Episode 3 Homes Under the Hammer


Episode 3

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Transcript


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-Hello, and welcome to the show.

-For many, buying and doing up property

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is just a dream, but for others it's a wonderful reality.

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So are you a doer or a dreamer when it comes to homes under the hammer?

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Well, buying at auction is exciting but it can be stressful.

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The hammer goes down and, in a second, you've bought a house.

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So if you are planning to buy at auction, make sure you're prepared.

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So let's take a look at the auction properties

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that were up for sale on today's show.

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In Stoke-on-Trent, are things looking up for this two-bed house?

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Just check the roof, cos I can't see what kind of state it's in.

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And talking of roofs...you've got this, a London roof terrace.

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It's just fantastic. I love it.

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These properties have been sold at auction.

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

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when they went under the hammer.

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Your lot, sir. Well done.

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Vauxhall in south-west London has changed massively

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over the past 15 years.

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It used to be an area dominated by offices and factories.

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Now it's a popular, sought-after destination

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with lots of new housing developments, cafes, bars

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and incredible transport links.

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100 yards from the hustle and bustle

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and I'm here to see today's auction lot

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tucked away on this beautiful little square.

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You know, it feels a world away from busy, bustling Vauxhall.

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And here it is.

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Now, it's detached but I'm afraid it's not the entire building.

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I'm here to see the two top flats.

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Now, the average one-bed flat in this area can command

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as much as 350 grand,

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so I was very excited to hear the guide price on this, just £310,000.

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I'm going to get inside.

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Now, this is interesting because the flats are described in the auction

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catalogue as being non-self-contained.

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That means they've not legally been converted.

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So what you're really buying here is one property across two levels.

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What you've got to decide is whether you want to keep it as one

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or take the time and trouble to get planning permission

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to turn it officially into two flats.

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On this floor, you have a lounge and a bedroom with a bathroom leading

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off it, and the kitchen is on the floor below,

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along with another toilet.

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The second flat has a kitchen but it's just as tatty as the other one.

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But fear not, when all seems doom and gloom,

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there is one glimmer of hope.

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Permission for conversion for two flats was granted eight years ago

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but that has now lapsed.

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This nugget of information, well, it may give you some sway with

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the planners but, as we know,

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planning restrictions can change from year to year.

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The thing that made them happy eight years ago may not prove popular now.

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On the top floor alongside the kitchen, there are two more

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good-sized bedrooms, a very dirty bathroom and a separate loo.

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And if you still aren't quite convinced,

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there's one more set of stairs I haven't tackled yet.

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I wonder where they could possibly lead.

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Well, if you're wowed by all the greenery

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and pretty little spaces outside,

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look, you've got this, a London roof terrace.

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It's just fantastic. I love it.

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Brilliant!

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So, it's nice to end on a positive.

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The roof garden is this property's crowning glory.

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So with a guide price of 310,000,

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it seems like a lot of property for the money

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but is it worth all the hard work?

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I asked along a local property expert to give his views.

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It would probably turn out to be a spacious one-bedroom flat

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so you could possibly get up to the ranges of £325,000 to £350,000.

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A two-bedroom flat in this building with a roof terrace,

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you probably would achieve around about, let's say £400,000.

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If it was stripped out and converted to just one large flat,

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how much would it be worth then?

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You could expect to get up to around about £600,000, possibly.

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With one-bedroom flats achieving £1,300 per calendar month

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and two-bedroom properties fetching £1,700 per calendar month,

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it seems like a great investment for buy-to-let.

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There is an awful lot of work to do in this confused house.

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But if planning goes your way and you manage to separate these flats,

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the rewards will be high.

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Let's see who wanted this property

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and its beautiful setting as we go to auction.

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Three floors. You've got two non-self-contained flats.

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Start low at 300. Not going to go below three.

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300? In the ar... Yeah, 300.

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305. 305.

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you310. 315.

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320. 325.

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330?

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-330.

-330.

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-331? 332.

-335.

-335.

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336. 337.

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340. 341?

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341.

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-3...

-345.

-345.

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346. 3... 350.

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351.

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351. Another spot on the right. 351.

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-352.

-355.

-355.

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3...

