Episode 97 Homes Under the Hammer

We all know that the price of property can go down as well as up,

so it's really important to buy at the right price in the first place.

And one good way to do that is to buy your home under the hammer.

Well, if you'd like to have a go at buying at auction,

but haven't done so far, then maybe now is the time to start.

The market is always changing, so you have to judge when is the right time to buy.

Today's bidders have already put their money where their mouth is. Here's what they bought.

In Woodhouse, Leeds, a property that gets double thumbs up from me.

I think it's got great potential. Yeah, really.

In Croydon, Surrey, a house that needs tearing to shreds.

Now you can see, oh my goodness, it needs ripping apart.

And I fear it's time for this old community centre in Lincoln

to exit stage left.

Sadly, I think in reality it might be the final curtain call for this place.

All of these properties were sold at auction, so we find out

who bought them and what they paid for them when they went under the hammer.

Sold.

This is Leeds, birthplace of Chris Moyles

and Scary Spice herself, Mel B.

# Every boy and every girl Spice up your life... #

Not only that, but this cosmopolitan city in Yorkshire is home

to the biggest student population in the UK outside London.

I'm in an area called Woodhouse, about a mile from Leeds city centre.

It's a really popular area for students,

as you can literally walk to the Leeds University campuses from here.

And it's got great transport links into the city centre and some local shops.

So what is there not to like?

# Baby, I like it The way you move on the floor

# Baby, I like it I-I-I-I like it

# Baby I like it The way you move on the floor

# Baby, I like it I-I-I-I like it... #

Well, this is the more popular end of Woodhouse,

and I'm excited to hear of a property that's up for auction.

It's this end terrace over three floors and a basement.

It was just £50,000. That's a very low guide price.

I wonder what the reason is.

# There must be a reason why I'm king of my castle

# There must be a reason why I'm freeing my trapped soul

# Must be a reason why I'm king of my castle

# Must be a reason why I'm making examples of you... #

There are no obvious structural problems from the outside,

but guide prices like that are not without their reasons.

Let's take a look inside to see what they are.

Right.

That'll be why, then.

Severely fire-damaged.

You're not kidding.

Well, I can see so much when I'm wandering around,

but the big question is how much damage has been done

to the infrastructure of the house itself,

and you can't tell that just by looking superficially.

That needs a proper survey.

Fortunately, no-one was injured in any fire here.

It seems that the damage was caused by several small fires in each room,

perhaps created for warmth by squatters, so the damage isn't as bad as it looks.

So, look past the smokescreen,

and the property actually has a lot to offer.

The top floor offers some great views,

and has space for a bathroom and two double bedrooms.

On the first floor, there are another two decent sized rooms,

with original fireplaces and space for what could be a bathroom.

The ground floor also offers two good-sized bedrooms,

and then there's the large basement with its three rooms.

One of these used to be a kitchen,

and the other is ideal for a living and dining room.

But nothing is certain.

As this property has been fire-damaged,

the gas and electrics will need to be thoroughly checked by a professional,

and don't forget that all-important structural survey.

So let's assume that any professional report on this place

comes back giving it the thumbs up.

What could it actually be?

Well, setting aside how it looks right now, this is a fantastic house, especially for this area.

Because what you've got is lots of individual rooms

which could be let, surprise, surprise, to students.

But before you do that, you've got to take a lot of regulations into mind.

HMO, house of multiple occupation.

It's a licensable HMO because it's got four floors,

and it's got the six rooms.

So you're going to have to adhere to all sorts of regulations like fire regulations, ha ha!

You're going to have to put in a certain number of bathrooms,

a certain amount of kitchen facilities, sound insulation,

fire alarms and things like that, so lots of work to be done.

But in terms of profit, in terms of the space

and in terms of everything else that this needs,

I think it's got great potential.

Yeah, really!

So, a big house and a big renovation project to take on,

but an enticingly low guide price of just £50,000.

Let's hear what a local property expert thinks of it.

The property is going to appeal to a range of buyers,

particularly investors and parents buying for their son or daughter.

Because of the close proximity to Leeds University, I think this is a very good investment.

But how much would someone have to invest in it first?

Depending on your contact with trades, I would suggest anything

from £30-50,000 to improve it into a good quality accommodation.

Once that money's spent and the work done,

what could the financial returns be?

Once it's completed, I'd be looking to place an asking price

somewhere between £160,000 and £170,000.

And rental?

I would be looking at achieving around about £1,600 per calendar month to six tenants.

Well, it's a property that clearly needs some attention.

But if you can see through its current state,

I think there's a fantastic moneymaking opportunity here.

Good size, great location and a good guide price.

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

The vacant six-bedroom mid-terrace house

in need of complete renovation.

Start me off at £55,000.

At £55,000, 56.

57? He will, in the door, 57. 58.

With bidding fierce and competitive,

we rejoin as the auctioneer reached £95,000.

95. And a half.

96. And a half. 97. And a half.

98. And a half?

At 98. And a half anywhere else?

All finished, then, at £98,000 I am selling.

