Episode 79 Homes Under the Hammer

Buying a property can be a long, drawn-out process,

but not at the auction.

Imagine getting the keys to your dream property in about a month.

Sound too good to be true? Not if you buy your home under the hammer.

Sometimes buying at auction can be a bit of a gamble but not

if you do your research first.

So are today's buyers on a winning streak?

Well, here's what they bought.

In Maidstone, Kent, there's confusion in the kitchen.

That's not a cupboard, that is a downstairs bathroom.

There's a plot of land that's in peak condition in Shepshed, Leicestershire.

If you're a mountain goat, it's absolutely perfect.

And in Chester-le-Street, County Durham,

this double-fronted three-bedroom house shows a lot of promise.

And then it all starts to go horribly wrong because you've got this kitchen.

All these properties have been sold at auctions.

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

when they went under the hammer.

There you go.

Maidstone in Kent. With marvellous motorway connections

and direct trains into London,

it's in the garden of England, yet close to the capital

and the coast, so certainly worth checking out its property prospects.

Just north of the town centre

and minutes from the motorway is the property I'm here to see.

It's also very close to the barracks of the Royal Engineers, which might

just mean you have a ready stream of families looking for rentals.

Worth investigating, as is the property itself.

It's this three-bedroom mid-terrace and it had a guide price of £90,000 to £100,000.

Time to march inside and see if we have a fighting chance

of making some sound profit.

OK, eyes front, stand straight, ready for inspection.

What have we here? Dodgy roof, but on a decent street,

and its location could be perfect to attack the rental market.

Large rear garden but shabby.

I don't think it would pass muster in its current state.

OK, in my job you don't expect to walk into these houses

and for them to smell of roses

because if you did, you'd be disappointed.

This house, it's not straightaway filling me with enthusiasm.

It's tired, it's dated, the wallpaper's peeling off,

there's cobwebs everywhere.

But on the upside you have got a nice big bay window which does let

lots of light through, so I'd go to town on the decorating in here

and it could be a nice, bright and spacious room.

You've got the kitchen at the back of the property,

a little cupboard through here...

That's not a cupboard, that is a downstairs bathroom.

Now I would have expected that in a Victorian house perhaps,

but not a 1920s/30s build. That's rather strange.

I'm just wondering whether you could improve on that,

and through here, oh dear, not even a downstairs toilet, an outside toilet.

Extremely cold in the winter months. No central heating out there at all.

There's a lot I would do to rearrange the space.

I'm just wondering whether there is another bathroom upstairs.

I'm going to go and check it out.

The house has been vacant for a year

so no wonder it's in a bit of a state.

The kitchen definitely needs refurbishing

and the toilet situation has to be addressed.

Another significant outlay is required for installing central heating,

as there's currently none.

I think an all-out assault on this place

is necessary to get it back into shape.

The first line of attack should be tackling the bathroom/toilet position.

So, time for some reconnaissance upstairs.

So if you are determined to bring the downstairs bathroom upstairs,

the obvious place, in my mind, would be the smallest bedroom

because the plumbing is directly underneath,

but then you would be losing that bedroom.

So, because this room, look at this,

is very generous as a master bedroom, it's actually too big,

you could think about taking a portion of it

to put the bathroom in this end.

You would have to knock down some walls, put up a partition,

change the plumbing around.

It would be a lot of hard work, a lot of money

and a lot of lost profit, but it is doable.

If this was to be my home,

I'd definitely want to move the bathroom upstairs, either by losing

the smaller bedroom or taking some space from the larger master bedroom.

But as a development project, I'm not sure it would add up.

There's high demand for rentals in this area so leaving it downstairs

probably won't affect the monthly yield too much.

But losing a bedroom certainly would,

so the moral of this story is to keep it simple and don't be hasty.

# All I ask is not so fast. #

To get a clear idea of how to tackle this three-bedroom terraced house

that was guided at £90,000 to £100,000,

we asked a local estate agent for his opinion.

It's definitely worth putting the bathroom

on the first floor, no question.

Because even if it doesn't add any particular value to the sale price,

it will undoubtedly make it more attractive and obviously

when its more attractive, it's going to appeal to a wider,

broader section of the house-buying community.

OK, so he's keen to move it,

but do the numbers really justify the work involved in doing so?

I think the property, fully-renovated with the bathroom

remaining on the ground floor, is probably worth about £125,000.

Renovated, with the bathroom upstairs,

maybe £130,000 to £135,000.

From a rental perspective, I think,

irrespective of whether the bathroom goes upstairs or not,

I think you'd probably get about £750 per calendar month.

So listening to my heart over my head,

I might recommend changing the layout,

but wearing a developer's hard hat,

leaving it as it is should be the financially sensible choice.

This is an easy investment in my opinion.

An established estate which is popular with renters

and a straightforward refurb with the chance to add a little bit of value.

Let's see who fancied this one at the auction.

Lot 48, we move to Maidstone. Start me at £90,000?

90, I have, thank you.

92, do I see? 92, I have, 94?

94 is bid, and 96.

96 and 98. 98 and 100. 100 I have.

102, 102, 104, 103, 104.

104, 105, 106.

There was a lot of interest in this one.

We rejoin the bidding at £111,000.

111 and 112. You can see the hand as well as I can.

112 is bid, 113. 113 and 114.

114 and 115.

115 and 116. You're shaking your head the wrong way.

At £115,000 on my left-hand side. In the room for the first time,

£115,000.

For the second time at £115,000.

Third and final time, £115,000. Are you all done? Sold at £115,000.

