Episode 18 Homes Under the Hammer

Hello. Browsing through the auction catalogues can be very tempting.

Mmm. But it's quite another matter

getting down to the auction room and actually raising your hand

-to buy something.

-Yes, you need courage and conviction,

buying your home under the hammer.

Derelict, decaying...but delightful.

You can find all sorts of properties at the auctions.

So let's see what our buyers went for on today's show.

In Staffordshire, there's a cottage that may lack in some areas,

but makes up for it in others.

It's got character.

In Northolt, Middlesex,

I find a tasty bit of land.

Worst case scenario - you could pick all these little beauties

and make a nice blackberry pie.

And I have high hopes for this 1920s property

in Marske-by-the-Sea, North Yorkshire.

Apart from the hike, got to be worth a look.

All of these properties have been sold at auctions

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

when they went under the hammer.

Your lot, sir. Well done.

I'm in the Staffordshire countryside

in the small village of Newchapel,

not far from the city of Stoke-on-Trent.

So it could be ideal for commuters.

Well, the property I'm here to see

is right on the main road that goes through the village,

and it is quite busy, as you can see.

But the good news is it does at least have off-street parking.

And this is it. It's a two-bedroom cottage

at a guide price of £39,000.

What's it like inside? Only one way to find out.

Tiled floor.

That's kind of unusual,

but a half-decent-sized lounge.

Er...

Talking about half-decent, half-timbered, which is interesting.

You might want to change that.

But lots of noise coming from the road,

so the double glazing doesn't seem to be working.

Maybe investigate something else that you could possibly try and drown out the sound of the traffic.

But through into the rear of the property...

It's a fairly classic two-up, two-down terrace layout.

Rear kitchen area...

Well, it's got a sink in it - that's about it!

Obviously needs new units and stuff,

but it's not a bad size.

Stairs up to your bedrooms,

and then...well, a bit of a downside.

That is the only loo and bathroom in the property -

it's out the back, it's downstairs

and it is in need of complete refurbishment.

So, um, what could you say so far?

It's got character.

-# Cos you've got

-Personality

-# Walk

-Personality

-# Talk

-Personality

-# Smile

-Personality

-# Talk

-Personality

-# Love

-Personality

# Cos you've got a great... #

This place does have a rather eccentric personality,

especially upstairs,

where the layout's really impractical.

You have to walk through one bedroom to get to the other.

These rooms really just have to be given their own doors off the landing.

That will make the staircase dark,

but it's a small price to pay for the better configuration.

Mind you, you can bypass the stairs altogether,

as there's a mobility lift that goes from the main bedroom

to the ground floor.

Just another thing that needs to be sorted.

So a bit of work to be done inside.

Maybe outside will raise my hopes about the potential here.

Well, at the rear of the property, this little lean-to thing,

which adds a bit of extra space,

but I'm not too sure how well-constructed it is.

You could possibly think about something a bit more substantial

and increasing the size of the loo at the same time.

But there is a slight issue at the back here, and that's access,

because basically you've got this shared walkway to the rear of the property,

which goes behind the adjoining properties as well.

In fact, to get to the road, you have to go up there and out through an alleyway.

Now, that is something a solicitor would have to check out, for sure.

But practically, when it comes to doing work at the rear of the property,

all the building materials have got to come through there, so that's definitely a consideration.

My first job would be to get on good terms with the neighbours.

You'll need to, because no doubt you'll have to ferry rubble

along this pathway.

# Walk on by

# Walk on by... #

Even though there is a substantially sized garden,

given the walkway situation,

it doesn't look like any kind of extension could be added.

The layout's quirky inside

and the outside might put off some buyers.

On the plus side, there is that guide price of £39,000.

So there may be possibilities

for this rather unconventional two-bed terrace.

We asked along a local estate agent for his thoughts.

I think the property represents a great opportunity.

It just needs a little updating - general cosmetic improvements,

installation of a new electrical system,

along with a new gas central heating system.

The upstairs layout needs to be changed

to achieve a really good return on this property.

That brings me nicely on to the subject of money.

If this property was to be renovated to a reasonable standard,

I would expect it to achieve somewhere in the region of

£75,000 to £80,000.

And the rental returns?

I would be able to rent this property out

for somewhere in the region of £400 per calendar month.

Well, I like this little cottage.

Yes, it could certainly benefit from some internal reconfiguration,

but not too much of a challenge. And at that kind of guide price,

yeah, good one to go for.

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

35 to start me?

30, then.

30 bid. Thank you. At £30,000.

£30,000.

31 in the middle.

At £31,000. 32? 32.

33.

34.

35.

36.

37.

38.

39.

Do you want to go 500?

New bid of £39,500.

40.

£40,500.

41.

41.

£41,500.

42? 42.

Shaking his head. Still with you, sir.

£42,000. Standing in the middle.

New bidder. £42,500.

43, sir?

43.

£43,500.

44.