For the first time...second...

third and final time at £98,000.

All done, thank you.

That successful £98,000 bid came from 23-year-old Sapphire.

She's just finished her degree in marketing,

but like many other members of her family,

has her sights set on a career in property developing.

I met her back at her new four-storey house to see

what she's got planned for this hidden gem.

-Sapphire, lovely to meet you.

-Lovely to meet you.

-Congratulations. Well, sort of!

-Slight wear and tear.

-A little bit of work to be done.

Tell me why you wanted to buy this place.

As a student investment, and we know the area.

And it just seemed like a good house, good-sized rooms, things like that.

-You have to see beyond the blackness.

-Quite.

So tell me a bit more about you.

Well, I finished uni,

and then I basically came and started managing some student houses,

and as I say, some of those needed work, so I managed the projects of those,

and then from there we've bought a few, and just kind of expanded.

Sapphire's never done a project this big before, but it doesn't faze her.

She plans to complete it in a mere nine weeks,

and wants to put some sparkle back into the place.

Then she'll rent out the six bedrooms

on the ground floor, first and second floor to students,

and create a shared living area in the basement.

There's certainly space to do that.

But you do need to speak to the local council before doing a basement conversion.

You must also comply with building regulations if you change the layout in any way.

And there's even more to think about

when dealing with a property that's been fire-damaged.

With fire-damaged properties, you have to be careful. You don't know if the structure is damaged.

What do you know about the structure, and what have you done to check it's OK?

Well, we are getting a structural engineer in just to check.

You can see it's sound, but you know, with regards to which ceilings need to come down,

because some are cracked, but they're still sound.

But we just want to do a proper job,

so we'll get someone in to get further advice on that.

Fantastic. Going into six rooms and four floors

-brings you into the territory of houses of multiple occupation.

-Yes.

What are you going to have to do to satisfy the requirements for that?

I have filled in applications for those before and they've gone through.

But obviously you've got to take into consideration your windows or the fire doors,

um, there's some woodwork that will need fireproofing.

So all of that we will take into account to comply with.

-Right, but it will become a licensed HMO.

-Yes, definitely.

Who does the project - is it you, is it you in conjunction with people?

Well, I will probably find a team of builders. And this time...

I usually, if it's a smaller project than this, I will project manage it.

But at this scale I want a team to come in

and have a manager that can do it. I'll just keep an eye on things, but really...

Willing to pay the price for that?

Yeah, exactly. I don't want to be managing one electrician

with a plasterer, this, that and the other. I'd like a team so they know each other, so work together.

Talk me through the finances then - how much is it going to cost?

We're still getting quotes in.

Um, but we're looking, hopefully, to spend no more than 40,000.

But that's start to finish, with furniture and decor and everything like that.

-And that's employing a project manager as well?

-Yes.

-Great.

-What about other family being involved?

-I get good advice from,

well, a lot of family - my mum, my uncle particularly.

Um, I'm trying to get my younger brother to get a feel for things

-and help out a bit. He'll kind of... He's only 15.

-Oh, wow!

# One for my sister

# One for my brother... #

And it's younger brother Max who's keen to follow in Sapphire's footsteps.

He's also a joint name on the mortgage,

so has more than a passing interest in it.

-So Max, congratulations, you're part of this then?

-Yes, I am.

-What do you think about that?

-Eh, I think it's a pretty cool thing, really. It's good experience.

Um, my whole family does it, from my grandma to my sister now.

-Your grandma?

-Yeah. She was the one that sort of...

..she owned lots of houses and then she gave it to my mum, who is her daughter obviously,

and, like, my uncle, and they split the houses between them.

-Now my mum's got our whole family into it.

-How old's your granny now?

-She must be in her 90s, I think.

-Fantastic! So it's in your blood?

-Yeah, it is.

It's quite an ambitious project for your first project. How do you feel about that?

-Um...

-What did you think the first time you walk through the door?

-This is crazy!

-Congratulations. Good luck.

-Thanks.

-I look forward to seeing how you get on.

-Should be interesting!

# One for my sister

# One for my brother, this one's for you

# This one's for you. #

Well, many 23-year-olds are more concerned with partying than property picking.

And 15-year-olds playing computer games.

But it seems the team of Sapphire and her brother

are really going to get their teeth stuck into this project.

It's an ambitious one, lots of work to be done

and that £40,000 budget, it'll go like that.

How will they get on? You can find out later in the show.

I've travelled to Croydon in Surrey today,

the birthplace of top model, Kate Moss.

I'm hoping that the property I'm here to see has great proportions and great bone structure.

Let's just hope it doesn't demand huge sums of money.

# Girls on film

# Girls on film

# Girls on film... #

I'm here to see a three-bedroomed mid-terrace house.

It had a guide price of £130,000.

The auction catalogue tells me this lot

is a short distance from the University Hospital.

That's interesting because it's flagging up the fact there's a strong rental demand in this area

and that can only be a good thing.

As for the house, from the outside, it doesn't look like it's an emergency case.

