Episode 7 Homes Under the Hammer

Hello. Welcome to the show.

We've both been dealing in property for many years now

and have witnessed the fluctuations in the market.

But through it all, we remain convinced of one thing.

You can pick up some interesting buys at the auction.

We've always been really excited by the concept of buying at auction.

And it's true - the speed, the excitement

and the chance for a real bargain make it a thing to try.

So let's find out what got our buyers hot under the collar

on today's show.

This three-bed mid-terrace in Walthamstow

needs a sorcerer's touch to shine.

How are you going to work THAT into your budget?

My husband, he knows some magics.

And this barn in Cornwall, offers a touch of the tropical.

You've even got your own palm trees.

All I need now is a cocktail. Oh, thank you.

These properties have been sold at auction.

We find out who bought them and for how much

when they went under the hammer.

Well, I might be in east London today,

but this feels more like a village than part of a big metropolis.

Walthamstow's E17 postcode was once most famous

for the name of a popular 1990s boyband

with questionable taste in headgear.

Now, however, it's a desirable location to live,

with plenty of young families priced out of east and north London,

heading over to take advantage of its burgeoning cafe culture

and excellent tube links into town.

# It's all right

# It's all right

# It's all right

# It's really all right

# It's all... #

The property I'm here to see is more of a bus ride than a stroll

to the tube, but it's in a more affordable

part of the postcode. And I really like this little

turn of the road which means you've got off-street parking here.

The house itself is this three-bedroom terrace

and it had a guide price of £190,000.

And like this area, this 1950s, ex-local-authority property

looks all right too.

# ..It's all right

# It's all right

# It's all right... #

Ooh, now, interestingly, you've got a lot of space outside,

and you walk in, and it's a lot smaller than you would think.

It certainly needs an overhaul. Very dated indeed.

There's only one reception room on the downstairs floor

and a kitchen, again very disappointing

although it's quite a good size - almost the same size as next door.

What's round here?

Oh, we've got a downstairs bathroom.

I'd like to think we could shift that upstairs and create more space.

Therefore you would be able to have a little dining area around here.

Hopefully, fingers crossed, we can do that.

# With a little luck

# With a little luck

# We could shake it up

# With a little luck

# Oh, yeah... #

So let's investigate up here.

Well, there is a bedroom with a boiler there.

I think I'd try and relocate that.

Towards the back of the property here, yeah, a good-size double.

A really nice room.

And through here... Oh, oh, oh, oh. Yes, look.

..it's a bathroom. THAT is really good news.

And you can see all they've done is just pinched

a little of the bedroom through here.

I'm really pleased that's upstairs.

That means downstairs, you can get rid of that bathroom

and just completely go to town on that living space.

Well, that's great news.

The layout of the upstairs is just about an open-and-shut case.

There's no need to really do anything

other than upgrade and refurbish.

Well, if ever there was a reason to buy a property,

then this is it!

Look at the size of the garden! It's overgrown, but it's massive.

It's certainly enough space for an extension, should you want it.

So with plenty of scope for improvement inside and out,

it seems this house is brimming with possibilities.

A local estate agent came along to tell us

what she thought of this property - guided at £190,000.

Keeping the existing layout to the first floor,

I would value this property in the region of £270,000.

By adding in a loft conversion to this property,

I would estimate the value to be in the region of £285,000.

By adding a rear extension to the property and a loft conversion,

I would estimate the value to be in the region of £300,000.

So after you've factored in build costs,

neither extension would add greatly to your potential profit margin.

It just makes a nice home to live in.

But what about rental potential?

The property with its current layout would rent

in the region of £1,200 per calendar month.

The property with an extended layout and a loft conversion would rent

in the region of £1,300 to £1,400 per calendar month.

So a good value family home in a decent area

increasing in popularity, with an outstanding garden.

Let's see who went for it at the auction.

To lot 20. A three-bed, mid-terraced house

not far from Walthamstow town.

190 anywhere?