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360. 365?

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360. Standing up. Anyone else? 360.

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First time, second time,

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third and last time. Have you all done?

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HE BANGS GAVEL Sold 360.

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That one and only bid made by Bill

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secured the two flats for 360,000.

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His wife Kumi seemed rather excited,

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and I think she has every right to be.

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I met them back at the property to find out their plans.

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Congratulations. This really is a gem of a property

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and you got it on auction day.

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So how much had you, in your minds, intended to spend on the day?

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-Well, it was your money.

-400. 400,000 was our budget.

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It's a fantastic building but it's just a bit confused on the inside.

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So what are you two going to do to get the most out of it?

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Well, um, the possibility is one property,

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two floors with a roof garden,

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or two flats, so one floor each.

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We haven't decided on that yet.

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We've got to start immediately now with getting electricity

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and water into the place.

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And then we'll do a strip-out, first phase demolition,

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and start obviously building up, plastering, services,

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without still knowing whether it's going to be permission

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for two properties or one property.

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We'll get the result of that within three months, hopefully.

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Kumi wants me to finish it in three months after that.

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I'm telling her six.

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-So nine months in total.

-So, come on, roughly how much have you got

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-to spend on this?

-150.

-£150,000 to really bring it up to scratch.

-Yeah.

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So not only is this property sitting in a beautiful area,

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but Kumi and Bill plan a real luxury finish which could entice

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no end of interested renters.

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But once all the hard work is done, I really wouldn't be surprised

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if we return and find these two have fallen under the property's spell.

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Guys, I'm so excited to see the outcome of this property.

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And I've got a cheeky suspicion that I think you might be moving in here.

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-Bill, I can see the twinkle in your eye.

-I don't know what to say.

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-Just wait and see.

-Wait and see. Good luck with it.

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-So nice to meet you, Kumi. Thank you.

-Thank you.

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Something tells me Bill and Kumi are going to end up moving into

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one of these flats. I just know it.

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They are so taken with this square. I can see why.

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But, as ever, everything is subject to planning.

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Will they get the go-ahead for the two flats?

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You can find out what happens later on in the program.

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I'm in the dynamic conurbation that is Stoke-on-Trent.

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I'm here to see a very traditional mid terrace

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in this row of similar properties.

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Good, solid housing stock. Make great homes or investment properties.

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This is it. The guide price was £45,000.

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Let's take a look inside.

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Well, you're certainly protected from the elements by a variety of doors.

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You've got this porch thing going on then through to the main door,

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but it doesn't half make getting in a bit of a struggle.

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And squeaks like you wouldn't believe.

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And I just know if this is going to be a running theme of this house,

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because you come into this little corridor

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and there's this stud partition.

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I would've expected to walk straight in from there into the front room.

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And certainly with the addition of that porch, you don't need

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to have this wall here, but it is only a bit of wood and plasterboard,

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so get rid of that, open this up.

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Because at the moment, what could potentially be

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a nice little front room is actually horribly claustrophobic.

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Not only is it light on space, the decor isn't what

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you would expect either - black and white tiles and that parquet floor.

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It's got a bit of a '30s theme going on

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and there's definitely a door theme going on too - here's yet another.

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I've never seen anything like that before. How very strange.

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It's like a semi-cellar. It's not really, is it? How odd.

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Strange things, properties, but through to the rear sitting room.

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Actually, this room at last feels a little bit more open.

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Chance to breathe. Another very interesting fireplace.

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Stairs up to your bedrooms and then, very traditional layout, through

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to the rear of the property where you've got the kitchen.

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Um, well, you know, it could be nice. At the moment, er...

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Why on earth would you do that - paint the ceiling gloss brown?

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Anyway, kitchen, yes, it could be nice, and then through to the loo

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and the bathroom. Just all needs a bit of work.

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Basically, this house looks pretty sound and pretty standard,

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despite the fact that the decor seems to have come from the era that style

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forgot, when brown ceilings were all the rage.

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When was that exactly? Will upstairs be pretty standard too?

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Yep. Two bedrooms.

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# And that's typical... #

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Just as you would expect - two decent-sized bedrooms, no bathroom

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and some tired decor.

