Episode 61 Homes Under the Hammer

-Hello and welcome.

-Whether you are a developer or first-time buyer,

what you will want is value for money.

In a fluctuating property market, where do you go

to find out what's happening? Try the auctions.

Sometimes you know you've bought a bargain,

and sometimes, well, you're not quite sure.

The best way to find out is to see for yourself.

So, did the buyers on today's show get themselves a bargain or not?

Let's find out.

In Salford, a property which challenges me to dig deep.

Superficially, clearly it's dreadful.

But I'm trying to get into the roots of it.

There's a plot in Chatham, Kent,

which may never let you bear the fruits of your labour.

So, it's all looking rather peachy...but no.

And in Brampton, near Carlisle, one big property

which could be cut in half to double your dosh.

Either way, you know what? There's money to be made here.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them

-when they went under the hammer.

-All finished. Sold.

This is Salford in Greater Manchester,

currently undergoing a period of regeneration and investment,

which includes upgrading of local housing stock.

Well, just two miles from the university,

two miles from the train station, reasonable area.

So why was there a property up for auction -

three-bed, semi-detached house - with a guide price

of just £25,000?

Well, as I said, not a bad area. Does it have holes in the ceiling,

in a dreadful state? Well, kind of.

What do you reckon? How about that?

It's a burnt-out wreck.

It certainly doesn't look very appealing from the outside.

But at least there is off-street parking...

..and the garden, although not massive, wraps around three sides.

Yes, well, it is as bad as you might expect.

The first thing you got to consider with fire-damaged properties is,

how bad is the damage?

And that will make the decision then

as to whether you try and refurbish this

or knock it down and start again.

That's ideally not what you want to do,

because it's going to cost a lot more.

However, if the fire has got into the fabric of the building,

and I'm talking about the timbers, the joists and the walls,

it could have cracked the underlying structure of the property.

If it's that bad, the only option is to knock it down.

You need to get a builder or a surveyor in here,

somebody who can tell you how bad it really is.

Superficially, clearly it's dreadful.

But I'm trying to get into the roots of it.

I need a bit more of a look around.

As far as the internal layout goes, it's a decent-sized semi,

with a kitchen, dining room and well proportioned living room

on the ground floor. If the place is structurally sound,

don't underestimate the effort it will take to sort it out.

Things like pipe work. The joints will have probably gone,

and you want to replace that for sure.

The walls! You can't just paint over this, obviously.

You'll have to strip it back to the original plaster

or at least put specialist paint coverings on there,

so that the blackening doesn't come through.

The joists, obviously, as I mentioned before,

they'll need to be checked out, and stuff like the electrics.

I mean, that's probably all just melted

as a result of the heat, so you've got to factor that

into your costings. That said, if you were to restore this place,

you'd probably want to do the electrics anyway.

But it's certainly being forced on you in this instance.

It's not an easy fix to repair a fire-damaged property.

Even if you don't have to rebuild it,

it can almost feel like you are, and from scratch.

And what about those stairs?

I don't think so!

'Our fearless cameraman did head upstairs though,

'adhering to health-and-safety rules, of course,

'to give us a look at the bedrooms and the damaged bathroom.'

So, a major project with a minor guide price of 25,000.

We invited a local expert from the auction house

that sold it to cast his eye over this charred offering.

The damage that's been done to the property

is quite substantial, but there doesn't appear

to be anything structurally wrong. It won't be a cheap job,

but you will end up with a house that's fully refurbished,

so it will end up being a good buy.

What's the rental market like in this area?

'A three-bedroom semi in this area would rent really well.'

We'd expect to rent this out for £550 per calendar month.

Perhaps you'd be better putting the property up for sale.

When the property's refurbished,

I think it'll be worth between £75,000 and £85,000.

If they decided to do the loft conversion,

and perhaps put a conservatory on the back,

that could take the value up to between £90,000 and £100,000.

Well, fire-damaged properties do offer great potential,

but they're not for the inexperienced.

You do need to know what you're doing.

But if you could get this for anything like the guide price,

you could be onto a winner. Let's see who fancied the massive challenge when it went to auction.

OK. Lot 60.

Fire-damaged three-bed semi.

I've got proxy bids on this, telephone bids on it.

What's it got to be worth today? I've got a bid at 20,000.

20 I have. 25. The lady's bid at 25.

At 25,000, then. 27. I have 27.

Do I see 30? 30,000.

30,000 I had, then. Do I see 31 on the phone, maybe?

31. 32.

33,000.

At 33,000. 34.

35. 36. 36,000, then.

37. 37.

38. 39. 40.

41. 41,000, then.

42. 42. 43.

44. 45.

46.

46,000. 47.

At 47,000. 48 anywhere?

At 47,000, then, for the first time.

47,000 for the second and final time.

Are we all done at 47,000? Lady's bid. There we go.

The winning bid of 47,000 was made by Angela,

who gives study support to students with dyslexia.

She and her builder Pete have refurbished together before,

and she wants to rescue this one for herself and her family.

# Won't you come on down

# To my rescue? #

-Angela, lovely to meet you.

-And you.

-Congratulations.

-Thank you.

-I THINK congratulations. THEY LAUGH

-Hmm.

-So, a bit of work to do, then?

Yes, you could say that, couldn't you?

Hmm. Er, why did you want to buy it?

