Episode 51 Homes Under the Hammer

Hello and welcome to Homes Under The Hammer.

Now, property auctions used to be the realm of just developers

and builders, but now all sorts of people are realising

the opportunities that are on offer.

And even in this more difficult market,

they are still managing to find good deals under the hammer.

Even for the most experienced of buyers,

auctions can be exciting and nerve-racking places,

but it is really important you don't get carried away.

So, did today's buyers keep cool heads?

Did they get some great deals?

Here is what they bid for.

I'll be stripping near Stoke-on-Trent.

Oo-er, missus.

Well, there you go.

At least stripping the wallpaper won't take long.

In Swanscombe, North Kent,

this three-bed terrace is a dating disaster.

Very dated. You need to clear it out, start over again.

And in Kenfig Hill, Mid Glamorgan, I discover

whether bigger really is better in this commercial property.

Look at the size of this! Fantastic amount of space.

All these properties were sold at auction.

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

when they went under the hammer.

If it is rural idyll you crave,

but you can't imagine giving up good shops and transport links,

then this Stoke-on-Trent suburb may be your idea of paradise.

# Oh, think twice

# It's just another day for you You and me in paradise. #

Well, pretty much right in the centre

of semi-rural Newchapel,

but close to Kidsgrove, with its shops and amenities,

as the property I am here to see.

It's a semi-detached cottage. It sounds quite cute.

The guide price was £50,000 plus, but straightaway I'm seeing

some rather interesting features that I wish weren't there -

like a wiggly roof.

# Right smack dab in the middle of town

# I found a paradise

# That is trouble-proof

# Up on the roof. #

Well, I think there might be trouble in this paradise

if that's what it looks like out here.

Ah-ha. OK.

It's not looking good, is it? The door doesn't fit very well.

Door frames are always a giveaway for potential problems.

They swell in the damp and doors don't shut properly.

And also, if there is any shifting in the building, then again,

door frames just show it, they amplify problems going on elsewhere.

That's not good.

I'm just glancing now in this room.

You don't have to be a rocket scientist to see -

things ain't quite right.

We've got obvious signs of damp,

we've got some cracks going on there, we've got

electrics that are clearly way, way old.

Meanwhile, trying to find the positive.

This is your front room. Gas fire, that will need to be replaced.

It's not about size, though.

I mean, cottages, you never quite know what the light will be like.

And in here it is at least OK.

Into this rear room here.

Understairs cupboard you've got. This wall...structural wall.

Wouldn't be necessarily massively difficult to take out, but, mm...

I'm not sure if you can do that or not.

But, yeah, rear room is OK.

A pretty traditional layout for this kind of place,

which I reckon, originally, was a two-up two-down

and at some stage this has been added on. This is an extension.

Unfortunately, as you can see...

Oh, my word, what is that?

That is a classic, textbook case of all sorts of mould.

I love that one.

Yep. That's not brilliant.

Sorry, I got a bit distracted there by the completely brilliant bit

of damp going on. It feels damp, it smells damp, it looks damp.

But this is your kitchen area. Um, pretty shoddy.

And then through to the only bathroom and loo in the property.

So, all in all, out of 10...

# Five, four, three, two, one

# Five, four, three, two, one... #

I'm not going to give my final score just yet,

as I fear there may be worse to come upstairs.

# Five, four, three, two, one... #

We come upstairs into the front bedroom here

and things just keep getting worse and worse.

This place is an absolute disaster!

I mean, look at this horrible crack in the ceiling there, you know.

Somebody has tried to wallpaper over all the problems,

it ain't going to work!

What you probably can't see is the fact that this whole floor

is sloping into this corner where I am standing.

It is almost like you tread gingerly, like you would

on thin ice, just to check you don't actually go through the floorboards.

It's not good at all. Lots more damp here and I bet...

Well, there you go. At least stripping wallpaper won't take long.

# Tonight I'm going to pull the switcheroo

# Do you mind if I strip for you? #

The second room is, unfortunately, no better.

This project is definitely not for the faint of heart

or those with shallow pockets.

Do I even dare look outside?

# I'll be creeping 'bout 12 o'clock. #

Well, at the rear of the property, a really good-sized garden.

Clearly, it'd benefit from the chopping down of these conifers

and, obviously, a bit of tidying up. But it is a nice-sized space.

While I'm out here, though, you can see the layout.

That bit at the front, that was the original cottage.

And at some stage, someone has added on this extension at the back,

which is where the kitchen and the loo is.

Now, you might think straight off, knock that down maybe

and put a bigger extension, but your issue is,

when this was built as an extension, obviously,

there was a conversation with the next-door neighbour,

and the whole thing, two properties' worth of extension,

was built at one time.

My concern is whether they put a proper dividing wall in here.

Because if they didn't,

if you knock your bit down, you are going to knock down

the neighbour's extension, as well, and you clearly can't do that.

Party walls and all that kind of stuff.

So, it might not be as easy as it might look at first glance

to do something with this back.

On the other hand, have a chat with the neighbour

and maybe the two of you can get together and build a new extension.

# Let's work together

# Come on, come on Let's work together

# Now, now, people. #

With the potential cost of the work needed inside and outside,

plus whatever the buyer pays based on the £50,000 guide price,

they'll need to be careful this doesn't become

more of a money pit than a paradise pad.