So, for £115,000, the successful bidder

for the three-bedroom mid-terrace house in Maidstone was Nicky.

She works as a crime manager for the local police force

and is in the process of taking voluntary redundancy.

I met her back at the property to find out why this particular one caught her eye.

-Nicky, congratulations.

-Thank you.

So why were you inspired to go to auction and spend the money you did?

Because I'm taking redundancy from work,

and I've always wanted to get into property renovation.

So that's what inspired me.

Tell me about your job, what have you been doing?

-22 years working for the police force.

-Really?

Yes, and obviously they're making a lot of cutbacks at the moment

so I thought while the opportunity's there, time to do something else.

-Brave young lady. So you're venturing out into property.

-I am.

What is it about property you love so much and what inspired you?

I've always liked DIY and I've been on a few courses, plumbing

and plastering, and I thought I need to practise it now so I went

-and got myself a property.

-What caught your eye about this property?

It was quite close to where I live so coming back

and forward wasn't an issue. And the price, really.

-And did you see inside?

-No, I didn't, the ultimate sin!

You didn't look inside? Did you peer through the letterbox even?

I hadn't seen it before. I saw it in the catalogue

and I read the legal pack but I hadn't visited.

So you spent £115,000 and you hadn't seen inside?! Were you disappointed?

No, I was really pleased, actually.

I do hope that first-time property developer, Nicky,

hasn't got stuck with a tight profit margin.

This place needs a lot of work

and she did pay a bit over the guide price.

Still, she's going to be very hands-on which is the best way to keep costs down.

What is it that you don't like about the property?

The fact the bathroom's downstairs. I want to move that upstairs.

I'm hoping to take some of the main bedroom and put the bathroom there

but if not, then I'll use the small bedroom as it is now,

turn that into a bathroom and then take some of the main bedroom for the other bedroom.

I'm really glad that you're not going to sacrifice a bedroom

for a bathroom, so you're still going to have three bedrooms upstairs.

-Are you going to keep the downstairs toilet?

-If I can keep one, I will.

How much do you think you'll be spending?

I have a budget of £10,000, so hopefully I can keep within that

doing most of the work myself and just getting professionals in for the electric and gas.

That is quite a tight budget because you've got to have a new kitchen,

brand new everything, actually.

Carpets, everything. Everything you're looking at.

-It does need...

-Everything.

-Everything.

A £10,000 budget on top of her £115,000 purchase price

means she's already in for £125,000.

The estate agent valued this property, once refurbished,

with the reconfiguration, at £130,000 to £135,000

so there's not much in it.

She'll need to tighten those purse-strings on her first venture.

-Is it quite daunting, taking this on?

-It is, yeah, this is my first one.

But other people do it and achieve it so...

Absolutely, and you know what, unless you give it a go,

you will never know, and this is the time in your life to take this on.

-Absolutely.

-So how soon do you finish work?

-I've got another month.

So you've got four more weeks to bear it and then you're going to get stuck in, overalls on?

Well, I have puppies due as well,

-so it might be delayed a bit more as well.

-You're having puppies?

-Not me, my husky is having puppies.

-How many are they having?

I don't know yet. I can't have her X-rayed until day 55.

And how many do you think you could have?

-She could have anything up to 10.

-And you've got a house to renovate?

-Good luck!

-Thanks, I'm going to need it.

-You are.

Look, it's been fantastic meeting you. Good luck with this.

Well done, thank you.

Of course, the puppies take priority

so Nicky's given herself four to five months

to get the work done here.

# And they called it puppy love

# Oh, I guess they'll never know. #

Oh, Nicky's budget is tight. As are the profit margins.

I can see why she wants to move the bathroom

but she needs to do her sums to make sure it's worth it,

otherwise when she comes to sell

she'll be having kittens as well as puppies.

You can find out how it goes later in the programme.

I'm in Leicestershire in the town of Shepshed.

Historically, it's been known both as Sheepshead and Shepshed.

The translation of its name in the Domesday Book is "a hill where sheep graze".

So no prizes for guessing that it was important in the wool industry.

Its history is reflected in the buildings of the old quarter

but there's a lot of modern development here, too.

I'm here to see a plot of land with planning permission

at a guide price of £65,000.

And, as is usually the case when it comes to looking at plots of land,

sometimes it's quite difficult to establish where the boundary of the land is.

It's actually part of the land that once belonged to the pub there

which has been divided off.

That bit of the car park there isn't part of the plot.

It's actually a line between that gatepost there and where the hedge

has been cut down on into the distance where the fence is.

324 square metres in total. OK, let's take a look.

This plot is just part of a bigger development scheme.

The pub has planning permission for conversion

and permission has been granted for several new builds

in the rest of the car park and land.

When it comes to plots of land,

three things you really want to have. One, it to be flat.

Two, good road access. And three,

easy access to services such as sewers, electricity and gas etc.

Well, it's going to do OK on road access

because that's already established.

On the electrics, gas, sewers, I think because there's residential

properties over there, that won't be much of an issue.

The big problem as far as I can see is the whole flat issue.

That's one thing it certainly isn't. If you're a mountain goat,

it's absolutely perfect but you have to say,

there's going to be a lot of earth movement required to sort this one out.

# When the earth moves again

# When the earth moves again. #

But, of course, the big advantage here is that detailed planning permission is already in place.

The plans that have been passed are for two semi-detached properties,

and quite nice they sound, too.

Downstairs you've got a kitchen, a lounge, a ground-floor toilet.

Upstairs, two bedrooms and a bathroom.

