Episode 14 Homes Under the Hammer

Fancy buying property at auction, but don't know where to start?

Perhaps we can show you some tricks of the trade.

Yes, join us now as we follow buyers who bought their homes under the hammer.

Auction rooms aren't intimidating places,

you know, anyone can buy there.

Yes, today we talk to intrepid buyers who've taken the plunge,

but did they sink or swim?

Let's find out.

In Driffield, Yorkshire, the layout of this cottage

has me mightily confused.

I really do not know what's going on here at all.

This three-storey terrace in Mid Glamorgan is a great workout.

And as staircases go...

my thighs are starting to burn!

And in Exmouth, Devon,

this two bedroom maisonette is bigger than you'd think.

It's got more space than some houses I've been in.

All these properties are being sold at auction.

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

-when they went under the hammer.

-And done.

Today I'm in Foston on the Wolds, a picturesque village

in a conservation area in Driffield in the East Ridings of Yorkshire.

Well, it's a quiet spot

and if you're looking for the rural life this could well give you it.

And quiet it certainly is.

There are no pubs or local shops around here though.

They're about five miles away in the neighbouring town of Driffield.

But what you do have here is peace and quiet.

MUSIC: "It's Oh So Quiet" by Bjork

It's a three-bedroom detached cottage with large gardens and some out buildings.

It's actually specifically mentioned in the Foston on the Wolds conservation appraisal document,

not as a listed building but of historical interest.

The guide price was £125-150,000 quid.

This is it. Suddenly I'm very interested.

A tingle of excitement as you open the front door and...

what do you find?

Well, entrance hall here, kind of unusual.

Strange little cubby hole there with a window in it so...

That's just a bit of wood that,

I'd get rid of that for a start.

Not a good sign, there is a bathroom and loo there, and my guess is that's the only one in the property.

So it's really not in an ideal location.

Through to, then, what is the kitchen.

At last, some lovely little features. A fireplace.

Well, I don't think it is a fireplace.

It's a sort of cooky, oveny kind of thing.

I haven't seen one like that before, quite unusual.

Whether or not you'd keep that or not, I don't know.

But as a kitchen space, it's not bad.

The whole property is not that wide, and basically from front to back.

Nice to have the open beams, though. Then through into your living room, sitting room,

you have got the open fire but what we've also got

is clearly some really bad problems.

Yeah, if you look, I'm afraid this isn't just cobwebs.

That is dry rot.

Not good.

# B-b-b-b-bad

# Bad to the bone.. #

It looks pretty bad, and you'd need to investigate further

to see if it's just in this area.

The last thing you want is to find dry rot everywhere.

The living room's tired and dated, and the bathroom is a good size

but not ideally placed as it's downstairs.

But let's see what is upstairs before we think about moving it.

So upstairs and into one of the bedrooms.

You've got this door, but then it gets really, really weird.

Look at this! The whole wall comes out, to create this massive opening.

So, large stairways, then this huge, great space.

I really do not know what's going on here at all.

Let's hope it improves a bit on the other side.

Well, I'm not sure it does, for a start there's this chimney breast.

It has obviously been blocked up,

at least there's a fire brick to stop damp,

but it either wants to go or actually be used.

To put a real fire in there or something.

The room itself is not bad in terms of size,

and it's nice that you can see the garden out there.

But then you come through to the third bedroom,

and the only access is through that second bedroom.

Not at all ideal.

This room, it's not a bad size, but it just doesn't work, does it?

The whole of the upstairs needs to be reconfigured,

and I think the way to do that

would be to maybe move the stairs round through 90 degrees

to the edge of the property and create a corridor at the rear.

Have three decent sized bedrooms

and hopefully the bathroom up here as well.

Because at the moment, it REALLY doesn't work.

# It's not working out

# But we're not giving in... #

So to make this higgledy-piggledy cottage work,

you'd need to do some jiggery-pokery with the layout.

And that's upstairs and downstairs, including the stairs!

You might even get planning for an extension.

So we've established that the property itself has charm aplenty,

what about the plot it sits on?

Well, first of all, there are these little outbuildings.

Very useful, and lovely little things like this old pump.

Wonderful. Very useful.

They obviously need a bit of tender loving care, like the house,

but very useful space.

But then the garden itself, well, it is overgrown, but within it

there are some gorgeous bushes and shrubs and roses.

I don't know, get this sorted out, mow the grass,

and it doesn't let down, does it? It's great!

Bearing in mind the guide price of between £125,000 and £150,000,

we invited along a local estate agent

to hear his thoughts on this cottage.

It's a great auction lot.

It is something that we would like 10 of in every auction.

It offers excellent potential for anybody who is after a good project.

Let's talk figures,

what could it reach on the resale market once refurbished?

With just the basics done and no extension,

I would expect it to realise, in the current market, around £225,000.

What about as a rental?

In a letable condition

it would realise in the region of £550-£575 per calendar month.

Well, what is there not to love about this place?

Yes, lots of work required to sort it out,

but I'm sure it would have generated a lot of interest

before the auction.

Let's see who was lucky enough to get it on auction day.

Last but most definitely not least, it's a unique cottage.

Where will we start with that one, somebody? £135,000, say? £135,000?

125, then? No bidders, have I no opening bidder?

£100,000. £100,000, I'm bid.

I should think so, as well.