I wouldn't say it's high risk.

I hope the inside doesn't need intensive care.

Oh! Well, Kate Moss may be a local girl but this certainly isn't model standards.

In fact, it needs a good old slap of night cream, if you ask me.

Look at the state of it, you've got a downstairs bathroom here and in this room...

It's a good sized family lounge. You can see, oh my goodness, it needs ripping apart.

The carpet needs to come up, the wallpaper needs to come off.

The windows needs replacing... You need starting over.

You've a fireplace here and you can see somebody's drawn all over it

so you'll need some heavy duty cleaner to get all of that stuff off.

A good space. You've got the kitchen leading off there.

Again, not a bad area, you could get to work on that and really liven it up.

You need to spend some money here.

Overall, you need to take a good, long hard look at this property

and go right back to the drawing board.

And not just that, I think you'd have to go back to the bare brick as well.

I imagine the plaster will need replacing

and the kitchen, well, that's pretty tired.

The bathroom, that's dead on its feet.

This house needs someone to come in and wake it up with new fixtures and fittings

and a skip-load of paint to enliven it.

Even though this house is incredibly dated

and it's in a right old state, what I do like is the fact you have

little windows everywhere, letting in lots of light.

Up here we have three bedrooms, two of a good size and this is the third.

A bit strange because it's really, really small.

You couldn't fit a single bed here, or here.

Partition wall, you know what I'd be inclined to do, take this down,

open the space up and just have one big impressive master bedroom.

Imagine this as one big room. Double aspect and spacious.

I know what I'd rather have and it really does seem like the best thing to do here.

Otherwise, as things stand, this upstairs layout really is unacceptable.

Then, you haven't seen the garden.

# I beg your pardon

# I never promised you a rose garden... #

You'll have your work cut out clearing up this lot!

Rubbish aside, it's a good size. Get out the secateurs and bow saw

and this could be a fantastic bit of outside space.

With its guide price of 130,000, has this place got what it takes to leave a mark on the market?

We asked a local estate agent what he thought of it.

This property needs full refurbishment. It needs a new bathroom, new kitchen.

Well, probably the central heating will be need looking at.

New windows, probably. Everything.

Once the work's done, what sort of rental income could be achieved?

This property would rent for around £850 to £900 per calendar month.

And for resale?

We would market this property at £170,000.

There is a ceiling price on this road and the aim of the game here is not to exceed that.

Therefore, the bathroom should stay downstairs because everything else in this property needs doing!

Whoever takes this on may want to reconfigure the upstairs

as bedroom three is teeny tiny.

Let's see who's up for this challenge as we go to auction.

Lot 80, where do we start?

It looks a 150, at least, house to me.

150 anywhere? 120, then? Do we go below 120? 120 on my right. 120.

125? 125.

130? 135.

140, 141.

142, 143. 144,

145. 146?

146. 147.

147, 148?

147 with you. 148? If not, 147.

First-time... Second time...

Third and last time, we all done? Sold, 147. Well done.

It was Graham and Sue who got the lot with their successful bid of 147,000.

Graham's a manager at facilities management company

and his wife, Sue, is an office manager.

If you think they look familiar, they appeared on the show in 2008

when they bought and renovated their first auction property in Kent.

I met them back at their latest Croydon purchase to catch up.

Graham and Sue, we meet again!

-We do.

-Yes.

-Three years on, you've bought another property. How's it been going?

We haven't done anything since. This is our second property.

Our son, Neil, took over the property

and he is now the landlord and we have tenants in the existing property.

Sue, what has inspired you to move on and get another one?

Just loved doing it the first time and it doesn't seem possible it's three years,

time has gone so quickly, but we decided this is the time we want to do another one.

Rested enough, ready to do it again.

The plan was to sell their previous renovation in Sittingbourne, Kent

but the drop in the market forced them to reconsider

and since then they've rented it out.

# Get together and do it again #

With this one, the couple feel it's the right time to step back into developing

and they aim to sell it once they've done a good renovation.

Want to bring it up to a nice good standard.

Change all the windows... The kitchen and bathroom need

a lot of attention and give it a new, modern feel to it.

I've noticed there's three bedrooms upstairs and an incredibly small bedroom.

-I'm guessing one of them has been partitioned off, am I right?

-That's correct.

What we're going to do there is, they're not really big enough for three bedrooms

so we're going to put it back to two.

What about the bathroom downstairs, do you think that will detract the value of this property?

What we're going to do there, we're going to enlarge it by pinching the hall

and making it longer so we can get a decent sized wash basin in there.

We won't really lose the hallway because we can use the lounge as the throughway to the kitchen.

-So you'll have to come in and come around and come through.

-Yes.

-You'll open up the bathroom and have more space.

-That's right.

-The bathroom is going to be in the middle of the house, isn't it?

-Yes.

We had looked about moving upstairs, but where the drains are, it's not really practical.

With space at a premium upstairs, I reckon Graham and Sue's plan

to expand the bathroom into the hall is fairly sound.

