Episode 30 Homes Under the Hammer

-Welcome to the programme.

-If you've ever tried to buy a property but been caught in a chain,

you'll know what a nightmare it can be.

So, how do you avoid that kind of situation?

Well, one way to cut through the links in the chain

is to buy your home under the hammer.

Well, people go to the auction to buy all sorts of properties

and they have all kinds of budgets.

There's an enormous choice available,

so what did our buyers decide to bid for?

I have just one verdict on this property in Gillingham, Kent.

Dated, dated, dated!

In Maryport, Cumbria, I've made my mind up about this house.

To be honest, I don't care about the rest of the house, I already love it.

And in Wiltshire,

sometimes it's not just plants you can grow in the garden.

You've got to be a dedicated gardener to chose your roses

over a rather large chunk of cash.

All these properties went to auction -

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

when they went under the hammer.

Want to live in London,

but can't afford the astronomical property prices?

Well, Gillingham in Kent could be the place for you.

Reaching the capital couldn't be easier, it takes an hour by train,

and there are also strong road links, should you wish to drive.

The average property price here is just under £200,000,

so, you can see why it's a big hit with commuters.

It's also a very popular area with students,

with MidKent College nearby,

an £86 million development which opened two years ago.

Now with students around,

there are two things they're bound to need - pubs and accommodation.

# Everybody's got to learn sometime. #

So, this area is an ideal buy-to-let opportunity.

A short walk from the college and the train station

and I'm here to see today's auction property.

Now, the catalogue tells me it's in need of some improvement,

and that is good news, because there could be scope to add value.

It's here, looks OK from the outside,

and the guide price, well, that was set at a very reasonable £85-90,000.

I'm going in.

This two bedroom, mid-terrace house sounds promising on paper,

but what about inside?

Dated, dated, dated!

Look at this obscured glass, it's rather strange to have it there,

but it is letting light into the hallway.

Nevertheless, it's got to go.

Wallpaper, that's all got to come off, you've got a good-sized lounge,

but tongue-and-groove everywhere in there.

It's not quite fitting the modern, 21st-century look, I don't think.

Polystyrene tiles on the ceiling, the carpets have all got to come up,

this has all got to go, it needs a complete rethink, this property.

But the room sizes are good,

and look at this for the back of the house.

I think this was an extension that was added on at a later stage.

A good sized kitchen, although the kitchen's out there,

I'd like to bring it in here.

Once you've done those alterations,

you could have yourself a nice little house here.

Well, I'm optimistic so far, but what's in store upstairs?

So, we have two good-sized bedrooms upstairs,

and we also have, which is good news, a bathroom of a fair size.

Some rather jazzy pink and black tiles.

The good thing is we have a cupboard space here,

we have exactly the same next door,

and I have seen this done so many times.

You could create a corridor along here,

this is all so bedroom number one can access this bathroom

without having to walk through this bedroom.

Partition wall here, doorway, so this allows this room

and that room to have separate access to the bathroom.

Fantastic, that all works out.

A bathroom leading off one bedroom is never ideal,

especially in a student let.

And check out that design in the bathroom!

It all depends on what you're going to do with the property.

If it's a shared one,

you'll want to move this bathroom to between the two bedrooms,

but the bottom line is that I think rental is the way forward here.

Personally, I don't think this house is a short-term money-making machine,

the resale figures aren't amazing, so I would be inclined

to take the long-term view and rent this property out.

Let me show you why.

Now, I'm going to crunch some numbers here.

OK, so, a buyer picks this up at auction for,

let's say £100,000,

they spend a further ten grand in fees and renovation costs,

and they secure a rent for £600 a month.

So, that's 600 x 12,

that equals £7,200.

Then you divide that number by the total amount spent,

in this case, £110,000.

So, I've done some figures previously,

now, that comes out at roughly 0.065.

If you times that by 100,

you have your figure of 6.5,

and that is your yield.

A great return on an investment, I think.

Those are just my thoughts,

but what does a local property expert reckon?

We asked one along to hear his opinion on this place.

First impressions, nicely surprised,

it's really, a typical house for this area,

needing a fairly basic and light renovation.

This property as a rental would appeal to students and families alike.

Once the property was renovated, how much could it rent out for?

I would expect to achieve around £600 per calendar month.

What if the buyer chose to sell it on?

When completed, I'd put this house on the market for £120,000.

Well, you know what I think by now,

this is a perfect buy-to-let property,

if you buy at the right price.

You'll never be short of tenants, and the yield is high.

It's a no-brainer to me,

let's see who else fancied this one as we go to auction.

Start me at 85,000, good value at 85,000.

Start me at 80 then, at 80,

80, I'm on the way. 80, I've got.

With you at £80,000, and 82?

82. And five?

85? 85.

And eight, 88,000.

90 anywhere?

90 in a fresh place, 92 it's against you, the 91 I've got, and two, 92?

You know it's worth it, 92 I've got, and three, and four.

It's in the room, its 94, it's with you again. 95 if you like now,

95, and six?

I've got 96 sitting in a fresh place in the aisle.

97, it's against both of you 97, he's shaking his head.