-I've been looking at it for a while.

-You've been looking at it?

At the house, because it's been for sale,

but it didn't get into the auction for quite a few months,

and I thought it would suit my purposes,

as a house to live in with my sister and my mum,

who's quite elderly, and she needs ground-floor accommodation,

and I thought we could do something with this.

Between what it's like now and what you want it to be,

there's quite a hurdle. Why not buy somewhere that's sorted out already?

Um, well, I do like a challenge, I suppose.

HE LAUGHS

And I think, for the money I've paid for it,

and the budget that I've got to spend on it,

I should get something really nice for under £100,000,

whereas if I'd bought something else,

I would've still had to do something to it, I think.

And this is sort of a blank canvas. I can start from scratch,

-and get it exactly how I want it.

-How you want it.

-Yeah.

-So, this doesn't faze you too much?

-No, not really.

No. I find it quite exciting.

I like to take something that looks quite unpromising

and turn it into something quite nice.

# Baby, save me

# Save me...

I love Angela's understatement,

calling this burnt-out wreck "unpromising".

But she can see its potential to become a future home

that will suit her and her family.

But it's not quite big enough for her, her mum and her sister yet.

Well, we're hoping to do a loft conversion,

and downstairs we'll be changing the configuration

and making a bedroom for my mum,

and we'll put a conservatory on at the back, as well.

What kind of budget have you set aside for the work?

-About £50,000.

-Don't tell your builder that number.

-SHE LAUGHS

-Tell him you got 30 to spend.

THEY LAUGH

What kind of timescale are you hoping for?

-Four to five months.

-Right.

So, how involved in the project are you going to be personally?

When it comes to the finishing off, I will do some of that myself,

such as tiling, which I quite like doing,

and decorating, obviously.

-So I'll do the nice bits, really.

-Right.

And let Pete and his mates do all the dirty...

HE LAUGHS ..horrible jobs.

-Well, the first bit is going to be a bit unpleasant.

-Yes.

What does your mum think about all this?

-Um, she's very keen on it, you know.

-Has she seen it yet?

No. No, she hasn't seen it yet.

I'm not going to bring her over just yet.

-"Mum, this is your new house."

-Exactly.

Yeah. So I'll wait till it's looking a little more, you know...

presentable, before I actually bring her over to have a look.

# Save me

# Somebody save me...

Angela has undertaken renovation projects before.

She worked with builder Pete on her most recent project,

her current home, and luckily he's on hand

to help with this one too.

So, Pete, it's your job...

-HE LAUGHS

-..to turn this place around.

-Sure is, yes.

-Oh, wow. What do you think of it?

I think it's great. Got a lot of potential, indeed.

It's a good-size property.

OK, they've got the damage, but structurally it's sound.

-So, did Angela make the right decision to buy it?

-Definitely.

Definitely. This is one that even I would have bought.

What do you think it's going to cost to get it sorted?

-HE HISSES THOUGHTFULLY

-You did what all builders do!

-You suck through your teeth!

-HE HISSES

-THEY LAUGH

-Well, we have a guideline.

I've worked with Angela before,

so we have a guideline of what that cost,

so, you know, we're looking...

anything between 35, 40.

-Great. We can hold you to that, can we?

-No!

THEY LAUGH

# Save me

# Somebody save me #

Well, I'm not going to let on to Pete

that Angela quoted a higher figure than that for her budget.

But for Angela, this project isn't really about making a big profit.

It's more about building a new home and a new life

for herself after a very difficult year.

I have moved over to this area,

having lived in Lincolnshire previously,

but sadly I lost my husband last year,

-so, um... Oh, dear.

-Oh, I'm sorry to hear that.

-Um...

-So you're making a new life in Manchester.

Exactly, yeah, and this is where my family and friends are, really,

-which is why I've moved back over here.

-Well, congratulations.

Good luck with it. A few challenges ahead,

-but look forward to seeing how you get on.

-Thank you.

Well, it's a new start for Angela and her family,

and we wish them all the best with that.

And hopefully with Pete's help,

they will be able to transform this wreck of a property

into a beautiful place to live.

You can find out how they get on later in the show.

This is Chatham in Kent,

popular for its many transport links into London,

lovely surroundings, and affordable properties

of all shapes and sizes.

So, three big ticks already for this part of the country.

I'm here to see a site today that's being offered with detailed planning permission

for development of four houses, so that is great news.

And the guide for this plot? £200,000 to £220,000.

MUSIC: "Kids" by MGMT

And this large rectangular plot sits amidst a real mix of properties,

with excellent access to local amenities.

It also seems popular with the local wildlife.

Buying a plot which already has planning permission

is a great bonus, and will save you having to spend valuable months

drawing up plans and obtaining permissions.

The four semi-detached properties for here

have an open-plan kitchen, living and dining room

on the ground floor, three bedrooms and a bathroom

on the first floor, and a master bedroom on the top floor,

but no bathroom.

I've got the plans here. I've got a bit of a reservation.

It feels a little bit top-heavy for me.

A good number of bathrooms to bedrooms and reception rooms

is always critical. I just feel the layout might not be ideal.

It can be really tempting to view extra bedrooms

as a quick route to a big profit.

But if that means an undersized kitchen, lack of living space,

and inadequate bathrooms, you won't see the return you're hoping for.