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Well, out the back of the property and what would have originally been

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a yard area of a two-up two-down terrace

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has been filled with probably the most popular and typical

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extension in the country - single storey,

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which houses the kitchen and the bathroom.

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Um, yes, it makes perfect sense. This out here, not in bad nick.

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Nice that you've got the alleyway at the back there.

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While you're up there, by the way, just check the roof,

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cos I can't see what kind of state it's in.

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# And that's typical... #

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And an initial look at the roof shows it might need some work,

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so best get someone to look at it.

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# And that's typical... #

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The backyard, like the inside, also needs a bit of sprucing up,

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but I think it's all pretty straightforward.

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If you were to buy this to let, you might keep the layout as is

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and just renovate it.

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If you wanted to make it your home,

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you might think about some layout changes.

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# And that's typical... #

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But what does a local estate agent thing about this two-up two-down?

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The main challenge of this property is to bring it to an up-to-date

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standard which would certainly require new kitchen, new bathroom,

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decor throughout.

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There does seem to be some signs of damp as well,

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so it possibly needs a damp-proof course and possibly a rewire.

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And after all that had been carried out, what could this house,

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that was guided at £40,000, be worth?

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I would anticipate a resale value in the region of £75,000.

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That sounds encouraging. What about rental?

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I would anticipate a rental income in the region

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of £450 per calendar month.

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So not too many surprises with this one.

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A fairly standard terraced house just in need of some sorting out.

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

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Mid terraced house, two bed, popular spot, double glazing,

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two reception rooms. So can we start the bid at 32?

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32 right at the back of the room. £32,000.

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Right at the back of the room. Have we got 34? 34 bid now.

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34. 36? £36,000.

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38? £38,000. I'll go in ones if it helps.

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Can we say 39? At...

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39, new bidder. 39,000.

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40? £40,000. 41?

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£41,000. 42?

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Somebody in the aisle. 42? 42 at the back. 43?

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44. 45. 46.

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47. 48.

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No? 48 still seated. Somebody at the back?

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No. 48 still with you seated. At £48,000.

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Another one anywhere else? If not, selling it at £48,000.

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For the first time at £48,000.

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For the second time. Third and final time.

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Bid seated. No mistake at 48,000...

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You bought it, sir. Well done.

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£48,000 secured the Birches Head terrace,

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which was bought by Nick and Cloge.

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I met them at the house to find out

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what drew them to a property in Stoke.

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-Nick, Cloge, great to meet you both.

-Nice to meet you.

-Nice to meet you.

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-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

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As an investment. We just want to try, you know.

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Nick's always wanted to do something like this.

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I wanted to do it. So we went ahead and bought it.

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-Are you mates or what?

-Son-in-law.

-Oh, right.

-Son-in-law.

-Got it.

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And did that come about over a Sunday family gathering or something?

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-Yeah, it did. Yeah.

-Yeah, pretty much.

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-Oh, great.

-It was kind of more or less me that wanted to do it.

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-He didn't really want to.

-Right, but you've drafted him in.

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-Yep, drafted him in. Yep.

-Kicking and screaming.

-Yeah.

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Cloge has started to build a portfolio

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for some income and for a retirement fund.

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He used to work in a car body repair shop but is now focusing on property.

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With one already in this street under his belt,

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he must know what to expect with these houses.

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-So, have you got a builder's type DIY background?

-No.

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DIY background, but obviously for the major stuff -

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electrics, damp course, anything like that - I'll get a tradesman in.

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The central heating, I'll get people in.

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Checking the electrics, I'll get people in to do that.

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With the rest, I'll be knocking down, the painting,

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the decorating and bits and pieces, you know, I can do that myself.

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-Do you both have jobs when you're not doing this?

-I do. I do.

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-He's semi-retired.

-Right. What do you do?

-I work for a local bookmaker.

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So are you betting on this being a success, are you?

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It should be, yeah.

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-What's the first thing you're going to do?

-Get these nice carpets up.

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Right. What's the budget for the work?

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-10,000 to 12,000.

-Right. And timescale?

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-Three to four months. Probably the four months.

-Right.

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-Well, all interesting stuff. Congratulations.

-Thank you.

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-Good luck to you both.