At 96, then, sitting in the aisle right in front of me for the first time.

At £96,000 for the second, 96 and a half, I'll take once.

97 it's against you. 97 and a half again?

97 and a half. And 98?

98? He says no. 97 and a half then, for the first,

second, if you're sure you're all done,

third and final time, £97,500, all done.

It's yours at 97 and a half.

And it's Craig who's the happy new owner of the property,

with his triumphant bid of £97,500.

He works for a sports distribution company

whilst taking a break from his Business Studies degree.

He's based in London, but knows this area well.

At the age of 23, he's a young investor,

I met him at the house

to find out whether he was doing this refurbishment for business or for pleasure.

Craig, congratulations, lovely to meet you today.

-And you.

-Well done.

-Thank you.

I want to know why you wanted to buy this property.

Well, basically, my dad owns a property in the area as it is,

and that's a student let,

and I thought I could replicate that on my own.

So, is it close to this house?

-It literally two, two to three roads away, so yeah, five minutes' walk.

-Oh, wow.

Fantastic, you score points there, because you obviously know the area.

Yes.

What about this property?

Um, good question. To me, it was meant to be,

because I saved up the deposit,

and literally, I finished that about a month ago,

and then, lo and behold, I had a look on the auction,

and the property came up.

So I rung up my dad, and he was like, yeah, let's go for it.

Has it been difficult trying to save that money over such a long period of time?

Oh, absolutely, with the girlfriend wanting to go on holidays,

and friends wanting to go out, it's been tempting to tuck into it.

But, yeah, you've just got to have a lot of self-discipline, and just, yeah.

Do you have any money left over for the work you need to do here?

I do, I've got a very tight budget of £5,000,

and Mum and Dad's bank account if I need it.

Five grand does sound tight,

so, what's he going to try and do with that?

The plan is to move the bathroom into the conservatory room,

cos at the moment, that's just dead space.

And then, we're going to juggle the lounge upstairs,

cos at the moment you have to walk through someone's bedroom

to get to your room, and that's a no-no.

So, therefore, we've decided to move the lounge up there instead.

So, that's the communal area of the house

and kitchen, bathroom down here.

-What will this room be?

-This will be a bedroom as well.

Now, what sort of rental income can you get by doing that?

Based on what my dad's got round the corner,

anywhere between £60-£70 per week, per room.

OK, now, how does that compare with a family let,

because I've got numerous properties that I do the same thing,

but a family let to me, you get longevity,

you get a family that stay in it for quite a long time,

and you wouldn't have to do so much partitioning and rearranging.

Have you looked into that?

Not at the moment, I am open to ideas,

cos obviously, the project is at its starting point,

so, yeah, maybe if you visit me again, I might have changed my mind,

but I will definitely look into it.

I'm worried that a multiple let will mean more work,

and let's face it, Craig's five-grand budget will only stretch so far.

How are you going to manage to do it on such a small budget?

The good thing is, my mother and father will be living in the property and doing it up.

My dad's a wizard with DIY,

he's been doing it ever since he could stand up, basically.

And, yeah, he basically done his house round the corner,

so all the work was done there, so, yeah, we're going to save that way.

And how are your DIY skills?

You've talked about your dad's, what about yours?

How much are YOU going to do here?!

Yeah, they're very basic, to say the least.

But I'm a quick learner, so hopefully this project will whip me into shape.

Having such helpful and willing parents

will save Craig a lot of money in the long run.

But how long has he given them to do all the work on the property here?

The deadline is four months' time,

so, yeah, I've given my mum and dad up until that time to do it.

And they're really happy,

because that means my mum and dad can keep busy doing what they do,

as well as looking at property in the area for themselves.

Aren't they going to miss their creature comforts?

I'm sure I can bring them some coffee, or come down on the weekend, keep them company.

You think that cheeky little smile can get away with everything, don't you?

Pretty much, it has done so far, so, yes!

Craig, I'm really excited to see the end product, well done.

-Thank you.

-Thank you.

Craig's mum and dad have certainly got their work cut out here,

and they are working to a tight budget of £5,000.

Something tells me they may need to dip into their own bank accounts.

Will Craig manage to turn this house into a four-bed student let,

or will he take my advice and opt for a family rental?

You can find out which way he goes later in the programme.

This is the busy harbour town of Maryport on the coast of Cumbria.

Once famous for steel production,

it now thrives on smaller industries,

and the charming harbour with its bobbing fishing boats

is also home to a famous blues festival.

But I hope the property I'm here to see doesn't give ME the blues.

So, with all that going on and good proximity to the town centre,

and some good local schools,

the property I'm here to see sounds like a real find.

It's on this really interesting corner plot,

so it's got this nice double aspect, looks in good condition.

The guide price was just £80,000 for a large, three-bed house.

Oh, let's have a look.

From the outside, it looks like a fine, solid property

over three floors.

So, I can't help feeling this place has something going for it.

Not quite sure what I'm going to find, actually -

given the odd shape - but let's see what there is.

So, the lounge area there, the bay window is nice,

it looks to be in, oh, nice features, in good condition.