Shaking your head.

44. Still with you, sir. Are we all done now?

£44,000, then, for the first time...

Back in. £44,500.

45.

And a half.

£45,500.

46.

Sure?

46, then, in the middle. All done now?

Third and fin...

New bidder. £46,500.

Do you want to go 47?

You do. 47.

And a half? No.

It's still with you, sir.

£47,000, then. I'm not going to linger.

£47,000 for the first time...

£47,000 for the second time...

Third and final time, then, at £47,000...

You bought it, sir. Well done.

Those successful buyers who bought this lot for £47,000

were Harry and Susan.

The couple are no strangers to the show.

They originally appeared in 2009,

when they bought and successfully renovated

a property in Brown Lees, Staffordshire.

Harry's the director of a company which provides portable air conditioning equipment

and, along with Susan, he planned to breathe some life back into this cottage.

I met them there to find out more.

Harry, Susan, good to see you - again!

Yes!

It's been a while since we last met.

Quite a few years.

The place you bought then is not too far from here, if I remember rightly?

-About four or five kilometres.

-Right.

And how did that go in the end for you?

It went very well.

Yeah, we got some tenants in there without any trouble.

So remind me how you first got into property developing.

-You had a bit of a lucky break, didn't you?

-Well, yes.

I suppose you could call it that. I didn't think it was that at the time, but we couldn't sell our house.

The house we live in, that is.

And the guy who wanted to buy it hadn't got enough money,

but he did have some garages.

So we had those in part exchange,

and then he told me he had planning permission on the land.

-Ha!

-So we built two semis.

Sold one of them, which paid for the building of the second one,

and we've kept that ever since. That was the start of the...

the renting business, so to speak.

# Come on and be my little

# Good luck charm

# Aha-ha... #

After that lucky break,

the couple continued to build a portfolio of nine properties.

They've been involved in properties for over 20 years,

and it's not just about the numbers for them -

they seek out properties with personalities.

Why this property, then?

Well, Harry saw it.

We said if we did another one, we would like to do a cottage again.

-And the fact that my mother grew up in the village...

-Oh, great!

Yes, it's got quite a few memories as well.

So, yes, we're really...

I was pleased when we went ahead and bought it.

Terrific. So what's the plans for it, then?

Well, it does need a complete renovation.

But that's a good thing - you've got a blank canvas to start with.

So it can be replumbed, replastered, rewired.

And it's a nice position.

Parking at the front.

Nice garden. So I think it'll work out all right.

It's got the cottagey feel to it.

Front room stays as the front room.

This room we stand in now will be the kitchen.

Alter this window here on my right

-to a doorway.

-Right.

What about the position of the loo - will that stay downstairs?

It's staying down here,

but we're going to get rid of the passageway here,

cos it's taking up about a square metre, metre and a half,

and then make the bathroom bigger.

So how are you going to get over the layout issues upstairs?

-Cos obviously it's not ideal that you have to walk through one bedroom to get to the other.

-No.

That is an issue, but I don't think it's a big problem.

Knock one door open and knock another one home.

Well, not me, but the builder!

I like the plan of using the corridor space

for a bigger bathroom.

Though that would mean access will be through the lean-to.

But it's still an improvement.

So along with sorting out the doors upstairs,

the two main problems seem to have been solved.

But what about the look of the place?

Well, that's down to Susan.

I usually get involved with the decor.

And at the moment, I think I've got quite a job on with this!

I want to make it more modern,

but still have a character with it,

because I do like the cottagey feel.

But it needs to be brightened up.

And Harry, are you hands-on?

To a small degree.

-OK!

-It takes enough, actually,

to keep an eye on everyone else.

I think you can get it done much quicker by using the right people...

-Right.

-..than trying to do it yourself,

so I keep an eye on everyone else

and that's enough for me.

What's the budget for the work?

Up to 15K.

10-15, maybe 20.

I'd like to think 13,

because it just rounds it off with the...

But I think it might go to 15.

A possible £13,000 budget?

Well, Harry and Susan are obviously not the superstitious types,

though I reckon they will need some luck

to get all that work done for that money.

They're not gambling on a quick turnaround,

aiming instead for a fairly relaxed six-month timescale.

So, with a growing portfolio,

what is it they look for when buying a property?

Something that's got a good location.

Something a little bit oddball,

a little bit cottagey.

Why do you go for oddball?

Because if you rent it or sell it,

people like something a little bit different.

-Quirky.

-Yeah. And with an older property,

you can sell it on its...

It's modern and it's new,

but you can sell it or rent it on the fact that it's old, it's quirky.

-It's got lots of character.

-Mmm.

Well, congratulations to both of you.

Good luck with it and we look forward

-to seeing how you get on.

-Thanks very much.

-Thanks.

Well, Harry and Susan adding another property

to their portfolio.

Is this one oddball enough for them?

How will they get on renovating it?

You can find out later in the show.

Your idyllic English country garden setting.