There should be plenty of interest, surely, at £100,000.

10, 110.

12, 112.

114. 16.

18. 118.

20, 120.

Two, 122. Four, 124.

Six, eight. 128.

30. 130,000.

Two, 132. Four, 134.

Six, 136.

137, 138.

139,000. 40? £140,000.

Two? 142.

Four? 144. Six? 146.

Eight? 148, 50. 150.

Two, 152. Four, 154. Six.

158, 160, two, 164, 166,

168, 70.

170,000, two, 172, 174.

£174,000.

It's at the back of the room, at £174,000.

Once, £174,000, twice,

it's your last chance at £174,000 and I'm selling at 174.

Fighting off all competition there was Sandra,

with her final bid of £174,000.

She describes herself as a property prospector,

with a large portfolio of commercial and residential buildings.

She works with her husband, Peter, who is a builder by trade

and also runs his own business.

# It was the perfect match... #

Sounds like a perfect match to me.

I caught up with them both, back at the cottage, to find out more.

-Sandra, Pete. Great to meet you both.

-Hello. Pleased to meet you.

-Hello, Martin.

-Congratulations. A cute little place.

-Yes, it is.

-Tell me why you want to buy it.

-Well, we've always loved the place.

-We live next door.

-Literally next door?

-Yeah.

Right next door, the farm next door.

So we fell in love with this place years ago,

and we said if it ever comes up for sale, we'd like to try and buy it.

-And you did!

-Yes!

-We certainly did!

-You must be slightly in a state of shock, really?

-Very. Yes.

I was a bit emotional at the auction after I bought it,

because we really didn't think we'd get it.

The couple have two daughters.

They bought this place as an investment

and possibly a future home for their elder daughter, Sammy Jo.

They also have 11 horses

and both daughters compete at national levels

in Horse Of The Year competitions.

So at least Sammy Jo won't have to travel far

to get some riding practice.

What are they planning to do here?

We're going to completely renovate it, really.

Because there is quite a lot of dry rot.

So we must rake everything of that out.

We're going to try and get the bathroom upstairs.

Really just get it going, get it up and running.

Get somebody renting it.

But we'll do it in the style of the cottage.

Sandra and Peter will be doing this renovation within building regs,

so they don't have to go down the planning permission route.

This will help save time, but what else are they planning to do?

Well there's the old Yorkshire stove, we'll keep that in.

-Put fireplaces in upstairs.

-That's right.

-Things like that.

I'm sure they'll do a good job on this renovation project,

while keeping the cottage's character intact.

They have a fairly flexible £30,000 budget to do the work.

What about timescale for sorting this out?

We're going to turn it round in two months.

But from work wise, my brother has gone and injured himself,

I work with my brother all the time.

So he's going to be off work for a couple of months,

so we are going to say now, this is about three or four months to do.

How inconsiderate of him(!)

I can't believe he's done it, really!

Pete's brother has broken his ankle, so let's hope he gets better soon.

As the extra help

will make this renovation a far less painful project.

Listen, congratulations. I can't wait to see how you get on with it.

-Thank you very much.

-Good luck.

-Thank you.

-Thanks very much.

Well, Sandra and Peter are clearly delighted to have got this place

and who can blame them?

However, I am a little concerned about what they're going to find

once they start ripping up floorboards

and taking down ceilings.

The restoration is going to be interesting.

You can see how they get on later in the show.

Today I have travelled to the Valleys in South Wales,

to a place called Penrhiwceiber.

The locals call it Ceiber for short,

and it's a former Welsh coalmining village.

The local pit closed in 1986,

and although the industry hasn't survived,

remnants of the past live on.

The Workmen's Hall and Institute was opened in the village in 1888,

and remains one of the most prominent landmarks

in Penrhiwceiber.

# Into the valley... #

It's not all historical buildings in this village.

There are a whole host of amenities, and if you're running short of time,

then this nearby clocktower is a useful and constant reminder.

I'm here to see a three-storey, three-bedroom terraced house.

Now, that all sounds quite sizeable. The guide price doesn't, though.

It was set at just £22,000.

Please do not adjust your sets, viewers.

Because that is right, you heard me. Just £22,000!

But, you can see these security shutters may put some people off.

But I won't be deterred,

you know what they say about books and covers.

I'm going in.

# You can't judge a book by looking at the cover... #

I'd like this house to put a smile on my face

on this damp and dreary day today.

Well, so far, so good.

It's not in hideous condition, I've certainly seen worse.

So where is this other floor? Here's the door.

You really don't expect to see that, look at it!

That's a pretty steep staircase, actually.

So downstairs you've obviously got a big space,

I'm going to inspect that a little bit later on.

This will be the lounge.

You'd come in through the front door, into this room.

Not a bad size.

Really good point, we've got gas central heating here.

We've got double glazing.

And once those shutters come off

you'll have loads of light coming in through this room.

I like the fact somebody's got a bit jazzy

and they've put a feature wall, some rather rosy wallpaper up.

I quite like that.

So this house really is taken to another level

with that downstairs floor, if you excuse the pun.

# Can you feel it? Can you feel it?

# Feel another level Can you feel it?

# Can you feel it? #

So three levels at a guide price of £22,000.

That's a lot of house for your money.

On the ground floor, along with the living room is the bathroom.