And then through here, I am loving this, look at this room,

a really nice, what would you call this,

a family living area, I would say.

You've got this wonderful, old range cooker.

Unusual ceiling, but a really nice space,

especially when you consider where it's located,

it's literally off the kitchen area.

Again, lots of light flooding into this part of the house,

obviously it's a bit of an extension at some point, cos it's got this rather unusual ceiling.

Maybe not ideal,

but the positives of it are that you get all this light in here, which is fantastic.

It's a good size.

It's fairly old and in need of a bit of playing around with, for sure.

But, all in all, this is fantastic.

And I love the fact you've got these patio doors

out onto the little yard area there.

To be honest, I don't care about the rest of the house, I already love it.

The space inside makes up for the small garden,

most of it taken up by this fishpond.

But on this I'm being a bit KOI, CARPING on about its only negative!

So, I'll carry on upstairs - while you groan.

On the way to the first floor there's a small landing with a loo.

Up the next flight of steps there's a large bedroom,

flooded with light from its dual-aspect windows.

Across the landing, there's a smaller room, but with an ensuite toilet and shower.

And you would really be happy with that,

in terms of the house finishing there,

but no, it continues on, up to this extra floor on the top.

And, it's just little things, as you walk up here,

you notice that somebody has gone to the trouble, and time,

and effort, and painstaking...

oh, whatever, of actually stripping the banisters back,

the doors have been done as well, I mean, it's just lovely.

Practicalities, things like you've got double glazing.

Up here, two bedrooms, one on this side,

it's got an ensuite as well,

it's not the most modern, but it's perfectly usable.

And then back across the landing,

admiring for a moment the staircase and banister,

to the last of your bedrooms.

Interesting little area here, obviously some kind of store area.

A few issues, you've got these roof supports, the purlins here.

Could be a bit of an issue, possibly something you bang your head on.

But I love attic rooms, it's got character,

it's got lots of light flooding in from the windows,

things like this lovely fireplace.

What is there not to like about this house?

It's one of those classic cases where if you came to see this

prior to the auction, you would see what an amazing opportunity it is.

Yes, an opportunity to grab with both hands.

It's structurally sound, with everything in serviceable condition,

and space aplenty, all for a guide price of just £80,000.

For a second opinion, we asked the auctioneer who sold it

about the pros and cons of this three-bed,

three-storey house in Maryport.

I think the positives of this property

is its proximity to the town centre.

You wouldn't necessarily need to own a car to either own the property,

or rent the property.

It's very easy walking distance to the town centre

and all its amenities.

But does the house itself have any drawbacks?

I think this property does lack a family bathroom,

and as part of the refurbishment works

you might want to consider creating a family bathroom.

So, how do the figures look?

First, if resold.

I think if this property was done up,

I think you'd probably achieve

a figure in the region of £110,000.

And what sort of income could you expect if it was let?

I think you may well achieve a figure in the region of £500 per calendar month.

Well, in case you haven't guessed it by now,

I absolutely love this place.

A really great auction find.

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

OK, we're going down to Maryport,

well presented, large, end terrace house,

anybody start me off at 80?

70 then? Not going lower,

I need 70. £70,000 seated.

At £70,000 we're away.

Take it in twos, if I may.

72 anywhere? 72 I've got.

74?

76?

78?

And 80?

82?

84?

86? 88?

90?

92? 94? Shake of the head at 94.

At £92,000, here, I'll take in ones. 93?

94. 95?

Shake of the head at 95.

At £94,000 in the front.

At £94,000 then, for the first time.

At 94 for the second time. Take a half, madam.

Shake of the head. At £94,000.

Not quite there, ladies and gentlemen, come and see us afterwards.

As the reserve price wasn't met at the auction,

the property didn't sell.

But it did eventually end up with Pauline and her daughter, Becky,

two of the original bidders.

Pauline works at a boarding school,

while her daughter, Becky, works in a residential home for the elderly.

I met them at their purchase to find out more.

-Pauline, Becky, lovely to see you both.

-You too.

I have to say, I'm a little bit surprised to see you,

what happened there, cos I didn't think you'd got it?

Well, we hadn't got it.

We set ourselves a limit of 92,000,

and we went to 93, the hammer dropped at 94.

It didn't meet its reserve,

the other couple disappeared,

within ten minutes, the auctioneer's assistant came along to us

and said would we pay 94,000 for it?

My husband and I were discussing it and started looking at each other,

and Becky made the decision.

Why were you so decisive at that moment?

No-one could make a decision, so I thought I'll make it for them.

-We're having it.

-We're having it.

You'd looked at this, didn't you, initially, and said, "I love it".

So, just to take a step back, why you wanted to buy it.

Basically, an investment property.

We want to rent it out, and have got tenants interested already.

We hope to turn it over really fast,

and yeah, my money in the bank was doing nothing much at all.

-Becky had a little bit of money.

-Yeah.

-So we decided our first venture, put it together.

-Yeah, first one.

Let's try it, didn't we?

For £94,000, I think they've got themselves a good buy-to-let here.

Pauline and her husband already have two properties they've renovated and currently rent out.

While for Becky, this is her first project.