-Thanks very much.

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-Look forward to seeing how you get on.

-Thank you very much. Thank you.

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So what odds would you give Nick and Cloge

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on making a success of this place?

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Oh, I think fairly good ones.

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Find out how they get on later in the show.

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Well, making the right design decisions when it comes to doing up

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a property isn't just about choosing the paint colour.

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It can actually seriously affect your profits.

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Transforming your ideas into a reality can be a thrill,

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but did our buyers get it right?

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Let's go back and find out.

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We're off to the south-west London area of Vauxhall.

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Described as two non-self-contained flats,

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it was a number of higgledy-piggledy rooms

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spread over the first, second and third floors

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of a lovely old brick-fronted building.

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And it was bought at auction for 360,000 by Bill and his wife Kumi

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as part of their property development sideline.

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It's a fantastic building but it's just a bit confused on the inside.

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So what are you two going to do to get the most out of it?

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Well, the possibility is

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one property, two floors, with the roof garden,

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or two flats, so one floor each.

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We haven't decided on that yet.

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Despite having no definite plans,

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they hope to complete the full renovation in nine months

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and on a budget of £150,000.

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Now, over two years and three months later,

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we're back with Bill and Kumi to see what they ended up with.

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Wow. Wow! They've certainly upped the whole building's kerb appeal.

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So let's go through the communal entrance

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and see what they've done upstairs.

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Well, we got planning permission to make it official - two flats,

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which is really what we wanted to do,

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which obviously gives a better return on the project.

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So now on the first floor there's a one-bedroom self-contained flat.

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Well, that is impressive,

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with fantastic period features and high-quality flooring.

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But in the corner of the room, there are steps. Where are they going to?

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Now, that's an amazing kitchen space.

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This is the first-floor kitchen,

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coming from the first-floor lounge area.

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And this is quite a big kitchen for a one-bedroom flat.

0:19:100:19:15

Because I love cooking, I really like space here.

0:19:150:19:19

There's a small cloakroom off Kumi's spacious kitchen

0:19:230:19:26

and then onto a fab bedroom.

0:19:260:19:30

There's an impressive ensuite bathroom.

0:19:360:19:39

And it's up a flight of stairs to what is now

0:19:390:19:41

the two-bedroom flat on the upper floor.

0:19:410:19:44

Remember that rather sorry rundown living area?

0:19:460:19:49

Well, just take a look at it now.

0:19:500:19:53

Well, this is the living area for the top flat.

0:19:550:19:59

And I think the most obvious thing we've done here

0:19:590:20:01

is we've taken the ceiling out and we've got a vaulted ceiling now.

0:20:010:20:04

To go with that fabulous kitchen-diner,

0:20:050:20:08

there's the two bedrooms and both are ensuite.

0:20:080:20:11

There's even a storage room in the loft space.

0:20:120:20:15

Kumi and Bill have really eked out every inch of this building.

0:20:150:20:19

But why has it taken over a year and a half longer than planned?

0:20:190:20:24

I think the main problem is that

0:20:240:20:26

it took us a year and three-quarters

0:20:260:20:27

to actually get power into the building.

0:20:270:20:30

It wasn't just the power that caused some problems.

0:20:300:20:33

They were also delayed by planning issues

0:20:330:20:35

and whether the roof terrace was a terrace or just a roof.

0:20:350:20:40

Having finally resolved all the issues,

0:20:410:20:43

they've ended up with two great properties.

0:20:430:20:45

So what's the plan now?

0:20:450:20:48

Originally the idea was about investment.

0:20:480:20:51

But since we started doing this project,

0:20:510:20:54

we really started falling in love with the square, the house.

0:20:540:20:58

So we would like to move in into one of the flats.

0:20:580:21:03

But we have so much stuff. I have a grand piano.

0:21:030:21:07

So one of the flats would not be big enough for us for long-term.

0:21:070:21:11

So what we would like to do is, having moved here,

0:21:110:21:14

we look for another property in the square

0:21:140:21:17

and when there is a nice house, we move in there.

0:21:170:21:20

Yes, I always thought they just might be tempted.