I think you'd have to think about tweaking these plans slightly,

to give the master bedroom an en suite.

The plot here has a story behind it.

So here's a little bit of background history.

You see these three houses here? Well, they've all got together

and decided to sell off part of their gardens,

creating a rather lucrative building plot.

It makes you think, doesn't it?

If you're on good terms with your neighbours,

and you've got good access,

you too could be paying off a large chunk of your mortgage.

# Somewhere

# Over the rainbow #

Forget chasing rainbows! You could find a pot of gold

at the end of your garden. But if considering doing something similar,

you must check with the local council

about the legalities of doing so.

And that's not my only word of warning.

Another sound bit of advice - try and make all the design decisions

before the contractors start on site.

I know it sounds really obvious, but you'd be surprised

how many people overlook this when it comes to self-builds.

Sorting out the fixtures and fittings early

can really save you money in the long term.

Worst-case scenario, you have a builder on site without materials.

That could be a nightmare. And whilst you're at it,

you must make sure you're on top of your budget,

and don't forget to factor in the costs associated with borrowing,

buying and selling.

There is something lurking beneath the surface of this plot,

which could make it less appealing.

So, it's all looking rather peachy...but no.

There is a drain underneath this plot of land,

and that could prove to be a huge drain on your budget.

So you've got to contact the water board

and work out the costs to relocate this before going to auction.

We invited a local estate agent to the plot

to give us her opinion on the proposed plans.

The plot looks to be a reasonable-size plot,

although once the properties are erected,

there isn't going to be a huge amount of garden with them.

'The layout, for some people, is going to cause the problem.'

A lot of people don't like the thought of two sets of stairs,

If you've got very young children,

it is quite hard going up and down them all the time.

I would have thought we're looking for professional people

or people with older children. It would suit them much better.

The plot had a guide price of £200,000 to £220,000.

What could the potential profits be?

I think we'd be looking at renting them out

at round about £900 to £950 per calendar month.

I think if we were to sell the properties at the moment,

we'd be looking about £200,000 per property.

It's a relatively level site. The setting is ideal,

and Chatham has got strong transport links.

Now, the only problem is that pesky drain.

It didn't put somebody off, though. Let's find out who that was

as we go to auction.

Where do you want to start me on this one? 200,000?

I'm underway at 200.

205,000. Where are all the developers?

Pleading with their bank manager, most of them, at the moment. Right at the back, 205.

I'm obliged. And 210 sitting. 215 at the back.

215. And 20.

And 25. And 30.

235. 240. It's with you, sitting.

245. And 50. 250.

And five again. 260 I've got, sitting down.

And 65. Again, it's against you. 265.

Drive down that road, see somebody else's scaffolding going up...

Think, "That could've been me." 265.

And 70. 270. And five. 275.

Ooh... What's that - two?

272, I've got.

275, I've got.

And 77. 277. It's worth a try.

277? Otherwise, for the first time, at 275...

He's a determined bidder. Second time at 275.

Third and final time. I'm sure you're all done.

It was Michael who made the successful bid of 275,000.

He, his business partner John and son Matthew

run a property-development business, so they're very familiar

with purchasing land to build on.

SONG: "Daddy Cool" by Boney M.

And they're no strangers to Homes Under The Hammer, either.

-What are you going to do with it?

-Knock it down.

-Are you, now?

-We're going to try to.

'They may have knocked down there, but I wanted to find out

'what they plan to build up here.'

Well, you've certainly been busy, haven't you?

-Yes.

-The last time I saw you two was in Sheerness back in 2007.

-Yes, it was.

-Gosh! How time flies!

-So, congratulations.

-We're still here!

You've bought this plot of land. Have you both been extremely busy

-since we last meet?

-Yes,

but we've achieved very little.

We've had three very bad years.

We didn't buy... This is the first site we've bought since Sheerness.

We've done very little, but been busy chasing our tails.

So, why have you moved on to buy this site and develop it?

Well, basically, Dad did the bidding at the auction.

-I wasn't there, unfortunately.

-He'd have stopped me.

No, I wouldn't have done that. He does a great job at auction.

And it's a lovely site. Comes with full planning permission,

which was very much what we like. We can get straight on this site

and get straight on with it, and that's the really attractive part.

And the architect had done a good job.

It's a sensible house that has got four bedrooms,

it's got a sitting room and a dining kitchen

-of some size.

-So it really appealed to you to buy this site

with the planning permission. So you're ready to crack on.

Hit the nail on the head, yeah.

Will you be changing anything at all about what you've got on the plans?

-Internally.

-Yes, some internal work.

-But very minor.

There's no sanity to it, but in the original plans

that had been passed, they've got, in brackets,

the master bedroom doesn't have a shower room.

And it's a piece of cake to do it,

so you'll have a general bathroom on the first floor,

and then it'll be a very nice and spacious master bedroom

with a shower room or bathroom on the second floor.

I really think you need to add that shower room,

because you need access to washing facilities upstairs.

-It's crazy.

-Is there anything else that's problematic with the site?

Yes. There is. There always is. There's always something.

-It was never going to be that easy.

-Never, ever is. It's the drains.

The drains. We've got a foul that runs from this boundary

straight out to the centre of the road,

and that goes under one of the foundations,

so we've got to reroute that, talk to the water board

and the powers that be to get it moved and get permission,

so that will be the difficult part.