Although they live a 1½-hour drive away,

they were attracted to Maryport through Becky's partner

who lives in the area,

but is that the only reason it caught Becky's eye?

Just making a bit more money.

My mum and dad have done it so I thought I might as well give it a go,

-see what happens.

-She thinks it works.

-Yeah.

What was it you liked about the house?

Just the character of it, um, it's quite big itself,

but also the layout, it's different from many other homes.

-It's not a boring house, is it?

-No, it's not a boring house.

What do you do when you're not doing this?

Well, I work in a boarding house, a school,

down in Cumbria, further down, I've been there nearly 30 years.

-Oh, congratulations.

-It's something I've enjoyed doing, and you.

-I'm a carer for the elderly in a residential home.

-Oh, great, OK.

Pauline helped put the money up for the purchase,

but any profits made will be shared between her and Becky.

As far as the renovation goes, it seems it's going to be a family affair.

Us two being very amateur, we can paint and that's about it.

We've got a son who's an electrician, a son who's a plumber.

-Wow!

-So we're going to use them, aren't we?

Yes, this one, I think because it didn't want a lot doing to it,

we thought, let's try it.

Because it was going up for auction,

it was going to happen fast for us and that's what we like.

So tell me what you are going to do to it.

Initially, we're going to paint through, aren't we?

-Put a new kitchen in.

-Possibly the kitchen.

That's going to be the biggest job.

-On the bathroom issue, there isn't a bathroom per se, is there?

-No.

-It's a bit...

-There are bathrooms, but they're attached to bedrooms.

That's it and I think the previous owners had actually

had the smaller one with the shower room attached to a laundry room.

Which seemed a good idea at the time but it doesn't, when you look at it,

that would be the one that I'd do for the bathroom if I was to do it.

But I think as it is at the moment, for a rental property,

it's got toilets on each level and it's got everything it needs

without having to spend a lot of money on a bathroom.

It's a wise move, because their budget for their planned works

is only £5,000, so a new bathroom would push it to its limits.

They want this place earning as soon as possible

so need to get it turned round in just a month.

As it's Becky's first project, she's gone for the role

of head of the decor department, so what's her vision here?

Just warm, neutral colours.

I'm going to do the kitchen, try and tie it in with the Aga,

a bit of a country theme going on

and then keep the rest of the rooms all natural and neutral.

Congratulations. You've got yourself a corker.

-Look forward to seeing how you do whatever you do.

-That's it.

-Watch this space.

-Yep!

Well, apart from the pond, nothing fishy about this place whatsoever.

Just a really good purchase for Pauline and Becky.

How will they get on sorting it out?

Not that they're going to do a lot, but find out later in the show.

Coming up in Wiltshire...

If renovating an old house doesn't appeal,

what about taking it a step further

and buying a plot of land and building your own?

In Cumbria, it seems that property refurbishment can for some

be the perfect family pursuit.

It's a whole team effort and we all enjoy doing it.

But first, we return to Kent

to see if property development is a step too far for Craig.

I just thought, "wow, what have I taken on?" to be honest!

Earlier in the programme, we were in Gillingham in Kent

to see this mid-terrace which sold for £97,500.

It was bought by Craig who is working as a sales coordinator

for a satellite sports channel

whilst taking a break from his Business Studies degree.

With his dad's help, Craig plans to renovate the house

and let it out to students.

The plan is to move the bathroom into the conservatory room there.

At the moment, that's just dead space.

Then we're going to juggle the lounge upstairs.

At the moment, you have to walk through someone's bedroom

to get to your room and that's a no-no.

-What will this room be?

-This will be a bedroom as well.

Over four months have passed

and we've returned to Gillingham to see how Craig is progressing

with the business of turning this two-bedroomed mid-terraced house

into the perfect student pad.

At the back, the garden has been cleared

and the outside toilet has gone.

Inside, the extra space has been put to good use.

A new bathroom has been installed

and the former kitchen has been transformed

with new units and appliances.

Along the hall to the front of the house,

the living room is now the first of four bedrooms.

The glass partition wall has gone, as has the fire from the fireplace.

In the rear living room, the wood panelling has been removed

and it has become bedroom two, adjacent to the kitchen.

The kitchen was, believe it or not,

one of the rooms which didn't need much complex work done to it.

It was literally gut out the old unit that was there,

put a new one in.

The aim of the game was to make it really light and airy

and I think we've done that really well. It looks great.

It does, but has Craig managed to achieve the same standard upstairs?

Now that he's created a brand-new bathroom on the ground floor,

that funky pink and black bathroom upstairs

has become bedroom number three and there's now a communal area

made out of the original back bedroom.

There's a further bedroom at the front

which brings the total number of bedrooms to four,

increasing the property's rental potential.

But how did Craig find the refurbishment?

It was a blast from the past. It had everything needing doing to it.

The walls were a nightmare.

Every room had a wall that needed doing.

I just thought, when all the wallpaper was down

and the plaster was bare, I just thought,

"wow, what have I taken on?" to be honest.

Well, it was a mid-terrace that hadn't been touched for years.

Lots of original features and lots of problems.