190? 190 straightaway at the back.

195.

200. 205. 210.

215. 220.

225. 230. 235.

240.

241.

242. 243?

You must do.

You'll regret it. 243?

242, on my right at the back.

243 elsewhere?

If not, 242 first time. Second time.

Third and last time. If you're all done...

-GAVEL BANGS

-Sold - 242 at the back. Well done.

Wow! For £52,000 over the guide price,

for £242,000, the new owners of the three-bed house in Walthamstow

are married couple Kristina and Agris.

Originally from Estonia, Agris is a plumber,

and Kristina is a beauty therapist.

While Agris kept an eye on Albert, I caught up with Kristina

to find out about their plans for their new purchase.

-Kristina, congratulations.

-Thank you.

So tell me all about the story,

which has led you up to the sale of this property.

We had another house which we refurbished. We sold it a year ago.

So where have you been living for the last year,

if you sold it a year ago?

We are just renting at the moment. Just in the area.

-So did you view this prior to auction?

-We've seen it just once.

In my mind, it was a bit different.

Ah, so what's it like now you've seen it again?

A little bit disappointed? Is it better than you expect?

I'm happy that, for example, we can extend 6m

on the ground floor of the house, because we have a very big garden.

So we have this very good opportunity.

Tell me what you'll do upstairs.

How are you going to change the space?

So basically we need one more room

to make this house like a family house.

So we're going to put it upstairs to the loft.

And it's going to be a third room, like maybe a master bedroom upstairs.

So what sort of budget are you looking at for the work?

Oh, about 30 or 40.

30 to 40,000?

They're quite expensive, loft conversions.

How are you going to work THAT into your budget?

My husband he knows some magics.

He knows some magics? I love that!

So he's got some sneaky people in the trade that he knows a well.

-Yeah.

-That always helps.

# Magic

# It's a kind of magic... #

LUCY CHUCKLES

Magic Agris and his friends in the trade.

Well, that makes the budget

and the plans sound a little bit more feasible.

They have a timescale of three to four months,

during which Kristina might skip off back to Estonia

with little Albert to escape the dust and the mess.

Yes, sensible woman.

I do have one worry, though - they did pay 52 grand over the guide price.

Add another £40,000 for renovations.

Well, then, that would make their total investment go up to £282,000!

Kristina, it's been lovely meeting you.

-Good luck with this project.

-Thank you.

-Thank you.

So, a family home for Kristina, Agris and lovely little Albert.

I am so pleased for them.

And I'm sure they will turn it into a wonderful house.

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

Today, I'm in Cornwall in St Day, about two miles from Redruth,

and what am I here to see? Well, it's a barn with land.

How much do you think that will cost around here? 200,000, 150,000?

Maybe 100,000? Nope, the guide price was 50,000 to 80,000 quid.

St Day is a pretty little village,

and the position behind the post office off the main street is handy.

So, that guide price would be good for nearly any plot and barn.

But this isn't just any old barn, it's a barn that comes

with full planning permission

for conversion into a two-bedroom dwelling.

Now, around here, something like that's going to sell for around

the £175,000-185,000 mark,

so suddenly THIS could be a bit of a money-spinner.

Well, at the moment, you'll have to use your imagination,

because what you've basically got is a shell.

But I love some of the original materials in here,

some of this old wood - it'd be great to have that

treated for woodworm or whatever, but keep it.

Similarly with these beams and all this stone.

The issues you're going to have?

Damp proofing, both on the floor and the walls,

services, such as electricity, gas, water.

Then the actual structure of the building, what's that like?

It seems pretty solid.

It's going to take a bit of effort,

but you could end up with something really, really special.

There is a second floor I can't access today,

so there's ample room for two bedrooms.

But the fun doesn't there - through this little gate

from the courtyard just in front of the barn here

leads you through to this fairly sizable garden, so that's good news.

It gets better, though, because there are two garages there

and planning permission has been granted.