Which you'll probably want to update.

Downstairs, on the lower ground floor you'll find the kitchen,

which could definitely do with a new look.

It's ripe for ripping out.

There's also access to the back garden

which is where you get a real sense of the size of this terrace

with its three storeys.

Time to ascend to the dizzying heights of the top floor.

This certainly isn't going to be for everybody.

Bathroom down there and as staircases go,

my thighs are starting to burn!

This is quite a steep staircase.

You've got three very small bedrooms here

so I'm gathering on the ground floor you've got the kitchen,

you've got to walk right the way up to the top floor for the bedrooms.

Not a bad size at all.

This would be the master and once decorated, it could look quite nice.

But £22,000 guide price?

You can't really complain.

What I really like is that little view out there.

I know it's a rainy day, but when the sun shines,

that will be a nice view.

# Take it to the limit One more time... #

Talking of views, what are the views of a local estate agent

when it comes to this house, guided at £22,000?

It's a good, large terraced property.

Over three floors, but does have the benefit of modern central-heating,

new double glazing and it would appear that it's been rewired.

Could this be a good buy to let?

If the property was renovated to a decent standard,

they should hope to achieve £380 per calendar month.

What about the resale value?

When fully renovated, I would hope to achieve in the region of £55,000.

This oddly configured house on three levels will not be for everyone

and the amount of work that's needed here,

it might put some people off, but one thing's for sure,

whoever takes this on will have to be fit,

because those stairs will definitely take their toll.

Let's find out who fancied this challenge

when it went under the hammer.

Who's going to start me off with £25,000?

£25,000? 20, 20, be quick.

£20,000 I'm looking for. Thank you, £20,000 is bid.

21, thank you.

21, seated,

22. 22,000 is bid.

23, thank you.

24, I'm looking for 25.

25,000, thank you.

25 is bid here, seated.

Any advance on 25?

I'll take half.

Quick, I'm going sell.

Any advance? 25 bid.

In the foreground in a blue top was Henry

with that successful bid of £25,000.

He was at the auction with his dad

who owns a property development business,

investing in residential buy to lets.

At 24 years of age, Henry is an apprentice at the business.

Henley, lovely to meet you. Congratulations.

Tell me about this property, what is the story behind it?

Basically, our family have a property development company.

We used to do industrial properties,

but because of the current financial problems,

we decided to move into residential

and this is one of a few properties we have started with recently.

What was it about this one that you thought was worth going for?

They were actually three for sale on this street, all identical,

with the same guide price.

We ended up buying two of the three.

We nearly got the third, but just missed out.

Were you surprised to get it for the money you paid?

It was probably the top end of what we were looking to go for,

I don't think we would have gone any further.

We missed out on the other one by £500 and decided not to.

Do you think people might want to go for a layout change

or do they predominantly keep them as they are?

From the other properties we viewed, they're all exactly the same.

People haven't bothered changing the layout.

We're not going to bother either,

we will just renovate it completely in the state that it is.

The downstairs kitchen might not be everyone's cup of tea,

but Henry's probably wise to leave it as it is

so as the company's apprentice, so to speak,

what is Henry's involvement here?

My involvement was to source the properties.

I viewed approximately 12 different houses, doing all the legal packs

and looking for similar properties to compare

to find out about rental incomes and market values

once they had been renovated.

I then went to the auction with my dad and bought two properties.

How old were you when you first went to your auction,

when you first dipped your toe into the property market?

The first auction I went to was about a year ago so I'd have been 23.

What is it that you enjoy about this,

is it because it's a family-run business?

Yeah, it's quite laid-back but we do things efficiently and quickly

and I get on well with my dad and we enjoy working together.

It's great that Henry gets on so well working with his dad.

With a portfolio of 10 buy to lets,

they've already sussed out the rental quotes for this terrace.

They're hopeful of a yield around the 12-13% mark.

Also on the company's books are two trusted builders who'll be doing the work.

That means Henry doesn't have to factor their costs into his budget.

So what are you going to do to turn this around?

We'll have a brand-new kitchen, brand-new bathroom,

carpets throughout. This one has a brand-new boiler already installed,

so that's a bit of a saving for us, and just a general redecoration.

So what's the budget for the work here?

Because we have a workforce who are working for the company exclusively,

our costs are very, very low.

We can also get everything at wholesale price,

so we're going to do the kitchen, the bathroom, the carpets

and the full redecoration. We've budgeted £4,000.

-What?!

-It's very, very low.

-That is...

And do you think you will come in on budget?

I'm sure you will, by the sounds of things.

Yeah, we've bought many kitchens and bathroom,

and it's not a problem.

So, £4,000 is the budget. How quickly can you turn this place around?

Um, we will do it in approximately three weeks, I would have thought.

Henry, I like your style. £4,000, three weeks. I mean, who's over that?

Who's going to be the person to be cracking the whip?

Um, we don't really crack the whip.

The guys are very, very good and efficient

and they'll get the job done within the time.

I'm very impressed by the way you work.

I can't wait to see what this place is going to look like.

-Thank you so much. It's been a pleasure meeting you.

-Ta.

Well, I'm certainly impressed by Henry's business acumen.

He certainly seems to know what he's doing here.

Plus, he's got a team of builders ready to begin renovations like that.

But I do worry a £4,000 budget won't be enough to tackle the work here,

and will he manage to do it all in just three weeks?