Could that be quite costly? Have you worked out any prices?

-Yes, it's quite costly.

-Go on, go on. Tell me.

To get permission, it's around about approximately £2,000

-just to say hello.

-Just to talk to the people?

-Just talk to the people.

-OK.

-The work, um...

I haven't done a full appraisal,

but it will be around the £8,000 mark to actually do the work itself.

So, £10,000 to fix the issue with the drains.

But Matthew wouldn't let something like that get in the way of a build.

'As for Michael, well, with his background,

'he's been there, done that, and probably got several T-shirts.'

Michael, I know you're very experienced,

-and you have been doing this for many years.

-Sure.

Some 40 years. Absolutely.

And built... I don't know. Probably completed...

must be 70 or 80 different developments,

-way over 4,000 units altogether.

-Ooh!

Now, Matthew, you must have learnt a lot from your dad over the years.

-I have.

-Is this something that you aspire to do?

It wasn't quite what I had in mind originally,

but, like all these things, you sort of drift into them,

and I've enjoyed doing it, so, um, yes. I like building houses.

It's creative. You come back ten years' time,

say, "Well, I built that," so it's nice.

-So, what had you intended on doing?

-Being a model.

-He was going to be a model?

-I wasn't.

Yes, he did. Yes, he did. You speak to his mother.

-She'll tell you.

-He is really embarrassing you now.

Not really. I'm used to it, because he does it all the time.

# I'm going to be a supermodel #

So, perhaps, some less-than-model behaviour from cheeky chap Michael,

but with his vast experience of over 4,000 property developments,

and a lot of charm, he gets away with it.

It's lovely to see such a great relationship between this pair,

and their optimism is infectious. I'm very glad to see

that they're both still going strong despite the recent tougher market.

So, with the property dip, it obviously didn't burn your fingers.

-You're positive. You want to come back for more.

-Always positive.

-I enjoy the business.

-Yes.

And we've got enough experience to make it profitable.

How long do you think this site is going to take you

-to get these houses up and running?

-Six months.

-Certainly no more.

-Have you guys really had a chance to do your sums

-and work out the build costs?

-I'm doing it at the moment.

-SHE LAUGHS

-What - right now?

-Pretty much.

-You're going over in your head the sums?

-Part of it.

-So, what do you think, Matthew?

-I think... The actual amount?

-Yes.

-Um, I reckon it's going to be around the 400 mark.

-Yeah.

-So £400,000 to build all four semis?

-That's correct, yeah.

And that's everything - kitchens, bathrooms...

-Even the drains.

-Even the drain removal?

-Yes.

Guys, great to see you again. Good luck with this.

-Thank you.

-Thank you very much.

Michael, with over 40 years of experience

building a whopping 4,000 properties...

I think I can say this project is in safe hands,

and with Matthew by his side, using all of today's technology,

I'm sure they will make a success of this.

The only issue is that drain underground.

It's an unknown quantity. Will it throw up some problems for them?

Well, you can see how our father-and-son team do

later on in the programme.

Coming up - this property in Brampton near Carlisle,

an area fit for a prince.

Blimey! Even Bonnie Prince Charlie stayed here.

In Kent, did this plot make Matthew and Michael lose the plot?

I'm the guy that walks by and buys it,

and then he sorts it all out because I've made a mistake.

But first, did Angela keep her cool when the heat was on?

I wasn't fazed by it. Um... I don't know why.

'Time for us to go back to Salford in Greater Manchester,

'where support worker Angela bought this,

'a sadly burnt-out semi, for 47,000.'

But she was a cool customer when it came to the fire damage.

Between what it's like now and what you want it to be,

there's quite a hurdle. Why not buy somewhere that's sorted out already?

I do like a challenge, I suppose. HE LAUGHS

And this most certainly was.

Angela planned to turn this into a beautiful home

for herself, her sister and their elderly mother to live in.

We've come back seven months later to see if she rose to the challenge

she'd set herself.

Wow! The property looks fantastic,

not even a hint of the blackened, burned-out shell that it was

not so long ago.

The house has not only had an incredible makeover,

but the kitchen has been extended, two more bedrooms have been created,

as well as an additional bathroom and an en suite.

None of this would have been possible

without Angela's close friend and builder, Pete.

It was an interesting project. Everything was ripped out -

the floors, roofs, the whole thing. But it worked to our advantage,

because we could put a dormer in for a nice loft conversion.

I'd done one for Angela before, so it worked very well.

She trusted me and I trust her,

and as far as doing the burnt-out,

it was just the same old...

To us, it's just taking out the old and putting in the new.

Positive Pete seems as unfazed as Angela was,

and that's even after most of the graft has been done.

I've really enjoyed it. It's been a very, very successful project

for everybody. Angela's going to end up with a very good house,

and we've had plenty of work with it, so really enjoyed it.

Luckily he's not the only one who's pleased with the results.

It has actually surpassed my expectations.

It's actually a lot nicer than I thought it was going to be.

I wasn't fazed by it. Um, I don't know why.

Maybe... SHE CHUCKLES

I do... I just like doing this kind of thing.

I just thoroughly enjoyed the whole thing.

And particularly as this is going to be a home

for herself, her sister Sue and their mother,

who's going to really benefit from being here.

