bathroom from the old part of the house

into this new area. We've built a bigger bathroom than we had before.

We've managed to incorporate a walk-in wet room and added a good-sized double bedroom.

It's added about 30% to the floor space on the upper floor.

We're very pleased with the quality of the finish we've achieved.

Once we'd decided what we were doing, we anticipated it taking 12 weeks.

Or I did. The builders didn't.

It took nearer 16-17 weeks in the end,

so the overrun was 4-5 weeks.

'So it seems the schedule ran away from Sean a little bit.

'What impact did that have on the budget?'

The last calculation we did, we came in at £88,000.

We spent a lot more because we changed the specification.

Rather than doing a basic refurb,

we decided to put the two-storey extension on and that's what has cost the bulk of the money, really.

And some of the features, like the staircase, for example.

That's cost quite a lot of money over and above what we budgeted.

And there were things we hadn't budgeted for like hire tools, scaffolding and skips.

We'd anticipated a few hundred pounds and those items cost thousands.

Keeping your budget realistic at the start of a project is the way to make money from development.

But the research you do before you bid at an auction really makes the difference.

We're pleased that we chose the house.

We were lucky that the house happened to be in a catchment area for one of the best schools.

We're a bit over schedule, we're quite a lot over on the budget that we first set out.

However, we've gone for a high end product, so the budget had to shift accordingly.

So here's hoping that this is the right decision

for that high end product.

We asked two local property experts for their thoughts.

The vendor has done the extension very well.

It's been sympathetically done.

Using the bricks from the side on the front elevation works well.

Also, the finish is very good, obviously, when it's completely finished.

But everything about it is good. I like the open plan.

He's done a good job. He's used the plot to its full advantage.

As far as the extension is concerned,

whilst they were doing a permitted development on the ground floor,

it was worthwhile to go that extra hog and come up to the first floor.

He's added that extra bedroom. It's not a massive bedroom, but it does help definitely.

Phew! That's a big thumbs-up for the new extension.

Sean has always been very clear that he wants to sell this property, not rent it out.

He paid £141,000 at auction and has spent £85,000 on the refurbishment,

bringing his total outlay to £226,000.

So what do the property experts think that the place is now worth?

My opinion on the price would be that it's somewhere in the region of £275,000 and probably no more.

I would put this property on the market with an asking price of £275,000.

Based on those figures, Sean could make a healthy pre-tax profit

of £49,000, minus the usual selling expenses.

That's very good. That's what we need to recover some of the budget overrun, so that would be fantastic.

But Sean's already thinking about how to make his next project take less time and less money.

Probably if I was to do the next one, I would do less work

and try and speed up the project, so I can turn more projects around in a year.

Today, I'm north of Derby city in the picturesque village of Duffield on the edge of the Peak District.

Duffield has great public transport links and some excellent local schools,

making it ideal for families or anyone seeking the quiet life.

In the heart of Duffield, close to The Ecclesbourne School, is the property I'm here to see,

so it's extremely well located.

This is it, a two-bed bungalow. It had a guide price of £195,000,

which for round here is good value for money, but it gets better

because it's also got planning permission to add another storey

to create a four-bedroom, detached house.

Ooh, that could make somebody some money.

# Ain't it kind of funny? It boils down to money... #

Development opportunities like this are in short supply in this area,

especially with that planning permission in place.

So what's on offer? A nice bit of parquet flooring for a start.

A bedroom down that end, large living room there, lots of light.

Second bedroom there, a bathroom

which looks like it's had a semi-makeover going on, a half-finished thing there,

then through to your kitchen. That is basically the property.

It's a nice-sized kitchen, more of a kitchen-diner.

Very old and tired units, you'd want to get rid of these, but the sink is looking out over the garden

and a few nice, added bonuses.

This looks like a brand-new, fairly energy-efficient boiler. That'd save you a few thousand quid. Good news.

At least you'll be warm while you spend every penny you have on those potential extensions.

Building is a costly business, but with such a prime location, it should be well worth the expense.