It's only outline planning permission,

but planning permission nevertheless,

for the creation of another dwelling.

So suddenly,

this lot is looking incredibly potentially profitable indeed.

You've even got your own palm trees.

All I need now is a cocktail...

Oh, thank you.

(It's a milkshake.)

..and Club Tropicana playing in the background.

Perfect.

MUSIC: "Club Tropicana" by Wham!

Uh, before you go-go, it's reality check time.

It's all very well, sipping cocktails on the Cornish Riviera.

But they will have to wait.

There are a few issues you would need to ponder, like access

and getting building materials in, for one.

And there may be a party wall issue to sort out.

However, for a guide price of between £50,000-£80,000,

I think it makes a really interesting lot.

Does the agent who sold it rate the barn and the plans?

Two-bedroomed properties in St Day

will typically fetch between £165,000 and £185,000.

For a property in reasonable spec, you could expect

somewhere in the region of £750pcm for the rental.

Let's see who went for this intriguing lot at the auction.

Lot 76.

Who's going to kick us off at 80? Straight in, 80?

Bottom end of the guide, 50. Two.

50, we're in. 50, we're away.

52. 54.

56. 58.

And 60. And a half.

And nine. And a half.

And 60. And a half.

And 61. And a half.

62. 62 and a half - or is that 63?

65 - straight in, 65. Burn you out completely.

At 65. 65, you're in, sir. Yellow shirt has it. You're in.

At 65 for the first time.

At 65 for the second.

At 65,000, third and final time.

Selling to you, sir, yellow shirt, at 65,000...

And out.

Congratulations.

That determined bidder who managed to get

the property for £65,000 is Jeff,

and Jeff may be more local than most

because he owns the post office next door.

-# Stop

-Oh, yes, wait a minute, Mr Postman

-# Wait

-Wait, Mr Postman... #

-Congratulations.

-Thank you very much.

Tell me why you wanted to buy this place, then?

When my parents bought the property next door,

back in the '70s,

my father said, "What about the barn attached to it?"

And they said, "Well, the local shop is using it,

"so we can't include it with your deeds."

So Father said, "Well, OK.

"If anything comes of it in the future..."

And over the years, we've still tried to buy it from previous owners,

but the price was always too much.

But it's just happened it's come at the right time.

Jeff bided his time to get the barn, so presumably,

he's had a long time to think about

how he's going to put his stamp on it.

But before we find out his plans...

I've got to ask, what does your T-shirt mean?

-"Cornishmen do it dreckley?"

-Yeah.

Well, it's a little bit slower than Spanish manana.

It'll get done...eventually.

But my wife has another phrase that she likes to put on the end -

"Cornishmen do it dreckley, Cornishwomen want it done NOW."

THEY LAUGH

So it'll be interesting who gets their way.

It certainly will.

So, what are the plans?

My mother-in-law thinks it would nice to have an artist's studio upstairs,

and my wife was saying, "Why can't have we have a workshop downstairs

"for a local business or something?"

So I think, initially, we're going for putting the new roof on,

altering the heights of these ceilings,

so that there will be more room down here,

-and then see what the funds will allow us to do in the future.

-Right.

That's this building here, then.

What about the garages and the garden?

-It's a nice little garden there, too, isn't there?

-Yes.

But there's a neighbour who wants to buy it,

and he's got a couple of cars, that he can use the garages.

So that would be an answer, really,

to a big development happening in, really, a nice, small area.

-So you might sell it?

-Yes.

-Right.

Now, will you limit by putting a covenant on the sale,

what that person can do with the bit of land and those garages?

Would you stop them building that house?

That might affect how much I'll get for it.

It might, but on the other hand, if he ends up building houses there,

-you're back to square one.

-Yeah.

I hope Jeff gives this a lot of thought and takes legal advice.

But whatever happens to the plot and the barn, be it a gallery,

workshop or a house, he's given himself 12 months to do the work.

So talk me through the numbers, then.