She's looking forward to it. She's in a flat on her own

at the moment, and it's on the second floor.

She's not very good mobility, so she doesn't really get out much,

so this is going to be a lot nicer for her, really.

There's still around two weeks' work left to do,

mainly in the garden, but with the transformation that's been done here

so far, did Angela manage to stick to her time and money projections?

Well, I did think about six months,

and that's what it's actually turned out to be.

In fact, from actually buying the property,

two months went by before anything actually got started,

so the actual work has been less than that.

It's only been probably four to five months.

I had a figure of £50,000 in mind,

and I think it'll be 60, actually.

I think I've probably gone 10,000 over budget,

which, I think, for what we've got, isn't bad at all.

We asked two local estate agents to come and have a look round

Angela's new home and share their views.

'Fantastic property. They've done a really good job.'

I do like a lot of the touches, like the stripped flooring

and the open-plan feel downstairs.

The upstairs has dramatically changed the property

by adding the second bathroom.

I'm very impressed with the property.

They've finished it to a very good standard,

and it will be a really nice place for them to live.

Angela purchased the property at auction for 47,000,

and spent 60,000 on converting it, making her total outlay £107,000.

What would the agents value it at if she wanted to sell it on?

We'd see this property fetching between £105,000 and £110,000.

I would look to market the property at £110,000

and attract offers in that region.

Well, that's OK. We obviously haven't done it to make a profit.

Yeah, that's very pleasing.

The important thing here was that Angela created somewhere

that she and her family could call home,

and she's certainly achieved that.

It does feel like home, and I've enjoyed seeing my ideas,

you know, coming into being, and that's been very satisfying.

I'm in the market town of Brampton, about nine miles east of Carlisle.

The place is absolutely steeped in history.

It's on the route of Hadrian's Wall. Look at the age of the buildings,

from the 15th, 16th, 17th and 18th centuries.

Blimey, even Bonnie Prince Charlie stayed here.

This was Charlie's headquarters in 1745,

when he laid siege to Carlisle.

Well, just off Brampton main street is the property I'm here to see,

but before I even get to it, I'm seeing a few issues.

You've got this fish-and-chip shop there,

and these are the rubbish bins from the shop.

They're a permanent feature, and not a very nice entrance to your property.

This is called a lane, but who knows whether or not it's an adopted lane?

If it isn't, you're responsible for its upkeep.

Second slight problem I'm seeing is these cars.

They're owned by the people who live round here,

but they're right in front of the property I'm here to see,

and if nobody owns this road, it's really debatable

whether or not people can park here, so that could be an issue.

The property itself is certainly substantial.

The lower part of this building used to be a pub around 50 years ago.

It was converted to residential, originally two flats.

You got one door there, one door over there.

Now knocked into one. It's going to be complicated,

but let's take a look inside.

# It takes two, baby

# To make a dream come true

# Just take two...

Yeah, this property is a toofer - you get two for the price of one.

So even with the smell of fried fish and slightly dodgy access issues,

it's still going to be as cheap as chips.

I get the feeling the layout of this place

is going to be a difficult thing to get your head round,

but I will do my best. In through that front door

to a living-room area here. Good-size space, so we like that.

Off that is the kitchen.

Looks fairly grubby, I have to say,

but the units, I think, could possibly be salvageable.

Through that little archway there you've got a bathroom,

storage cupboard, and on to the bedroom.

The back bedroom in this part of the property

leaves a lot to be desired, but it just needs a thorough clean.

The bathroom is in a right old state.

It needs a really good scrub, and maybe some clever lighting

would help to lift the gloom from this room.

Now, that is this flat, which originally was one on its own.

We know it's been knocked through. But that's the start.

Then through here into what was the second flat,

and through this door, the other entrance door,

into a similar-size main living-room area.

Looks like there's been a bit of a problem with damp in here.

That could just be that the property hasn't been lived in for a while.

But off here, double doors, you've got your kitchen,

and then it winds round. Another bedroom,

another bathroom.

-You got an idea of what it's like?

-HE LAUGHS

Through here. Let's see.

At the back of the kitchen, a shortish hall

leads you to a really large bedroom,

with fitted wardrobes that go on forever -

easy enough to sort out.

And then another bathroom with a few tiny issues.

Start from scratch here, I think.

So, as you can see, this unusual property

has two very nearly self-contained flats.

So, let's just talk through the financial possibilities

for this project. Let's say you buy the property

as it is for around the upper side of the guide price, 50,000 quid.

You spend £10,000 restoring each flat,

and I think the way to go is to convert it back into two flats.

So you've spent around £70,000.

Each of these flats around here, probably worth around 50,000 quid,

so £100,000 you're going to get back.

Take off your costs, you'll make about 25,000 quid.

The alternative is to think about renting them out.

Each of these flats would get you about £350 a month.

That's £700 a month for the two. That's £8,400 a year.

That is a 12 percent yield on your investment.

Either way, there's money to be made here.

The property is leasehold, owned by the upstairs occupant.

The lease is 1,000 years,

and it has been renewed in the last ten years.

So, out the rear of the property,

and there's this - well, back area. I don't know what to call it.

It's hardly a courtyard. It's sunken down,

so it's not somewhere you're going to use very much, I don't think.

What is quite useful, rear access to the property,

little lane running at the back there, up those stairs.

