Episode 75 Homes Under the Hammer

Hello and welcome. The auction room is an exciting place to be.

And you might even brave the bidding and bag yourself a bargain.

Yes. You never know what might happen

when you buy your home under the hammer.

Now, buying a property can be a long and stressful process.

But if you buy at auction, you get speed of service in the auction room.

That's because, when the hammer falls, the property is yours.

So let's find out what people bought on today's show.

We revisit this former martial-arts centre in Cardiff,

which packed a real punch when I first saw it.

-HE LAUGHS

-Wow!

I'll be checking how convenient this property in Watford is.

Got ladies' and men's loos, really good condition...

While I get the opposite impression with this house in Manchester.

I just don't think it's worth it.

It's one of those cases where you just leave well alone.

All these properties have been sold at auction,

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

-when they went under the hammer.

-There we go!

Back in May 2009,

I went to the historic but happening capital city of Wales, Cardiff,

to an area which was the childhood stomping ground

of Dame Shirley Bassey, no less.

I'm in a place which has one of my favourite names

of anywhere in the country - Splott!

It's a residential suburb of Cardiff.

Isn't that great? And there's a very interesting opportunity

on the cards. It's this building here,

the former aikido centre. It's a residential development opportunity,

but will it be "diamonds are forever" for the buyer,

or does it need "a big spender"?

# The minute you walked in the joint

# I could see you were a man of distinction

# A real big spender...

From the outside, this former martial-arts centre

is certainly impressive. It's a two-storey detached property

with a lovely brick-and-stone facade.

The guide price at auction was £42,000.

Let's take a look inside.

# Hey, big spender #

So, what's behind the big black door?

Um... OK. Well, downstairs here, one very large room.

I'd say slightly disappointing, though.

Big industrial space, if you like,

though bearing in mind this was a martial-arts club,

I guess this was a training area. You've got changing facilities there

but not a lot else.

Still, intriguing. Let's take a look upstairs.

# Everybody was kung fu fighting...

HE LAUGHS

Wow!

# In fact it was a little bit frightening #

What an amazing space!

Oh, you come up here, and this place has suddenly redeemed itself.

Look at this! The high ceilings, the wooden floorboards...

I guess this was where the main training area

for the martial-arts centre would have been.

So, what could you use this for?

Well, the biggest issue, at first glance,

is the fact that you've only got light on the front and that side

of the building, so if you're converting this to residential,

you've got that whole wall there and that one

which has got no windows in it, so you'd have to get creative -

think about knocking it down, putting a steel frame inside,

and converting it into flats.

Er, the options are endless and very exciting.

There are many options here,

and it's a great space for sure.

But the building is not without its problems.

Redevelopment as residential will need the planners on your side,

not to mention the neighbours.

Structurally, from the outside it's clear

that the walls and roof are in serious need of repair,

and that's going to cost.

But with a guide price of £42,000,

I think there's a lot of opportunity for this property.

So, will this former martial-arts centre be retained

and maybe converted into flats,

set up as a community centre perhaps,

or knocked down and replaced by houses?

I fear it may well be for the karate chop.

Let's go to the auction and find out what happened.

On we go now, then, ladies and gentlemen,

to lot number 24 in your catalogue.

Detached two-storey commercial premises this time.

I have a £49,000 reserve,

and I have a £49,000 proxy bid.

So what am I bid for it? Can I see 50 in the room, please?

I am selling all the time. I have a £49,000 bid.

At £49,000 I am selling.

50 if you like. At 49,000...

50. Thank you. At 50,000 I'm bid.

51 for my proxy bid.

At 51. Two if you like now, madam. My proxy bid is out.

At 52,000. I'm selling all the time.

It is your bid, madam. At 52,000.

Can I see three anywhere now? It's the lady's bid.

At £52,000. She's going to get it if you're not quick.

Have you all done, then? Three, thank you, standing in the back.

I thought you'd got it, madam. At... Four. 54 for the lady.

55, will you, sir? Five. 55 for the gent.

56, please, madam. 56, I'm bid.

At 56. Are you coming again, sir? Don't shake your head!

You don't get it that way. At 56,000 for the lady, then.

At 56,000. Are you coming again, sir?

Yes or no? The lady's going to get it.

£56,000. Have you all done, then?

At £56,000...

Lady's bid. Thank you.

The successful bid of 56,000 was made by Noor

on behalf of her husband, Ahmed.

Ahmed is a retired child psychiatrist

who's using his pension pot to invest in property.

He already has six others, five of which he rents out.

I met up with the doctor to find out if he had a remedy

for this ailing building.

Beautiful, beautiful.

I'd love to see these floorboards cleaned up.

I hope we'll keep on top of it, for the time being at least.

-Listen, congratulations.

-Thank you.

-Interesting project!

-Very.

-Tell me why you wanted to buy it.

-Because it's interesting.

-OK!

It's different than other buildings around it.

It seemed to have a character of some shape.

-I didn't have an opportunity to come inside...

-Really?

..but, you see, it's location, location, location,

so you have to study the territory around you.