With the help of his mum and dad, the property has been resurrected,

although they weren't always enthusiastic.

At first they thought it was a really good investment

and as time got on, they hated it and hated it.

Now, they've started to see the light at the end of the tunnel

and they love it now.

But at what cost? Did Craig stick to his budget?

The original budget was 5,000 to 7,000. We ended up spending 5,800.

There's a few jobs here and there

so the total spend will come in about six.

Craig's Business Studies degree course is paying off.

So, what is his tip?

The secret is to have a dad that knows all the trades

and can do all the work.

My mum and dad are heroes.

They were living on-site, I was down here every weekend.

It was a massive slog. We had to do it. That's what keeps costs down.

That's what you've got to do.

Time to hear what two local estate agents think of Craig's

and his mum and dad's hard work.

I think the four-bedroom configurations works very, very well

if you're aiming at a room-let market.

Personally, I think the property has been done to a reasonable standard.

It's magnolia, it's neutralised, it's bright, clean,

the ceilings are clean.

It's very typical of what you see in this kind of property.

The accommodation is a good size.

The smallest bedroom is very clearly a single room

but it works very well as a four-bedroom.

How much parental income could it produce if let to four students?

If the property was occupied by four students,

I'd expect the monthly income

to be approximately £1,400-£1,500 per calendar month.

As a student let, I think, over the 12 months,

you'd achieve around £1,000 a month.

Craig has already started securing tenants for his property,

so how much rent are they willing to pay?

I managed to get £95 a week. The first one is in the door.

It was off plan, so it wasn't finished.

I showed them round, told them to use their imagination.

They saw a couple of rooms, realised it was high-quality and loved it.

That means the four rooms he is renting out should generate

an income of £1,520 per calendar month.

This would give him

an amazing annual yield of around 17.5% - incredible.

And with a total investment, not including fees,

of £103,500, have the changes increased its resale value too?

I believe I could sell this property on

for a price in the region of £115-£120,000.

As an investment property, room lets, students,

I would expect an astute investor to pay upwards of £145,000.

Well, those valuations of between 115 and 145,000

would mean a gross profit of between 11.5 and a whopping £41,500.

145, wow, that's, that's really impressive.

The 115, 120, that's more or less what I had valued myself,

but 145, my dad's going to be really happy with that knowing that

he's put a lot more value onto it.

Brilliant. Really happy.

Craig's confident that he can achieve a high rental income again

on the next property he buys to convert into student accommodation.

I know the market. I know a lot of friends that lived in the area.

I've seen the state of their student houses.

Therefore, I'm like the inside man in what I know and, erm...

therefore I can bring, put my own input into it and bring it up

to what I've done to this one, so hopefully, fingers crossed,

I can do it to the next and next and next

and maintain those high rents, but we'll see.

This is Corsham in North Wiltshire

and like many of these little historic market towns,

it's picture-perfect.

Road links are good too, with Chippenham and Bath

a few miles away, so it's very practical.

For some people, the idea of renovating an old property

and dealing with damp - it strikes fear into their hearts.

For them, nothing could be nicer than a brand-new home.

So what about taking it a step further

and buying a plot of land and building your own?

Well, that is what we've got today.

It's land with planning permission for a two-bedroom house

and a guide of just 40,000.

Now all I can see right now is this garage.

So it must be round the back.

It's a pretty road, just moments from Corsham itself

but it is busier than I would have liked

and the factory next door is not exactly quiet.

As they so often are, the plot was created from next door's garden

and the access is still through their back gate.

Hmmm...

Not very convenient.

The garden is split down the middle and the house will retain

its own half of land with this side being developed.

Now, it's not a very businesslike thing to say, I know, but my first

thoughts are it's a bit of a shame this all has to go

because it's just beautiful.

It's like a little oasis tucked away from the road.

But let's be honest here,

you've got to be a dedicated gardener to choose your roses

over a rather large chunk of cash!

So, I'm afraid it's goodbye garden, sad, I know,

but the vendor will still retain a long strip of land for themselves.

What about plans for the new property? Are they as attractive?

I'm glad to say the house that's going to be built looks really nice.

It's in keeping with all the others along the terrace

and I think one of the bonuses here is it's a nice stand-alone

detached house.

It's got an integral garage for parking for two cars

but I'm going to come back to that a little bit later on.

Now the floor space downstairs looks quite generous.

You've got a kitchen going into an open-plan living/dining room.

You've got two bedrooms upstairs on the first floor, really nice space,

but you've got to remember you are upstairs in the eaves

so you will have restricted head height.

So, overall I would say it's small, but perfectly formed.

Well, the best things are meant to come in small packages.

The plans look good and this property has the potential

to become a very attractive home.

But back to that garage.

So, the plans include an integral garage on the ground floor.

Normally I would question whether this was really necessary

because I think it can eat into your living space.

Here, however, it's crucial and was key to getting these plans passed.

You can see in the drawings that the planners have specified

there must be two car parking spaces for this property

and the one next door, whilst keeping a turning circle free

at the front, which is here for both houses.

You cannot park in this area.