You've also got a bit of extra storage here,

and an outside loo, and rear entrance to the second flat

over there.

And...oh, it's a bit of an unusable space,

but it's the only garden you've got.

# It takes two, baby

# To make a dream come true #

All in all, an unusual little set-up,

with two kitchens, two bathrooms,

and all laid out like it's still two flats. But it's not.

I wonder what a local estate agent thinks.

'I think it's a great location.'

You'd probably be looking at somebody

that would buy the property to rent it out,

or perhaps a family looking to get their son, daughter,

onto the property ladder. It would have great potential for that.

'It's very comparable with Carlisle city centre as well,

'so you would have a demand for one-bedroom apartments.

Obviously it's not as big a demand as if you had a two- or three-bedroom property.'

One bedroom, the market is always that little bit narrower.

But, yes, there's definitely a need for it.

So, a lot of property for the money,

and I don't think it would necessarily cost too much

to get this place sorted out. Obviously reconvert into two flats

for maximum potential and profit. Let's see who fancied it

when it went under the hammer.

Lot 13, lucky for some. A spacious ground-floor property,

originally two one-bed flats. Let's see your hand at 40.

40 I have. At £40,000. We're up and away.

I'll take it in ones, nice and easy. You're not in the mood. It's cold.

41 I have. 41. 42, madam?

43, sir.

44, 45.

Shake of the head. It's with you at 44.

Are we all out at 44? It's too cheap.

Don't let her have it. 45, sir.

Can I say? 45 I have.

46, madam. 47, sir.

48. 49.

50.

51? Shake of the head at 51.

It's with you, madam, at 50.

Bull's-eye.

At £50,000, then. All done? All out?

51, 52.

New position here. 53? Shake of the head.

All done? All out? First time...

52 second time, then. Third and final time.

All finished. Sold to the pretty lady.

Sold to Anita for £52,000.

She bought this along with her husband and brother-in-law.

She's just started out in property development,

and this is her second purchase.

-Anita, congratulations.

-Thank you very much!

-Well done.

-So, what do you do when you're not doing this kind of thing?

-I work for the county council

-in the libraries.

-Oh, wow!

-A completely different day job.

-And your husband?

-He works for an oil company...

-OK.

..in marketing, so again, nothing to do with property.

-Why did you want to buy this place?

-We came in to have a look at it

-initially to discount it, really.

-What do you mean?

We were looking at a variety of properties coming up for auction,

and the shared yard put me off. But actually, when I came in,

I loved it. I think it's quite spacious.

They'll make lovely one-bedroomed flats,

and they're right in the centre of town,

so we really like them.

'Anita went into this venture with her husband and brother-in-law

'as a three-way share. How did that come about?'

My husband and I bought one at auction last year,

and when we mentioned to our brother-in-law

that we were thinking of buying again, he said he'd like to come in.

He lives abroad, so he's very much a silent partner.

He's been home once to see them.

He wasn't at the auction, but there's three of us in on the project.

-But helped with the finances, giving you that all-important cash.

-Yeah.

-How did the last project go?

-It was pretty good.

We got the property at a good price, but it took longer

than we would have liked to get all the work done,

and we learned important lessons on the way.

-What was the most important lesson?

-I think it's the schedule of work,

getting the workmen to come in one after the other,

keeping on top of it and making sure everything's progressing on time.

Cos if one person doesn't turn up, they have to go away.

If the plumber doesn't turn up, you lose the plasterer.

That's it, yeah.

With the property world in the shape it's in at the moment,

it's interesting that new recruits are still entering the market.

Money isn't making an awful lot in the bank at the moment.

Property prices are continuing to decline,

so there are bargains out there. So we thought we'd just give it a go

-and see how we come on.

-What's the plan for it -

to do it up and sell it on, or rent it out, or what?

We're open to either. We'll probably put them on the market

either for rental or for sale, and see what happens.

We'll be happy to keep hold of them and rent them out

-until the market stabilises a bit.

-What do you think about this place

as it is at the moment? What do you like about it

-and what don't you like?

-I like the fact it's spacious.

'There's a decent amount of storage in both properties,

'and the central location. And actually,

'if you look behind the dirt and cobwebs,

'there's only one wall to rebuild between the two

'to separate them back into two properties,

'so it's a minimal amount of work.'

That should be a simple fix, then,

but keeping the plans, and therefore budget, realistic

will be key to making money here.

First thing will be to get the new heating system,

so we're going to have electric storage heaters put in.

Then we're going to have the new kitchens put in,

new UPVC double glazing to match in with the upstairs property,

new doors, and then redecoration, new carpets.

-Who's going to do the work?

-We've got professionals lined up

to do all of the work. We'll take the kitchens out,

take some of the tiles off and things like that,

-but we'll do the demolition side and they can do the professional job.

-OK.

-What kind of budget have you got?

-We're hoping to have a maximum spend

of 75,000. So we paid 52,000 for them,

so around 23.

-Right.

-Hopefully 20, with a 3,000 contingency.

You should to do it for that. Keep a tight rein on the budget...

-Hopefully less, but...

-Negotiate hard,

and there are bargains to be had. And timescale?

Hopefully eight to ten weeks. We may bring it in earlier than that,

but having learned lessons from the last property, better to err on the side of caution.

Congratulations. I'm delighted for you.