You have to know what buildings are around,

so you can think what is the potential of developing this into,

and I thought that was a reasonable price.

Of course, I always advise against buying at auction

without viewing the property first,

but Ahmed had at least done valuable location research beforehand.

So, what's the plan for this place, then?

I don't think there are clear plans as yet, actually.

It goes all the way from demolishing it and redeveloping it from scratch

into, kind of, why not keep the walls...

So no clear plan yet, then.

There's quite a difference between the option of demolishing

and rebuilding and converting the current building to flat,

which is Ahmed's other idea. Whichever he goes for

will have a big impact on the budget, for starters.

Do you have any idea of budgets? How much have you got to play with?

With this size, then, the minimum I would think of,

if we can make that a couple of semis,

or three flats, that would be worthwhile.

Er, that will mean we may need to spend maybe £70,000, £80,000

on developing it and so forth.

So, the doctor's budget for redeveloping the building,

either by rebuilding or converting it to flats,

is similar - around the £70,000 to £80,000 mark.

-What kind of timescale have you got?

-Realistically I give this project...

a year. I'm hoping it will be eight months, something like that.

That's a realistic kind of thing, really.

As there are no planning consents in place here,

I just hope that eight months to a year will be long enough.

And although Ahmed may be hazy over which direction to take,

he's very clear about making an informed decision

based on professional advice. So, time to meet his trusted architect.

Somas, you're Ahmed's architect. What do you think of this place?

Initially when I saw this building,

I thought, "It has got character." That's what I told him.

And if he can retain the building in the development,

that would be a great achievement.

So I am in the process of designing something

where I will be retaining the building.

How are you going to do that? What ideas do you have?

It's creating small openings to act as light wells,

so that you can get light into the middle of the building,

so you can have bedrooms looking into the courtyard,

and yet keep the structure as it is.

I'll try my best to convince the doctor

that that is the best,

and try to show it in terms of economising wherever possible,

to reduce the cost in the conversion,

and get as many units as possible

so that it becomes a better return for him.

Ahmed gave himself a year to complete the work.

But when we first met up with him again in January 2011,

20 months later, things weren't quite finished.

It wasn't tenant-ready yet, but there was an interesting story to tell.

On the inside, they'd put down a brand-new floor.

So where the accommodation used to be over two floors,

it's now on three. So, why all the delays?

The original hope I had at the very, very beginning

was that I may have six one-bedroom flats.

We applied for that, and then were told no,

and so eventually, after some long negotiations,

we agreed to three one-bedroom flats.

So Ahmed's grand plans for six one-beds were rejected

in favour of three larger one-bed flats.

Each flat comprises a double bedroom, a bathroom

and a large kitchen-dining-living area.

The flats are pretty spacious,

each measuring around 100 square metres.

All the to-ing and fro-ing with planners really held Ahmed back,

and then there were the neighbours to get on-side.

We had to negotiate with the neighbours

how to go through the process of the development

and how to keep them kind of comfortable,

and coping with...

Ah, yes, I suspect builders around the place are intrusions,

so in that sense they had reason to be kind of...to be comforted.

It's always wise to see things from the perspective

of those living close by, and keep things amicable.

One agreement that was reached was for Ahmed to rent the garden space

of five neighbours to put scaffolding up

to take off the roof.

So eventually we were able to make the deal,

and eventually we were all kind of happy with the work to progress.

Phew! So the builders could then set about creating

three one-bedroom flats.

There's one flat on the ground floor,

one apartment on the new first floor,

and a light-and-airy penthouse on the top floor.

But the most intriguing feature of the accommodation

is that it's all been built around an ingenious light well.

# Light up, light up

# As if you have a choice #

OK, so this needs a bit of imagination!

But ignore the scaffolding planks at the top

and picture this shaft painted white, and you'll get the idea.

Ahmed hoped that when this was finished,

it would bounce the light around, creating a bright and spacious flat.

Later in the show, we catch up with the project

another six months on, to see whether Ahmed's bright idea

is finally complete.

# Baby, it's cold outside #

On this cold and snowy day,

I'm 20 miles northwest of Central London in Watford.

It's an important commercial and retail centre,

and historically was on the common route from London to the Midlands.

It's no surprise that these transport links

have continued to grow, as there's access to the M1 and M25,

with good train and Underground links.

But what about the housing around here?

This is predominantly a residential street in Watford,

with a number of reasonably modern houses,

very typical for the area. However, the property I'm here to see

had never been lived in. The guide price was £165,000.

It's a pretty modern build,

and I don't think you're going to be struggling for parking

with this space out here. I know it doesn't look like one,

but it's a church!

SONG: "Hallelujah Chorus" by Handel

It may not appear to be a traditional church

in an architectural sense, but its location in the heart of the community,

on a residential street, could benefit a shrewd purchaser.

So, this is the foyer.

Gosh! Do you know, it's clean as a whistle in here!

It's almost as though it's recently been renovated.

You've got the ladies' and men's loos, really good condition.

And this is the space!

Goodness! There's a whole load of nothing in here.

There's actually no character at all.

I was expecting a few stained-glass windows.