Now the catalogue does say that you might consider

putting in a third bedroom, perhaps in the attic space.

It's all about what difference that would make in the end selling cost

and how much it would cost to do it.

Work out those figures, make your choice.

Detailed planning permission is usually the second

and final stage of the planning process.

It basically means that the planners have not only okayed the build,

as in outlined planning permission, but also approved all the final

details such as the types of finish to be used and so on.

It means you can start building straightaway.

One note of caution, though.

I know that I always bang on about how important it is that you read

the legal pack before you buy a property

or a piece of land at auction. There is a good reason for that.

In the case of this bit of land, there's a covenant

which says that if somebody buys it and then sells it on

within 10 years, without actually building on it first,

then the seller actually has 30% of the profit of any future sale.

If you build on it, it's a different matter

but if you were just to buy it and what they call landbank it,

hold on to it with a view to selling it in the future at a profit,

you have to factor in the fact that you're going to have to give 30% of that profit away.

There it is, then, an incentive to get on and build.

But what if you didn't want to go with the plan?

Would flats or detached houses have a market?

We asked an agent from the company who dealt with

the sale of the land, guided at £65,000.

In terms of the flat market,

that's become more of a saturation point at the present time

and detached houses, a lot of developers are doing those,

so this represented a sector of the market

which was very much in demand.

What about the option of applying to add a third

bedroom in the attic space?

The planning application would have to be looked at again.

It would have to go through normal detailed planning again.

It would be worth it if you felt that you could get that additional third bedroom

which would represent a good-sized room.

Certainly price would be better,

probably achieving a further £5,000 to £10,000 more

than as a two bedroom.

Once built, would there be a good rental demand for the houses?

I feel that it would rent very easily.

As a two-bedroom, it would rent at £500 per calendar month.

As a three-bedroom, three-storey,

that would be £550 per calendar month.

What about the resale value here?

A two-bedroomed semi with detailed planning as it is would be worth £125,000.

With the change of the detailed planning to a three-bed,

making it three-storey, that would be £135,000.

Because the site has already got detailed planning permission

it means a lot of the hard work has been done for you and you

could literally start building here pretty much straightaway.

If you stick to a tight budget and get your costings right,

I think there's money to be made, too,

so who fancied it when it went under the hammer?

Lot number 19 is some residential building land.

Where do you want to be on this one?

£60,000 to start me? £60,000? 55?

55 is bid, thank you. 55 is my opening bid. 56, quickly.

£56,000 is bid. At 56, 57, 57, 58.

59, 59,000, 60. At 60...

60,000 down the centre. New bidder down the middle at 60,000. 61?

At £60,000 it's in the market, no mistakes.

We're going to sell at £60,000 for the first time.

Against you at the back. At 60,000 for the second time.

Third and last opportunity. All done? Sold at 60,000.

That look of relief about their final bid of £60,000 was between Vicky and her husband, Steve.

They're experienced developers and have recently built a house

in Melbourne, Australia.

However, they were missing their family so they've come home.

# We're coming home. #

I met up with them to find out what they were plotting.

-Steve, Vicky, lovely to meet you both.

-You too.

-Congratulations.

-Thank you very much.

-So, you've bought yourself a bit of land.

-Yes, we have.

-Why?

Well, we came back from Australia.

We've been out there for 12 months

and we just wanted to do something different.

So we saw this block of land.

It was affordable so we decided to try and buy it.

Is this something you've done before?

We've done various projects before.

Mostly houses that need renovation, not necessarily land.

Apart from the house that we had built in Australia which was very long distance.

We bought the land and then we had a building company that built

it for us and then we went over there and everything was fantastic.

Your brother, who was out there at the time, project managed it for us.

Right. Australia, what were you doing out there?

We just decided to move over there,

we thought we could perhaps settle. I didn't settle terribly well.

I missed my family and my friends so much, and the UK,

so we decided to sell up and move back.

-How long were you out there for?

-Just 12 months.

-Where?

-In Melbourne.

We decided we were coming home, sold the house, got a really good

price for it and came home on a fantastic exchange rate.

That is why we bought this land. We've also bought a terraced property to develop.

# We've been searching for a place to call our own

# Yeah, we're coming home. #

Vicky and Steve really are the comeback kids.

Not only have they bought this plot with the plan for two semis

but they've also got that terraced house as an investment.

And as if all that wasn't enough of a challenge,

they're also having work done on their own home, too.

So what are the plans, then?

Are you going to stick pretty much with what's been passed?

I think we'll stick to the plans as best we can.

We've got an architect to look over them for us

so we'll see what he has to say

and if he can make any really good changes to them

then we'll go with that and go with his recommendation, really.

Obviously, we've got planning permission for two two-beds.

There is potential to go to three beds,

which may increase the value of the properties, so...

It's just something to bear in mind, isn't it?

Now, clearly cost is going to be absolutely key to this, because this

is a business venture, presumably to sell the properties on?

We've not really decided.

It depends on the market value at the time.

If it's advantageous to sell then we'll probably sell.

Equally, if it's advantageous to rent, then we'll rent them out

and see where we go from there.

The costs either way are going to be important.

Do you have any idea of budget at this point?

In terms of construction costs,

we know that they're going to be £60,000 and £100,000 for the pair.

What's the process to getting it done and what's your involvement?

We'll probably project manage.

Well, we will project manage the construction,

make sure that the services and materials are here on time.

We'll have a really hands-on approach. We want to keep our finger on the pulse.

So what's the timescale for doing this?