They have a healthy timescale of four months for the job, with 10,000 to spend on the renovations

but they also have a possible £3,000 for a conservatory which might be added as the work progresses.

Are you guys going to be working on this every day, is this your main focus?

We both work full-time so it's going to be evenings and weekends

but we've got a big workforce in family and friends.

And we live locally, whereas the previous property we had quite a distance to travel

and that did make quite a big difference.

We live just a few miles away, it'll make it easier for us

to get here and do work in the evening, as well as the weekends.

What's it like working closely with him?

Oh, well, we have a few ups and downs but we manage it somehow.

-He goes upstairs and I go downstairs.

-Perfect!

-Yes.

But, when it comes to decision-making, I reckon they'll always meet in the middle.

I'm wondering if selling the house is their final decision.

Now, guys, I know there's a university hospital nearby.

Is there any chance you might consider renting this out? Because the rentals are strong in the area.

I mean, if we couldn't sell it at a good price I think that's the only time we would say,

"Yes, OK, let's rent this one."

-The reason for selling it on, is that to get the cash to reinvest into another property?

-Yes.

-Definitely, that's what we'd like to do.

-Straightaway?

-We're looking to go straight into another one.

# Ain't no stopping us now We're on the move... #

Well, for Graham and Sue it seems full steam ahead,

not just for renovating this place but also forgetting their property developing future back on track.

Will Graham and Sue do all this for just £10,000 in four months?

And, will they spend a further £3,000 on a conservatory?

It may give the house the wow factor but will it add anything to the end value?

Personally, I don't think so.

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

Coming up, this community centre in Lincoln comes with restrictions.

This cannot be used as a restaurant, hotel or anywhere selling intoxicating liquor.

In Croydon, we discover Graham and Sue's secret to working in happy harmony.

I get sent out in the garden, Graham stays in the house.

But first, in Leeds, what does Max think of his sister's property developing talents?

I'm really impressed and proud of her. It's amazing.

Now we head to Leeds and student hotspot Woodhouse, to be precise.

Here, property developer, Sapphire had purchased this four-storey, six bedroomed property

at an auction for £98,000.

It had been badly fire damaged so renovating it would certainly be a challenge.

But not one that Sapphire was going to have to face alone.

-What about family being involved?

-I'm trying to get my younger brother to get a feel for things

-and help out a bit and he'll... He's only 15.

-Oh, wow!

So, a family refurbishment and one that Sapphire wanted done in double quick time

to have it ready to let out to students. She set herself a tight nine-week timescale

and 11 weeks after we first met her we have returned to see

if she's taken this place from shell to chic.

Wow, given the state it was in less than three months ago,

to have this place in such great shape, in such a short time, is pretty incredible.

The top and first floors have two bedrooms, each with newly fitted bathrooms.

The ground floor has a further two bedrooms.

And, where the real revelation is is in the basement, where there is now a communal lounge

and two rooms that have been turned into one large kitchen/diner.

So, originally this was two rooms. They had the kitchen and the second half was a coal room.

We've knocked it all through and we've made it a lot bigger

so we've got room for a dining table, as well.

We've got plenty of units for all the students' pots, pans and food.

We've got all new facilities and a brand-new kitchen.

This is absolutely ideal for student accommodation.

Just remember, if you're thinking about doing a basement conversion,

you must speak to the local council for advice on permissions or building regulations first.

If you plan to knock down any walls to open up an area, get the experts in.

You must be sure they're not supporting walls before unleashing your sledgehammer.

And, there have been more impressive changes upstairs, too.

This is the first floor bathroom, which we've completely redeveloped.

This was actually a wardrobe at the back here.

We've knocked through and created space for a bath with a shower over

whilst maintaining space for the toilet and sink as well.

So nothing becomes too cramped.

Sapphire also had to apply for an HMO licence

and comply with HMO regulations on points like fire safety.

She managed to achieve all of this in just seven weeks,

two weeks short of her original timescale.

What about her budget?

I've spent in total about 45,000.

My original budget was approximately 40. We're not far off

and I do know where the costs have gone. Things such as new gas supply, HMO licence,

also, the cost of skips and we had some scaffolding up, things like that.

It's not too bad.

What has she learned from this, her biggest property to date?

Doing this property has allowed me to make sure I feel confident starting a house from scratch

without electricity, or anything, and hopefully

I can apply those skills to other projects, which I'm keen to do.

And it's not the only way her confidence has grown.

Sapphire had considered getting a project manager on board.

I was the sole project manager throughout

but my main builder helped liaise with the electrician and the plumber who was separate from his work

and kept everyone running on time and made sure everyone was ahead of each other.

I came to the property every day to catch up with them,

and we were always in contact and it went quite smoothly.

# I work for my sister

# I work for my sister... #

Although she took charge, Sapphire's teenage brother Max also got stuck in.

Throughout the project, I helped with various things

like the colour scheme and design of the rooms, especially the main rooms like the kitchen and lounge.

Also, I did some cleaning around the house when we first got it because it was pretty messy.

And, I helped put some furniture together, as well.