What you do have, though, is fairly new double-glazed units,

so that's one good thing.

I'm just wondering what you could use this room for.

You've got some heating down there,

and there's air conditioning up here,

so you don't have traditional radiators.

I'm just wondering if there's any way

you could increase the square footage by knocking through here.

I'm going to investigate.

So it's a serviceable building which is in pretty good condition.

But with a big, plain room like this,

I think the selling factor would be the amount of space you've got.

Could the answer lie outdoors?

You've got a little bit of room outside this building here,

and I don't think you'll have too many problems getting permission to extend.

It could open up the opportunities of what the place could be used for,

and I think it'll make the world of difference to the interior.

It may not be a huge amount of room,

but those extra feet could open up your options here.

And, as the space at the back has no other use,

it would be a real shame to waste it.

So, what could you do with this place?

Well, the current classification is D1,

which means this building can be used for medical or health services.

It could be used for a day nursery, a creche,

education facilities, or as a place of worship.

You could also apply for a change of use.

However, there are only so many things you'll be able to do

with a building like this. I'm not so sure this building lends itself

to make a nice cosy home, but what about a development opportunity?

Could you knock it down and replace it with two new builds,

if the local planning authorities agreed, of course?

You know, I think it's definitely worth a bit of research.

I love the fact you've got lots of options with this place.

But what does the local property expert think?

We asked one along to tell us what she thought

of this former church that was guided at 165,000.

The building's in very good condition.

It has air conditioning, double glazing,

good facilities.

What's the development potential of this place?

There's definitely a strong argument for viewing this as a plot,

and possibly a developer knocking down the building

and putting residential dwellings on the plot.

The rental value of the premises as it stands,

with its current usage, I would say you would get in the region

of £15,600 per annum.

Because it is on a sizeable plot, we would look to market the premises

at roughly £250,000.

So, a big open space in need of some inspiration.

I suppose as it is, it is a good blank canvas.

Let's find out who had a vision for this place over at the auction.

Lot 37. We move up to Watford now.

Who'd like to kick off on this? 150 in the aisle.

Thanks. 150. 155.

155.

160. 165.

166.

167.

168.

169. 170.

This is exactly what every seller wants -

two bidders fighting it out.

It's not long before the bids shoot up past 240,000.

241 with you.

242.

If not, 241 on my left.

First time, second time, third...

242. 243.

244.

245.

I know what I'd bid.

You're not with me. 246?

No? 245 on my left.

246 elsewhere? If not, 245.

First time, second time.

Third and last time. Have you all done?

Sold, 245. Well done. Sorry, at the back.

That successful bid of 245,000,

a massive £80,000 more than the guide price,

was made by Rudra, a full-time property developer.

He and his wife Bhama have an interesting plan

for this former church. I met up with Rudra

at the property to find out more.

-Rudra, congratulations. Lovely to meet you today.

-And you.

What's the story behind you wanting to buy this?

We've got a little boy, and we've always looked around at nurseries,

and we couldn't find one,

so we thought we'd build our own from scratch.

So you saw this and thought of it as a nursery?

-Yes.

-So when you viewed it for the first time, what did you think?

Good. It had potential. It wasn't as big as we thought,

but I thought it had potential to extend

and make it into an ideal day nursery.

You are going some, buying a nursery just because you couldn't find one for your son!

Yes, but we thought we could provide a good service,

and, you know, it's nice to have your own,

and you can drive it yourself then.

That's certainly dedicated parenting,

and what we find here is a building

that seems to be offering a lot of opportunities.

So, you're saying that you feel that you'd need to extend this?

-Mm-hm.

-Where would you do that?

Just behind where you stand. We'll be punching a hole through there

and creating a baby room, and on this side would be a kitchen,

and obviously this will be the main day room.

So when you saw it for the first time,

did you think, "Ah! This is perfect"?

-Yes.

-And how much experience in property do you have?

I've got some experience. We've done conversions

and new builds, but nothing in the commercial sectors such as this,

and involving other people's children, primarily.

Rudra may not have any experience of running a nursery,

but he does know his way round the property market.

That means he's aware of many unexpected legal issues

that could crop up.

Was there anything that took your eye in the legal pack?

Did you read it prior to the auction?

We went through it. There is an overage.

There's a clause within it,

which, again, we have to share it with the original sellers.

But it's limited to ten years, so...

So you need to keep these premises for ten years,

otherwise you have to pay a percentage...

-Yes.

-..to the original vendor?

-Yes.

-And how much is that percentage?

-It's 20 percent of the gain.

Rudra and Bhama view the nursery as a long-term investment,

so they don't see the sell-on clause as too much of an issue.

The good news is that the D1 classification

covers the building for use as a nursery,

so they don't have to apply for change of use.

But they will have to get planning permission

to extend at the back.

So, what sort of budget are we looking at here,

-to do the work that you need to do?

-We've earmarked about £60,000.

How long do you think it will take to get all the work sorted out?

It's going to be about 12 to 16 weeks.

-And you're quite certain on that?

-We'll try to.