I look forward to seeing how you get on.

So, how will Anita and her partners get on sorting this place out?

I think they're definitely doing the right thing,

converting it back into two flats,

cos there's certainly money to be made.

All seems pretty much like it'll go to plan,

but with properties, you just never know.

Find out how they get on later in the show.

Well, the plans and dreams seem good at the time.

The months have gone by. Have those dreams become a reality?

Let's go back and find out.

We head back to Chatham in Kent now,

where seasoned property developer Michael

purchased this impressive plot at auction for 275,000.

'But he did so without his son and business partner Matthew's knowledge.'

Dad did the bidding. I wasn't there, unfortunately.

-He'd have stopped me.

-I wouldn't have done that.

He does a great job at auction.

'So, there was no stopping him at the auction.

'Let's hope the same goes for this pair's plan

'to turn the plot into four semi-detached properties

'within six months. We're here ten months later

'to see what's been going on.'

There's still a few weeks' work left to do,

but this is unrecognisable as the overgrown plot

of ten months ago. Each property comprises a living room

and open-plan kitchen/diner on the ground floor.

There are three good-sized bedrooms

and a family bathroom on the first floor, and on the top floor,

a master bedroom and that much-needed en suite

which was lacking on the original plans.

Well, this is the master bedroom. We wanted to go for a high-spec

because these days, that's what sells the house.

We will be putting cupboards later on in here.

We think that, er, being the master bedroom,

more storage is very important.

And again we went up-spec in the bathroom/shower room,

and basically, again, it's to sell the house,

because that's the name of the game these days - to be the best.

The other change they made to the original plans

was opting against a completely open-plan ground floor,

and keeping the living room separate from the kitchen/diner.

We over-designed the kitchen so that we could having a dining area here,

which has worked out very well,

and the big problem was that I have a thing about black and white,

which you can see we achieved,

but then I had this area here,

and I didn't know what to do,

and so I rang my daughter, who's an interior designer,

and she said, rather frighteningly,

"Why don't you use red, dark red?"

And by sheer fluke, I remembered the tile about four years ago,

rushed round to the ceramic people,

walked in and said, "I want six metres of those,"

and I think they've really done a superb job,

and I'm very pleased with it.

The dapper gents had planned on a six-month timescale for the project,

but came up against a few obstacles.

We have overrun to what we wanted.

The schedule hasn't overrun, if you take into consideration

the cold weather we had, because that's a month and a half.

We can't build then. There's only so much you can do.

One of the biggest problems was diverting the main sewer.

-Absolutely.

-That's really put time on,

and they're only finishing it now.

Specialist finishes always take that little bit longer.

Luckily, the £400,000 budget was another matter.

-Spot on.

-Spot on!

Seriously, spot on. Yeah.

-Yeah. We're very happy with it.

-Yeah.

The properties will look even better

when the outside work is done and dusted,

and finishing touches added inside.

Opting for a higher spec is an excellent choice,

particularly in such a difficult market.

It's corny, but it's going to be a very nice unit to live in.

This is a higher spec than we normally do,

and I think we're going to be sticking to it,

so we'll be ahead, we like to think, of the others.

The market is so tough today.

There'll be four buyers somewhere in the area.

-We have to capture them.

-We want 'em first!

-Yes.

Well, before they go buyer-catching, we invited two local estate agents

to give us their opinions on this plot-to-property project.

'I think they've done a very high specification,

'and they're really nice houses.'

They've ticked everything, as long as they finish the gardens nicely,

they do the front nicely with paving,

so that it really does give a good impression when you pull up.

'It's a very nice specification.'

Especially kitchen, bathroom tends to sell a house,

and both of them are really good spec.

The plot was 275,000 at auction,

and the work cost £400,000,

making their total outlay 675,000.

If Matthew and Michael were interested in renting the houses out,

what return could they expect?

I think the rental in pounds per calendar month

could be in a range of £1,000 to £1,200.

£950 per calendar month to £1,000 per calendar month.

We're not into renting. It's not in our minds.

But they're rather reassuring figures.

So they're all for selling.

What would the estate agents market each of the four properties for?

I would value each property individually

in the region of £300,000 to £325,000.

I think we'd be looking at somewhere in the region of £250,000

to £275,000.

Based on those figures,

Matthew and Michael could be looking at a pre-tax profit

of between 325,000 and 625,000,

minus the usual selling expenses.

But the pair were dubious about the higher figure.

I think the three to three-whatever was way off the mark.

-It's quite high.

-Yeah.

-You can get a lot of property in this area

that's maybe not new, but a lot of square footage, for that money.

Now, we would have said the other person was spot on.

Yes, I agree.

This duo really do know their stuff.

So what's the true story behind their teamwork?

I'm the guy that walks by and buys it,

and then he sorts it all out because I've made a mistake.

-Yes, that's the truth.

-That is the truth.

We're back in Brampton near Carlisle to see how Anita got on

with her "buy one, get one free" property beside the chip shop.

Anita bought this property with her husband and brother-in-law,

keeping it in the family. The flats are spread across the ground floor

of this building. For some reason they had been knocked into one,

although they had two kitchens and two bathrooms,

as well as separate gas and water supplies.

But Anita wasn't daunted by the scale of the project.

There's only one wall to rebuild between the two,

to separate them back into two properties,

so it's a minimal amount of work.