The whole lot cost us 65,000.

Then I shall be spending a total of the same amount to do up this,

-using the proceeds from the other side...

-Right.

-To do this one up.

But I'm a bit confused, because you got pressure from the family

to not convert it into something that people could live in.

You're talking about working space, workshops and galleries.

There's only the wife and the mother-in-law!

Oh, OK, then. I'm sure you'll get away with it, then.

But I might have to move in myself if they don't agree with it!

Well, listen, congratulations.

-Good luck with it, and I look forward to seeing how you get on.

-Thank you very much.

Well, it really was the obvious thing for Jeff to do,

to buy this particular auction lot.

I think he really would have regretted it had he not.

Although I am a little bit concerned about selling off parts of it so soon,

because once it's sold, you never know what somebody might do with it.

And of course,

there are the arguments that are in store between him and his family.

How will it all turn out? You can find out later in the show.

Renovating a property can be a very time-consuming undertaking.

Especially if things don't go according to plan.

So let's see if our buyers' dreams got off the drawing board.

First, we're back in Walthamstow, east London,

where, earlier in the programme, we met Kristina,

her husband, Agris, and their little baby, Albert.

The couple, originally from Estonia,

had been living in rented accommodation

after selling their previous house, and this ex-local-authority house

is where they decided to create a new family home.

They paid 242,000, which was a whopping 52 grand over

the guide price.

The three-bed house needed a lot of vision,

but that is exactly what this couple have.

They planned an extension into the huge garden and a loft conversion.

We came back to see what they'd achieved

just under five months later.

And while the front doesn't look any different, just have a look inside.

Firstly, the couple have taken advantage of that huge garden

and conjured up this fantastic new kitchen-diner!

They've also managed to turn that old downstairs bathroom

into a stylish, new and lovely shower room.

The dated lounge is now open and family-friendly.

At the top of the house, a loft conversion means there is

a lovely, airy, master bedroom.

So, are they enjoying this fabulous new family home?

Oh, it's amazing, because now we have

just a lot of space for the baby as well to run around and a cat.

It is also easier for me to cook and just to do some stuff.

If the ground floor and new bedroom weren't spacious enough,

they've also done a bit of rejigging on the first floor.

They've turned the rear, smaller bedroom

into a good-looking family bathroom.

And the space once claimed by the old bathroom

has been added to the front bedroom.

With bedroom two also renovated,

all these changes mean the house still has three bedrooms,

but the flow and size of the rooms give the house an airy feel.

Now the garden. Nice job!

I personally was in a tent for a month, outside, in the garden!

And another builder the same,

but luckily, before the cold came, we already were ready to move in.

As planned, Kristina and baby Albert

hotfooted it to Estonia for a nice little break,

so they did avoid the dust and the nights under canvas.

Agris has certainly worked his magic on this place,

but did he work the same trickery on his £30,000 to £40,000 budget?

We spent around 35, we don't include my work -

electrician, plumbing, every night supplying materials.

If you add their 242,000 purchase price

to that £35,000 refurbishment cost,

it brings their total spend to 277,000.

Now, I think they've done well to do so much for that budget.

But what do two estate agents make of the couple's hard work?

I would resell the property,

the price in between £290,000 to £300,000.

This property could resell for around £350,000 in its present state.

These two very differing valuations mean that Agris and Kristina

could make a possible pre-tax profit of between

£13,000 to £73,000.

We made this house for ourselves, so it's just great to know that

we can sell with a profit,

but now we will stay and live - how long, we don't know.

Earlier we were in Cornwall

and the little village of St Day near Redruth,

where, tucked behind the main road, lay this exciting opportunity.

It was this barn that came with planning permission

for conversion into a two-bedroomed house,

and with it the garages and land which also had permission for

a separate house to be built.

Getting this all for £65,000 was Jeff

who also owns the property next door where he is the local postmaster.

Jeff reckoned on a 12-month turnaround

and a budget of £65,000 for the conversion.