How good are you at keeping to figures and timescales?

When you come back, we'll find out whether we have been.

Rudra hopes the paperwork won't take more than six weeks

to get signed off. After that, that's when the real work starts.

You have mentioned that you've got a little bit of experience in property.

Have you thought about potentially redeveloping this site,

maybe building a couple of houses here?

We did look into the option,

but our primary goal was, we wanted a nursery, a nursery site.

But that's a real good sort of failsafe, I suppose.

We can still probably put - we've spoken to the planners -

-put two houses up.

-That's something you can think about in the future.

Yes. Maybe after the ten years.

-Exactly. Whatever you do, stick with the ten years!

-Exactly.

Good luck with this. It's really an exciting project for you,

-and it is your time. Well done.

-Thank you.

-Thank you.

Rudra and his wife are taking on a brand-new, exciting challenge

in their lives. But I've got a feeling

the church renovations are going to be the easy part

compared with running a nursery!

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

Coming up - this house in Manchester is far from being homely.

Well, as you can see, it does need some work.

Turning this church in Watford into a nursery wasn't child's play.

They suggested that we have the nursery up and running,

and then do the extension.

But first, in Cardiff, Ahmed has been selfless

with his renovation.

It's not what I want.

It's what someone who will live here would want.

Now to Cardiff, where, back in 2009,

this former martial-arts centre sold at auction for 56,000.

It was bought by Ahmed, a retired doctor,

who was looking to build up his portfolio of properties.

But he wasn't quite sure what to do with this one.

I don't think there are clear plans as yet, actually.

It goes all the way from demolishing it and redeveloping it from scratch

into, kind of, why not keep the walls?

He decided not to demolish the building,

and planned to convert it into modern flats to rent out.

He gave himself a reasonable timescale to work to.

But 20 months later, when we first returned,

he hadn't quite done as much as he hoped.

The work was delayed waiting for planning permission,

and when his proposal for six one-bed flats fell through,

Ahmed had to settle for converting the property

into three large one-bedroom flats. But in order to do that,

he had to create a whole new storey in the property,

and there were other delays, too.

We had to negotiate with the neighbours about the development,

and how to keep them kind of comfortable,

and coping with...

Ah, yes, I suspect builders around the place are an intrusion,

so in that sense, they had reason to be kind of comforted.

So, six months on from our last visit,

and just over two years since he bought the property,

has Ahmed finally completed the project?

# Trust me, trust me, I'm a doctor

# Trust me, trust me, I'm a doctor

# I know, I know what I'm doing wrong #

As you can see, each of the flats has been finished off nicely,

with new flooring throughout

and fresh paint on those new interior walls.

Ahmed has put modern, stylish shower rooms and kitchens in each flat.

Although the colour scheme and fittings are all fairly neutral,

remember, he did plan to rent the flats out.

Honestly, when we do a project like that,

it's not what I want.

It's what someone who will live here would want,

and how it can be comfortable, how it can feel safe,

how it can feel kind of refreshing,

er, liveable in.

The piece de resistance is the conversion of the top floor

into a bright penthouse flat.

There's a lot of space up here,

although the bedroom is a little on the small side.

I would have gone for more substantial central heating

than those heaters, but those VELUX windows in the roof

make the whole place shine.

SONG: "Ray Of Light" by Madonna

# Quicker than a ray of light

# Quicker than a ray of light...

And it's Ahmed's favourite too.

I like the top flat, actually.

It's, er, very, very pleasant,

very, very kind of well lit,

and so many kind of windows everywhere,

and very comfortable, very open.

Somewhere you really feel comfortable in.

The other two flats below only have windows at one end,

but Ahmed's still managed to keep them bright

with the ingenious light well

running from the top of the building.

# Quicker than a ray of light

# Quicker than a ray of light

# Quicker than a ray of light... #

This is part of the atrium, they call it.

It's a place where you get extra lighting

for the whole building from.

They can have an indoor garden here of some shape.

I can see myself here sitting with a couple of chairs

and a little table, and kind of enjoying the sun

when the sun is coming here,

so that's a very practical part of the ground floor here.

Ahmed's not the only one happy with the outcome.

So is his architect, Somas.

I am very, very happy. It's three flats, large flats,

rather than, you know, one house.

It's more beneficial for my client

because he can get a better return.

Originally everyone said this can be only one house,

but that wouldn't have been financially a feasible proposition,

so we went in, tried our best, and got him three very large flats.

He's happy. Inside, the property looks completely different

to what it was.

# Love

# It's so crazy, make my heart go oops-a-daisy

# Cos I love you inside out #

Overall, Ahmed's spend on the property increased

from his original budget of 70,000 to nearer 90,000.

Added to the 56,000 he paid at auction, that's a total outlay

of around 146,000.

Will his hard work return him a decent profit, though?

We asked two local property experts to give us their thoughts

on the place.

Well, the transformation's been immense.

What we have here is now a great volume of space

coupled with contemporary modern living.

So from an overall feel, as such, it creates space, atmosphere...

I like the open-plan space. I think that works very well,

and the tunnel coming through the centre of the flats

is a massive added bonus.