We invited a local property expert to take a look around

this literally cracking house.

Quite a lot of work is required here. Kitchens, bathrooms

are both required. Central heating, double glazing,

quite a decent hitch required on the property, really.

OK, we are agreed, there is a lot to do here.

And with the varying varieties of moulds to consider, I've not even

begun to tot up the cost of the heating

or the windows or the cosmetic touches or the minor details -

like a new kitchen and bathroom.

But if all that was done, how much could this place be worth?

Once renovated and, you know, in a tiptop condition,

I would imagine this could be somewhere in the region

of £80,000 to £85,000.

How does that translate to rental return?

Rental market, again in a decent condition,

I would imagine somewhere in the region of £425 to £450

per calendar month.

Well, that £50,000 plus guide price

is certainly attractive on the face of it.

But delve a little bit deeper into this cottage and I think there

could be a few serious structural issues,

which would definitely eat into a budget.

Let's see who was ready to take this on when it went under the hammer.

Two-bedroom, semi-detached cottage. 40, going to say.

35, then. Can we get it going at 35?

35 bid, thanks. At £35,000. 40, going to say now. Yep, 40.

At £40,000.

We'll go in ones if it helps.

At 40. 41. 42.

43. 44.

45. At 45.

46 is it now? At £45,000, then, for the first time.

New bidder at £46,000.

At 46,000. 47?

47.

48? 48.

49.

50? 50.

At 50,000. 51?

At £50,000, another one?

No? At £50,000, then.

I'm selling it at 50,000.

First time at £50,000.

Second time at £50,000.

Third and final time, are we all done?

At 50,000, then.

It's your lot, madam, well done.

That successful bid of £50,000 right smack on the guide price

was made by Suzanne.

She is a promoter and manager of tribute acts,

property development is what she does for an extra buzz.

# And I'm able... #

But if she manages to transform this semi-detached cottage,

she'll be the star performer here.

-Suzanne, lovely to meet you.

-And you.

-Congratulations.

-Thank you.

-Tell me why you bought this place.

-Well, I like to do up properties,

anyway. So, it was just one that I saw in auction

and decided to go for it.

-Ever done this kind of thing before?

-Yeah.

-How may times?

-About 20.

-20? Oh, wow! How long ago did you start?

-About 40 years.

-Gosh.

-Yeah, I was only five.

Were you really five when you bought your first house?

Is this your full time job, then?

-No, this is just a hobby.

-Oh, right, OK.

What do you do?

-I manage and promote tribute artists.

-Oh, wow!

-Singers, you know.

People who sound like...

People who sound like Elvis Presley, Johnny Cash, Blues Brothers...

-Oh, great.

-You know.

# There is a guy works down the chip shop

# Swears he's Elvis. #

There's no easy way to dress up the problems this house has,

although at least Suzanne has plenty of experience.

It also seems she knows the area pretty well, too.

-My father, who is nearly 90, was born five doors down.

-No way!

-Yes.

-Oh, fantastic.

I didn't realise, cos he's not from here,

he's from a little place called Mow Cop that's not far away.

But his mother went into labour the day she was visiting

some relatives five doors down.

-Oh, wow.

-And he was actually born.

-How amazing is that?

So, tell me what you are going to do to sort it out?

It's going to have new windows. It's going to have a complete rewire.

-It's going to have central heating.

-OK.

I don't know what the roof's like, if the roof's OK. That'd be good.

If it's not, we'll look at that.

It's going to have the kitchen re-jigged partly into here.

-Oh, OK.

-That wall's coming out and being moved

this way to give a little bit more room in the front lounge.

-Your structural wall?

-Yes.

-In fact, one of the main walls and the house.

-That's right.

I just think it'll make it more modern

and it'll make that lounge a bit bigger.

I don't like to see a kitchen in here

-and a lounge in there. And that is too small in there.

-Right.

So, it's something I've done before and it works well.

-So, who's going to do that?

-My son is going to do that.

Is he a builder?

-No. No, he's not a builder.

-Is he lucky?

-He's lucky.

-But we've done it before.

-What kind of budget have you got for the work?

I'd like to spend about ten.

But, you know, if there's anything unforeseen, probably up to about 15.

-And the timescale?

-About three months.

As well as roping in her son, Spencer, Suzanne wisely aims

to bring in contractors to tackle the electrics and plumbing.

This property needs a new look if it's to become a star,

so can she sprinkles some start dust here?

It's going to be a hard act to follow.

Let's hope she doesn't get the blues and makes it a showstopper.

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

This is Swanscombe in North Kent.

A quick search unearthed the fact that Swanscombe is one of only

two towns in Britain where Stone Age remains have been dug up,

dating back 400,000 years.

That is quite interesting.

But what is much more relevant is that you are only a couple miles

from Ebbsfleet International, that will get you into London

in 17 minutes!

Now, that is my kind of time travel.

# Take me away

# I don't mind

# But you better promise me I'll be back in time! #

Swanscombe is a charming, small town with attractive properties,

great transport links and all the local amenities you'd need.

It also boasts this gorgeous green at its centre,

perfect on a lovely, sunny day.

Here is hoping that today's lot is just as perfect

and that whoever buys it, gets one of these.

There is no denying that Swanscombe is very well connected

and the house I'm here to see, well, it's just a few minutes walk

from the high street

and tucked down this attractive residential road.