Well, at the rear of the property, not a huge garden, but a decent enough sized lawn, I suppose,

and here you can see the potential for that extension.

But the school which I talked about earlier is a real draw for families to this area.

You couldn't be much closer. Over the other side of that hedge is the school playing field,

which means that your garden seems a bit bigger than it actually is.

So you could extend up and out or just do one of those, but what's the best option?

We asked a local property expert for his opinion and his thoughts

on that all-important planning permission.

The planning permission is interesting

and I can see why someone would want to develop a family house here,

but it's probably more cost-effective to put a small extension on the existing bungalow.

# I want easy

# Easy money, easy money... #

With that guide price of £195,000 in mind, is there easy money to be made on this property?

Forget building up into the roof. What about that small extension?

And I think with a small extension, it could get to £275,000.

If you were to develop the house,

then I think the market would allow a price of around £325,000.

That's a pretty good return on the money.

But it could cost a fair bit to carry out either extension,

so what would the rental values be?

You would expect to get a rent of round about £650 per calendar month.

If you were to develop the three/four-bedroom, detached house,

you would expect to get a rent of around £1,000 per month.

What you've got here is a nice, little bungalow in a lovely location.

You could spend some money doing it up as it is and that would be fine,

but the real money is to be made from carrying out those plans.

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

Lot 52A is in Duffield.

Presently a two-bed, detached bungalow,

but with consent to develop into a four-bed house.

175 is bid on the phone, thank you. 176.

177. 178.

179. 180.

183. 183. 184.

185. 185.

186. 187.

188, sir? 188. 189 is it now or not?

Fresh bidder, 189. 190? 190.

At £190,000. If that's the highest bid, we shall sell it.

190,000 for the first time...

Second time. Third and last chance quickly.

£190,000... Yours, sir.

Thank you, 190. 386...

'That was closely contested, but the final successful bid of 190,000 came from Wayne.

'He and his wife Jackie have recently returned to the UK after years of working in property abroad.

'I went to meet them to find out more about their very first development venture back home.'

-Jackie, Wayne, congratulations.

-Thank you.

-Thank you.

Tell me more about you two.

We've travelled and just had a fantastic life so far.

It started off when we first bought a little holiday place in Spain and we did it all up and renovated it.

We just found that we absolutely adored doing it.

As a result of that, we then started looking to buy property in other parts of the world.

And through a chance meeting of a few different people, we ended up moving to Dubai

and I ended up working for a couple of developers in Dubai.

'Since then, Wayne and Jackie have returned to the UK,

'so their three-year-old son Ollie can grow up here.

'So why this property in this location?'

Well, this bungalow is really in the heart of the village.

And right behind us is the school.

Its location, more than anything, was a real selling point,

plus it's a bungalow and therefore, it's on a large plot.

It's got quite a bit of land around it and we feel it would make a really nice family home.

It ticked all the right boxes.

-One box must be it already has planning permission.

-That was a big box.

-What are your plans for it?

-Big plans, aren't they?

-Big plans.

The plans are to double the size of this room, to knock out that wall and double the size of the lounge.

It currently has two bedrooms. They will both disappear and become a very large lounge-diner.

Then upstairs, because we have permission to double the height, will be four bedrooms,

a big family bathroom and obviously an en-suite to the master bedroom.

Are you pretty much sticking to the plans as were passed?

We've made some changes already

and we've already made one visit to the planning part of the council.

We will probably have to make a couple more trips with a couple of the ideas that we have.

They're not major structural changes to the property,

but we believe they are small changes which will add a great deal of appeal to the property.

'What are these intriguing small changes that Jackie and Wayne think will make such a difference?'

The kitchen-diner wasn't on the original plans,

but we think a 27 square metre kitchen-diner will add a lot of wow factor to the house.

Do you know the cost of doing what you're planning?

We've worked very hard on planning the budget.

At the moment, the budget is around 90,000, all fees, everything covered in that,

and we're confident that we'll stick to that.

-Yes.