What does Max think of his sister's work on the property?

I'm really impressed and proud of her. It's just amazing.

It's definitely something I'd like to follow up in the future.

Sapphire's spent a total of £143,000 here including the £45,000 renovation budget

but has it been a good investment?

Let's hear from two local estate agents.

I think the property is superb.

I think the owner's done a great job getting it done in the time she has.

It was a big job from start, a complete fire damage property.

Now she's produced quality, comfortable accommodation.

I think the house has been done exactly how students would like it.

It's the right layout. The bedrooms are in the right places.

It's got two bathrooms, a good-sized kitchen. It's spot-on for that market.

Not only did Sapphire get the work done quickly but she's already let out the six rooms.

As she was a little late to hit the student intake,

she's charging her tenants slightly less than she plans for the next academic year.

What could she be getting?

I think the rental value will be around £65 to £70 per week, per tenant.

I would expect this property to let at six students at £65 per person per week.

OK, well Sapphire's currently charging between £50 and £60 per room per week.

What did she think?

I'm hoping, when I market it next year, I'm going to be looking for 75 to 80.

Based on my previous letting experience, I'm very confident that we can reach that.

If we got 75 it would be a 16% return which, of course, I'm very happy with.

That is an impressive return.

However, if she wanted, Sapphire could consider selling the property, but at what price?

I think the resale value would be around £190 - £195,000.

As an empty property, I would place a figure in the region of £180,000.

If, however, the owner of the property could achieve a full let on this property, to six students,

I would place an asking price on this property somewhere in the region of £200 to £210,000.

Bearing in mind Sapphire's total outlay of 143,000,

that's a potential pre-tax profit of between 37 and 67,000,

depending on whether it's sold as a full let or not. Is she tempted?

What I think I might do, is let it out in January for the coming year and once it's let

put it on the market and see if anyone likes to buy it. If not, we'll hold onto it.

Good thinking.

Just a few miles from the beautiful historic centre of Lincoln is Ermine West.

This isn't so much Cathedral Quarter as 1950s local authority housing.

However, the prices are good and the location is not bad either.

So a large housing development with the convenience of local shops.

There are plentiful transport links to the city and if you peer over the rooftops,

you can even glimpse the Cathedral itself.

Estates like this were very much built with the community in mind and, of course,

local residents would need somewhere to have their coffee mornings, bring and buy sales

and mother and toddler groups.

Which is why community centres like this one were built.

It's this one that was up for auction.

A guide price of 80 to 90,000, 1,700 square feet, let's take a look inside.

It certainly sits on a big plot as well,

with substantial car parking at the back.

Despite some signs of neglect, it doesn't seem to be in particularly bad nick.

What have we got?

Well, come through the door, you've got loos there and into the main hall.

Great space. Look at the parquet floor.

It's a bit scratched but that would be absolutely beautiful sorted out.

It's a really nice sized room and pretty much as you might imagine.

It's got a kitchen area there and then up onto the stage.

It's all in pretty good condition, actually.

You can't help but imagine this place

when it was fully active, you know, trestle tables at the time of Coronation, celebrating.

Maybe the local amateur dramatic society putting on a play up here

or at Christmas, a nativity play with the kids from the local school, or even a panto.

My mind is buzzing.

Sadly, I think, in reality it might be the final curtain call for this place.

I don't know who would have the money to take this place on, pay for the upkeep

and maintain it for the community. I'm afraid we may have heard the last chords

from this little piano and the tea urn's stewed its last cup.

To put your hand in your pocket for this you would want more than loose change in return.

Let me put my hard-nosed developer's hat on for a minute.

Is there potential to make money out of this building?

I guess, one obvious option is to knock it down.

You'd have a very sizeable plot in a residential area.

You'd have to apply for planning permission, but I reckon, in this kind of space

you could build four or five very decent sized houses, which is probably what I'd go for.

So, given today's build costs, with the state of the market, I think you could do quite well.

This isn't a particularly high-value area but the guide price of £80 to £90,000

is reasonable for a 0.2 acre site like this.

With the market a bit tough, I'd advise against building a large number of small units

and stick to decent sized houses. Use your head and there could be some money in it

but my heart draws me back to the role this building plays in the community.

Could there be any way to make money from it as it is?

The space as it stands is pretty functional

and could be put to a variety of uses, pretty much as it is.

A playgroup maybe, a dance school or something.

The only restrictions are imposed by the council who are selling it

and there is a restrictive covenant saying this cannot be used as a restaurant, a takeaway,

a hotel or anywhere selling intoxicating liquor.

Quite right, too! There's a local community here to protect.

Ruling out the food and drink option could mean the death knell for this building

as whoever buys it will need to make money.

I can't imagine many small businesses,

such as playgroups, being able to afford it.

Despite its solid structure, I think the time has come for it to bow out.

Just to make sure,

we asked a local estate agent along to see what he thought.

Looking at this building, it appears to be in very good condition.

It's purpose-built, it's got good car parking out the back.