I probably would have done a more luxurious finish,

but that's from a selling point of view.

I think the top floor, the penthouse, is probably my favourite,

the fact that it has the most light, and the views as well.

And I suppose, from that point of view,

that gives you the independence that you're not close to anyone,

as it were. You're at the top of the tree, so to speak.

So, if Ahmed did decide to sell,

what would he get for each individual flat?

Remember, the total spend on the whole building,

including the conversion work, is around 146,000.

In my opinion, the sale value of the ground floor and first-floor flats

would be £100,000, and with the penthouse, with the views,

in my opinion, the resale value would be £110,000.

The sale value of this property would be looking to achieve

around £100,000 for both the first floor and the ground floor.

The top floor maybe a little bit more,

around about 100 to 110.

That's a combined total of around 310,000,

a massive potential profit of £164,000,

minus the usual expenses and taxes, of course.

What does Ahmed make of those figures?

That's a pleasant surprise, if you like.

It can make up for the 20 extras that I had to pay for.

But his plan is to rent them out,

so what do the experts think he could charge per calendar month

for each individual flat?

The rental market for this property is good.

I think you'd be looking to achieve around £525 per calendar month.

In my opinion, the apartments would rent

for £525 per calendar month each.

Yes. On average, that would be what I expected. That's fine, yeah.

Those rental figures will give him a return

of £1,575 a month, if he rents them all out,

giving him a fabulous yield of just under 13 percent.

So it may have taken a good while longer to complete this conversion

than he first planned, but the future looks very bright for Ahmed.

Well, I'm about five miles east of Manchester city centre

in Audenshaw, famous for, amongst other things,

its three reservoirs, built by the Manchester Corporation

between 1877 and 1882. Now, when they built these,

unfortunately the original hamlet of Audenshaw was lost in the waters.

Still, they are hoping to open up this whole area to leisure pursuits

in the not-too-distant future.

# Well, you gotta come down to the reservoir

# I don't care who you say you are #

And at least in the meantime, Audenshaw will give you great access

to the countryside as well as the city of Manchester.

The property I'm here to see is right in the centre of Audenshaw.

It's a popular little spot, good schools,

and you're only 14 minutes from the centre of Manchester by train.

I'm here to see something that sounds like good value.

It's a mid-terrace, two bedrooms, and a guide price of 45,000 quid.

Nice redbrick construction. Let's take a look inside.

Well, if it's anything like as sturdy-looking on the inside

as it is on the outside, then, we're on to a winner.

You can't beat this cul-de-sac location.

There's a park at the bottom and a shop at the top.

It's very attractive.

Nice little entrance porch, keep the cold and the draughts out.

Into your front living room.

Very, very standard layout, I have to say.

Bit of damp on that front wall, rising damp.

Not that difficult to resolve with a chemical damp-proof course,

but you do want to check the floorboards

to make sure they haven't got rotten in the process.

Stairs where they should be in this kind of property, in the middle,

then through into your kitchen. Well, as you can see,

it does need some work, so to speak. But it's a good-size space,

nice big window so you've got lots of light,

and again, fairly traditional for this kind of property,

the loo, the bathroom, out the back. But people round here,

these kind of properties, it's kind of OK. It's accepted.

What's less acceptable, though, is the state of that bathroom.

The tiles and bathroom suite are way beyond repair,

so I think you have to cough up for a refit in here and in the kitchen.

So, upstairs, no great surprises - two bedrooms,

one at the front, one at the rear. You know, reasonable sizes,

and in terms of the internal layout of this place,

I don't think there's a lot you would do.

Move the bathroom, perhaps? I really don't think it's worth it.

The only thing you will have to factor in

is some money to sort out the central-heating system

and the hot-water supply, because it's clearly a little bit dated.

Even with the boiler out of the way,

I can't see how you would squeeze in a bathroom on this floor

without making one of the bedrooms far too small.

I wonder if the proportions are as restricted outside?

At the rear of the property you've got a little back yard,

and I'm just sitting here thinking,

is there any point in putting an extension on this property?

You could possibly do it, but in this instance,

I just don't think it's worth it.

It's one of those cases where you just leave well alone.

With a guide price of only 45,000,

is a local property expert as happy with the property as I am?

The property is a great first-time-buyer property

or buy-to-let property. It's got two good bedrooms,

and the bathroom extension... I would move the bathroom upstairs

and put the kitchen into the extension,

so you'd have two great reception rooms, a kitchen,

one big main bedroom, a smaller second bedroom,

and a bathroom. But it's ideal for the first-time buyer, and it's in a lovely position.

And, if it's bought as an investment,

what would he expect to get for this one as a rental?

'To rent this property, we would expect to achieve

'around £450 per calendar month.'

Would it do equally well on the sales market

once completely refurbished?

If we were selling this property,

we'd expect to get between £85,000 and £90,000,

but if it was done really well, to a high standard, £90,000.

Well, this is the kind of house that would be perfect

for a first-time buyer, or could well form the bedrock

of a property-investment portfolio. Not too much work to be done, and rent out ten-a-penny.