-The good thing is that the builders that we're using are related.

My brother runs his own building company and it's once the build work is finished that we'll come in.

And the plan then is to sell it on?

This is a business to make money, so yes, the plan is to sell it on.

'It's clear that the couple are thoroughly prepared, so is there anything that concerns them?'

The biggest thing that we cannot control is the market,

so at the end of it when it's looking fantastic and we put it on the market to sell,

we need the buyer to come in the door.

-You bought it for 190 plus costs.

-Yes.

-You're going to spend about...?

About 90 with a contingency of about 10 in there as well,

so you could say the cost to us will be about 290.

What do you hope you might be able to sell it for?

We should be able to get somewhere between 360 to 380.

-A £70,000 to £90,000 profit?

-Somewhere in there, yeah.

What's the timescale for doing it?

-Just a little over four months.

-This is a family house and people relocate to Duffield because of children,

so we need this property to be back on the market to catch the Easter and then the May and June buyers

who are looking to move before school starts after the summer holidays.

-Great. I wish you all the best in your plans and good luck with it.

-Thank you.

-I look forward to seeing how you get on.

-Thank you.

Well, Wayne and Jackie are obviously excited to take on this project and quite right too.

But that four-month timescale could easily go awry

if the planners need more than just a casual chat before they make the changes.

They're keeping it within the family. Will they keep it within the budget? Find out later.

It's been quite a few months now since we saw those properties.

-But has time and money been well spent?

-Let's go back and find out.

'We head back to Streatham, south-west London now

'where Paul had paid £426,000 for this three-storey semi,

'divided into two flats.

'He had only recently moved into full-time property developing,

'but clearly had grand plans for his new career.'

What was it about property and why do you love it so much?

I think I'm a wannabe architect

and I like changing things around and improving old properties.

# I only wanna make things right... #

It's now 16 months later and Paul's invited us back to see the transformation.

# I only wanna make things right... #

A three-storey property now gives a much more impressive first impression.

The two separate entrances remain.

And in the ground floor flat, the large living room has been completely refurbished.

The narrow kitchen has been extended into the corridor and fitted out to a high specification.

So in terms of the layout, this used to be a corridor

and a separate kitchen with a wall at the back and a separate living room.

What we did was we knocked down that wall, opened up the space.

We carried on with under-floor insulation

and started adding some of the toys,

so we've got our door entry system over here,

we've got our multi-room music system, as well as a zoned mood lighting system,

but what was important to me was to try to marry the new with the old.

So we had to bring some charm back into the property.

That meant bringing in an old fireplace and also some old-style radiators.

The two flats were registered as one dwelling,

so Paul had to jump through a few legal hoops to sort this out.

This proved to be a formality. He got planning permission for a ground-floor extension

which has increased the size of the original bedroom

and as Paul promised, the flat now has a staircase leading to a second bedroom up on the first floor.

Back on the ground floor, a new bathroom has been installed.

Up on the first floor, the second flat has also opened its kitchen and living room up,

giving them a much more contemporary style.

On the top floor, the two bedrooms have been totally overhauled.

Paul's added a Juliet balcony to the front bedroom,

but both have been reduced to accommodate a new bathroom.

A new staircase has been constructed up to a loft conversion.

So this is where we've carried out the loft extension.

Previously, it was just an open loft, but we were able to speak to Planning.

They were unhappy with a wide dormer at the back of the building,

but they gave us permission to have the side dormer,

and with that, we have the access, albeit a little bit tighter than we would have liked.

So the upper flat has retained three bedrooms and the garden flat now has two bedrooms.

The garden has yet to be landscaped. It's all taken longer than planned.

Paul's worked on other conversions and could only work on this project when his other commitments allowed.

How much has he had to spend?

We still need to, as far as budgets are concerned, do that final tot-up,

but I suspect we're around the £150,000 mark.

With the 426,000 he paid at auction,

that takes the total outlay to £576,000.

The property obviously in financial terms has to pay for itself because this is what I do as a living.