The nicest use for this building would be if a community group

come in and want to buy it for a club, or a children's nursery

or some use that makes the best of the existing building.

As an alternative, we may see it demolished for housing and that would probably

give the best financial return.

I think you could probably get four houses on this plot. What sort of value could each gross?

I would expect that a two bedroomed house is worth in the region of 80 or £90,000.

If the lot was bought close to the guide price of 80 to 90,000,

there's definitely money to be made and not just in resale.

The rental market in Lincoln is strong. We are looking at £400-£500 a month

for two and three bedroomed houses.

It's a solid and functional building that would suit all sorts of institutions and groups

and really could easily carry on its place in the community.

However, it's also a potentially quite valuable building plot

and if the guide price is anything to go by, there would be

some interest in the auction room from developers. Let's find out what happened.

Lot number 19.

This property is a community hall

and centre on the site of 0.2 of an acre.

£60,000 and let's make a start.

£60,000, 62, 64,

66, 68, 70, 72, 74,

75. At 76. At the back of the room, 77.

78, 79, 80.

At 81, 82, 83, 84, 85,

86, 87, 88, 89, 90.

At 91, 92, 93,

94, 95, 96.

Against you at the back at 96 seated. 97, 98.

At 98, you'll have to have another go. 99, £100,000.

Are we going again? At £100,000, once.

Twice, the third and final time of asking at £100,000.

Your lot, sir. Thank you.

The successful bid of £100,000 plus an additional 5,000

to cover the vendor's sale costs and fees came from Nigel.

He's a chartered surveyor, but also dabbles in development.

He bought this one with a friend who owns a construction company.

But it was Nigel and his architect, Ian, I met at the old community hall to find out its fate.

-Nice to meet you. You've got a community hall.

-Excellent!

Why did you want to buy it?

In the current market, we thought the price that we paid for the land was good value for money

and we saw it as an investment.

-You say, the land, you bought it for the land?

-Yes, we have.

We don't intend to continue with it being a community centre, I have to say.

We hope to develop it into residential housing.

-You're not into amateur dramatics or...

-Certainly not, no!

It's never been my forte.

-What kind of issues are involved in taking on a project like this?

-Quite a lot.

Without there being planning, our main concern is we get the right planning

for the site and get approval for it.

An overview of what you're going to do here?

At the moment, subject to what the architect says, we think

we can get six, 2/3-bed town houses on the property, stacked in a terrace,

that will have gardens and on-site parking.

Creating a terrace means Nigel really will be getting the most out of this plot.

I went outside with Ian, the architect, to discuss the outline plans in more detail.

So, Ian, it's your job to turn this, basically,

car park into something imaginative.

What have you done?

What we have been looking at, Martin,

is a terrace of essentially affordable homes that basically

reflects the existing properties in terms of scale and size, to the west and to the east.

It looks like they'd all have a reasonable amount of space, not huge, but they are terraces.

Absolutely, one of the aspirations of affordable and eco-housing

at the moment is to have some defensible space at the front of each door of each property.

-Defensible?

-Defensible space, it's really the aspect

of a two to three-metre strip in front of the front door.

It gives people a psychological well-being.

That's one of the aspects of the design that I've put into it.

It makes a lot of sense and, of course, it's not unusual to build houses

with space at the front and back.

What's different about the design of these is that they're eco-friendly.

All the building materials are either natural or from a renewable source.

Each has a high level of insulation to minimise heat loss.

Water would be conserved too, possibly through rainwater harvesting

and the fitted appliances would be energy efficient.

All this should work in their favour where planning permission is concerned,

and don't forget, this all hinges on that.

-All in all, are you hopeful?

-Very hopeful.

The City Council are very keen for affordable

and sustainable homes to be built.

We would target the people wishing to buy these sort of properties,

perhaps even people that live on this estate that are new families or newlyweds, that sort of thing.

There would be a willingness for people who've lived in this area for a very long time,

or second-generation to move into these homes.

It's all very interesting and, of course,

in that respect the development will be given back to the community.

The eco-friendly elements would minimise the impact on the environment.

What about the figures, are they as appealing?

Any idea of how much it's going to cost and the kind of finances of this project?

Yes, we do. I've got a build cost based on a programme of six terraced houses.

We've got a build cost of about 420,000.

What resale value do you think they'll have?

We think based on current market value, that the total six of them will be 690,000.

Right, so there's about 150 by the time you've taken off the costs.

-That's right, yes.

-What's the timescale for the project?

We'll need to go for full planning permission,

which in itself will take two or three months.

Once we got full planning, we'll be able to commence construction work on site

and we envisage that taking about six months.

From here, probably by the time we've finished, probably a good year, I would say.

-Good luck with it, anyway.

-Thank you.

-I look forward to seeing how you get on.

-Thank you.

So it looks like it is final curtain for the community centre.

For Nigel, though, it could be a nice little earner

and he is giving back to the community by building that affordable housing.

But only if he gets the planning permission.

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

Well, time is a healer but it can be an enemy

if you're up against a deadline.