There's the village green, the post office, the thatched country pub...

Doesn't get much better than this, does it?

It's perfect.

So where am I?

Well, believe it or not, I'm in Northolt,

which is the London borough of Ealing

and it's just west of the capital

and on the Underground Central Line.

# The beat goes around and round

# It's the sound of the under Sound of the underground... #

So, with good links to the city and a rural vibe,

you might conclude that the plot of land I'm here to see

would be unaffordable to most of us.

But in fact, this suburb is often overlooked.

Now, the auction catalogue describes this

as "a rectangular-shaped, overgrown level site

"with a single garage in situ."

And here it is, on this corner plot.

"Overgrown" - yes, I think that is a real understatement, if you ask me!

All I can see is lots of blackberry bushes

and a tumbledown old garage dumped in the middle.

Yes, now, the important guide price -

£15,000,

which I think is staggering.

Yes, you heard me right - £15,000.

But at only 84 square metres,

you're going to have to be pretty imaginative

as to how you develop this plot.

That is if you CAN actually do anything with it.

OK, so it's very hard to see what's underneath all these brambles and bushes,

but as I said, it is level, which is a good start.

But it's not a large plot,

and that will determine the size of house

if you're going to build here.

In fact, it's very narrow.

I can't imagine the council allowing somebody to build a house here.

Perhaps clearing away all these brambles will make a difference,

but I'm not convinced.

Worst case scenario - you could pick all these little beauties

and make a nice blackberry pie.

Mmm!

# Goodbye, Blackberry Way

# Sure to want me back another day... #

So far, any attempts at developing this site

have been pie-in-the-sky.

There's got to be a way forward

to make something out of this plot of land

with its £15,000 guide price.

Surely?

Now, there are some issues with this plot which might explain that surprisingly low guide price.

The services are really limited on this site.

I think there's electricity, but water, gas... Nada.

Also, there hasn't been any recent applications to redevelop this land.

Now, that could mean getting permission to build here -

well, it might be more difficult than you think.

Planners will also look at the parking issues,

the access, and whether the proposed building

will even fit in with the other houses on the street.

The history of this site isn't encouraging either.

Plans for flats submitted five years ago, back in 2008,

failed to get past the planners.

Even for a £15,000 guide price,

this site is a prickly problem.

# I told you I was trouble

# You know that I'm no good... #

We asked along a local estate agent

to see if she could see the wood for the trees on this one.

There's two particular options here.

One would be flats, or number two would be a small detached property.

With reference to flats, because of the parking restrictions,

I do think that would be a huge problem.

But you could possibly get a very, very small detached house with off-street parking onto it.

OK, so if the purchaser does manage to put up a house on the plot,

what might it fetch if sold on?

I think a three-bedroom detached property within the local vicinity

would sell for approximately £250,000.

What about putting that three-bed house on the rental market?

If you were looking to rent the property out,

I think you'd be looking within the region of approximately £1,000 per month to £1,100 per month.

Just clearing this site would be a start.

Then, should you want to build, planning is not guaranteed.

Get the permission, and this could be a really shrewd buy.

But if it gets turned down,

you've got an expensive piece of land

with drastically limited potential.

So is it worth a punt?

Well, let's see who thought so at the auction.

Lot 47.

Rectangular-shaped parcel of land.

I don't know... Start at £10,000?

See where we go from there.

£10,000. 11.

11. 12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

Come to you - 21 now, yeah? You bidding? 21.

22. 23.

One bid, couple of bids, and that's it.

£22,000. 23 anywhere?

It's going at 22... 23.

24. 25.

26.

27.

28.

29.

30.

31.

32.

33?

32.

33?

Lady in the green, 33, coming in.

£32,000 down here.

Anyone else?

Another thousand - 33?

If not, £32,000.

First... 33, back in.

34.

35.

36.

37?

36, back to you.

37 anywhere else?

36, first time...second time...

Third and last time, if you're all done.

Sold, 36. Well done.

That final bid of £36,000 was placed by Zaki.

He's spent the last 20 years

sourcing and managing property development opportunities

for investors.

I met him at the plot to find out what he has in mind for it.

-Zaki, congratulations.

-Thank you.

You got the plot of land. What I want to know is,

what are you going to do with it?

It's quite a small plot, isn't it?

Why I bought this land is because our client has got a house next to it.

And we can use some of the land from there.

-Aha! So you've bought it on behalf of your client.

-Yeah.

And they live there?

They own the house - they don't live there.

-So you're hoping to take a little bit of their land...

-Their land, yes.

And then do what?

And build maybe two three-bedroom flats or a house.

What's your preference - a flat or the houses?

-We'd prefer a house.

-You'd prefer to build a house?

If not, then my architect will try to negotiate with the council to make a flat.

-How much land are you going to take from...?

-At least, I think, two metres.

More...

-So that's the reason you wanted to buy this?

-That's the reason.