So, you can't ask for much more than that, apart from a decent

investment perhaps, and maybe this is it.

It is a three-bedroom terrace. It had a guide price

of 95,000 to 100,000.

Smells a little musty in here, although I don't think there's

any worrying signs of damp, but fairly good space.

No double glazing, so only single panes there.

So, here's your second reception room.

Now, I have on a few occasions seen this portion of the wall come out,

so you get one big through room

with the stairs looming over the top.

I'm not a fan of that.

Another thing you could do would be to turn the stairs around,

put them against this wall. But, you know, it's costly,

you've got to take the chimney breast out.

So, I think I'd leave it as it is.

A galley kitchen. Look, you can see, very dated.

You need to clear it out, start over again. But not a bad space at all.

And sadly, yes, you've got a downstairs bathroom.

I know I'm always banging on about this.

But actually, it's not about space.

What you have got is this sort of wasted bit of space here

with the door leading out to the garden.

I'm just wondering if you could, maybe, close that door up,

put another door in there to incorporate this

as part of the bathroom.

But then you've got to move the boiler.

Lots of expense, lots of hassle.

My only concern is that is the only loo in the house.

I'm going to have a look upstairs.

# Things are looking up

# It is a great little world we live in

# Oh, I'm happy as a pup since love looked up at me. #

Upstairs, there are two good-sized bedrooms -

one at the front and one in the middle.

While at the rear, there is a slightly smaller bedroom.

But as I suspected, there is no bathroom,

so a re-jig could be in the cards.

Another idea for downstairs

would be to replace the living room window

with double doors onto the garden at the back.

OK, so, it's all rather concrete-y at the moment and, boy,

that's a job-and-a-half to get rid of,

but once you've got a bit of lawn, it's a great selling point.

One thing is for sure, this property is not short of options.

The age-old dilemma, what to do with the layout?

And really, when it all comes down to location,

if you are in an expensive postcode

where people aren't used to downstairs bathrooms,

I would say it's essential to move it.

If you are in a lower-cost area with a higher concentration

of little Victorian terraces,

the chances are that the locals just expect this kind of arrangement.

Now, this property falls into the latter category,

and although estate agents may say that moving the bathroom

will make a property more saleable,

that just means it will sell more quickly

and doesn't mean it will be worth any more.

So, if this was my investment, I'd keep my pennies

in my purse, be patient and leave the layout as it is.

Making something more saleable is vital in a sticky market,

but not at the expense of your profit.

We asked a local estate agent along to hear her thoughts on this lot,

guided at £95,000 to £100,000.

What I particularly like about the house

would be the fact that you've got

two decent-sized front rooms and you've also got a nice-sized garden.

If and when the property gets the required updating,

what effect could that have on the sale value?

Once fully renovated, this property would be worth

in the region of £150,000 to £155,000.

And could it see a healthy rental return?

In good condition, this property

would rent for £675 to £700 per calendar month.

This property is all about location, convenience and connections.

And as far as an investment goes,

it's got "rental" written all over it.

Let's see who decided to bid for it at the auction.

So, lot 71 is 95 to 100.

Start me at 95.

£95,000.

Starting at 90, then.

90. I'm on the way, I'm obliged. £90,000. 90.

Now 95. 95 I've got.

And 100. And 105.

And 10. 110.

And 15.

115 behind.

That's 118 if it helps you. 118, I'm looking for.

118 on a fresh place. And 20, it's against you.

120 is with you.

And two. 122, I've got.

And five now, it's against you. 125.

123, I'll take, if it helps you. One more.

It's going to be sold.

123, he's back. 124, it's against you.

12...124.

And five is against you again. 125.

No, that's a shaking head, I think he means it.

At £124,000 for the first time.

Second time. Third and final time.

If you are sure you are all done at £124,000...

It's yours, sir, at 124. And your card number?

Is D213.

The successful bid of £124,000

came from former construction manager Colin.

After retiring, he decided to put his time and money into something...

um...constructive.

He and his partner Julie have turned renovation

and redecoration into a hobby.

I caught up with Colin to find out more.

Colin, congratulations, really good news.

-Thank you.

-So, what was it like on auction day for you?

How nervous were you?

Pretty nervous. But I've been to a couple before,

so it wasn't actually as nervous as that was.

I felt a bit more in control of this one. I don't know why, but I did.

-How much research did you do?

-My partner, Julie,

had basically gone on the Internet.

We get the catalogue and she goes online and checks out prices

of what they went for previously, what houses in the area went for.

And then we... We did do a fair amount of research.

So, were you looking for a property to invest in?

Yes. More importantly, to actually give us something to do,

or to give me something to do. Julie, my partner, she does the decorating.

So, it's really something to do.

I've run a construction company for years

and no matter how many units we'd done, and we did thousands,

there's always that excitement of going in when it's finished.

The smell of the paint, it's such a...

It gives you a buzz coming in when it's finished.

-So, it's not about the money for you.

-No, not really.

# It's not about the money, money, money

# We don't need your money, money, money

# We just want to make the world dance

# Forget about the price tag... #

So, for Colin, this is more about the project than the profit.

He lets the last property he purchased and renovated,

so does he hope to replicate that approach here?

I'm not actually sure yet.