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

Coming up, I'm in seventh heaven in Devon.

What more could you possibly want?

Golden sand, sunshine, maybe an ice cream or two.

In Mid Glamorgan, is Henry the UK's most trusting project manager?

The guys have done all the work on their own.

This is the first time I've seen it.

But first, in Yorkshire, Sandra was in no doubt about her priority.

We really wanted to get the bathroom upstairs.

Back now to the peaceful village of Foston on the Wolds in Yorkshire,

where property prospector Sandra and her builder husband Peter

had bought this three-bed detached cottage at auction for £174,000.

They live next door and hope this will eventually be home

to their elder daughter Sammy-Jo.

The cottage had rotten woodwork

and a pretty rotten room layout to boot, but Peter had grand plans.

We're going to completely renovate it, really,

cos there's quite a lot of dry rot,

so we must rake everything of that out.

And we're going to try and get the bathroom upstairs and, really,

just get it going - get it up and running, get somebody renting it.

But we'll do it in the style of the cottage.

The couple plan to do the renovation within building regulations,

in three to four months.

Well, five months later, we're back to see how they got on.

MUSIC: "Good Feeling" by Flo Rida

What a transformation!

The back garden has been completely re-landscaped.

There are new windows, doors and guttering.

And that gorgeous old water pump has been brought back to life.

And inside?

There's a spacious, open-plan kitchen-dining area.

The old bathroom's been removed to make space for this,

and what was the pantry has been rebuilt as a utility area. Fantastic!

So, what we did here - we took the bathroom out

and put it upstairs, and so what we did then

is decided we'd put the kitchen in and open this out.

The pantry - which was over there - we took the walls out

and put the walls back in, but we decided to lead it into a utility room.

And I think it's set out all right. I think it's looking OK.

Sandra and Peter have done an amazing job here.

The kitchen was hand-built and painted by their joiner.

Very impressive!

The open-plan layout is fresh and modern,

but they've been careful to retain the original character of the cottage...

..from the restored quirky old cooker

to the beautiful exposed beams in the ceiling.

But let's see how they got on in the living room.

The staircase has been moved 180 degrees

and the flooring's been completely relaid, with dry rot eradicated.

There's now insulation and underfloor heating -

and as if that's not enough, there's a new fireplace, as well.

The front door's been restored to its rightful position,

on the front of the house.

On entering, there's a WC straight ahead

and the living room's to the right. It all makes much more sense.

In this room, this is where the big dry rot problem was.

What we had to do was take all of the dry rot out.

In doing so, we could then get rid of the staircase

and turn the staircase around, which then meant

we could put a corridor along the back wall,

so that we didn't have to walk through all of the bedrooms

to get to another one.

Let's head upstairs and check out that new configuration.

The beautifully restored master bedroom is to the right of the stairwell.

And to the left, a new corridor leads to the second double bedroom,

tastefully decorated in neutral colours.

Further down is the new bathroom, with contemporary fixtures and fittings.

It's eaten space from the third bedroom, but that was a compromise worth making.

We really wanted to get the bathroom upstairs

and make a kitchen-dining area.

That was the main priorities.

We didn't want to lose the character of the cottage, did we?

-No, not at all.

-We wanted to keep... You know, keep it as a little cottage,

but still try and revamp the whole place.

If we'd gone down the planning permission route, it would've taken a lot longer -

and longer means time and loss of rent,

so we decided to do it all within building regulations.

They've done a beautiful job,

keeping the cottage feel of the property but bringing it right into line with modern living standards.

It's pretty much been ripped apart and started again.

One of the main reasons for this was that they discovered the root cause of the wood rot.

The property was sitting in a pool of water!

We found that there was a potted dyke had been bunged up for many, many years.

So we had to get the digger in and it was a tree what had gone through the drain,

so we lifted the tree, got the dyke moving again. Within hours, the water level had gone down.

As for the dry rot, every piece of wood downstairs was removed

and disposed of carefully.

They sprayed for dry rot and woodworm

and also put in a damp course.

They've gone a month or so over their original timescale,

but how did they get on with their £30,000 budget?

What did it come out at, Peter?

37,700.

They plan to rent the cottage out for a year,

to help recoup some of the renovation costs.

But after that, their daughter Sammy-Jo will move from her mum and dad's farm next door

and make this her new home.

I love the whole cottage.

It's so homely and I could just see myself living here, on my own,

so close to home.

The house cost £174,000 at auction

and they spent 37,700 on it,

making a total outlay just short of £212,000,

plus the usual taxes and expenses.

Do two local estate agents think it's money well spent?

The finish, overall, is very nice. It's appealing to the eye.

Again, it's a contemporary feel that we've got -

a few nice oak doors, underfloor heating.

It all works very well together.

Yeah, it's a beautiful period cottage.

It's been refurbished to a very high standard,

and it's in a lovely, picturesque village.

What could the place make on the rental market?

I'm of the opinion that a property of this quality

would rent for approximately £800 per calendar month.

I would expect this to rent for £750 a calendar month.

-Oh, well, that's what we thought.

-That's right. Yeah, it's good, that.

It's good. I think that's OK for here.

That's a reasonable yield of between 4% and 4½%.

But renting is a temporary measure here.

Have they managed to increase its value on the resale market?