Now, that is fine, but whoever buys this plot has

the responsibility for all of the ground works which, when you

take into account the demolition of that garage, it could be fiddly

and expensive and it certainly needs to be added

to your pre-auction budget.

Remembering that guide price of 40,000 and with a build cost

in the region of £80,000, depending on the specification,

the total spend to build the proposed house would be about 120,000.

We asked a local estate agent along to tell us what he thinks.

Looking at the plans, I think they've done a very good job in maximising

how much accommodation they'd get on to what is a very narrow plot.

They've done a very good job overall.

It's crucial they've got off-road parking because

even though you can park on the road

at busy times, it's a very busy road and you don't really want to leave your car on there.

OK, let's talk figures.

What could this plot achieve on the resale market as it is?

I think the plot is worth something in the region of £50,000-£55,000.

And, once the new build is complete, what could the resale value be then?

A completed, detached two-bed house would be worth

something in the region of £160,000-£165,000.

What about the rental market?

Once completed, I think the property

would rent for something in the region of £575 per calendar month.

It's not a totally straightforward plot but, at that guide price,

you can afford to factor in a few complications.

And, for somebody who is careful with the pennies,

this plot could turn you a tidy sum.

Let's see who swung it at the auction.

Lot three it is, a little building plot, will you start me,

£40,000, somebody?

35, then, OK, at £35,000, lot three,

that's what I'm selling the building plot at, at 35.

With detailed planning consent. 36, 37, 38.

39, OK, at £39,000, over there at £40,000.

Over there at 41, at two, may I say? 42, I've got it, OK at 42.

43, 44, 45, 46,

47, sir. 48. 49, 50,000.

51, 52, 55.

If you listen to other people, 56, 57.

58. 59. 60.

One. Two.

61.5? 61.5? 62, to you, sir, and a half again, sir?

And a half? And three, sir? And a half, 3.5, 64?

No, 63.5 there, for the first time.

£63,000 for the second time,

and 63.5 for the third and last time, are you done at 63.5?

That successful bid of £63,500 was made by Sue,

with her partner Terry doing the bidding on her behalf.

Sue has been looking for somewhere to live locally, but a plot of land?

I met them on it to discover how this purchase came about.

-Guys, congratulations. I bet you're really thrilled.

-Quite excited.

So, I want to know, what's the story behind you buying this plot of land?

I walked into the estate agents to look at a one-bedroomed cottage

and it was a real no-no, so I went back to the office

and I spotted this plot of land up for auction,

the same day. And I decided on the spot, I'd like to go for this.

Luckily for Sue, her brother's a chartered surveyor,

so she asked him for his advice.

Unfortunately, he didn't receive the legal pack

in advance of the auction,

but was able to make a few enquiries and Sue decided to go for it anyway.

Although she loves the plot,

she's not so enamoured with the current plans.

The front door is situated within the garage door.

They would prefer a walkway leading up to the property

with the front door on the side.

But, is there enough space for this?

Terry was thinking of pushing the property back a little

and I know my brother is as well.

How would this house would benefit from that?

Push it back and I'd rather see a double,

two storey rather than three-storey and do away with the bottom garage.

-So you would be happy to park your car not outside your door?

-I would.

If Sue wishes to make these changes, she'll need to reapply

for planning permission, which will cost both time and money.

In this situation, I think if it ain't broke, don't fix it.

The plans do work and have been approved, so I would leave them be.

They have a timescale of 18 months

so there's no heavy pressure for the build to be done quickly.

-Are you guys planning to live in this house yourselves?

-Well...

-No.

Oh! Wait a minute! So, a "well", and a "no"!

So now are you doing this for the sake of a development project?

-Yes, we're doing this as a business.

-Probably, yes.

Sue's funding the project from the proceeds of selling her property,

but do they think there's much profit to be made here?

If a one-bedroom flat in Corsham is selling for 130,

she's spent 63 on this up to now and if the build comes to 100,

that's 163 - houses are selling here for 210 up the road.

Hmmm, I think those figures are a bit too high.

More worryingly, Sue's not keen on renting the property out

due to a bad experience in the past.

So they don't have a plan B if they can't sell the property on.

If Sue's intent on reapplying for planning,

she'll have two add more to her 80,000-£100,000 budget.

But, her brother and Terry will be working for free,

which will certainly help.

I've got to say, it's no laughing matter. She has spent £63,000 here.

That's your life savings. You've put all the money you have into this.

This has got to work out for you, Sue.

It's got to work out,

so we'll all pull together and make sure it works.

-Good luck with this.

-Thank you very much.

And I hope you don't have any problems and it all works out.

-Thank you, Lucy.

-Thank you so much.

-Cheers, Lucy, thank you.

I've got to say, I am worried about this project.

Sue and Terry have taken on a development that's unlikely

to make any money, at least in the short term.

And with no plan B,

it means that my nails are going to be bitten down to the quick.

You can find out how it all goes later on in the show.

Well, time has passed. Let's hope that money has been well spent.

It will be great

if all those wonderful-sounding plans have worked out.

Let's go back and find out.