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

Lot number 18, two-bedroom terrace. Got a phone bid on this one.

What's this worth? 45? 45,000? £45,000 I have.

Do I see 50? 50 bid. At 50,000. Back on the phone, at £50,000.

Do I see 51? Your bid at 51. New bid at 51.

At 52. At 52. At 53. At 53,000.

53. 54. 54. 55. 55. Your bid, at 55,000.

56. At 56,000. 57. 57 we're at. Do I see 58?

At 58,000. 59, anywhere? At 58,000.

At 58. 58 and a half, then?

OK. It's going to be sold at 58,000.

Any advance on £58,500?

Rolls off the tongue. At 58 and a half, then, for the first time.

At 58 and a half for the second time.

Are we all done at 58,500?

There we go. Paddle 331, telephone bid.

# Hanging on the telephone #

It's sold to telephone bidder Joe, a 22-year-old first-time buyer.

He got this property for £58,500,

£13,500 over the guide price, and I went to meet him.

-Joe, good to meet you.

-Good to meet you.

-Congratulations.

-Thank you.

-You were on the other end of the telephone.

-I was, yeah.

-How was that?

-Very nervous. Very nerve-racking.

-What made you make the decision

-to make a telephone bid rather than be at the auction?

-At work.

-Oh, right.

-I was working at the time.

-Nipped out for a coffee break, and...

-Yeah.

-..bought a house!

-Yeah.

-Tell me about you. What do you do?

I'm a civil engineer. I graduated from university about 18 months ago,

so I've been working in Manchester on the new Manchester Metrolink.

So you've bought this for a place to live?

Initially, yeah. I was looking to rent somewhere,

and I started looking at the price of rent,

and I saw this place come up on auction,

and the price seemed about right, and I thought,

if I can make them figures work, it could be a good investment.

I came for a quick look round. It seemed quite big,

good rooms, and I think the work's quite manageable.

-I think I'll be able to take it on.

-Well, being a civil engineer,

-you must be vaguely practical.

-I'd like to think so.

-I'd like to think so.

-Build bridges and things,

but a bit of decorating might be a bit of a challenge.

Yeah. It might be the details that catch me out.

-Is this the first house you've bought?

-First house, yeah.

How do you feel now you've spent the money?

I'm pleased with it, yeah. The more I come in,

I think I've made the right decision. Obviously time will tell,

once I've done the work, but I'm confident it's a good purchase.

So, a good solid house.

What does this civil engineer have planned

for his very first property purchase?

'Well, first of all I'm just going to strip everything back,

'um, all the wallpapers.

'The kitchen itself will need taking out.'

The bathroom's not in too bad a state,

so I hope to save money by not spending too much on the bathroom.

The bedrooms themselves, the wallpaper, again,

stripping back. I'm going to get rid of them wardrobes.

They're a bit outdated these days.

There's an immersion heater upstairs. It's quite a large cupboard,

so I'll try and get rid of that and replace it with a combi boiler.

I think I could make quite a bit of space from there.

Right. I noticed a bit of damp on the front elevation of the house.

-Have you looked at that?

-Yeah. It seems to have dried out,

so hopefully it shouldn't be too much of a problem.

There is some water marks from the guttering,

so I may need to replace them, but I'll be stripping it back

and seeing what the problems are.

-Is the plan to do the work yourself?

-Yeah, as much as I can.

Hopefully my friends will help me out,

but that's the only way I can do it, to save on labour costs.

-Cos what's your budget?

-Budget's about 8,000.

Right. That's not a bad budget for this kind of property.

The bits that will take up the money is if I'm looking at rewiring,

obviously the boiler, and also windows and doors,

so there's some quite large expenses in there

that I need to take into account.

To help his money stretch even further,

Joe will move into the property while he renovates it.

So goodbye, social life for a bit, then.

Do you think this might give you the property bug?

I'll find out in a few months' time. I'm quite excited to do the work,

so hopefully I'll keep that... carry on that excitement,

and it'll be something I want to do again in the future.

What's the timescale? As quick as poss,

-cos you'll be living here, but roughly?

-Four to six months.

Right. You'll be doing it in your spare time.

Because I've got a job, which obviously takes priority,

and this will be my spare time.

Congratulations. It's good to see you get on the property ladder.

-I look forward to seeing how you get on.

-Thank you. I will.

Hopefully Joe won't need to call on too much of his civil-engineering degree to sort this place out.

I don't think there are too many structural issues.

And it's great that he bought his first property under the hammer.

You can find out how he gets on sorting it out later in the show.

You never know quite what you'll have to face

when you start your renovations.

Things don't always go to plan in the property world.

No. So, have our new owners put hammer to hail,

or has it all gone Pete Tong?

Back to Watford in Northwest London now,

to see how Rudra got on with the church premises.

The property was built as a place of worship in the '60s.

Although it wasn't exactly a cathedral -

no stained glass or altars here -

this hall did offer a very flexible business opportunity.

Property developer Rudra saw the potential the building had.

He'd dreamed of running a nursery since his son Reuben was born,

and they'd struggled to find a local nursery for him.