Remember, they've spent just under £212,000.

Resale value - at the moment,

I would put a mid-price on it of £285,000.

I think the resale value of this property would be approximately £275,000.

I thought 275, to be perfectly honest - plus - but that's good.

Yeah, that's OK.

That's more like it! Those values would mean a potential pre-tax profit

of between around £63,000 and £73,000,

minus the usual selling expenses.

I think they've done an amazing job here. What do they think?

I think it's gone really well. I'm pleased with it.

I'm pleased with the valuations, I'm pleased with the rental value, and I think it has gone OK.

We'll carry on renovating properties. We enjoy it, don't we?

We get on quite well together.

# Round, round, get around I get around

# Yeah, get around, round, round I get around

-# I get around

-Get around, round, round

# I get around

-# From town to town

-Get around, round, round

# I get around... #

This is Exmouth in Devon.

You know, seaside towns like this are hard to beat.

What more could you possibly want? Golden sands, sunshine,

maybe an ice cream or two,

and, of course, some property bargains to bid on!

# I'm gettin' bugged driving up and down this same old strip

# I gotta find a new place where the kids are hip... #

As tempting as it is to stay on the beach,

I think I'd better get AROUND to business.

# I get around... #

Well, the property I'm here to see is a maisonette.

Had a guide price of 90,000 quid. Two bedrooms. Let's take a look.

The maisonette's on two levels, just behind and above a shop.

It's on a busy commercial street, where parking's restricted,

but you can park nearby, off the main street, so let's not be put off just yet.

So, what's it like? Well, actually, at first glance,

bigger than you might expect, although...

Rather a strange door!

Doesn't seem to work very well.

Stairs up to some rooms there

and then down this corridor to the main living area downstairs.

This bit here, described as a dining room. Well, you know what?

Yes, it could be. Er...

and somebody's tried to be a bit clever by building this thing here.

Got a bit of a wood-burning stove there.

I don't think this works cos what it does is it separates this area from the kitchen.

Now, the kitchen itself is pretty small,

so why not try and take this out?

Bit of a big job, cos I think that's probably a chimney breast, so a bit of work required,

but it'd definitely be worth it cos then you'd have this huge, great open-plan area,

which immediately gives it that feeling of space.

Which is quite surprising for a maisonette.

All in all, a very good start.

# Pretty good

# Not bad

# I can't complain, yeah... #

The central heating and radiators look in good nick,

but you might want to check the condition of the wiring.

Removing that chimney is a big job.

Whether it survives or not will depend on budget

and whether the plan is to live here or rent it out.

Time to head upstairs.

Now, of course, an inevitable problem with split-level living

is the kitchen's downstairs and the living room's up here, so you're struggling upstairs

with your spaghetti Bolognese in one hand and your glass of red wine in the other.

Not exactly ideal, but forget all that, because up here - a stunning amount of space.

Bedroom at the end.

You've got a bathroom and loo, and a separate loo, as well.

Nice landing. Huge great ceilings.

Another bedroom there, and up those ladders into the attic,

where I think there's potential for yet even more conversion.

Through on into this room, which I absolutely love.

You've got this big bay window.

OK, you're on the high street here, so there might be a bit of noise from traffic,

but lots of light coming in here. You've got the open fire.

This would make an absolutely gorgeous living area and, all in all,

it just doesn't feel like a maisonette.

It's got more space than some houses I've been in!

# Bigger, brighter, better

# And I was sold for ever... #

The decor and carpets are a bit tired and dated,

but that's easy to rectify. There are surface cracks here and there,

and one worrying one under the bay window in the living room.

It's possible they're caused by the excess weight

of that unauthorised loft conversion above.

So that'll need to be checked out by experts.

But this maisonette is big, so since I'm banging on about all this space,

what about other development opportunities?

Well, at the rear of the property, there's this courtyard.

Obviously, it could do with a bit of a clear out,

but most importantly, and crucially, it has this -

a separate access to the rear of the property.

Why is that important? Well, it opens up the option of converting this

possibly into two flats.

Maybe convert the attic into another bedroom, giving you a two-bedroom flat upstairs,

one bedroom flat downstairs. It's going to cost you a bit more,

you'll have to convince the planners, but you can certainly increase your profits, as well.

# Money, money, money

# Must be funny

# In a rich man's world. #

With a guide price of £90,000,

let's think this potential money-spinner through a little more.

Splitting it into two flats means the one-bed on the ground floor

would be pretty tiny,

but what about extending outwards into the courtyard, where the lean-to is?

In theory, that could be done.

But before I get carried away, with the costs involved,

would it be worth the extra effort?

We asked a local estate agent to check the place out.

# It's a rich man's world. #

My first impressions of the maisonette is it's a very good size

and it does have the advantage of outside space,

which is quite unusual for maisonettes above shops

in this particular area.

What could the property sell for after being refurbished as it is?

If the property were to be kept as it is,

with two-bedroom accommodation, but renovated,

I would recommend an asking price of £145,000.

And rental?

As a two-bedroom maisonette, the rental value

would be £650 per calendar month.

If converted into a three-bed, what could it sell for?

It should achieve in the region of £150,000.

And the rental for a three-bed?

Rental value would be around £700 per calendar month.