We head back now to the Cumbrian coastal town of Maryport,

where mother-and-daughter team, Pauline and Becky,

bought this imposing three-storey, three-bedroom house for £94,000.

They didn't make a successful bid in the auction itself,

as it didn't reach its reserve price, but acquired it afterwards.

But, while Mum and Dad hummed and hah-ed about it,

Becky plunged in and took up the offer.

Why were you so decisive at that moment?

No-one could make a decision so I thought, I'll make it for them.

We're having it!

You'd looked at it with us initially and said, "I love it".

This was to be daughter Becky's first project,

and she couldn't have picked a better one to start with.

Everything was in good condition and full working order.

All it needed was a bit of freshening up.

Well, 2½ months later,

we returned to see if that's what's been achieved.

Inside, the biggest changes have been made to the kitchen,

where the tired, outdated units have made way

for something much more stylish and contemporary.

Through to the dining room, which has been given a lick of paint

and some accessories to make it look more homely.

The main living room is still looking grand,

but has been dressed to give it a more lived-in feel.

Becky was unable to be there on the day, but Pauline was on hand

to show us around, starting with the new kitchen.

This is the room I'm most pleased with

and the one we've done most work in, to be honest.

It was a bit of a mismatch, not a pretty kitchen, and it's not

a very square sort of kitchen, a lot of difficult angles

and what have you, but there was a fridge-freezer over there

which has gone, and some mismatched units round it,

so we took the whole thing out and put a fresh, white kitchen in

and I'm very pleased with how it's turned out.

We finished it off with tiling it and, as I say, I like it very much.

It's a good addition to the house.

Upstairs on the middle floor, removing the mirrored wardrobes

has opened up the main bedroom and revealed a lovely period fireplace.

And, with the walls redecorated,

this double-aspect room is just bathed in light.

Across the landing, there's been little change

apart from a coat of paint in the shower room.

On the top floor, a spot of redecoration

highlighted the period features,

such as the fireplace and roof beams.

But that's not all that came to light during the work.

In here there's been quite a lot of changes, to be honest with you.

There was a walk-in storage area.

It was taking up too much room, so we took all that down.

Once we took that down, we realised there was a damp area there,

so we addressed that.

And then we realised further on there was no insulation,

so it was absolutely freezing, so we addressed that straight away.

New plasterboard, new roofing, and painted it.

And as you can see, it turned out really nice

and I'm really pleased with it.

That was the only surprise in the whole project.

Once a roofer fixed the leak,

Pauline got on with repairing the damage,

which wasn't straightforward.

They're not sort of square rooms.

They're at awful angles, and I remember holding the plasterboard and what have you

and struggling with my husband. A few choice words came out!

But yes, we got there, and it's worth it in the end,

when you look at it, yes.

The other attic room was freshened up in exactly the same style.

The changes here have all been for the better,

and with the carpets cleaned throughout and the electrics and plumbing checking out fine,

this has been a largely cosmetic exercise apart from the kitchen and attic room.

Ideal for a first timer.

Becky, she's been a big part of the project.

It's been her first project. We've let her take control, if you will, of it.

She could've soon got carried away with things that she likes

and colours that she likes and real big changes,

but we've had to sort of bring her back down to earth a little bit

and say, you know, it is a rental property. But she's kept it on course,

So she's been a big part of this project.

It is always a temptation for first-time developers

to splash the cash needlessly,

though fortunately Becky has had Pauline on hand

to guide her through the pitfalls.

But it wasn't just down to the pair of them.

So did other family members help?

All the family has been in.

My son's an electrician who's done the electrical work.

My son that was home from Australia

actually came and did some of the painting as well.

And my daughter and myself have done the painting, the decoration,

the bits of finishing off. The good bits!

It's all helped to keep their costs down,

with the spend on this renovation coming in

under their £5,000 budget at £4,500.

Add that to the £94,000 purchase price

and their total outlay is 98,500,

and it seems they're poised to earn some of that investment back.

We have got tenants coming in two days' time,

a lovely family, a Scottish family who want to move to Maryport,

so yeah, a long-term let.

That's the plans for it at the moment.

But have Pauline and Becky got the best out of this house?

We asked two local property experts

what they think of this £98,500 investment.

I'm delighted with the results of this property.

I think they've brightened it up really well.

I think the decoration they've carried out

has made it light and airy.

The biggest work they've carried out, of course, is in the kitchen area.

It's now providing a great living space with a dining area

which flows very well into the kitchen.

I think it's a fabulous property. Nice big, light, bright, airy family home.

I really love this kitchen.

It suits my personal taste

and I think it's really going to suit a lot of families.

A really sociable living space.

So the experts like the improvements.

But with the property on a long-term let,

have Pauline and Becky got the best rental return possible here?

I think if this property was exposed to the rental market,

you would achieve a figure of around £450 per calendar month.

Rental-wise, probably in the region of £450 per calendar month.

Yeah, about what we thought. Yeah, we're happy with that.

We've actually got a little bit more, 475, on the top end of it.

That rental income of £475 per calendar month

would see the pair reap an annual yield of around 6%.