But, never having run anything like this before, there were risks attached.

I've got some experience. We've done conversions and new builds,

but nothing in the commercial sectors such as this,

and involving, you know, other people's children, primarily.

Rudra planned to extend at the rear of the property,

to add a kitchen and a quiet room for babies.

The couple paid 245,000 for the property,

and put aside a budget of £60,000 to refurbish the interior

and build the addition. They thought it would take three to four months.

We've come back just under nine months later to see.

Will it be kiddie heaven or planning hell?

SONG: "Kids" by Kylie Minogue (with Robbie Williams)

# And we'll paint by numbers

# Till something sticks

# Don't mind doing it for the kids #

The once-drab exterior is now unrecognisable

as the churchyard makes way for a nursery yard.

But there's no extension.

Since you were last here we applied for planning,

and initially they said we could have the extension

as we proposed. Subsequently, because of the traffic-flow issues,

they suggested that we have the nursery up and running,

and then do the extension.

The extension would have been through the rear patios.

That would have created a dedicated baby room

to care for about six babies,

but unfortunately we now have to bring it into the main hall,

and then later move it across once planning is attained.

So Rudra decided to withdraw the application

and follow the council's advice to reapply at a later date.

But he has done the groundwork for a future extension.

We've gone with the existing footprint,

but we've put the foundations in and the boundary walls in place,

so when we do get planning, there won't be a great deal of disturbance.

The nursery can carry on whilst the extension's being done.

Although he wasn't able to add the extra space he wanted,

Rudra has not kept his imagination in check.

This former church is now well on the way to becoming

the perfect playground for pint-sized people.

If you remember, when we bought the property,

behind here where we are standing was the entrance lobby.

This side we had some toilets, three toilets, if I recollect,

and on this side was just blank.

We've converted this side to form the offices,

and we've changed the layout of the toilets around

to face the main hall,

and we've got the children's loo and a store room,

which has now become the kitchenette.

This hall has remained pretty much the same,

apart from the patios leading out to the play area.

This area would obviously be subdivided now

to form the children's play area, the two-to-threes,

and three-to-fives,

and also we will incorporate, on this corner,

a children's rest area too. Now the work's finished.

The transformation's complete, and I'm extremely pleased with the results.

The original idea for the nursery business

grew out of Rudra and his wife Bhama's experience

of trying to find quality childcare for their son Reuben,

and it's been a family affair

to get the church conversion to this stage.

We have our dinner, then we sit down, go through the numbers.

I do the spreadsheets and he writes the emails.

We have it pretty much sorted out, who does what,

and, you know, as long as I'm in bed by 11, it's all right.

'Actually, I have to give all the credit to my husband.

'It's pretty much all his idea - the water pump, the bridge,

'even the outdoor space and the decking.'

We've done our children's toilets... It's quite special.

I haven't seen any nursery I've been to look at

have toilets like that, and we didn't have much.

We've done the best we could with what we had.

Rudra and Bhama bought the property for 245,000,

and completed the renovation work for their original budget

of £60,000, bringing their total outlay

to 305,000.

Time to hear what two local property experts think of their efforts.

Nurseries are hard to come by. D1 use is difficult to get sometimes.

You're competing with other D1 users.

This is a very high-density neighbourhood,

and I think the catchment area of the nursery will be excellent, probably.

There's always demand for nursery places across the board,

and especially in a residential area like this.

Well, that's a big thumbs-up for the nursery idea.

But what could the building now be worth?

A resale value on a property of this type

I would put somewhere in the region of £250,000.

Personally I see the value of this property at £200,000,

and as a going concern, I do not see the value increasing dramatically,

if at all, at this time.

Those valuations would mean a loss of between 105,000

and 55,000 before costs and expenses.

But it was never Rudra's intention to sell,

so he's not too worried about those estimates.

'When we bought it, the fallback option was to,

'if the business didn't succeed, convert it into two houses,

'so we knew the land was worth about stamp duty, which is £250,000.'

Although the property has not held its value,

Rudra and Bhama have a financial safety net in the worth of the land.

They have an agreement in principle from Ofsted

to open as a nursery, and are just awaiting the final legal checks

on their staff. They hope to start taking bookings

in the next month or so.

If this goes well, we're hoping to replicate this.

We want a boutique type of nursery,

not for the masses, and keep the numbers down

so it gives a homely feel. Hopefully we can replicate another one soon.

We're back in Audenshaw near Manchester

to see how 22-year-old engineering graduate Joe got on

with his very first-ever property buy.

Externally the two-bedroom mid-terrace was in good shape.

Internally the layout could be a drawback to potential buyers.

Not everyone likes a toilet off the kitchen.

But these are small but perfectly formed houses,

which can be difficult to alter.

Civil engineer Joe might be more used to building bridges

than stripping bathrooms, but he was willing to muck in

to help keep his costs down.

I'll do as much of the work as I can myself.

Hopefully my friends will help me out.

That's the only way I can do it, to save on labour costs.

First-time buyer Joe paid 58,500 for the house,

which was right at the top of his budget.