We bought this land because of the next-door house.

-So you wouldn't have bought this plot otherwise?

-Otherwise, it's too small.

Now it's all beginning to make sense.

Increasing the size of the plot by taking some land from next door

will be the making of this site.

Suddenly the idea of a three-bed house

or even two two-bed flats here doesn't seem so far-fetched.

But any plans have to be approved by Ealing Council.

Submitting them will be Zaki's architect, Lowji,

who's already met with the council to talk about his proposals for the plot.

Lowji, thank you for coming along today.

I'm really intrigued to know - what do Ealing Council want?

How do they see this property?

Interestingly, when we first went there,

and said, "We have a plot of land - what can we do?" -

the answer was, "You can do nothing on this plot."

So first off, they said no?

There was nothing could be done on this.

And then, when they sat down and listened to what we had to say -

"Look, we are taking a part of this property. We're also looking at possibly the land behind us,

"and we now want to build a house. We know there's a shortage

"and pressure on Ealing Council to provide the housing."

And then they did actually sit down and listen to us.

And then we left the office more positively.

So, it's fair to say you do have a challenge on your hands with one, don't you?

We certainly have a big challenge on this one.

-Is it something you're very much looking forward to?

-We are.

We think we can actually resolve this challenge.

In fact, what we're also looking at is trying to make this house

as part of a closer-to-zero carbon...

There's no such thing as zero carbon,

but we're looking to build this house

as close as we can to zero carbon.

So it's going to comply well above the minimum building regulations standard.

Does that cost you more money in the long term, building a house like that?

It does. It does actually add a cost of about 30% more than a conventional way of building houses.

But it does pay off in the long run.

It really does. And I think some clients

don't actually understand that at the beginning, because they're having to pay out more money.

-But we have a client who is actually very understanding.

-It's also good for the council

to be seen to be building houses like this.

It's actually good for the council's PR.

-And it's good for the environment, of course.

-Absolutely.

-And that's why we must do this.

-Yes.

All of a sudden, I'm quite excited about the prospects here.

An eco-friendly, zero-carbon building sounds fantastic.

So we've got everything crossed for Lowji and Zaki

getting permission for that.

Once they do, Zaki will project-manage a team of builders

as they transform the site, with the finished building being rented out to council tenants.

How much do you think it'll cost you to build here?

It's about at least £100,000.

-£100,000. Is that for the house?

-For the house,

or for the flats, nearly the same price.

Why do you feel the house is more beneficial than the flats?

It's more resale value

and more rental income from the council.

Zaki, how long will it be before we can see a house here?

If everything goes OK,

it's about five months from today.

Zaki, good luck with this project,

-and I really hope you get the planning permission.

-Thank you very much.

Zaki and his architect, Lowji, seem very confident

that they're going to get that all-important planning permission

to build a three-bedroom house here.

It's a risky strategy,

but I for one hope they're successful.

Join me later in the programme

to see if it all works out for them.

Coming up... Does this property in North Yorkshire live up to expectations?

Are the views as glorious as they say?

We return to Northolt, Middlesex,

to see if persistence really does pay off.

My client wanted to give up. I said, "No, don't give up. Keep trying."

But first, it's back to Staffordshire to see the results at Harry and Susan's latest purchase.

We're quite pleased with how it's worked out.

Earlier, we were in the village of Newchapel, near Stoke-on-Trent,

where we saw Harry and Susan buy this two-bedroom terraced house

for £47,000.

They've already appeared on the show once before,

when we saw their renovation of this house in Brown Lees, Staffordshire.

Now they've added this one to their expanding portfolio.

So what do you look for when you're deciding which properties to buy?

Something that's got a good location.

Something a little bit oddball,

a little bit cottagey.

Why do you go for oddball?

Because if you rent it or sell it,

people like something a little bit different.

-Quirky.

-Yeah.

Well, there were plenty of quirks here to satisfy Harry.

There was a tiny bathroom with no bath,

the front bedroom could only be accessed through the rear bedroom

and there was a lift for the disabled between the living room and the front bedroom.

With a budget of around £15,000

and a six-month timescale,

would Harry and Susan be able to overcome these quirks

and make the house just what the rental market wants?

Well, it's five-and-a-half months later,

and a splash of paint on the outside gives it a fresher look.

But is it as fresh inside?

Susan has certainly kept to her plans of making this a cosy cottage.

The dated stone-clad fireplace is no more

and the original fireplace has been rediscovered,

and the wood-burning-effect stove put in.

In the kitchen, that solitary sink now has some culinary companions.

It all feels very homely,

which must be good news for the tenants,

who have already moved in.

At the back of the property, the plans have changed.

Harry and Susan have not extended the bathroom,

but it's been refurbished and a new shower installed.

And it wasn't the only idea of Harry's that hadn't been realised.

The layout's basically as it was before.

I couldn't see any reason to change it round.