The estate agent also said that if the property was split into two separate flats,

as a one-bed, the ground floor could sell for £100,000,

whilst as a two-bed, the first floor could sell for 125,000.

So, subject to planning, it could be worth the extra costs and work involved.

Well, I like this maisonette.

It's got options galore for the adventurous developer.

Properties above shops aren't everyone's cup of tea

but with this much space, I think it was a great one to go for at the auction.

It's a two-bedroomed maisonette. Good size.

How about 85, straight in?

85.

How about 80? Nobody start me at 80?

No? OK, that's fine. Come and see us afterwards if you'd like...

Oh, 80? Well done, you, sir.

80, I've got. At 80, at 80. You thought I was joking.

82. 82.

84. 86?

88. Guide? 90.

Lives up to its name at 90. 92.

94. 94? 96.

Now, think about it. What's his limit? Could it be 100?

100. 102.

103. And four.

Yes, five? OK, I will. Six.

106 on my right hand side once.

At 106 on my right hand side twice.

You are out. At 106.

You're sure and done? It's your last chance. Here we go.

At 106 and done. Well done.

The final winning bid of £106,000 was made by Ian and Philippa.

They live and work in Exmouth,

running their own passenger-boat business.

They also have a small sideline venture developing properties.

I met them back at the maisonette to find out more.

-Philippa, Ian, lovely to meet you both.

-Thank you.

-Hello.

Congratulations. So, why did you want to buy this pretty stonking maisonette?

Well, predominantly for, er, one of our staff,

-and for work for us to do when we have quiet times.

-Right.

It's a project for about a year

and when we get an odd day here and there to do some ripping about, we'll come and do it.

So, tell me more about buying for your employee.

We've got one of our members of staff been with us for about 15 years now,

and he's just paying lots of rent all the time.

We've done it with one of our other staff

and he's getting a cheap rent and we then get loyalty back, as well.

So, what's your business?

We've got a passenger-boat business here in Exmouth

-and so we do boat trips, excursions, functions.

-Oh, great!

It's nice but obviously, every now and again,

we have downtime and we can employ staff all year round, then.

MUSIC: "Step Into My Office, Baby" by Belle & Sebastian

It certainly makes sense.

During the quiet business times, the staff can keep busy,

helping the couple refurbish the properties they buy as a sideline.

And there's a chance of renting them out at a reduced rate afterwards,

as is the plan with this one.

One of their employees, Kevin, is already lined up to move in here.

-So, why this property particularly?

-It's based right in the town centre.

It's really easy just to get in and out.

There's no real parking here but that's not really a problem.

That's because their business is only a short stroll away.

Time to get down to the nitty-gritty now.

Tell me what you're going to do to sort the place out, exactly.

All the ceilings are coming down.

Where they've done the loft conversion, they've put Velux windows on the back.

We want to put a Velux window on the front, as well.

They're sometimes funny about putting Veluxes on the front elevation.

There's lots here. There's several dormer windows,

but we're not planning on putting a dormer window in.

It's a very big space up there at the moment, but we just want to get rid of some of the weight

and put a proper staircase in so it's all accessed a bit easier.

Making the most of the attic space by doing a legal conversion

is the sensible way forward.

They'll consult with the experts to be sure it complies with building regs,

and get any planning permission required from the local authority. Those cracks in the living room

should be enough to persuade anyone why it's important to stick to the rules.

-And would you be doing a lot of the work yourselves?

-All of the work ourselves.

-All?

-Yes.

-All. Friends, as well. We've got friends that are plasterers and electricians,

but predominantly staff, so labour costs are down.

We've got to pay our staff to work anyway, so we might as well pay them

to be doing painting and decorating here, as opposed to making cups of tea on a boat.

And presumably the chappie who is moving in here must be delighted.

Absolutely over the moon. It's so handy.

He can walk to work in minutes and it's right here,

everything he'd ever want on his doorstep.

So, a great team effort, then,

with trades coming in to sort the wiring and plumbing.

But have they thought about turning this place into two separate flats?

We have looked at that, but...

There's lots and lots of small flats in this town, to be fair,

and we want something a little bit bigger for more long-term.

So, any idea how much it's going to cost to do what you want to do?

Forgetting labour - we're going to be doing most of it ourselves -

-so we anticipate the extras will be about £5,000.

-And timescales?

We're going to start it when we have a few odd days here and there

and then, from then, it's going to be about three, four months.

Their employee, Kevin,

will move straight into the flat, living on the ground floor, while work starts upstairs.

What's next for Ian and Philippa?

We'll be finishing this before we go on to anything else and...

Yeah, it's a project, like I say, long term.

We've done it before and it's worked well

and no doubt we'll do some more properties, as long as the price is still right.

Well, congratulations. Well done.

-And we look forward to seeing how you get on.

-Lovely. Thank you.

Well, how about that, then?

Philippa and Ian must be pretty perfect employers

and Kevin, their employee, not surprisingly, delighted.

Still, he'll never have an excuse to be late for work again!

Find out how they get on later in the show.

It's been many months now since we last saw those properties.

So, have the renovations been plain sailing or a bumpy ride?

Let's go back and find out.

Back now to Penrhiwceiber in Mid Glamorgan,

where earlier we met Henry.

He bought this three-bed terraced house at auction for 25,000.

Purchased with his father as part of the family's property investing business,

24-year-old Henry was learning the ropes

and doing a great job.