He knew it needed rewiring amongst many other things,

and he'd allowed just £8,000 for the refurbishment.

We've come back four months later

to see if Joe has made his very first house a home.

Outside, the old wooden windows have been replaced

and made watertight, but the house is not finished yet.

Joe has a full-time job, so he works long hours,

and only has evenings and weekends to do the work here.

But he's on his way to converting this neglected mid-terrace

into a contemporary home.

The past three months we've got quite a lot done.

We've been able to put new double glazing throughout the house.

It's had a full rewire. We've replaced the boiler

and put a combi boiler in downstairs so we could get a bit of space.

The main job now is decorating the whole house,

flooring and wallpaper, and then we can move in the furniture.

So, doing the work that this house needed

meant working up from the most basic level.

In the kitchen, we started by completely ripping out the kitchen.

We've ripped out all the tiles and all the wallpaper.

We then started by replastering the kitchen.

We've also added a new combi boiler in here,

so we could take out the immersion heater upstairs

to create more room. We've got new radiators.

The kitchen we've put in is an ex-display one,

which saved a bit of money, which has helped my budget quite a bit,

especially the price of some of the kitchens.

We've lowered the ceiling here as well,

which has enabled us to put downlighting in,

improve the lighting. It had been quite a tall room,

and also put some insulation in. We're now just waiting on appliances,

so then we'll have a functional kitchen,

then after that, a bit of decorating to finish it off.

Joe made the decision not to move the bathroom upstairs.

In addition, he's managed to save himself even more money

by keeping the white suite.

In the bathroom I installed a new shower direct from the combi boiler,

taking away the old electric. I re-tiled the bathroom.

The biggest problem, I've found, has been time,

not just for me to do the work

but even to find the people to come in to do the work,

and organise them, so I was, like, juggling two jobs at once.

So no time to himself this summer.

Joe has discovered that doing up your own property

is indeed a full-time job,

and one that has had to fit around his other full-time job.

It's been hard work after work, knowing other people can go home

and chill out or go for a drink or whatever,

and try to keep yourself motivated to finish work at six, seven o'clock

and then come up here to start tiling or painting or whatever it may be,

particularly on the weekends after a long week.

Sometimes it's the last thing you want to do,

but at the end of it, it will have been worth it.

Upstairs there were already two good-size bedrooms.

Now there's just a little bit more.

In the main bedroom we stripped all the wallpaper back.

We've broken away some rotting plaster around the windows,

replaced the windows with new double-glazing.

We've also lowered the ceiling, allowing us to reinsulate it there,

and also provide downlighting to improve the lighting in the room.

We've started to decorate. It just needs its final coat of paint,

and obviously we're going to wallpaper this wall here.

Er, we've also been able to put in a new en suite

by knocking through the wall to the cupboard where the immersion heater was,

and I'm looking forward to having an en suite upstairs.

Sounds like he's ready to move in.

But having an en suite was not in his original plans

or his original budget.

'Er, my original budget was 8,000.'

When complete, that will be 12,000.

It's increased due to extra things that we've done,

including the en suite. One of our main problems has been my time

to be able to do it, with work,

so we have had to get some people in a few times

to do some of the work which I had originally planned to do myself.

Joe bought the house for £58,500,

and spent £12,000 on refurbishing it,

bringing his total outlay to 70,500.

Time to find out what two local estate agents think of his work.

What I like about what he's done so far,

the kitchen's really nice.

I think the en suite is a nice touch in the main bedroom.

Again, most people renting or buying this type of house

would be a couple or a single person,

so the bathroom in the bedroom is a nice touch.

It's a terraced house, so there's not a lot more you can do to it.

The property, I feel, would appeal to first-time buyers.

It would appeal to them on the basis

that it's going to be at the lower end of the marketplace.

Around here there's a few semi-detached properties,

but this would be perfect for them because there's no work needed,

and will be an affordable price.

What could the property sell for?

The resale value of this property, when it's completely finished,

I would put between £80,000 and £85,000.

Once completed, I would look to market this property

offers in the region of £85,000.

Those valuations would give Joe a profit of between 9,500

and £14,500 before costs and expenses.

That's pretty much what I was expecting,

so I'm quite happy with that, yeah.

Although Joe's going to live here for the short term,

longer term, his work may take him anywhere in the UK,

so what do the experts estimate for rentals?

The rental valuation I'd put on this when it is finished

is between £475 per calendar month

and £520 per calendar month.

Once completed, I would look to rent this property

at £450 per calendar month.

Yeah. I think that's pretty much what I was expecting.

I think I was expecting around £475,

so to get even higher than that would be a bonus.

With Joe very nearly ready to move into his new home,

is this the start of his very own property portfolio?

It's been a success as in I've finally got my foot on the property ladder.

If I'd gone for a finished house, I couldn't have afforded it.

This way I've been able to get my first property.

It's also been a reasonably enjoyable experience,

stressful at times, but I'd definitely do it again.

We hope you've enjoyed watching, and learnt something along the way.

Join us next time for more auction-room action

-on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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