We were going to put a door in the alcove here,

but decided not to,

because it allows more light in and sort of opens the room up a little bit.

We took a corner fireplace out

and that's allowed us to put the wall cupboards in squarely.

And we actually used the fireplace to vent the cooker.

So, all in all, we've managed to fit everything in.

The washing machine has gone into the conservatory outside.

So it's left quite a bit of space in the kitchen,

and we're quite pleased with how it's worked out.

Upstairs, the couple decided that having to go through one bedroom

to get to the other was a quirk too far,

and the bedrooms now have their own doors to the hall.

They've been replastered and are now light and airy.

In this bedroom, it was quite a big change,

because we had to move doors around.

If you recall, there was a lift about here

that went straight through the floor.

And this door wasn't here,

which, in effect, meant you had to come through the other room to get into here,

so we had to block that doorway up,

block the floor up, and re-put a door here.

It's all worked out well. We're quite pleased with it.

The flow of the rooms up here obviously works a lot better now.

Removing the lift helped solve those access issues,

although getting rid of it didn't go smoothly.

The builders really struggled to get it out.

How it came in, we'll never know,

but they ended up cutting it into pieces with a Stihl saw

to remove it out of the house.

Well, it doesn't sound like uplifting work,

but the garden has certainly been lifted.

A good spruce-up and removing the outhouse

has opened up the outside space.

In general, the renovation went smoothly,

with Harry overseeing the works.

And while the couple normally choose the decor together

for their other refurbishments,

this time they had some help.

In this case, we'd made a decision

to keep it modern, but still keep the character.

But finding two tenants who really wanted the property,

it sort of took some of it away,

because we allowed them to make their own choice of colour,

which was probably similar to what we would have chosen anyway.

And it appears the couple didn't have to look far for their tenants.

In fact, they didn't have to search at all.

A couple saw us doing it and came along and asked

what we were going to do with it, and we said we were anticipating possibly renting it,

and they said, "Well, can we have first option?"

Er...and they're a nice couple, good tenants, so we said yes

and here they are - moved in.

With their experience of past renovations,

they easily turned the house around

within their timescale of six months,

ensuring it earned its keep as soon as possible.

But how did they do with their £10,000 to £15,000 budget?

On the upper limit.

About £15,000, £15,500.

Add that spend to their purchase price of £47,000

and their total outlay is £62,500.

Time to find out from two local estate agents

what they think of this latest addition

to Harry and Susan's property portfolio.

The property has been nicely renovated.

It's a little on the compact size, but it has been very well renovated.

My initial thoughts are it's been done to a good standard,

neutral decor. It's got off-road parking,

which is a bonus, and a good-sized rear garden.

The downstairs shower room isn't obviously going to be to everybody's taste,

but what they have done with it is of a good standard.

One of the main features is the garden.

A lot of properties of this type don't have garden space. It'll appeal to many buyers.

The couple plan to let the house for the foreseeable future.

So are they getting the best rent from their current tenants?

I would put this property on the rental market

for £475 per calendar month.

If this property was put on the rental market,

I'd expect it to achieve between £400 to £450 per calendar month.

Those rental returns could give Harry and Susan

an annual yield of between 8% and 9%.

That's pretty good.

I didn't imagine quite that much.

-So, yeah, I'm pleased.

-Yeah.

So will the...

the people who are renting it!

Smiles all round, then, on that one.

Will the resale value make Harry and Susan smile too?

The estate agents reckon the house could fetch

between £85,000 and just under £90,000.

With their outlay of £62,500,

those valuations mean the couple could achieve

a possible pre-tax profit of between £22,500 and £27,500

before the usual tax and expenses.

I'm very pleased with that. That covers all our...

-That's in the region we were thinking.

-..all our costs...

and renovation.

But for now, they plan to stick with the rental income

for this latest addition to their property empire.

Chances are, though, that Harry and Susan

are planning to add to their portfolio.

-A break!

-A break... Well, we always say we wouldn't do another one,

but if the right sort of property comes along,

you know, we could be tempted, I think.

Yes. We always say no, but something comes up

and then we get tempted!

I'm in North Yorkshire today.

Marske-by-the-Sea -

a small - surprise, surprise - coastal town

just five minutes from Redcar.

In 1801, Marske consisted of just one lone street

of whitewashed cottages,

only one of which survives.

The town is a little bigger now,

but still has that peace and tranquillity

you often find in places by the sea.

# A quiet place to live... #

Well, down this little lane is a property

that, intriguingly, at the auction,

had its guide price reduced from around £145,000

to £80,000.

The auction catalogue describes it as having "glorious views"

and that's because it is up there.

Up those steps.

Still, three-bedroom mid-terrace...

Apart from the hike, it's got to be worth a look.

# I'd climb the highest mountain

# If I knew that when I climbed that mountain

# I'd find you... #

It's not just the climb -

it's how you get to base camp.

The house was built in the 1920s,

when fewer people owned cars.