Anita had snapped these flats up at £52,000 for the pair.

She planned to spend £23,000 refurbishing the flats,

and hoped to complete the work in eight to ten weeks.

We've come back five months later

to see how well the flats have scrubbed up.

Those grimy, dingy rooms

are now sparkling bright and squeaky clean.

The division between the flats has been reinstated,

and there are now two light and fresh one-bedroom flats.

Planning permission was fairly straightforward

because they were originally two properties,

and they'd been put back into one without planning permission,

so we just submitted the plans and the maps of the area,

and it came through pretty quickly.

It's not clear who owns the land at the front of the flats,

so the only outside space the flats have is at the rear of the property.

It was a rather dark and run-down area,

but now it's practically a garden.

We've decorated the outside, put new windows in,

new heating, new bathrooms.

One new kitchen. Refurbished the other.

New back doors. Redecorated, new carpets.

Just everything, basically. Just refurbished everything.

# It takes two, baby

# To make a dream come true

# Just take two #

Of course, buying two run-down flats means replacing everything twice -

two front doors, two bathrooms... Well, I could go on.

Maybe it's not such good value for money.

So this was the new wall that we've had built up

to separate the properties back into two one-bedroomed,

which was actually very straightforward,

but I am a bit of a perfectionist, and these were the original doors.

We didn't have a budget to replace them,

and I did spend four hours with a Stanley-knife blade

cleaning off all the old paint and polishing the glass back up

to make it a decent finish.

And this is the brand-new kitchen that we've put in.

And whilst it's a really old property,

we did feel it was better to go for a more contemporary look

to appeal to more people.

In this flat, Anita felt the kitchen was beyond saving,

but throughout the two properties,

she has refurbished and re-used where she could.

In the bedroom, she decided to dismantle

all the broken-down wall cupboards. Well, they were a tad dated.

She treated next door slightly differently.

So, we decided in this property to keep the existing kitchen,

simply because, if we do go down the line of renting it out,

we thought it would be good enough standard,

but we have had new tiles, a new cooker, work surfaces and sink,

and put some new handles on just to tidy it up.

So we think it looks quite good as it is.

And then in the living room,

all of these walls have had a damp-proofing course.

'Through in the bedroom, we do still have a slight issue.

'There's one small area of damp on the wall,

'which is the result of a water leak from the property above,

'but there's been no heating in here up until now,

'so we'll get it put on. If that doesn't dry out,

'I will get the damp-proofing people back just for one day,

'to make it absolutely perfect and get it all dried out.'

We actually started decorating,

and we realised that one of the walls wasn't drying out.

We knew we'd had a water leak in the wall from the property above,

but when we got a contractor to come out and check,

they found that we had rising damp,

so they took the opportunity to check both properties,

and as they went round, the machine beeped louder and louder,

and screamed all the way round both houses,

so we ended up having to have a damp-proof course put in

just about every single wall in both properties,

but at least now we know that the work's been done,

and we shouldn't have any problems in the future.

The damp problem meant Anita's schedule and budget needed revising.

The refurbishment took a month longer than the eight to ten weeks

she'd originally planned, and that had an impact on the budget.

'We've gone over the original budget slightly.'

We had built in a contingency,

but we hadn't counted in the damp-proof course,

which has actually been our biggest bill for both properties.

So we've probably gone a couple of thousand over.

We're waiting for some bills to come in,

but slightly over, including the contingency.

So this pair of properties took longer and cost more.

It's time to find out if this toofer will make double the money

for Anita and her partners.

We asked two local property experts for their opinions.

'The right decision has definitely been made to split them into two.'

First impressions,

bright. You can see it's newly painted.

Internally it's very transferable taste,

neutral throughout, and some nice features.

The location of the properties are fantastic,

in the town centre, within walking distance of all the amenities,

and the sizes of the lounge are good as well.

Anita and her partners bought the properties

for 52,000, and spent between 27,000 and 28,000 refurbishing them,

bringing their total outlay to around 80,000.

If they were to go on sale,

what do the estate agents think they're worth now?

The value of the first property, now that it's finished,

is in the region of £49,000.

The value of the second property is slightly more, due to size

and the new kitchen, at £55,000.

The resale value of that one I would see sitting

in around £50,000 to £52,000,

and the resale for flat two sitting in between £52,000 and £55,000.

Averaging out those figures would give Anita and her team

a profit of between 22,000 and 27,000 before costs and expenses.

The valuations are lower than I had hoped for,

but I do accept that the market has dropped dramatically

even since we bought the properties.

What about rental values?

The rental figures for flat one

would be around £350 per calendar month,

and for flat two, around £375 per calendar month.

With regards to letting the properties,

the first property, I would recommend £325 per calendar month.

The second property, due to the better finish and size,

£365 per calendar month.

I'm quite happy with those quotes for renting the properties out,

and based on the valuations, we will probably go down the line

of renting them out.

Although these flats won't make Anita a lot of money

in the short term, there are other benefits.

When I came in, I did fall in love with them,

and I thought they were really nice properties.

We've found out that they're actually around 500 years old,

so it's nice that they're kind of up and running again,

and ready to be moved into.

We'll be back next time to receive more news

from the front line of the property world.

-Join us then for more Homes Under The Hammer.

-See you.

-Goodbye.

-Goodbye.

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