And if they decide to sell,

the experts reckon they could achieve between £110,000 and £115,000,

giving themselves a potential pre-tax profit

of between 11,500 and 16,500.

But the plan for now is to have the property earning a steady income

and keep this as a long-term investment.

Pauline, Becky and the family are already eyeing up their next move.

Going to the next option. I think we've got the bug.

Yeah, we love it, all of us.

It's a whole team effort, and we all enjoy doing it.

Earlier in the programme, we were in the Wiltshire town of Corsham,

where the garden behind this garage was sold as a building plot

for £63,500.

It wasn't just the land. There was planning permission to demolish the garage

and build a three-storey, two-bedroom house.

It was bought by Sue, and came as a surprise to her partner Terry,

as she'd originally been seeking something else.

I walked into the estate agents to look at a one-bedroomed cottage.

It was a real no-no, so I went back to the office

and I spotted this plot of land up for auction, the same day.

And I decided on the spot I'd like to go for this.

The plans that had been passed required the house to be built in 18 months,

and stipulated there had to be parking for two cars and a turning area at the front.

But Terry had a different idea and wanted to resubmit the plans.

Terry's thinking of pushing the property back a little.

So how do you think this house would benefit from that?

Push it back and I'd rather see a double, a two-storey then a three-storey,

and do away with the bottom garage.

Well, it's now two years and five months later

and we've come back to see how things have turned out.

Well, the garage has been demolished

and there are signs of some ground work.

At the back, the garden has been cleared

and a new fence separates the building plot from the neighbouring property.

But there's no sign of a house at the front of the plot...

..or the rear.

But as Sue explains, there have been some unfortunate delays.

In the original contract,

it said that I had to build within 18 months of buying the plot.

Unfortunately, I became very ill

and everything was put on hold.

A new build can be very difficult and challenging at the best of times.

But Sue's illness meant that this one was an even bigger challenge.

So what exactly have Sue and Terry managed to do?

We've put all this fence in along here. We've removed different trees out.

So we've done quite a bit of ground work ourselves,

but we had main contractors in to come and clear this double garage.

They sensibly employed experts to remove it, as it contained asbestos.

But what about the proposed changes to the plans for the house?

The plans were changed slightly.

Not a great deal, because what we did was

we tried to cut down on the timber,

the amount of timber in the loft,

because there was an excessive amount of timber.

So what we've done is we've installed an A-frame on the plans,

which cuts down on the costs of the timber.

But sadly the only timber that's been bought so far

has been for the fence, and the plot is without that planned A-frame.

Parking also proved to be an issue,

as they'd missed the fact that there had to be a turning area at the front.

That was the main issue,

but we tried to get that changed and regulated and we couldn't.

Sue paid £63,500 for the plot.

Her brother's a surveyor and has helped her with her planning appeals.

How much has she had to spend?

Roughly, including buying the plot, it's cost me about 87,000.

That's a whopping £23,500 on top of the purchase price,

and still no house to show for it.

With her ill health

and the difficulty she's faced trying to amend the plans,

Sue's now decided to sell the plot on, with the planning permission.

So how has that gone?

I've sold it for 62,500, and it's cost me about 87.

I just fell in love with the plot.

It's a beautiful plot, and so, you know,

me and my finer wisdom went ahead,

much against Terry's better judgement.

This has been an unhappy venture for Sue, with a loss of £24,500.

So after this experience,

what would Terry's advice be to anybody tempted to buy a plot of land?

You've got to look and make sure you've gone through the plans

and everything before you buy.

The small print is very important on a plot.

That's really good advice.

But what's the future now for this land?

We asked two local estate agents to give us their thoughts on the plot,

first in its current condition.

In the last 2½ years, a few things have changed,

but obviously not a lot.

The garage has come down, the fence has come up,

but aside from that, it's still as is, really.

I understand part of the planning provision was that there has to be parking allocated to a neighbour

as well as turning space. But that will restrict, I think,

space on the plot. And that won't be for everybody.

Usually with building plots, they do tend to get on with it

especially seeing as it's a lot of money involved

and they'd like to get their money back, ideally. I think it's a difficult plot,

'but I think it's the best she can do with the actual terrain and the layout of it.'

How much could the house be worth once it's built?

Once the property's built, in today's market,

I would expect it would have sales figure of around £170,000 to £175,000.

I would see the value being around about £200,000 to £205,000.

If Sue had continued with the build, there could have been

some profit here.

But are they the figures she anticipated?

I would've thought right from the beginning 205,000 to 210,000,

because this is Corsham, and that has a premium on it.

So I'm not surprised.

What about the current value of the land?

Is the £62,500 that Sue sold it for in line with market prices?

I think the building plot at present is worth in the region of £60,000.

If they were to sell the plot as it is,

I would see the value being around about £60,000 to £65,000.

Well, at least she sold at the right price.

But overall, she still made a substantial loss.

How does she feel about that?

I mean, I have lost a lot of money. But hey-ho, you know.

It's yesterday. Tomorrow's another day.

Well, that's it for now.

Did we inspire you or put you off trying it for yourself?

We'll have more properties for you next time on Homes Under The Hammer.

-We'll see you then.

-Goodbye.

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