0:21:210:21:25

While Kumi might not feel there's enough space for a grand piano,

0:21:250:21:29

I would guess this conversion has cost a grand or two.

0:21:290:21:32

So does Bill know what the total bill is?

0:21:320:21:35

I know exactly how much we spent, down to the penny,

0:21:360:21:38

because I keep a log of it.

0:21:380:21:40

And it's, uh, by the time we've paid the bills, it'll be 300,000.

0:21:400:21:46

£300,000 is a doubling of their original £150,000 budget.

0:21:460:21:51

And with the £360,000 purchase price,

0:21:510:21:55

their total investment without taxes and fees is now 660,000.

0:21:550:22:00

Has it been worth going for that high-end finish?

0:22:000:22:03

What do two local estate agents think?

0:22:030:22:06

Well, for this flat, from a value point of view,

0:22:070:22:09

I'd be suggesting putting it onto the market at about £450,000.

0:22:090:22:13

I'd say you would push it to go onto the market at £450,000.

0:22:130:22:18

And what about the upper two-bed flat?

0:22:180:22:21

You'd probably have to put that property on the market for £650,000.

0:22:210:22:25

The two-bed flat upstairs with that roof terrace is exceptional

0:22:250:22:28

and I'd sort of stick my neck out

0:22:280:22:30

and suggest £650,000-£660,000 in the asking price on that one.

0:22:300:22:35

Well, those figures could potentially see

0:22:360:22:39

a combined value for the two flats of over a million pounds!

0:22:390:22:43

That's a pre-tax profit of up to £450,000. Wow!

0:22:430:22:48

I think the flats are gorgeous, and I'm so impressed.

0:22:480:22:52

What do they think about that?

0:22:520:22:54

-Good news.

-Yeah, I think we'll sleep well tonight.

0:22:540:22:57

It was in Stoke-on-Trent in Staffordshire where

0:23:000:23:03

we first saw a two-bedroom mid-terrace house.

0:23:030:23:08

And though there was less than an ideal downstairs bathroom,

0:23:080:23:13

the two bedrooms really didn't lend themselves to any layout changes,

0:23:130:23:16

so in essence, the place just needed a full refurbishment.

0:23:160:23:21

That suited Cloge and his American son-in-law, Nick.

0:23:210:23:26

Tell me why you wanted to buy this place?

0:23:260:23:28

Um, as an investment. We just want to try, you know.

0:23:280:23:31

Nick's always wanted to do something like this, I've wanted to do it,

0:23:310:23:35

so we went ahead and bought it.

0:23:350:23:38

And did that come about over a Sunday family gathering or something?

0:23:380:23:42

-Yeah, it did.

-Yeah, yeah, pretty much.

0:23:420:23:44

# Well, I talk about it Talk about it

0:23:440:23:46

# Talk about it Talk about it... #

0:23:460:23:48

Well, they say talk is cheap,

0:23:480:23:49

but in this case, their little chat cost Cloge and Nick £48,000 to buy

0:23:490:23:54

the house at auction, and then there was going to be

0:23:540:23:57

an additional £10,000 to £12,000 to do the refurbishment.

0:23:570:24:00

The plan was to complete the work in three to four months,

0:24:000:24:04

with Cloge doing most of the work himself,

0:24:040:24:07

while rookie Nick helped out where he could.

0:24:070:24:09

And now, five and a half months later, we're back with Cloge, Nick

0:24:130:24:18

and Nick's young son, Phoenix, to check on progress.

0:24:180:24:22

Well, no real changes outside, but it was the inside that needed them

0:24:250:24:29

to roll up their sleeves and crack on.

0:24:290:24:32

Hey, and talk about changes.

0:24:340:24:36

Removing the hallway has really opened up the front room.

0:24:360:24:39

And the rear reception room's not bad, either.

0:24:420:24:44

But what about that all-important kitchen?

0:24:440:24:47

And bathroom?

0:24:520:24:54

Great job, lads.

0:24:580:24:59

The two upstairs bedrooms have been spruced up and are ready to go.

0:24:590:25:03

So, how has it been?

0:25:050:25:08

We spent...we must have spent about a month just cleaning everything out.