Roughly, we'd like to get them constructed within 12 months.

Obviously, we've got other projects on the go as it were at the moment.

That's our target and hopefully that won't slip.

Only time will tell, I guess!

Is this going to be your job, for want of a better word?

Are you both going to carry on working? What do you do, work-wise?

I was an engineer by trade.

I'm a fitter by trade, so currently, obviously,

we're spending time doing the house up.

I may well go back into engineering. It really depends, Martin,

how well this takes off.

I was working in the health service as a health service manager.

I wouldn't mind going back into that but this is it, really.

If it works for us, then we'll probably carry on and continue

but if not, we've got jobs that we can go back to.

Listen, congratulations and best of luck to you both.

-We look forward to seeing how you get on.

-Thank you very much indeed.

Well, Steve and Vicky may well have done a new-build in the past

but that was in Australia and building their home.

Doing this for profit is a completely different kettle of fish.

Will they stick to the budgets and timescales and make money out of the venture?

Find out later in the show.

Coming up, in Chester-le-Street, this three-bedroomed terrace house needs a total rethink.

There's layout issues here that need to be addressed.

In Shepshed, as the old adage goes, if you're in a hole,

maybe you should stop digging.

We've had to remove quite a lot of earth, something like 400 tonnes.

But first, time to find out if it's huskies or houses for Nicky now.

I've really enjoyed the breeding but no, I love being my own boss.

We're back in Maidstone, Kent, to see how Nicky got on with that three-bedroom mid-terrace house.

She was in the process of taking voluntary redundancy from her job

as a crime manager in the police force

and this was her very first development.

The house was in a good location, with an army barracks

and university nearby. Very handy for recruiting tenants or buyers.

But it was obvious the house needed its own small army

to bring it back to life. It had no central heating,

the electrics dated back to the 1950s and that's not all.

-Did you see inside?

-No, I didn't. The ultimate sin!

You didn't look inside? Did you peer through the letterbox even?

No, I hadn't seen it before. I saw it in the catalogue and I read the legal pack.

So you spent £115,000 and you hadn't seen inside?! Were you disappointed?

No, I was really pleased, actually.

OK, so no evidence of property research there, then.

But Nicky needed to deal with one of the house's biggest problems.

The only bathroom was downstairs,

and the only loo was right beside it, by the back door.

I'm hoping to take some of the main bedroom and put the bathroom there,

but if not, then I'll use the small bedroom as it is now,

turn that into a bathroom and then

take some of the main bedroom for the other bedroom.

Although this was her first development, Nicky,

who's a DIY enthusiast, was hopeful that she could make

her relatively small budget of £10,000 work.

I was a bit concerned that that amount

and purchase price of 115,000 meant her profit could be eaten away

by her ambitions, particularly if she was going to shift rooms around.

She would still have to get professionals

to sort the electrics and gas,

but she was pretty optimistic she could do it in four months,

although did admit that her husky dogs producing

their first litter might take priority.

Nine months later, we're back to see how she got on.

Was it a pet project or a dog's dinner?

Storm has come along with Nicky to tell us all about it.

# Look at me

# You can take it all because this face is free

# Maybe next time use your eyes and look at me

# I can even do reality. #

Nicky has been extremely busy.

This house is unrecognisable, from the abandoned, mouldy,

unloved mid-terrace that it was.

OK. When I first bought the property, it was horrible.

It was tiles all over the wall,

there was two doors here to go outside towards the back door,

and then there was a toilet, and there was a bath here

in a really dingy, tiny room, set back in the alcove.

And took it back to bare bricks, really.

Levelled up the floor and then tiled it, obviously,

and did the rest - the heating,

and got all the walls plastered, and then I fitted the kitchen.

SHE LAUGHS

That was a job and a half, that was. Yeah, I've learnt loads.

# Come on and look at me. #

Nicky's transformed this dank and dreary space

into a family-sized kitchen diner.

By adding French doors to the garden,

she's flooded the whole of the downstairs with light.

The loo and bathroom have moved from downstairs,

but there are still three bedrooms upstairs.

I've moved the bathroom upstairs

and taken some of the front bedroom from that.

It was difficult trying to fit everything in.

I had to get a smaller door so that I could get a bath in.

I wanted a full-size bath in there,

so that was a bit tricky to get everything fitted in.

Managed it, just.

Nicky had to think small to fit a bath and shower in here,

but her clever reallocation of space upstairs

has left her with a decent-sized front bedroom.

The other two bedrooms have not been affected by the bathroom move,

but have been rewired, re-plastered and completely refreshed.

I did most of the work myself.

I did have a plasterer in to do the ceilings,

but I tackled some of the walls myself. I can do plastering.

They came out all right, but I don't really like it.

You have to keep going, and it's quite hard on the elbows.

I plumbed the bathroom in myself.

I had a company put new windows in,

and I had somebody put the radiators and complete rewire.

But other than that, I've done everything myself.

Wow! Is this lady Superwoman?

I'm really impressed with the quality of the work Nicky's done here.

Of course, by doing most of it herself,

she's kept her costs way down.

I haven't had time to completely down to the detail,

but I think I'm within my 10,000 budget.

That's not including if I paid myself a wage,

which I haven't been, but yeah.

About 10,000.

Nicky bought the place for 115,000

and has spent £10,000 on the renovations.

Time to find out if she has improved her finances as much as the house.

We asked two local estate agents along for their opinions.

What a transformation.

The owner's done a tremendous job.

As a result of the alteration on the ground floor,

it's created much better living space,

so we've now got a decent-size kitchen diner.