-What has happened to those properties?

-Time to find out.

We're back in Croydon, Surrey, now, where property loving couple Graham and Sue

purchased this three-bed wreck for 147,000 at an auction.

It needed renovation but they weren't scared off by the challenge of fitting

and refitting around their busy lives.

Are you going to work on this every day? Will this be your main focus?

We both work full-time, so it's going to be evening and weekends.

We've got a big workforce in, family and friends.

'Confident they could call on reinforcements

'and get this place done and dusted within four months,

'we're back six and a half months later to see how they fared.'

Downstairs, they've made the bathroom bigger and better

by extending into what was the hallway.

It still needs finishing off, as does the kitchen,

which has been ripped out, and on the way to a new, lovelier look.

The living room has been entirely redecorated,

and French doors added at the back,

as there's still the possibility of putting on a conservatory.

Personally, I like that it leads straight into the garden.

Certainly not what it was like when I was there.

When we purchased the property,

I don't think we realised what the garden was, in its size.

There was so much rubbish in the garden,

that had been turned out from the house.

We found parts of cars.

So much stuff in the garden, on the garden.

We didn't know there was grass and a path.

Spent a lot of time clearing it,

and were amazed at the size of the garden.

We sowed the grass seed,

and it's grown and looks amazing now, I think.

It looks so different.

Can't believe we've got the size of garden we have.

We're very pleased with it, and very proud.

My mum, who's a keen gardener,

is also very proud we've managed to achieve this.

They weren't kidding when they said their family would help out.

Sue's mum may be 82, but she helped make this garden glorious.

Upstairs, there were three bedrooms,

but two were tiny!

Would bigger be better?

Originally, this was three bedrooms.

Where I'm standing now was the lobby.

This doorway, which you can't see, has now been boarded up.

We've recreated this doorway, here.

Then, moving into the large bedroom,

there was a partition across here,

which left a small, long bedroom, which was not really practical.

Now we've turned this into a large master bedroom.

We're really happy with it.

And so they should be,

given the graft that went into this gaff.

It WAS hard going.

It seems like recently each weekend we've been here.

Sometimes I thought, "Are we ever going to finish,

"and will it look like any decent work's been done here?"

But now, very pleased with how it's turned out.

They've done a refurb before,

as well as renovating some of their own properties,

so they have a well-established way of working together.

I get sent out in the garden. Graham stays in the house.

-For the whole day.

-SHE LAUGHS

-I think that works quite well, actually.

-It does.

Sue and Graham weren't able to start straightaway.

But it's taken four months to get to this stage.

They've come in UNDER their ten grand budget,

as they spent just £7,500.

Added to their purchase price of £147,000,

that's a total outlay of £154,500.

Time to see what two local estate agents think of it.

The vendors have done a really good job. We can see in the garden,

which is great.

The house sits on a really large plot,

and it's nice to see the space that's actually here.

I think it's done really nicely, so far.

Once the kitchen and bathroom are finished to that standard,

it'll be a lovely house.

But, will it see a lovely return?

Remember, they've spent just under £155,000

and want to sell it on.

We could market this property

at £199, 950.

You could put this on the market for £185,000 to £190,000.

-Wow!

-That's good.

-Really pleased with that. Very pleased.

We are, actually. We thought it would be less than that.

-Well pleased.

-Worth all the effort.

With their £154,500 outlay,

the pre-tax profit here could be somewhere between £30,500

and £45,450, less the usual selling expenses.

If it doesn't sell, they would consider renting it.

What sort of numbers are we talking for that?

We would market this property for rental purposes

at £950 per calendar month.

I think you'd be able to rent this out for £900 to £950

per calendar month.

-It's very good as well.

-VERY good.

We hadn't thought too much about how much we would get,

-but I would have thought less.

-We're very pleased with that.

-That's worth considering.

-Definitely.

That yield of around 7 to 7.5%

could be just the ticket.

The rental market is buoyant in this area,

so it's a great fall-back if it proves hard to sell.

What about going to another auction?

-Yes, we'd go back to auction again.

-Definitely.

We enjoy it. We get catalogues every month,

and we keep looking.

Earlier, we were in Ermine West in Lincoln,

where chartered surveyor, Nigel, purchased

this disused community centre for £100,000 at an auction.

'He and his business partner run a development firm,

'alongside their full-time jobs,

'and saw this place as a great opportunity.'

The price we paid for the land was good value for money,

and we saw it as an investment.

You say, "the land". You bought it for the land?

Yes. We don't intend to continue with it being a community centre.

We hope to flatten it, and develop it into residential housing.

So, you're not into amateur dramatics?

Certainly not! It's never been my forte.

'Nigel planned to build a terrace of six houses on the plot,

'once the existing building had been demolished.'

He expected to spend around £420,000,

and do the work in six months.

That was based on getting the required planning permission

with minimal drama, within three months.

But we're back here two years and four months

after we met Nigel.

And... Oh, dear!

These are not the "before" shots, but the site as it was when we returned.

A distinct lack of houses,

and the community centre still standing.