But there is also an element of a labour of love

and to that degree, I've actually chosen to move into the ground floor flat.

Time to hear the opinion of two local estate agents.

It's a clever use of space. A lot of thought has gone into the design

to make both apartments as spacious as possible.

And it's great that the downstairs flat has a private garden.

First impressions are very important when selling a property

and the garden at the front has been done very, very well.

There is a very high standard of finish to the bathrooms and kitchens.

They have been done to a very good specification.

The extra gadgets added to the property really make it special.

How much rental income do the estate agents think that the two flats could generate?

My recommendation on the rental values would be

that the two-bedroom, ground floor garden flat should be put on the market

at £1,350 per calendar month

and the upper, split-level maisonette at £2,000 per calendar month.

You could probably look at about £2,000 per month for the ground floor flat

and maybe as high as £2,250 per month for the upstairs flat.

There's quite a big disparity there.

I don't believe the lower rental figure.

I have property in the area.

I could rent at that price tomorrow, but on the higher side, I'd be relatively satisfied with that.

What valuation do the experts give for the two flats?

Could they be worth more than the £576,000 Paul's invested here?

I think the ground floor flat with the garden would probably fetch £425,000.

The upper flat would probably fetch £450,000 for the right buyer.

My recommendation would be that the ground floor, two-bedroom flat should go on the market

at £350,000

and the upper, three-bedroom, split level maisonette at £475,000.

Those valuations of between 825,000 and 875,000

would generate a gross profit of between £249,000 and £299,000.

Overall, I'm reasonably happy with that.

As I say, I didn't primarily do this for just the profit.

We did a number of things that would never see an enormous return on them, but overall, I'm happy.

What's next, once this house is finished and he's moved in?

I think my next step is much of the same. It's out there looking for new properties.

The aim is to try and find another property of a similar ilk to this one and do a similar sort of job.

'We're back in Duffield near Derby to catch up with some globetrotting developers.

'Wayne and Jackie relocated back to the UK after developing properties in Spain and Dubai.'

# Roam if you want to

# Roam around the world... #

'They bought this house to start their property business in the UK

'and had grand designs for this modest bungalow.'

-Big plans, aren't they?

-Big plans.

The plans are to double the size of this room, so to knock out that wall and double the size of the lounge.

It currently has two bedrooms. They will both disappear and become a very large kitchen-diner.

Upstairs will be four bedrooms.

'Like I said, big plans and since this bungalow came with planning permission,

'this savvy couple spotted an opportunity to make the bungalow even better,

'if the planning department let them.'

-Are you sticking to the plans as were passed?

-We've made some changes.

We've made one visit to the planning part of the council.

We'll probably have to make a couple more trips.

We've come back six months later to see if Wayne and Jackie have reached for the sky

and doubled the size of the house.

The 1960s bungalow has been transformed.

It's bigger, it's better...

..but it's not finished.

They've added a whole new level to this house.

Downstairs has been completely reshaped

and on the brand-new upper floor,

there are now four bedrooms, two bathrooms and a lot more space.

But doing such a major re-design has obviously had an impact on the schedule.

We've slipped from our original timeframe, but purposely

because we took on another project in the middle of this one

which took us about four and a half weeks, I would say.

So that explains it. Wayne and Jackie saw the opportunity

to make an extremely fast buck on another property

while this one was being done up.

But still, in only six months, they've doubled the size of this one.

Since you last visited, we have literally gutted the house.

We've taken the roof off completely and just taken it back to four walls.

Then we have rebuilt it, taking it from a two-bedroomed house, one-storey,

to a four-bedroomed house, two-storey.

Well, that is impressive,

but it looks like there's still a bit of work to be done here.

There's a lot to do internally.

Right now, the kitchen extension hasn't got its roof on.

The tiles have just been delivered.

Tomorrow, all the block paving is arriving for the driveway to start finishing the exterior as well.

So there's a lot to do and a very, very short amount of time to do it in.

For that reason, all hands are getting on deck right now

and everybody is mucking in and starting to do some work.