There's only one small parking space,

and then there's that tiered garden to look after.

Clearly, all the steps make this place

far from ideal for anyone with mobility difficulties

or just a family. Can you imagine a pushchair and shopping and...whatever?

Still, are the views as glorious as they say?

No.

So...

What have we got?

Well, nice little entrance area here.

You've got the porch there too, which is a nice little bit of extra space

to put your bags and things down.

Stairs up to the bedrooms, through to the rear there.

I'll come straight into here, which is the front sitting room area.

But before we do that, this is really strange...

When I looked through there, I saw this rear sitting room area. You've got this one here.

Between the two, you've got this wraparound stud partition wall.

Straight away, I'm thinking, "What's that there for?"

It creates this room here, but you've got this really dark room towards the back.

So get rid of that stud partition wall.

And then you'd get light and the sort-of view.

It would be accessible then from much more of the property.

But in here, you get a flavour - it is all a bit dated.

And nowhere more so than on the fire breast.

Absolutely marvellous!

Straight out of a 1970s or '80s...

DIY...trendy-thing-to-do catalogue!

# Eagerly pursuing All the latest fads and trends

# Cos he's a dedicated follower of fashion... #

So, a little cosmetic updating to do.

But so far, considering the house was built in 1924,

it's in pretty reasonable condition,

although the layout leaves a bit to be desired.

Really rubbish, that. I don't know what they were trying to do -

I guess just create more rooms. But it's at the expense of...

I don't know, just logical living space.

So, yes, yes, yes - take it out, take it out!

What's actually gone on, though, is at some point,

an extension has been built - single storey on the back here.

This is where the kitchen now is.

I imagine the kitchen used to be out there.

It's not a bad kitchen - it's in half-decent condition.

I like the fact you've got a roof light there, which is good.

It's taken space away from the rear garden,

so you've now just got this very small space.

But if you were to rent this place out,

that wouldn't necessarily be a bad thing.

I have been rather down on this property -

its position, its decor and its layout.

But it isn't all bad.

As an investment for a rental portfolio,

it could be good to go almost immediately,

as it does have a decent kitchen.

And although that strange second living area

isn't my cup of tea, it could be useful.

Upstairs, there are three decent bedrooms in fairly good order.

Two doubles and a single,

and again, everything seems to be in good condition.

It just needs some decoration and modernisation.

At a push, even the bathroom is OK -

it's dated, but perfectly usable.

So, overall, there are more ups with this property than downs.

What does a local property expert make of this house,

with its reduced guide price of £80,000

and especially its location?

Not ideal for the two-car family,

probably ruling out the elderly or the very, very young,

purely because of the steep access to the front door.

So what about the house itself?

What work should be done, and should the layout be changed?

The layout is OK.

The kitchen is obviously an extension to the original property.

Because of the build of the house, I would be of the thinking that it would be quite difficult to rejig.

Once renovated, would it let easily?

There's a huge demand for rental properties in East Cleveland in general,

and even more so in Marske-by-the-Sea.

I would expect a three-bedroom property like this

to fetch in the region of £550 per calendar month.

What could this house sell on for?

If it was improved cosmetically

and given more of a modern feel,

I wouldn't be surprised

to see the property fetch in the region of £110,000.

Well, the position of this property, up all those steps,

certainly means it's not ideal for everyone.

But especially at that lower guide price,

a reasonable amount of house for the money.

Let's see who was interested in it when it went under the hammer.

Lot number 33.

Situated in a delightful location, just tucked off the beaten track.

Can I ask for £80,000? How about 76?

Thank you. Right-hand side, on the wall, at £76,000.

78 on the telephone.

78 on the telephone... £80,000?

80 bid.

82?

82 bid. 84?

I'm with Janet at £82,000.

£83,000 bid.

In the room at £83,000.

84.

It's against you, Janet.

84 bid.

85?

I'm with Janet at £84,000.

I'll take 85.

85 - Sarah's bid on the telephone.

86. You're out in the room. Janet, you're out.

It's sir's at 85.

£85,500 with Janet.

86.

86 bid.

Janet, it's against you now. £86,500.

£86,500 to Janet.

87.

87 bid.

£87,500?

No?

With sir at 87.

It's your last chance, because I'm selling. It's going once at 87...

I'm going for the second time at £87,000.

Sold, on the telephone.

So, the final bid of £87,000

was made over the telephone.

The identity of that secret phone bidder?

Well, it's Stephen, a civil servant,

who already lives in Marske-by-the-Sea

with his wife, Jennifer, and their daughter.

I met him back at his new purchase to find out his plans for the place.

Once he's made it up all those stairs, of course.

Stephen, good to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

You were the man on the phone?

-I was a telephone bidder. I couldn't make it to the auction.

-What happened part of the way through?

It seems like you lost connection or something.

Yeah. The mobile phone signal went dead.

Their mobile phone signal.

So that was a bit of a panic. So I had to ring them back.