On the plus side, at least it's looking a touch sunnier.

# Don't bring around a cloud To rain on my parade... #

But what about Nigel?

Did that planning permission rain on HIS parade?

It's been a difficult process getting it through planning.

It's taken a long time to get the right scheme for this.

He's not wrong.

Initially, he got outlined plans approved for six flats

and four houses on the site,

on condition it included social housing,

working in conjunction with the local housing association.

But, because of the economic downturn,

he found it hard to get ANY housing association with the money to collaborate.

So, it was back to the drawing board.

We had to go back round the planning process,

to develop the site for the open market.

That took time, patience and energy to get that through the system.

But we've done it, and we're happy with the result.

Now he has that all-important planning permission

for two pairs of two bedroom townhouses.

And a block of six two bedroom apartments,

and there's no stipulated tie-in to social housing.

This is where the two bedroomed townhouses are going to go.

At the front, facing the main road

is the main development,

which consists of two bedroomed townhouses on either side.

Then, with six apartments on a three storey level in the middle.

There will be off-street parking to the back, here,

which will facilitate off-street parking for both the townhouses

and the apartments.

It sounds like Nigel and his business partner really ARE

going to make the most of the space.

When I first visited the centre,

part of me had hoped someone would take it back to its former glory.

We did have a potential buyer for the community centre as it is.

They wanted to use the existing building,

but unfortunately we couldn't make a deal with them,

so it looks like it will have to be demolished.

Before we do that, we will salvage some of the items from the building.

The lovely parquet flooring, we will take up and probably use at home.

There's some smashing Belfast sinks we'll use.

Other than that, unfortunately it will have to be demolished.

Despite shattering my dreams of getting to play a panto villain,

I'm delighted to hear some features of the centre

will live on elsewhere.

The potential purchasers weren't the only ones with a funding dilemma.

There were further delays for Nigel and his partner

when they couldn't get funding from the bank.

Though they have put the site, plus planning permission, on the market,

they hope they'll be able to realise those plans themselves.

We're quite relaxed. We realise how difficult it is to get funding now,

so we're going to wait and see if the market improves,

and get funding in the future.

Fortunately, they can afford to wait.

Property development is a sideline for Nigel

and his business partner,

so they're under no pressure to sell.

After all the delays and effort in getting that all-important planning,

it would be a shame if they couldn't see the project through.

We think the development will sit nicely with the surrounding area.

We see it as low cost affordable housing.

It's a similar development to what's being built round the corner

by a national developer.

We're hopeful the scheme will sell well.

Here's hoping. We asked two Lincoln estate agents to look at the site,

and tell us what they thought about its potential.

The units planned for the site are ideal.

I think a builder will see that as a potential

for sales within a reasonably short period after development.

The proposed development is on a known council estate,

so there would be a ceiling price for the proposed properties.

But it would stand out in local competition, so should fare well.

With that ceiling price in mind, let's talk numbers.

Nigel and his business partner spent £100,000 at auction on the building,

plus £5,000 to cover the vendor's costs.

And around £10,000 on the work they've done so far.

Add that to the estimated build costs of £420,000,

and another £7,000 or so on demolishing and clearing up,

makes a proposed total outlay of around £542,000.

So, if the development goes ahead,

what price could the proposed units reach?

The units in question would achieve somewhere around £100,000 per unit.

That's four townhouses, two bedroomed, at £100,000 each.

And six two bedroomed flats,

at between £90,000 to £100,000 per unit.

I think the finished product of the small townhouses

is likely to achieve something in the region of £90,000 to £100,000.

The plan is to develop six apartments,

which are likely to achieve in the range £70,000 to £80,000.

The £70,000 we would say is low, and the £100,000 was high.

We thought about £85,000 for the flats.

That's a reasonable valuation for the townhouses.

We thought around £105,000, so I'm quite happy with that.

Let's tot those figures at the higher and lower ends up.

The combined valuation for the four townhouses and six flats

is an estimated £780,000 to £1 million.

If, and it's a big if,

all goes to plan, and to budget, and all units are sold,

Nigel could make a gross profit of between £238,000 and £458,000,

excluding selling expenses.

For the moment, however,

although not his preferred option,

the site is up for sale as it is.

What do the estate agents make of that?

As the development stands, without line planning permission,

I would expect it to be worth between £200,000 to £250,000.

It's likely the price achieved will be £160,000 to £175,000.

If we took a valuation between those two land valuations,

at say £200,000,

that would give us around a £90,000 profit on the sale of the land,

which would be a good profit for the effort and time we put into it.

It's been hard work, but that would be a nice reward.

If we develop it through, we'd hope to realise a higher profit.

# I'm going to take my time... #

After two years of planning, graft and patience,

has Nigel's enthusiasm for this place dwindled?

We think it has excellent potential, and is an ideal location.

We think Lincoln is desperate for this development,

so we'll bide our time, and hopefully maximise the profit.

That's it for now. We'll be back next time with more action

from auction rooms around the country.

Make sure you watch Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.

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