When it came to this three-storey property,

he had two builders in place and renovation plans sorted.

We'll have a brand-new kitchen, a brand-new bathroom.

Carpets throughout.

This one has a brand-new boiler already installed,

so that's a bit of a saving for us, and just a general redecoration.

With a budget of only 4,000 and a timescale of three weeks,

we returned two months later to see if Henry managed to keep his team on track.

And there's an instant facelift to the property exterior.

Those protective metal boards have been removed, to reveal the double glazed windows below.

There's no visible change at the back,

but it inside where the biggest transformation has occurred,

starting with the lower ground floor and that rather shabby kitchen.

Well, as you can see, we fitted a brand-new kitchen to the property.

It's not the most expensive kitchen about, but, er...

It's pretty basic, but it looks pretty good, I think.

We've left the relevant spaces for fridge, freezer, dishwasher and so on.

I think, all in all, it cost us about £800,

which is pretty good in anybody's eyes.

We're pretty happy with it.

With another two floors to go, I bet Henry's workforce had no time to stop.

# Don't stop

# Thinking about tomorrow

# Don't stop

# It'll soon be here

# It'll be here, better than before

# Yesterday's gone

# Yesterday's gone. #

The layout's still the same, with three bedrooms on the first floor

and a refitted and decorated bathroom and living room on the ground floor.

That means there's still quite a hike to the kitchen on the lower ground,

but Henry wasn't convinced it was worth changing the configuration.

We didn't consider changing the layout of the property at all.

It probably would have taken too long and been too costly,

so we just stuck with the layout at the moment, with the kitchen downstairs.

The renovation was carried out by Henry's workforce,

employed by his family business.

How much project managing did Henry have to do?

Since we bought the property,

the only time I've been back here was to remove the shutters off the windows.

Other than that, the guys have done all the work on their own,

and this is the first time I've seen it. I think they've done a brilliant job.

It's all done to a reasonably high standard. Well, a very high standard.

They did it quickly and efficiently.

We don't think it's risky to leave the guys to do the work on their own.

They're very experienced. They've worked for us for many years and are top-quality workmen.

It seems like this was an easy renovation for Henry, but is there a secret to his success?

I'd like to think the reason that the job was done easy

was because of a solid pre-auction report and investigation done into the property.

You just can't beat a bit of pre-auction research, Henry! Well said.

But what about his deadline and budget?

Yeah, we did originally time it for three weeks

and I believe they did it in exactly three weeks, so it was perfect.

Originally, we budgeted for £4,000. Having looked at the final figures of what we've done,

we've come in under budget, which we're very happy about, at about £2,900.

Obviously, because it's not the most expensive of properties,

we don't chuck in your expensive £10,000 kitchens and so on.

We do it to a standard that's sufficient.

Henry certainly doesn't mess about when it comes to property developing.

He spent 25,000 on this purchase and 2,900 on the renovation.

Adding fees, Henry says his total outlay is £30,200.

That doesn't include any labour costs,

as the builders are employed through the company.

Has he invested his money wisely?

Let's see what two local estate agents think.

The work that has been carried out so far to the property

has brought it up to a much more modern standard

since our first visit.

Aesthetically, it's very different to the first house we came to see.

Bathroom has been updated to a basic standard.

For the rental market, enough has been done with the bathroom.

The kitchen is very nice.

It's on the lower ground floor,

which opens onto the garden.

But it is quite well fitted for the type of property.

First impressions are not too bad, then, but let's talk numbers.

How much value has Henry added? Remember, he spent just over 30,000.

If we were asked to put the property up for sale,

in the current market, we would expect it to achieve

between £35,000 and £40,000.

I would estimate the value of this property

to be in the region of £40,000 to £50,000.

Well, it seems a lot lower than the price they gave the first time they came to see it.

And also, we've had it valued twice now,

most recently at about £55,000 to £60,000,

by local agents, so I'm a little bit disappointed in that.

Well, if Henry does achieve the figures he's been quoted,

he could be in line for a gross profit between around £25,000 and £30,000.

Of course, this was always intended for the rental market,

and to be added to their fast-growing portfolio.

Resale is hard in this area, making rental the way to go,

but what could it make?

We would expect it to achieve

between £375 and £400 per calendar month.

This property could now achieve

in the region of £350 per calendar month.

Yeah, the rental values are about where we were looking at.

Before we bought the property, we were aiming for 350,

but we've been since told 400 is more acceptable.

Well, the rental valuations speak volumes and confirm that this is best let out,

as Henry could be seeing a potential yield of around the 14% to 16% mark.

He must be pleased with how all this has gone.

Er, we're pretty happy with the house, to be honest with you.

It'll provide us with a very good yield of about 16%, hopefully,

and it will be a good contribution to our portfolio.

So, with the property renovated and on the rental market,

what does Henry hope for in the future?

In 20 years' time,

hopefully I'll be retired on a beach somewhere.

But before then, I'd like to be working alongside my father,

who runs the property company at the moment,

for a good few years to come.

Back down to Exmouth in Devon,

where earlier we met couple Ian and Philippa.

They bought this spacious two-bedroom, two-storey maisonette above a shop

for £106,000 at auction.

The couple live and work locally, running their own passenger-boat business.