It was 18 months later that we returned to the barn.

So, was it worth the wait?

What a barnstorming transformation. The question is -

after all the different ideas from Jeff, his wife

and his wife's mother on what the barn should be converted into

is it a gallery, is it a workshop, is it a home?

Well, while the existing window has been filled in on the first floor,

two new windows have been added giving a hint to the biggest

change here.

A great-looking kitchen/lounge.

Well, upstairs was just a wide open space.

And we've kept it like that, really, we put the kitchen in this side

with a living accommodation over there

and also we've got a lovely door leading to the steps,

cos you can open it like a stable door,

and I think that's the best thing about what's happened to the barn

is the character and hopefully somebody will be happy

to live here for the future.

And with new granite steps leading up to the kitchen door this

massive room really functions now as the main reception area

but as you can guess from the layout so far Jeff has gone for the

upside-down approach.

Downstairs we've put the two bedrooms - this is

a double bedroom. We've got the stairs in the centre

and the other bedroom at the end underneath the kitchen.

The main reason for that was that there isn't very much of a view

and being downstairs they only use it to go to bed so you're

pulling the curtains so it just makes sense that you aren't

going to miss out on a view that you can get from upstairs.

With the shower room also down here and with tenants lined up

Jeff and his wife finally decided that letting the barn out for

residential use was the best way for this place to pay for itself.

But before Jeff could even start the renovation he needed to raise

the money for the work.

It's unfortunate I had to sell the garages

and the land because that's a separate building.

It had to go cos I couldn't afford to do this financially

without selling on that part.

It turned out that there was a hiccup with the existing plans.

The barn was five feet shorter than the drawings indicated

and then there were building regulations to contend with.

Even though the walls are three-foot thick we still,

because of new building regulations we had to put extra insulation on

the inside.

Which, of course, made the inside a little bit smaller again

so we've had a few issues with the whole thing but, erm,

very pleased with the way it's turned out so far.

Jeff saved some valuable space by using underfloor heating

instead of radiators.

He used local builders to do the conversion, from installing

a new roof to insulating the walls and everything in between.

All told, after all the delays the actual renovation only

took five months, but Jeff still feels he managed to live up

to the dreckley motto.

Yeah, I think when you go into building

you need to build in an extra 10 to 20% of everything - time,

materials and labour. I should have done that at the beginning really!

HE CHUCKLES

And when it comes to money, Jeff bought the barn, garages

and land for £65,000,

reckoning it would cost as much again to renovate just the barn.

Well, he managed to get it done for £60,000,

which would take his total spend to £125,000.

Will the barn prove to be a good investment?

Time to find out the thoughts of two local property experts

and we start with the auctioneer who sold the property to Jeff.

This property should achieve on the open market

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

I would market it at an asking price of £150,000

with a view to achieving somewhere around the region of £145,000.

I think that's amazing, really. I didn't think it was going to be

anything like it.

I thought it was going to be more 110 or 120.

Well, no wonder he's happy because with those valuations

selling the barn could give him a pre-tax profit of between

£20,000 and £40,000. Of course, that's not taking into account

what he made from the sale of the land.

So, is it good news too on the rental figures?

On the rental market the property could achieve

somewhere in the region of £650 to £700 per calendar month.

Approximately £650 per calendar month.

I was thinking originally about 500.

But 650 is, er, very nice.

Well, Jeff already has tenants lined up, but if he went for those

possible rental figures then he could achieve a healthy annual

yield of between 6 and 7%.

It may have taken longer than he'd thought to get to this stage

but Jeff is pleased and proud of the final result.

But was it enjoyable enough to make him contemplate another project?

My wife and I haven't come to blows over it

but we've had various discussions...

Er, as to doing something else I think she's put the kibosh on that

for the time being!

Erm, I think this was a one-off, er...but we'll wait and see.

Well, that's it for today's show but join us next time

when we'll have more tales from the front line of property developing.

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

Goodbye for now.