I sort of was leaning towards selling it, I'm now thinking rent.

So, why are you thinking rent? Have you spoken to somebody?

Yeah, I've been to an estate agent and, I don't know,

she got me a bit more excited about the area.

The most important thing is where it's located and what it can offer.

And you are right on top of Ebbsfleet here,

which gets you into London in 17 minutes.

-Yeah, I know, amazing.

-Which is amazing!

Our biggest problem is the fact that it's three bedrooms

and no bathroom upstairs.

So, that's, you know, an issue that I need to think about

and think about the best way to deal with that, really.

-You are confused, aren't you?

-Yes.

-You are confused, I can tell.

-You are not sure what you're going to do yet.

-I'm not.

-I can hear your brain worrying.

-Yeah, it changes all the time.

It will change again, but, yeah, I am confused and it does change.

# Change

# You can't change. #

Colin has got some decisions to make.

Hopefully, he'll make them quickly,

as his proposed timescale is two months.

His current plan is to knock down the wall between the two front rooms

and install a new kitchen and bathroom.

He will use the dead space in the bathroom

to house a washing machine

and also make access to the garden from the second reception room.

But as the man himself said, that could all be subject to change.

Perhaps his budget will help dictate what he can and can't do.

How much have you got to spend on this?

-About 15,000.

-15,000.

And that includes the decorating, which Julie will do.

That includes Julie's wages, then.

-Yep, it does.

-And how does Julie feel about that?

We've already talked about the price, she knows what she is getting.

What do you actually do?

How hands-on are you, considering you were in the construction game?

I won't be that hands-on.

If there's a wall to be knocked down, I'm very happy, like most men,

to knock it wall down.

-But I am not actually very DIY... I'm not very good actually.

-Really?

No. I've had people

say to me that if they see me with a saw, they'll hit me,

cos they said I'll just butcher a piece of timber, but I love

coming to it and seeing the walls knocked down and something done.

Coming here and seeing what the guys have done

and seeing the finished article...

Not the finished, as it goes on, as it progresses, I like coming here.

I suspect I'll slow them up, really.

-Why would you do that?

-Because I talk a lot!

Colin, I think it's fantastic. I wish you all the luck.

I can't wait to see what you do here.

Congratulations on this and I hope it goes really well.

-Thank you very much.

-Thank you.

So, conundrums ahead for Colin, will he let or sell it?

And the one I am really intrigued about, that downstairs layout.

He needs to decide what happens to that bathroom.

Now, this is his own development, the buck stops with him.

Find out how it all goes later in the show.

Coming up, I let rip at this commercial property

in Mid Glamorgan.

Now that you can have some fun ripping off the walls,

it might even be a bigger space than it looks.

In Swanscombe, Kent,

did Colin swap changing his mind for changing his budget?

I already know I'm reasonably happy

with what we've got for what we spent.

But first, did Suzanne have a tonne of fun on her project?

I laid all the stones myself.

Six tonne.

Earlier, we were in the semi-rural hamlet of Newchapel,

near Stoke-on-Trent, where tribute act manager Suzanne bought this damp

and dingy cottage at auction for dead on the guide price of 50,000.

She'd done around 20 renovations before

and had big plans for this place.

So, tell me what you are going to do to sort it out.

It's going to have new windows. It's going to have a complete rewire.

It'll have central heating.

It's going to have the kitchen re-jigged.

That wall is coming out and being

-moved this way.

-So, who's going to do that?

-My son is going to do that.

-Is he a builder?

-No, he's not a builder.

-Is he lucky?

He's lucky. But we've done it before.

Let's hope that luck was on her side.

She wants to have the property redone

and ready to sell in three months.

We've come back to Newchapel eight months after we first met Suzanne

to see if she has made this house into a star turn.

# I like kicking in the gutter and wishing I was lucky

# Wishing I was lucky

# Wishing I was lucky

# Ooooh!

# Lucky! Kicking in the gutter

# Wishing I was lucky Wishing I was lucky. #

But as luck, and no doubt some hard work, would have it,

the downstairs is looking really impressive and completely different

than the last time I was here.

This was two rooms originally, so I decided to take out this middle wall.

But I didn't want to have it totally open,

so I decided to move the wall back, in effect,

which makes the sitting room bigger.

Obviously, it makes the secondary room smaller.

So, we decided to turn that into the kitchen.

It was still a little closed,

so I felt that if I took this wall out here,

which would open up under the stairs and make a bit of a feature

and an open staircase.

It has opened up the kitchen, it has given it a nice airy feel.

And it looks really good and I am really happy with it.

She didn't work on this alone, she brought a lucky charm, her son,

Spencer, with her to remove the wall

between the two original reception rooms.

As you can see, the chimney breasts have gone.

It is a lot bigger than it was.

I feel that it is given it a lot more space, a more modern feel.

I like it myself, I'm sure other people are going to like it, too.

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

# Baby, I like it

# I like it! #

I certainly like the downstairs, but how about that upstairs?

It was looking dark, dirty and drab before. How about now?

# Baby, I like it

# The way you move on the floor

# Baby, I like it

# I like it! #

Well, it may not be complete, but what a turnaround.

Before, it was host to all kinds of mould, but damp proofing

has been carried out and, thankfully,

that very smelly problem has been resolved.