They bought this maisonette not only as an investment

but to be rented out to one of their employees. They had big plans for the property,

including getting planning permission to make the attic a livable space.

They were going to do all the work themselves,

with the help of friends in the trade and their own employees.

But they weren't interested in converting the property into two flats.

We have looked at that, er, but...

There's lots and lots of small flats in this town, to be fair,

and we want something a little bit bigger for more long-term.

They had a budget of £5,000

and a timescale of three to four months.

Well, we're back 18 months later

and it seems the couple completely changed their original plan.

# I think a change

# A change would do you good... #

In fact, they decided they WOULD maximise the property's potential

by creating not two, but three, flats!

A split-level two-bedroom flat in the loft space...

..and down into the first floor to a living area.

# A change

# A change would do you good... #

A one bed on the first floor at the rear of the property...

..and another one-bedroom flat on the ground floor.

This one is still to be finished.

The chimney breast in the former kitchen has been completely removed,

gaining space both here and in the flat above.

As well as the kitchen and living area,

there will be a bathroom and bedroom in this studio-style apartment.

To see how it'll look once it's finished,

let's head upstairs to the other one-bed flat at the rear.

This is the new kitchen, on the middle flat.

It's going to be a one-bedroom flat.

There was a real big chimney breast here, right in the centre, which we've now taken down.

Opened the whole space up.

The lounge area is going to be here

and then we've made a nice balcony out here.

We've still got some finishing touches to do.

We got a nice stainless-steel rail to go across the back,

and you can also access it from the bedroom, as well, at the other end of the balcony.

At the front of the property, also on the first floor,

is flat number three.

The original bay fronted lounge is now the kitchen-living area

and up the brand-new staircase to the legally converted loft space

are now two bedrooms, with a contemporary bathroom.

New skylights have been installed to flood the rooms with light.

All three flats have been rewired, central heating installed

and new flooring put in throughout.

Outside, the walls have been rendered with new guttering, windows and doors.

The conversion took much longer due to the extra planning and work needed,

but there was another reason, too.

Unfortunately, I haven't been that well, health-wise, either.

Since you first came round doing the filming, I got cancer, unfortunately,

so that's a year ago now.

I got the all-clear on that and other items of health

take your priorities from doing some work, occasionally.

I'm so glad Ian is better now

and had the support of friends, family and also his staff,

to get the renovation to this point.

They've done a lot of work for me

and things like this were just my hobby, more than anything else,

so, yes, it's got all put to one side and we've just come back,

and doing it when we've got time to do it.

Converting this place into three separate flats was no easy task.

It was a quick decision to make it into three units,

but a long process actually doing the legal work,

because the more units you've got,

it was all the more money involved, and more time,

cos you have to get more permissions from different authorities

and the people who actually own the property and next-door neighbours for sound and noise and...

Yeah, lots of different paperwork.

How did Ian fare with his budget?

We ended up spending £60,000,

but a lot of the bigger expenses we weren't budgeting for

because we didn't plan to do it.

Obviously, to be able to convert it into three properties,

I had to buy the freehold, which was extra money.

Then whilst we bought the freehold, the person who owned the freehold also owned the shop downstairs.

I agreed to buy that and paid a deposit for that, as well.

Ian's spent a total of £191,000,

including the £106,000 purchase price,

£60,000 on the renovation and another £25,000 buying the freehold.

Ian's employee, Kevin, is already renting the split-level flat. The other two are still free.

What level of rent should Ian charge for them?

Time to hear from two local estate agents.

Very impressed with the standard and style of the work. Thoughtful use of the space.

I like the quality of the finish. They say it's in the detail

and the quality of the kitchen's and bathroom's very impressive

for this kind of conversion.

I like the maisonette best. It's got a good cottagey feel to it.

It feels a good deal of space.

The bay window at the front makes it nice and bright and airy.

What kind of resale value could the flats achieve?

In terms of resale value, the kind of figures that I'd be looking at

for the one-bedroom unit would be somewhere around about 90,000.

I think the two-bedroom, perhaps,

would be pushing up towards the stamp-duty limit at around 125,000.

For the one-bedroom properties,

a figure somewhere in the region of £85,000 to £90,000 could be achievable.

For the maisonette,

I think a figure somewhere in the region of £125,000 to £135,000.

That's a potential total gross profit of between £104,000 and £119,000.

Yeah, that's what we were expecting, really,

but, at the moment, for the amount of money that's been invested into it,

I think it's better to rent them out for a while.

What could he achieve rental-wise?

For rental, per calendar month, I would anticipate

the one-bedrooms achieving somewhere around about £550.

The two-bedroom, perhaps somewhere around about £650.

The one-bedroom flats would achieve a price

in the region of £525 per calendar month.

The maisonette would achieve a price somewhere in the region of £625 per calendar month.

That's about what we were expecting it to be.

Obviously, Kevin's living here, anyway, in one of them,

so he's having it quite a bit cheaper than that,

but I prefer to have probably slightly less,

but a tenant that's going to be here for a long time, really.

I don't want to be decorating them every six months.

Quite right. And with a potential yield of around 10½% to 11%, Ian's done really well.

So, what's next?

I've already bought another property, now, that's going to keep us busy for the next two years,

so, er, I'm not in a rush to worry about having to sell these.

We'll see you next time with more thrills and spills from the auction room.

So make sure you join us then for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

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