Very good for a young family. An excellent idea.

The work that the owner has done so far has been very good.

It's not quite finished,

there's a few little tweaks here and there,

but she's done a very good job with the property.

By moving the bathroom upstairs,

although she has stolen some of the bedroom space,

it has really improved the property.

A lot of people prefer an upstairs bathroom.

Nicky spent £125,000 on the renovation.

So what do the estate agents think it's worth now?

If I were to put this property on the market now,

I would expect it to achieve somewhere between 135,000

and £140,000.

If we were to put this property on the market for sale,

I would say it would fetch in the region of 140 to £145,000.

That would give Nicky a profit of between £10-20,000

before tax and expenses.

Excellent. I'm pleased with that.

Obviously, the higher one would be the better one,

but the market's a bit slow at the moment.

So, yeah, I'm pleased.

What about the rental market here?

If we were to put this property on the market for rental,

I would say we'd fetch in the region of £800 per calendar month.

I would expect to achieve

something in the region of £750 per calendar month.

I was thinking about 800, yeah.

Yeah, that would be good.

This was a double first for Nicky. As well as renovating the house,

she had to deal with her huskies' litter of puppies.

Storm here is one of them.

# And they called it puppy love... #

So, will it be houses or huskies for Nicky in future?

Oh, that's a hard one.

I really, really enjoyed the breeding, but no,

I love being my own boss, being alone with music in the house,

sorting it out. No, that's me.

This is the market town of Chester-le-Street in County Durham.

It's a commuter hotspot,

with ring roads linking it to Sunderland, Durham and Newcastle,

all a short drive away.

Well, literally just a few minutes from the high street

in this lovely little residential road

is the property I'm here to see.

And it sounds like a real good one.

Three bedrooms, two reception rooms, double fronted mid-terrace.

Guide price was 49,950 quid.

Got to be worth a look.

There are some kerb appeal issues to be dealt with,

but the house does look solid.

The double frontage certainly gives it a grand feel.

Let's hope it doesn't disappoint. So, what have we got?

A little entrance area there.

Double fronted, so basically, a living room on one side

and a living room on the other side.

That one looks to be in reasonable condition.

You've got a nice open fire,

although you'd probably want to sort that out and replace it.

The whole house feels damp. It feels cold.

That's probably because it hasn't been lived in for a while.

Get a bit of central heating on, get some people in here,

just get the air flowing, and that will sort itself out.

Nothing too obvious in terms of mould or anything like that,

which is definitely good news.

So, as I said, second large living room here.

So far, so good,

and then it all starts to go horribly wrong

as you move towards the rear of the property,

where you've got this kitchen.

Now, as you can see, it is in a right state.

Looks like something is going on with the roof.

It's not a pleasant space,

no windows other than the light coming in through the door there,

so it feels dark and dingy.

Some kind of a cupboard here.

Oh, actually, no. It's not a cupboard.

That is the bathroom and loo.

Off the kitchen, which isn't good.

In a right old state, which also isn't good.

So, good start...

..went a bit wrong, didn't it?

Just goes to show, never judge a property on first impressions.

Still, nothing that can't be fixed,

assuming there's enough room on the second floor.

So, upstairs, and a sort of strange layout starts to develop.

The staircase itself has this return in it,

which I think is really nice,

leading onto a little bit more of a landing there,

which separates two big bedrooms on either side,

and you've got the small box room in the middle.

Now, I understand that a lot of these houses on the street

originally had that as just one big open landing area,

and I think that would potentially be quite a nice thing to do,

although, of course, it would mean you would lose

that third bedroom, which would not be too good,

especially if you're looking at renting the place out.

But as it is, that doesn't work, the loo's downstairs,

there's some layout issues here that need to be addressed.

Perhaps the answer lies outside.

Well, at the rear of the property, this little courtyard area.

Quite a useful extra space, especially as you've got

access to a rear yard here through this gate,

so in theory you could park your car here.

But much more interesting, as far as I'm concerned,

is the space it gives to potentially build some kind of extension.

That could be the solution to those layout issues upstairs.

It would give you a chance to really integrate this kitchen area,

and just increase the size of the property quite dramatically.

As ever with these things, it's a case of looking at

how much is it going to cost to do that extension,

how much is it going to add to either the quality of life

of living in the house or the value

or the potential in terms of rental.

Weigh up those figures and then make your choice.

It would definitely need planning permission, though.

To figure out whether all that work is worthwhile

in terms of your wallet, we asked a local property expert

for his opinion on this house,

guided at £49,950.

What does he think it could earn per calendar month

if the layout were reconfigured?

Rental, I would think probably a guaranteed figure

of maybe £500 per calendar month,

upwards to 525 per calendar month depending on the layout

and how they improve the place.

If that work was done, what would it be likely to sell for?

With some minor alterations to the layout

and obviously, the refurbishment,

then you're probably looking in the order of about 110, £115,000.

But the 64,000 dollar question here is,

is there greater profit to be made

if the house were extended into the backyard?

I think an extension done in the right way

could push the property up to 130 to £140,000.

What would that extension mean for the rentals?

You're talking probably £550 per calendar month,

maybe even a little more.

Well, a few layout issues,

and clearly quite a bit of work required to sort this place out.

However, I think at that guide price,

this represented a really good investment opportunity for someone.

Let's find out who that was when it went under the hammer.

We're now going to go down to Chester-le-Street.

The double-fronted town house.

I need 50 to start. We won't go below.

Great price, this. 50,000. Gentleman sitting down at 50.