Luckily, it hadn't sold.

-What were you thinking at the other end of the phone?!

-"Oh, my God!"

Cos this was real time, and if you can't bid, you can't bid.

# I'm in the phone booth It's the one across the hall

# If you don't answer I'll just ring it off the wall

# I know he's there But I just had to call

# Don't leave me Hanging on the telephone... #

So that was a close call for Stephen.

But he got the right result in the end, though only just.

Phew!

So tell me what you're going to do with it.

What we're going to do is... There's a bit of damp work needs doing.

A little bit of work on the electrics.

And after that, it's just decoration and the flooring.

And then, internal walls... Some of them are stud partitions

and I felt that there could be a bit of rejigging that would help.

Yeah, it would help if we were going to sell.

But if we're going to rent, I don't think spending money like that

would add a great deal to the monthly rental income.

Stephen's right, of course -

although changing the layout would help the flow of the house,

it would have little or no effect on the potential rental price.

It might make it easier to let,

but the outlay may not justify the return.

So what is the budget?

-We would like to do it for between £4,000 and £5,000.

-Right.

-If we can do it for less, that would be great.

-And what kind of involvement will you have?

Um...just organising contractors,

maybe tidy up the garden.

If I can do things like rip things out...

Bit of painting. That will be it, really.

That's as far as my expertise goes.

And the timescale you're hoping to get it finished in?

-We're having a baby in February.

-Oh, wow!

We want to get it done and out the way before then, really, to cut down on the stress.

So that's months away.

But how quickly do you think, realistically, you are going to get it done?

-Between four and six weeks.

-OK.

-That would be great.

-Straight in, get it rented out.

Maybe advertise it for rent before we've finished, generate some interest.

Well, good luck with it and good luck with the baby.

-Thank you very much.

-Look forward to seeing how you get on.

So, Stephen embarking on his first buy-to-let,

and taking the very sensible approach of not spending too much doing it up.

Will he get it done and, more importantly,

will he get it done before his new baby arrives?

You can find out later in the show.

Well, it's time now to pay a visit to our plucky developers.

Will they welcome us back with tales of success and soaring profits,

or will things have turned sour?

Let's find out.

Just on the outskirts of London, in the suburb of Northolt,

we came across a plot of land

that, frankly, looked nothing more than a bit of scrubland

with an old garage on it.

At first glance, it had little or no potential

to be anything other than perhaps a bit of additional parking.

With no planning permission, it was hard to see much value in it.

But property agent Zaki bought it at auction for £36,000

on behalf of his client.

Together, they hoped they could add a little extra to their purchase.

# More than this... #

What I want to know is, what are you going to do with it?

It's quite a small plot, isn't it?

Why I bought this land is because our client has got a house next to it.

And we can use some of the land from there.

-And they live there?

-They own the house - they don't live there.

-So you're hoping to take a little bit of their land...

-Their land, yes.

And then do what?

And build maybe two three-bedroom flats or a house.

The extra land did make the idea of a new build

on this odd plot more viable.

But the council had refused previous applications for various reasons,

like over-development and lack of parking.

It was going to take a clever design and lots of effort

to persuade the planners to allow something to happen here.

That was down to Zaki's architect, Lowji.

So, it's fair to say you do have a challenge on your hands with one, don't you?

We certainly have a big challenge on this one.

In fact, what we're also looking at is trying to make this house

as part of a closer-to-zero carbon...

There's no such thing as zero carbon,

but we're looking to build this house

as close as we can to zero carbon.

So it's going to comply well above the minimum building regulations standard.

They hoped to build their three- to four-bedroom, carbon-neutral house

on a budget of £100,000

and in about five months,

provided they got that all-important planning permission.

Well, as they say, the best-laid plans of mice and men...

Time ticked on...

and on...

and on...

and now...

three-and-a-half years later, we're back.

So has the wait been worth it?

Oh, yes!

At last, Zaki and Lowji

have built a semi-detached house.

Let's hear more about the finer details.

The property we made is three floors,

with a loft conversion.

Four bedrooms altogether.

Dining room and sitting room on the ground floor.

There are two good-sized reception rooms on the ground floor

and a fully fitted modern kitchen at the back,

with French doors leading out to the garden.

And then three bedrooms on the first floor.

Again, the three bedrooms are bright, light

and surprisingly spacious.

And then one bedroom in the loft conversion.

The loft room's a great addition,

but because the headroom is quite tight,

some buyers might not term it a bedroom.

We've got three bathrooms altogether.

So there is a washroom on every floor -

a good family bathroom on the first floor,

a shower room on the top floor,

and a smaller cloakroom on the ground floor.

And we've got plenty of parking on the side and a rear garden as well.

So their patience does appear to have paid off.

But why did it take Zaki and his architect, Lowji, so long?

# Have a little patience... #

Initially, we wanted to persuade the planning officers,

in terms of the design, for a modern look,

where we can actually control the energy efficiency,

but the planners were insistent that it had to match what's next door,

so we tried to make it look more traditional,

but a bit of modernism in it.