0:25:080:25:11

We didn't order a skip straightaway, we just got some bags,

0:25:110:25:14

-some rubble bags, and we put all the rubbish in the rubble bags, didn't we?

-Yeah.

0:25:140:25:17

And we put them outside, so we got about 50, 60 rubble bags outside.

0:25:170:25:20

Then we ordered the skip and went to pick up the rubble bags

0:25:200:25:23

and didn't realise they were biodegradable and we couldn't lift

0:25:230:25:26

-nothing up, so it was like double the job, weren't it?

-That was, yeah.

0:25:260:25:29

That was a bit of a laugh, but apart from that,

0:25:290:25:31

everything else has gone pretty OK.

0:25:310:25:33

Bit of a laugh? Yeah. That sounds like bags of fun.

0:25:330:25:37

But I think they've done a top job, particularly in the kitchen

0:25:370:25:41

and in the bathroom.

0:25:410:25:43

Well, the bathroom and the kitchen,

0:25:430:25:45

it was actually all designed by my wife.

0:25:450:25:47

What she did is she drew it down and says,

0:25:470:25:49

"I want you to do it this way," and I have to do exactly what

0:25:490:25:52

she tells me to do, because inevitably I'll get it wrong.

0:25:520:25:55

I would come down and just crack the whip

0:25:550:25:57

when he wasn't doing what he was meant to be doing, so, uh...

0:25:570:26:01

All right. Crikey.

0:26:020:26:04

Poor old Cloge sounds like he was having to take orders from all sides.

0:26:040:26:08

When he wasn't doing the work on the house, he was babysitting one of his

0:26:080:26:12

seven grandchildren, and it seems THAT role might be getting even busier.

0:26:120:26:17

My wife's expecting our second child,

0:26:170:26:19

so, six months and she'll have the baby.

0:26:190:26:22

We don't know what it is yet, so...but as soon as it's born,

0:26:220:26:25

we'll have it down to the next property and earning its keep.

0:26:250:26:28

BOTH LAUGH

0:26:280:26:29

Yep, that's it, start them young.

0:26:290:26:32

So, has getting the whole family involved kept costs down?

0:26:320:26:36

-We have actually spent £12,000 on it.

-£12,000, yeah.

0:26:360:26:38

Got probably a bit more to spend, maybe another £500, £600,

0:26:380:26:41

maybe £1,000, but we...I'm pleased, really, with the budget, because, you know, we're very close to it.

0:26:410:26:47

Assuming a final budget of around £13,000,

0:26:470:26:52

with a £48,000 purchase price,

0:26:520:26:54

their total costs, without taxes and fees, would be £61,000.

0:26:540:27:00

Does that add up to a successful start for this family team?

0:27:000:27:05

What did two local estate agents think?

0:27:050:27:08

The likely rental income for the property would be in the region

0:27:080:27:12

of £425 per calendar month.

0:27:120:27:14

I'd put this property on the market for £395 per calendar month.

0:27:140:27:18

Even the lower £395 per calendar month would generate a rental

0:27:180:27:24

yield above 7%. Not bad.

0:27:240:27:26

Now, more importantly, how would the house Cloge

0:27:260:27:29

and Nick have invested £61,000 in fare on the resale market?

0:27:290:27:34

I would place this property on the open

0:27:340:27:36

market in the region of £75,000.

0:27:360:27:39

I would put this property on the market at £73,000.

0:27:390:27:43

Well, that's roughly what we expected, yeah.

0:27:430:27:45

That's about right, yeah. We're happy at that.

0:27:450:27:47

So, potential pre-tax profit between £12,000 and £14,000.

0:27:470:27:52

Not bad for starters.

0:27:520:27:55

So, is that enough encouragement for them

0:27:550:27:57

to continue with property developing?

0:27:570:27:59

Definitely, yeah, we've enjoyed it. I've had some good fun. Nick's enjoyed it.

0:28:010:28:05

He's learned a few things, so I'd definitely do it again.

0:28:050:28:07

We hope you've enjoyed our insight into the world of auctions.

0:28:100:28:13

Yes, make sure you join us for more, next time on Homes Under the Hammer.

0:28:130:28:17

-See you then.

-Goodbye.

-Goodbye.

0:28:170:28:18

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