And despite its wobbly appearance, Suzanne had the roof checked

to find if it had been recently renovated, so it was safe as houses.

The property hasn't exactly been in the spotlight for her,

as she has also been running her musical tribute act business.

Remember, property is her hobby, not the day job.

You've got to get your priorities right, at the end of the day.

And so, the house is, you know... Houses can wait.

We're having fun doing the shows.

The outside of the property has also had a total revamp,

both out the back and towards the front.

Where Suzanne was hands-on.

The very first thing I did was knock the wall down.

I did that the day I bought it. I just knocked it down myself.

So, now there is room for at least two cars.

Laid all the stones myself. Six tonne.

What's that about a rolling stone gathering?

OK, no more tribute band jokes.

With some work still to do, Suzanne thinks her spend on the renovation

will tot up to £15,000, which was her maximum budget.

Add to that, the £50,000 she paid at auction

and her total outlay will be £65,000.

We invited two local property experts to the house to hear

their views.

I think the work I've seen so far

is up to a great standard.

I'm very impressed with the outside space.

She seems to have utilised it to its full potential.

I am a big fan of the modern kitchen

and the bathroom suites work really well, nice and minimalistic.

What they've done so far is good. They've modernised the property.

There's still work in progress,

but they've changed the kitchen, changed the bathroom.

They have redecorated, replastered

and made very good and sensible use of the outside space

by creating off-road parking.

In the current market, the estate agents recommend

that Suzanne lets the property, but for how much?

The rental market is very buoyant at the moment and there is a height

around rental properties like this, mainly from young professionals.

When the property is finished to a reasonable standard,

I would expect to achieve a rental figure

in the region of £400 per calendar month.

I'd put this on the property for £550 per calendar month.

I would have thought about 495, 500 month.

With her total investment of £65,000,

Suzanne could see an impressive rental yield here of somewhere

between about eight and ten percent. But with her heart set on selling,

so she can release equity to start her next project,

what prices would these estate agents suggest?

The resell market in this area is still fairly static,

so I would recommend the purchaser keep hold of the property

for a number of years. However, if she wants to sell the property,

it would be somewhere in the region of £75,000 to £80,000.

I'd put this property on the market for £85,000.

I would have thought more than that, to be honest, you know.

I think those estimates are a bit low.

Going on what those two estate agents say, Suzanne would make

a healthy profit still of £10,000 to £20,000,

minus the usual expenses.

But as she is a little disappointed with those figures,

could she be tempted to go down the rental route, after all?

No, I don't think I would consider renting it.

I prefer just to sell it.

I don't think I would want a tenant in.

I think it's too nice.

Hopefully, Suzanne will be lucky

and get the price she wants for her new star performer.

This is the busy village of Kenfig Hill in Mid Glamorgan,

situated just five miles from the M4 motorway.

And like many places,

its high street retailers are having a tough time.

Well, I'm right in the heart of Kenfig Hill shopping centre.

So, it's no surprise the property I'm here to see

is actually a commercial premises. It's this.

Most recently used as an insurance brokers,

at a guide price of 31,000 quid, let's take a look.

# You better get some insurance on me, baby

# Take out some insurance on me, baby. #

It certainly looks as if it has a lot of potential, however,

any buyer would have to take into consideration the planning regulations,

which might mean the shop front is here to stay.

It certainly has got a nice, big frontage,

which is what you want if you were to be selling things.

But actually, the usage of this place is A2,

that means professional and financial services.

So, something like solicitors or estate agent,

absolutely ideal for that.

As I said, it was originally an insurance brokers.

Inside here, well, a little bit shabby.

Although if you have some fun ripping off the walls,

it might even be a bigger space than it looks.

But one main room here.

Tender loving care definitely required.

But then through to the rear, where you've got

this little anteroom, and it continues.

So, already I'm seeing quite a substantial property here.

As well as the shop front and the anteroom,

there's a rear kitchen and cloak room on the ground floor.

There's also access out the back.

And there's more.

So, upstairs, and what have we got?

Well, three fairly decent-sized rooms.

It seems like they haven't been utilised for anything specific,

maybe office space, storage, whatever.

One thing I do notice is in there, as I was walking up,

and also in here,

some signs of damp,

and my guess is that is coming down from the roof.

So, definitely get the roof checked out.

But while I'm up here, suddenly I'm thinking,

is there another option for this building?

Could you perhaps convert this into a self-contained flat?

Now, that is the interesting opportunity.

# This is a big opportunity

# To shop around... #

Mm, opportunity indeed, because,

although a planning application was turned down to convert

the whole building to a residential dwelling, it doesn't

rule out the possibility of a mixed commercial-residential option.

I think there may be a chance that route could succeed,

particularly when you see what's out the back.

So, if you were thinking about doing something with that upstairs area,

what would you want to do?

Well, first of all, you want to create separate accesses,

cos at the moment, it's actually through the shop.

But the good news is right down the side

of the property, there is this alleyway. And it gets better,

because of the rear of the shop,

there is this fairly large bit of land

and at the bottom, a separate access road,

so you could bring off-street parking in through there

or at least give access that way, as well.

But while I'm out here, as well,

look at the size of this! Fantastic amount of space.

And straight away, I'm thinking, can you be a little bit more

ambitious and maybe even think about putting an extension on?

Maybe even another flat!

What I like about this is there are lots of options.