Whenever you do a development, there are always days that drive you crazy.

Today's crazy aspect was the fitting of the stairway which should have arrived weeks ago.

It arrived a couple of days ago. When it did arrive, it was actually 12 millimetres too big everywhere.

# Heaven waits for those who dare to climb

# The stairway of love... #

Step by step, this bungalow is fast becoming a family home.

OK, well, this room was the original lounge

and in fact, it finished here where this wall is.

But we have now opened it right out and we've extended it into this area

which is now going to be the kitchen.

The kitchen is going to have units all built around here at the back,

a range cooker in here,

and a kitchen island in front of you where I'm standing now.

And so then the room beyond will become the kitchen-diner.

This is my favourite room because I feel any family will spend a lot of time in this room.

# I won't give up

# I'll never stop our love, I'll never stop... #

You might have to use your imagination,

but Jackie can clearly see how this dream kitchen will come together.

Throughout the house, there has been tremendous progress

as the old bedrooms have been knocked away to create brand-new living spaces.

So we've placed the stairs over what was previously the old bathroom.

Then of course, everything is brand-new up here.

This is bedroom number two. It's a really good-sized room.

I guess the only real change is that this space on the original plan was one bedroom.

It was over 20 square metres which we just figured was too big and not a usable space,

so we've made this into two separate bedrooms and they both work well.

They're both double bedrooms, good-sized bedrooms too.

Upstairs is much closer to completion

and it's easy to see how well-balanced this house will be when it's finished.

# I couldn't ask for another... #

But even for the very experienced, like Wayne and Jackie, not everything goes according to plan.

We're very happy with the overall speed and progress.

What has been frustrating is the last couple of weeks

where we've had to wait for certain things to arrive before we can do other things.

For example, we had a delay on the roof trusses. Once we had them, we had a delay on the roof tiles.

Those kind of things are costing us valuable days.

In the early days of a build project the size of this, there is always something you can do.

Towards the end, everything is linked to everything else.

It's time to bring in two local property experts

to see if the couple's hard work is going to be rewarded.

My first impressions of what's been done at this property

is they've quite seamlessly created a four-bedroom, detached house

from a two-bedroom bungalow, so the signs at this stage are good.

When you work within an existing site,

it's a challenge to get the right mix of accommodation.

The architect has done a fantastic job to come up with a brand-new family home within this site.

It's a big vote of confidence so far for Wayne and Jackie.

They bought the house for 190,000

and their projected overall spend is 90,000,

bringing their total investment to £280,000.

Although it's difficult to give a precise value with so much finishing off still to do,

can the estate agents see a healthy return here?

If the property was put on the open market when the works are finished,

it should achieve between £330,000 and £350,000.

Sale-wise, it ought to return somewhere between £390,000 to £400,000.

Based on those valuations,

that could give Wayne and Jackie a profit of between £50,000 and £120,000.

But that figure is speculative.

Yeah, I think that's about right.

To value the property at the moment is quite difficult, given its current state.

We both talked about that because they don't know the standard of fittings that we're putting in.

If you took the average of those two valuations, that's pretty much where we would value it as well,

so we're very happy with that.

So they've succeeded in sticking to their budget,

even though the timeframe slipped a little, due to working on their other property and bad weather.

They intend to finish here in the next few weeks and have it ready to market to buyers.

The project was made easier by the fact that they live in the village

and Jackie's brother was their head builder.

So does this mean their first experience of buying at auction was a success

and are they keen to do it all over again?

I think we would definitely go through this process again, particularly the auction.

The auction's great fun. You get in there, you get auction fever and you watch everybody else get it.

It's really exciting, particularly if you get involved

in bidding for a property that you want.

So definitely, I'm hooked.

We hoped you've enjoyed watching Homes Under The Hammer and learnt some useful lessons.

Join us next time when we'll have more hot properties and possibly some that are more lukewarm.

-See you soon.

-Goodbye.

-Goodbye.

Subtitles by Subtext for Red Bee Media Ltd 2011

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