Thank you very much. We're up and going at 50,000.

51 anywhere else?

51,000 standing.

I've got another bid of 51,000.

52 bid. 53.

54. 55.

56. Gentleman at 55,000.

A new hand, gentleman sitting down at 56. 57.

58. 59.

60. 61.

62. 63.

64. 65.

66.

I'll take 500.

500 bid. 65 and a half.

66. 66 and a half.

67. 67 and a half.

£67,000 standing.

It's your last chance. I'm going to sell.

I'm selling it once at 67.

For the second time, £67,000.

Sold to the gentleman in the white shirt.

It was husband and wife Paul and Karen,

along with their son Jordan, who bought the lot for 67,000.

Paul quit his job in the Prison Service several years ago

to focus on renovating properties.

Karen works full-time for the local council.

Together, they've built up a small portfolio of investments,

so I was keen to discover exactly what they had in mind here.

-Karen, Paul, lovely to meet you.

-All right?

-Congratulations.

-Thank you.

-Good house.

-Very good, yeah.

-Tell me why you wanted to buy it.

Well, we are actually property developers.

This is kind of what we do for a living.

-This is number six in the portfolio, isn't it?

-Yes.

-So it's just another big job.

-Great.

-Something else to get the teeth into.

So how do you define being a property developer?

Well, I kind of got bored of the job I was doing.

I got fat and bored, so I thought well,

-I'll come and do something different.

-What were you doing before?

-I used to work in the Prison Service.

-OK.

So it was kind of a big leap, something different.

So what inspired you to go down this avenue?

I saw an opportunity and really enjoyed the challenges,

and wanted to get involved in property,

so I persuaded him, worked my magic.

When was that?

Back in 2007 is when I really started looking

and investigating the possibilities,

-and then I found this quite good bargain, didn't I?

-Yeah.

We didn't start from a little renovation project

which was quite simple. We bought a house,

had to rebuild it bricks by bricks on the side.

Everybody says you find the worst possible house you can do

-and start from there. That's what we did, didn't we?

-Do they?! Right.

It was a good project. It turned out really nice in the end.

-It did, yes.

-We were quite pleased with it.

For Paul, the Prison Service was obviously

arresting his development...

# I'm free to do what I want

# Any old time... #

..while Karen has the skills that might prove handy

when it comes to renovating properties,

as she works full-time for the council in emergency planning.

So what kind of emergencies do you plan for?

Anything that affects the public, such as flooding,

if there is power outages, you need evacuation.

Anything, really.

-So you're good in a crisis, are you?

-Well, I would like to think so.

THEY LAUGH

Paul and Karen's early experiences in development

were a bit of a rollercoaster ride,

as the property market collapsed just as they were getting started.

That meant their profit margins were squeezed.

Undaunted, they've managed to build up a small portfolio,

and their intention with this house

is to sell it on after some major work.

Well, all the back end is going to have a double story extension on.

-Oh, wow.

-Demolish what's at the back now,

cos it's all rotten and falling to bits. Build it up.

Upstairs bathroom, add another bedroom,

and then knock out that odd-shaped bedroom at the top of the landing.

And see what we can do, just kind of see how it comes out.

-We get the feel for them as we go.

-Yeah.

There's a lot of alterations needed to make this property

good standard, really.

Yeah, we're thinking about putting period fireplaces and stuff back in.

-Nice.

-If we can.

What's the rough cost of the extension?

-We'll be looking with a budget of around 30.

-To do what?

-To do everything.

-To do everything.

So how much of that is the extension, though?

-There might be 15 to 20,000 in the extension.

-OK.

But then, we're putting kitchens, bathrooms,

new heating systems, rewire.

Needs a roof. Everything needs doing.

We save a lot of money because

Paul does a lot of the labouring himself,

-so we have minimal costs for labour.

-Good.

And what about other members of the family? Are they getting involved?

Yeah, we've got a little boy. Well, he's not so little.

-Yeah, he's a big lad.

-Yeah, quite a big lad.

-He likes tiling, doesn't he?

-He likes getting involved.

-He likes tiling?

-Tiling, yeah.

-He's learning the trade early.

-Have you got him plumbing and roofing yet?

-Not yet!

-He'd give it a go, though, wouldn't he?

-Oh, he gives anything a go.

Start them young, that's what I say.

Friends and family are also pitching in on this particular job,

but nothing will start until planning permission

for the extension has been approved,

which should take around eight or nine weeks.

Then it's going to be hard graft,

with a schedule of four to five months

to complete the renovation. The lifestyle, then,

has changed quite a lot from a 9-to-5 job or whatever it was -

I don't know if it was shiftwork - to the lifestyle now.

How would you compare the two?

Oh, fantastic, isn't it?

You can have holidays when you want, you do what you want.

I think it has its peaks and troughs,

because when you're nearing the end of a project,

you end up spending a lot more time there,

it takes up more weekends, it takes up nights.

But when you finish that,

at least you have a bit of a rest period afterwards.

Brilliant. Well, listen, congratulations, both of you.

Good luck with it. I'll look forward to seeing how you get on.

-OK.

-Thank you.

Well, Paul and Karen really appreciating the benefits

that being a property developer can bring.

It's not just about the money, it's a lifestyle thing.

How will they get on with this place?

Well, lots of work to do, a tight budget and yes,

planning permission by no means guaranteed.

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

Now time has passed,

I want to find out what has happened to those properties.

Are we confident that they will look brand new?

Oh, let's hope so.