The crucial factor when weighing up

those options is the financial return.

Although a new flat might be viable,

I would guess the cost of building it wouldn't justify

the likely return you'd get in this area.

So, I think a less expensive mixed residential

and commercial conversion is likely to be the way to go.

But there are still a number of options to consider here.

What does the auctioneer who sold it think might be best?

Well, my first impression of the building, purely

from a commercial point of view,

is the potential to subdivide, whether it be

taking an access off the side

and creating a new entrance at the back

to create additional accommodation

in the form of residential or office accommodation,

which is probably less of... there's less of a requirement for

at the moment, and of course,

the most valuable use will be for residential,

but it depends what the planners have

and how they feel about what the building could be used for.

Yes, clearly the planners will be key here.

But if a mixed commercial-residence option was possible,

what sort of rental returns would we be looking at?

If the first floor were converted to a one-bedroom flat,

I would estimate a monthly rental income of £300 per calendar month.

The business premises, I believe, would let

for approximately £400 per calendar month.

In these tough times for business, the auctioneer advises that

accepting a lower rent for a commercial property might be wise.

After all, no-one wants an empty property

with its own going running costs.

That's the business side of things, and the floor above?

Is there any resale value there?

I believe that the flat could not be sold separately,

purely because it would be very difficult to raise

a mortgage against it.

So, I think it is purely as an investment

as part of the whole freehold premises.

So, I think that we'd be looking at the value of the entire premises

between £55,000 and £60,000.

So, a careful refurbishment

and change of use might get a better deal, but nothing is guaranteed.

Well, starting any new business in this current economic climate

is always going to be a bit risky, so I would definitely hedge my bets

and convert that flat into either separate living accommodation

or an office.

But it is all down to whoever bought it. Let's find out who that was,

when it went to auction.

Onto another property lot, ladies and gentlemen.

It's a freehold semi-detached commercial unit with full width

display frontage.

30,000, to get things moving.

30. Thank you. 30,000. 31.

31,000. Two.

And 32. Three?

Thank you, 33. 33,000 is bid.

33,000, and four? Four.

Five? Five. Six.

36, thank you. 37?

37,000? 36 on you, sir. Give me half.

Half. 37? Thank you. Half?

Eight. Half. Nine. Half.

40? 39.5.

It's on you, sir, at 39.5.

39.5. 40. Half?

Half?

Half. Thank you. 40.5. 41?

Any advance on 40.5? I'm going to sell it quickly.

40.5? No? Yours, sir, 40.5.

Have you got a bidder's number?

For £40,500, the delighted new owner of the commercial premises

in Kenfig Hill, near Bridgend, is Jay.

He lives locally and runs his own IT and telecommunication company.

# It's my own business

# It's my own business... #

-Jay, good to meet you.

-And yourself.

-Congratulations.

-Thank you.

-Tell me why you bought this place.

We were looking for an office for ourselves.

We currently rent an office for the last five years.

So, we're looking for a property to do up ourselves.

We have never had a retail environment,

so we just want to bring something extra to the company.

Oh, great. Tell me what you do.

We are a business communications company.

So, primarily, we go out to see our customers.

But we want to try and bring them to us, as well.

What communications?

-We do telephone systems for companies.

-Right.

-Broadband.

Data requirements.

Great. And why here?

It's not far from where I live. It is close to the M4 links

and it's just dead in the middle

of where our customers are usually based.

# Peeeeerfect! #

Jay rents his current business space and will remain there

until the work is completed.

There are also plans for his wife, Heather, a web designer,

to be based in the new office.

So, it seems that this is potentially a perfect purchase.

# Peeeeerfect! #

So, tell me what you are going to do to make it fit your requirements.

There's a lot of work to do on it.

-We'll knock all the walls down internally.

-Oh, wow.

Apart from the load-bearing walls.

Ideally, downstairs will be a sales and introduction. With a meeting room downstairs and a stockroom.

Upstairs is being converted into four offices.

In the backyard, we're going to be, hopefully, depending on planning,

turning into a car park for our own staff use.

That would be perfect, you'd get the cars off the road.

Yeah. Ideally,

if I could've got planning,

I would have changed it to residential property completely.

But it has been rejected in the past.

I knew before we bought it, it wouldn't be allowed,

but because it is in a commercial improvement area,

some grants are available for the property.

-We are taking advantage of those.

-Tell me about the grants.

Because they are trying to push Kenfig Hill

into a commercial improvement area,

they are giving 30% towards all costs we spend on the property.

Oh, wow!

So, we're having a new roof fitted, a new shop front, possibly,

backyard, everything basically will be 30% funded.

Did you consider a mixed-use development like converting

upstairs to a flat?

You know, because it would be quite easy with the access you've got

down the side and at the back.

Yeah, the Council did say we could do that if we wanted to,

but it would be 30% funded if we did.

Ah!

Any plans Jay might have had for an upstairs flat will be

for another day because that 30% funding is definitely worth having.

The only downside of the grant is that the Council dictate

a number of factors, such as the look of the shop window,

the colour of the building and the access points.

They will also keep a careful eye on all the work he does here.

Do you have an idea of how much you'll spend to sort it out?

We've had estimates in, and they come in, including the roof

and the car park and everything else, it's coming around 40,000.

So, the timescale for sorting it all, then?

Ideally, I'd start it tomorrow, but cos of planning,

it'll be eight weeks before we can start.

They've approved one of our grants for the original ten grand,

so we've applied for another ten grand,

which will take seven to eight weeks. Once they prove that,

we can start the work.

I think it is going to be eight to 12 weeks of work.

So, is this your first venture into property?

It is, yes. I'm not much of a DIYer myself.

I'm more sort of technical,

-so it'll be builders working here.

-Right.

I'll oversee it and everything else, but, ideally,

I'd rather give it to them and I walk in when it's finished.

-Pretty exciting there.

-Yeah, definitely.

-Well, congratulations.

-Thank you.

Good luck with it. And we look forward

to coming back and finding a working office

-and shop.

-Thank you very much.

Well, this really is an ideal purchase for Jay, isn't it?

With the added bonus of the grant money to help

with the refurbishment, too.

Still, a lot of work to be done to sort this place out.

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

Well, once you have bought your property,

the hard work really starts.

And you've got to be prepared for all sorts of challenges

along the way.

So, have today's buyers uncovered

any hidden treasure or unearthed any hidden pitfalls?

Let's find out how they got on.

Earlier, we were in Swanscombe, in North East Kent,

where former construction manager Colin bought this terrace property

at auction for 124,000.

Since retiring, he has turned renovation into a hobby.

However, the various possibilities for the ground-floor layout

had his brain working overtime.

You're confused, aren't you?

-Yes.

-I can tell. You're not sure what you're going to do yet.

-I'm not.

-I can hear your brain worrying.

Yeah, it changes all the time.

It will change again, but yeah, it does.

Well, that was just over four months ago.

So, with his proposed two-month timescale,

let's hope Colin has made some decisions in that time,

as well as some drastic changes.

Well, talk about an overhaul!

Downstairs, Colin ditched his plan to take down the wall

between the two reception rooms,

but both have been entirely redone with the help of Julie,

Colin's partner, who was in charge of the decoration.

It is goodbye green and hello neutral hues,

making the whole place look brighter and more open.

There is a smart new kitchen.

And what about that downstairs bathroom?

The bath used to run along here and we've put it along there.

We think that configuration now works much better.

We took the wall down because the washing machine was going

to be within the bathroom.

But we thought it didn't look right, that it needed to go outside,

so we put the wall back.

A costly thing to do, but we had to do it.

And it looks much better for doing so.

Colin also stuck to his plan to block up the doorway

and create access to the garden through the second reception room.

I think that works so much better.

Even the garden has had some attention -

with lush green grass replacing the horrible concrete

that was here before.

Upstairs, each of the three bedrooms has been decorated similarly to

the downstairs rooms. There's an added bonus up here now.

Well, this is the biggest job we had to do in the whole house.

We took out the chimney breast,

we introduced a steel that runs from back to front.

We then managed...

That enabled us to get this bathroom,

which we think is probably the nicest thing we've done.

Which we think looks very good.

Yeah, I'm really impressed that Colin found a way to squeeze in

some upstairs facilities without having to sacrifice a whole bedroom.

With all this work, though, did he manage to stick within his budget?

I wanted to spend 15, actually spent about 27.

Still counting, but not much more to go.

27.5 maybe, max.

But we've done quite a few jobs that we didn't anticipate,

putting the bathroom upstairs.

Obviously, the en suite has cost quite a few thousand.

So, all in all, I'm reasonably happy

with what we've got for what we spent.

For Colin, this wasn't so much about the money,

but more about the job satisfaction.

It is exciting turning up. I've never lost that excitement.

That is the major kick for me.

It's not the money, at the end of the day,

although it helps if you make a few bob, as well.

But just getting it finished and finished to a good standard,

knowing that you've done the best you can do.

There are always things you'd change and do better next time,

but, you know, you learn.

He is absolutely right.

Renovations aren't always easy, but you do learn from every one you do

and can take this knowledge onto your next project.

Although Colin had planned to finish in two months,

due to some delays and the extra work done,

it has taken closer to three months.

It cost Colin £124,000 at the auction

and he estimates his final spend on it will be £27,500,

bringing his total outlay to 151,500.

We've invited two local estate agents to see

if they are impressed by his efforts here.

I am pleased with the standard of the finish.

Has put a door in between the dining room

and the garden, which obviously will make the garden

a lot more attractive and usable.

Really impressed, very high quality of finish - fixtures and fittings.

I am particularly impressed with the en-suite shower room.

When we last met, Colin was characteristically undecided

on whether to let or sell the property.

If he opted to sell, what sale price do the estate agents estimate?

I would put this property on the market or £160,000.

I'd be marketing the property in the region of £160,000.

160, both of them?

A bit surprised at that, a bit lower than I would have hoped.

I had an agent in a little while before we'd finished,

and he said about 170.

So, I think they are both a bit low, but, who knows.

Until you sell it, it isn't a done deal.

If the property were to sell for the £160,000

the estate agents recommended,

and bearing in mind Colin's total outlay of £151,500,

he could make a pre-tax profit of £8,500.

But has he decided yet whether to let or sell?

Let's hear the rental returns.

We could put the property on the market for £750

per calendar month.

On the rental market, you could achieve in the region

of £750 per calendar month.

750, yeah, I would say they are right on that.