Back now to the Leicestershire town of Shepshed,

a popular choice for commuters

working in Loughborough or Nottingham.

That's where local couple Steve and his wife Vicky

paid £60,000 for this 324 square-metre plot of land,

formerly part of the rear car park and gardens of this pub.

# Do you come from a land down under? #

They've recently returned from Australia,

and were attracted to the land,

which had planning permission for a pair of two-bedroomed houses.

We came back from Australia. We've been out there for 12 months,

and we just wanted to do something different.

So we saw this block of land, it was affordable,

so we decided to try and buy it.

The couple had dabbled in property development for 12 years,

and were going to project manage the new build.

They were considering submitting revised plans for the houses.

There is potential to go to three beds,

which obviously may increase the value of the properties,

so we'll just see what happens.

Just something to bear in mind, isn't it?

Well, two years and two and a half months later, we've come back.

# The houses reach into the skies... #

And the new houses have been built,

and Steve and Vicky were successful

with their revised planning application.

Each semi now has a third bedroom in the roof space. So far, so good.

But as I've said, it's been over two years since we were last here.

There's still building work going on,

so clearly their intended 12-month schedule has slipped somewhat.

We resubmitted a planning application

and construction started,

and it's been about seven months now since construction,

and as you can see, the properties are almost finished.

Another developer's built two other houses next to the former pub,

but work on Steve's two houses was delayed

due to his revised planning application

and the difficult terrain.

Out here was a major, major job.

We've had to remove quite a lot of earth.

In total, I think there was something like 400 tonnes of earth.

So obviously, still quite a lot of work

that needs to be taking place here.

We're going to have a tiered garden, patio area and retaining walls.

Both houses are now ready for the interior second fit.

In terms of layout down here,

what we've got is a downstairs cloakroom,

we've got a kitchen and a lounge cum dining room,

and then on the second floor, we've got two bedrooms,

we've got a main bathroom,

and then on the top floor we've got a cloakroom,

another bedroom and an en suite, and hopefully,

we've got about five months left of the project till completion.

Steve's returned to full-time work as an aero engineer,

and Vicky's managing another project the couple are involved in.

We've tried to come down on a regular basis.

We've not really got involved in the construction side of things.

We've sort of kept a backseat, as it were, and just left it

to our builder-developer to project manage it

and keep things on time, as it were.

What have been the financial implications

of the delayed start and that extra bedroom up in the roof?

Currently we've spent about 60,000 on the project.

We've probably potentially got at least another 60,000 to spend on it.

Added to the £60,000 they paid at auction,

that takes their total investment to £180,000.

So, what's the plan for them when they're completed?

Hopefully towards the back end of the year,

the properties will be finished

and then we can possibly look to either rent them or sell them.

We invited two local estate agents

to look at the current state of the builds,

and tell us what they think the potential is

for the houses once they are ready.

I think it's fantastic.

The property has developed more than I thought,

because originally it was going to be two bedrooms,

and they've made it into a three-storey three bed.

And I think that was the right thing to do.

Yes, I think going into the roof space

and putting that additional bedroom in,

making it from a two to a three, was a good idea.

It gives a bit more flexibility to the market.

It opens it up to first-time buyers and small family units as well.

How much rental income could they generate

if they were let to tenants?

The rental market is extremely strong in and around Shepshed,

and I would suggest that it would yield at around

£600 per calendar month.

Rental very strong. We'd probably be looking at

marketing the property at about £600 a calendar month.

That's a potential yield of 8%

if Steve decided to let both the properties.

That's very good.

That's in line with what we thought initially.

If we do go down the route of renting them out,

then obviously that would make us

quite a good return on our investment.

And what about resale?

Can the estate agents foresee the houses

being worth more than the £180,000 Steve has invested here?

In the current market, I value this property at £135,000.

I would suggest, depending on specification when it's finished,

that we be looking at probably in the region of £135,000.

If both houses were sold,

that could generate a gross profit of £90,000

before taxes and expenses.

Initially, that sounds a little bit low, OK.

Obviously, I appreciate they're unfinished,

so obviously it's very difficult to put a perfect valuation

on the properties, but again,

obviously we do need to get them up to a level

that hopefully will get more money for them.

So now Steve and Vicky have experience of managing

a new-build project here and in Australia.

Are they pleased they returned to the UK?

Yes, definitely.

100% happy to be back to the UK. Yeah, for sure,

and hopefully in the future, we'll do other projects.

It's back now to Chester-le-Street in County Durham,

where this Victorian three-bed terraced house

was bought for £67,000 by husband-and-wife team

Paul and Karen, accompanied by their son Jordan.

Sold to the gentleman in the white shirt.

For Karen, property developing is a sideline,

as she still works full-time

as an emergency planner for the council,

but Paul gave up a job in the Prison Service

to set himself free to concentrate on renovating properties.

The lifestyle, then, has changed quite a lot

from a 9-to-5 job or whatever it was -

I don't know if it was shift work - to the lifestyle now.

-How would you compare the two?

-Oh, fantastic, isn't it?

You can have holidays when you want. You do what you want.

Jordan is also involved in the family business.

-Have you got him plumbing and roofing yet?

-Not yet!

He'd give it a go, though, wouldn't he?

-Oh, he gives anything go.

-He does.

I reckon they might need a rest after dealing with this place.

The problems range from damp on the ground floor

to a run-down kitchen and bathroom out back,

and an odd layout up top.

Paul and Karen had a £30,000 budget

and thought that a rear extension was the only way to fix this place.

So we returned 10 months later

to see if they had achieved a miracle cure.