I'm not interested in renting it. It would be sold, anyway.

Even at 160,

I'd still make a profit, so...

We got a nice house at the end of it, and that was the important part.

Colin has decided that selling suits him better, as it will make

him enough profit to forge ahead with his next project or projects.

I shall absolutely be doing it again.

We'd be looking straight away and we'd definitely try to do another one this year, at least, if not two.

Earlier, we were Kenfig Hill, near Bridgend, Mid Glamorgan,

where business owner Jay purchased this commercial property

at auction for £40,500.

His plan was to renovate and refurbish it to house

his business communications company,

but it did sound as though he won't be hands-on.

-So, is this your first venture into property?

-It is, yes.

I'm not much of a DIYer myself. I'm more sort of technical, you know.

-So, it will be builders working here.

-Right.

I'll oversee it and everything else,

but ideally I'd rather give it to them and I walk in when it's finished.

As Jay was relying on financial grants from the Council

to start the work, his overall timescale was four to five months.

We've come back just over six months after we first met him

to see if he has turned this place around.

Well, he may have been hands-off,

but Jay's building team have done him proud.

This commercial property has been transformed.

The front shop area and anteroom

have been opened out to create a pleasant ground floor,

whilst upstairs has been converted into three offices.

Throughout, there are new carpets,

the walls have been replastered

and there's a new kitchenette and WC.

Out back has been tarmacked, making car park space for five cars.

This place now seems ideal for Jay to run his business from.

And if something is worth doing, it's worth doing right.

When we first bought the property, we had a rotten shop front

and a door, so we changed the whole shop front.

It is now an aluminium double glazed unit,

which prevents any road noise coming in, as well.

Downstairs is our sales floor. So, we've put an open area forum,

just so they can all work together and, you know,

help each other through the day.

We've put these divides in, as you can see here.

These are purely just to prevent any noise, you know,

when they're on the phone, etc.

I really love it. I think the style really suits us.

Our sales guys are really pleased with it.

I'm finding it really good having a separate area, as well.

As the Local Council want to encourage business in the area,

Jay was able to get grants from them to help with the refurbishment.

I spent about £42,000 on the refurbishment work.

The Council has given us about £21,000 back, so, you know,

we really haven't spent a huge amount of our own money on the project.

And speaking of OUR, Jay's wife, Heather,

had hoped she could also run her web development business from here,

but I don't see much sign of that.

Unfortunately, we needed the space for our own use,

but she understands,

she understands the business needs need to come first.

When I first visited the property,

I saw some real potential to convert upstairs into a self-contained flat.

But with an expanding business,

Jay opted to keep upstairs as office space.

# So what becomes of you, my love?

# When they have finally stripped you of

# The handbags and gladrags

# That your poor granddad had to sweat to buy you. #

We hope that if we did come to sell it in time,

that people leave it as an office,

because it has been finished to a high standard.

However, we have made it readily available if somebody did want

to use it as a house.

Because we have already put in separate electric metre upstairs,

so it's a completely separate area if somebody wanted it.

We may look at putting some type of extension on the back

in the next coming year.

So, there could be more work on the horizon for Jay and,

hopefully, with these new premises,

he will also be able to expand his business.

With the auction purchase price of £40,500

and £42,000 on the refurbishment,

Jay's total outlay including grant money from the Local Council

was £82,500.

We invited two estate agents to take a look around.

My first impression was surprise.

A lot of the internal walls have been moved around,

it has been refurbished to a very high standard.

And I was very pleased at what has been carried out at the property.

The office space upstairs is a good quality space,

open plan, which is what most people want these days

as opposed to smaller offices.

Good quality refurbishment, good lighting, good partitioning,

good quality space.

So, they are impressed with the new book,

but let's get down to the numbers.

If Jay were considering selling the property in its new, improved and fully renovated state,

what he could sell the premises alone for?

To a speculator or developer, somebody who is looking at this

as investment property, they'd want it probably for something

in the region of £65,000 to £70,000.

An investor may look to purchase a property

round about £60,000 to £65,000.

I feel that is quite low.

Obviously, we've specked it quite high for our needs,

but I still think it is a large building

and can be used for an office.

We may look at it, in the future, renting it out,

and getting our return that went.

With those estimates,

Jay would technically make a loss of between £12,500

and £22,500 on the premises,

however he did get that £21,000 grant from the Council.

As he mentioned, he may consider letting in the future,

so what rental return could he expect?

For a new business looking to come in and set up,

they'd probably look to pay you round about £500 per calendar month.

I'd say a rental in the region of £800 per calendar month.

Again, I think the values are quite low.

But, obviously, we won't know until that day comes and we do rent it out.

Ideally, if we were looking to rent, I'd be looking at £1,100 to £1,200

a month for a building of this size.

Based on the agents' valuations and Jay's 82,500 spend,

the rental yields would be between seven and 11.5%, very healthy.

But for the time being, Jay is more than happy to stay put

and build his business here.

It's exactly what we need.

We built it to our specification, not to sell on or rent in the future,

so it's not going to fit every business's needs in the future.

However, for us, it's perfect

and we love walking up to it every morning, and so does the team.

We hope you've enjoyed watching Homes Under The Hammer.

Join us next time when we'll have more fascinating stories

from the auction rooms for you.

-See you then.

-Goodbye.

-Goodbye.

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