And from the outside, well,

the front of the house has been cleaned up.

Freshly painted windows and a new front door

have certainly given the frontage more appeal.

But take a look at the back,

and a glorious two-storey extension has been built.

And through those patio doors?

Well, there's a wonderful, light, spacious kitchen

ready and waiting to be used.

Upstairs, the old half landing now opens up onto the new extension,

leading to the stylish bathroom suite.

The extension also houses a new bedroom.

But the star of this whole new addition is the kitchen.

Right, so I'm standing in what was the old bathroom.

We've had the walls and everything come out,

so this is all the new extension.

We had some delays with planning

because we had to get structural engineers involved

because we've had to underpin all this back wall along here.

But I think it's come together quite nice.

We've gone with a very Victorian theme,

put the fake chimney breast in, and I built that one last night,

but I think it's come out quite nice with the worktops,

the Belfast sink, and I think it's quite nice.

Quite a nice room.

Paul has done a grand job, but it doesn't end there.

At the front of the house, the original ground floor rooms

are now light, open spaces, retaining their character features.

One has an open fire,

while the second reception room has an inglenook fireplace,

housing a log burner.

Upstairs, the old box room has gone,

which opens up that landing,

with new doorways leading to the original bedrooms.

Again, both are restored and possess delightful character.

The loss of the box room has been compensated for

by the new bedroom in the extension,

so that the house still has three bedrooms.

And that's not all.

There's been an extension to Paul and Karen's family

with the arrival of their baby, four-month-old Brooke.

We've had a baby girl, a baby daughter,

and she is four months old,

and that's obviously delayed the project a little bit.

Yeah, just a bit, yeah!

Yeah, we actually took all of August off.

We took a nice long holiday so we could get to know her.

Yeah, so the family could spend some time together,

and she could spend some quality time with her brother as well.

Baby Brooke's arrival meant that the original schedule

was stretched from seven to ten months.

That delay was understandable,

but apart from underpinning the main extension,

there was another major drawback to contend with.

Well, the damp was a big problem.

We had to chip the plaster just over a metre off the walls

on every wall downstairs, and then we had a damp course injected,

and to be honest, a lot of it failed.

The company said that they might have to clear the cavities out,

so I had to dismantle all the brickwork on the outside

and clear everything out, and then build it all back up.

The entire property is now damp proof,

and removing the brickwork revealed that inglenook fireplace,

which was an unexpected bonus.

The original building has had a total overhaul,

from replastering to rewiring.

Builders built their new extension with qualified tradesmen on hand

to do the electrics and plumbing.

That left Paul to do the rest, with help, of course,

from 11-year-old Jordan.

-He loves helping, doesn't he?

-Yeah, he likes to get involved.

He does, he likes getting involved. He likes doing a bit of painting.

-He's been a great help.

-Yeah, a really good help.

-Does a lot of cleaning and tidying as well.

-And he does baby-sitting.

-Very good at baby-sitting.

-Very good at baby-sitting, yeah.

Possibly the most important job of all.

Paul and Karen estimated a budget of £30,000 for all the work,

and amazingly, estimate the final figure

for this renovation will be 33,000.

So with their purchase price of 67,000,

their total outlay is around 100,000.

Well done!

It is an impressive transformation,

and one that has almost changed their minds

about what they want to do with this place.

The plans that we had for this property, ideally, is to sell it.

I would like to move in it, personally,

because I'm really pleased with how it's ended up,

but that's not going to be.

If it doesn't sell because of the market,

we might have to look at renting it out,

but for a rental house,

-we wouldn't have done it to this standard.

-Yeah.

And that's ideally why we have to sell.

The couple have been caught out

by the ups and downs of the property market before,

so it's no wonder they are a bit anxious.

Do two local property experts

reckon they're home and dry with this £100,000 investment?

Overall impression - a job well done.

A Victorian house has been refurbished in the right way,

which is important in terms of the finish

that they've put into the house. Really nice job, yeah.

Having looked around,

the owner's paid particular attention

to the kitchen and bathroom, and overall, the property's been finished

to a very high standard throughout.

Has the extension given the house a new lease of life?

I think the extension in this case was crucial

to create a good-sized bathroom, make a bigger kitchen.

The two main features of the house.

It's worked fantastically well.

But what impact has it made on Paul and Karen's potential returns?

Remember, they've spent about £100,000.

So, with plans to sell, what could they expect if they did?

I would probably be looking to put the property on the market

at around £150,000.

I valued it at £150,000.

-Higher, actually, than what I expected.

-Higher than

-what we originally worked on, yeah.

-I'm pleased with that.

I think we only worked on about 135, 140 originally.

Yeah, it was about 135 upwards, so I'm really pleased with that.

It's nice, yeah. It makes you feel good about we've done. It's great.

No wonder they're pleased.

Paul and Karen could achieve a potential £50,000 profit,

minus the usual tax and expenses.

But should the house fail to sell,

the estate agents reckon they could expect

£650 to £700 per calendar month,

giving them a healthy yield of around 8%.

So, with the house ready to be sold and a new baby to look after,

what are their plans now?

-Probably back to the auctions, isn't it?

-No. We need a rest.

-Especially with Brooke coming along, we need a rest.

-Yeah.

Maybe we'll have another month off, then we'll be back to the auctions.

Join us next time for more auction properties to whet your appetite.

Yes, we hope we've inspired you and given you an insight

into the world of buying at auction here on Homes Under The Hammer.

-We look forward to seeing you then.

-Goodbye.

-Goodbye.

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