They still didn't like it,

so that process took longer,

and every time you make an application,

it takes at least eight weeks,

and then back to the drawing board.

You lose more time in doing the designs and going back to the council, back and forth.

Like Robert the Bruce's spider,

it was a case of try, try and try again.

Though they may not have got what they hoped for,

they certainly seem to have maximised the space they had available

and even managed to find a little more.

In terms of the garden, we actually took the rear part of the original house

to turn that into a garden for this house.

Eventually, there was a strip of land which was behind the garage,

which we actually advised our client to actually buy that land,

so we managed to give them a bit more garden than we originally thought.

But the planning was granted without that land.

By purchasing the land behind the garage,

it's actually given our client the opportunity

to put yet another house in the back garden.

Now with plans to build yet another three- or four-bed house on the land behind,

they're going to be busy here for some time to come.

Bearing in mind that time is money,

how much has it cost their client to build this three- to four-bedroom house

with its three washrooms and modern living accommodation?

To build this house is about £160,000.

And to apply for the planning permission, to get the fees for the architect,

council permits and building control is about £20,000.

And then we bought the land for £36,000.

Well, that little lot adds up to £216,000.

But it's been three-and-a-half years

in the making, and the property market's gone through quite a sea change.

So, has this protracted project still been worthwhile?

What did two local estate agents think?

It's absolutely beautiful.

The standard - very, very high specification.

It's got a lovely feel to it, offers very, very generous living accommodation,

sleeping accommodation. There's a lot of plus factors to this property.

I think it's a very nicely presented,

newly built three/four-bedroom end-of-terrace family home

in an established area.

So, in general, the house that Zaki and Lowji have built

gets the thumbs-up from the estate agents,

but their client has spent £216,000 on building the house.

So has it been a good investment?

We would market the property at £340,000.

In my opinion, the resale value of this property

is currently in the region of £345,000.

Yes, I was just offered this property this morning for £360,000.

And they want to buy within four weeks.

Wow! An offer of £360,000

could see a potential pre-tax profit of £144,000.

But the original plan was to let it.

Indeed, they have a tenant lined up,

so how could it fare as a rental?

We would put the property on the market for a rental figure of £1,500 per calendar month.

In terms of the current rental value,

I would estimate that to be in the region of £1,400 to £1,500 per calendar month.

I think I will get about £1,600 to £1,650

for the rental value.

And I'm not going to market it at £1,500.

Zaki believes because it's a new-build,

he'll manage to get a rent of at least £1,600 per calendar month,

which would be a healthy yield of above 8%.

So, rent or sell, it certainly seems like it was well worth waiting for.

My client wanted to give up. I said, "No, don't give up. Keep trying."

And we got there.

Just five minutes from Redcar, the North Yorkshire town

of Marske-by-the-Sea is a quiet coastal retreat.

Tucked away from the town centre, up a small lane,

we came a cross a 1920s three-bed terraced cottage,

which, although in OK condition,

had a rather boxy layout.

There were some interesting style features and three decent bedrooms.

There was an OK bathroom.

But the main downside - or maybe that should be upside -

was that you needed to be a mountain goat to reach it.

But despite the hike to the front door,

local man Stephen thought it would make a great buy-to-let.

He wasn't able to attend the auction himself,

and technology nearly cost him very dear.

The mobile phone signal went dead.

Their mobile phone signal.

So that was a bit of a panic. So I had to ring them back.

Luckily, it hadn't sold.

-What were you thinking at the other end of the phone?!

-"Oh, my God!"

Cos this was real time, and if you can't bid, you can't bid.

-# Call me

-Call me

# On the line When you're ready we can share the wine

# Call me... #

So it was a close call.

But Stephen did manage to beat the deadline

and successfully purchase the property

for £87,000.

He had another deadline to meet,

with his second child due in five months.

So there was to be no hanging about for him.

He hoped that, with a £4,000 to £5,000 budget,

he could turn it round ASAP.

Now, four months later, it was time for us to call in

and see what progress had been made.

I feel it's turned out relatively well.

I would have liked to have a little more time

to put a few more finishing touches in,

but we had somebody that wanted to be in in a rush, so we got it to a state

where it would be a nice home for somebody.

The property wasn't in too bad a condition.

So we only had to do cosmetic work initially, really.

We put new carpets in, we did some replastering,

and redecorated.

Stephen's also had new electrics put in,

and an air brick was fitted to sort a minor damp issue.

But otherwise, it was really just a case of getting out the paintbrush

to refresh the three bedrooms.

He decided to put a new suite in the bathroom,

which means that the dark wood surround has now gone.

As has the other dark wood surround in the house.

Originally, what was here was a lovely stone fireplace

with some wood cladding.

We were tempted to just paint over the wood cladding.

On second thoughts, we decided to just rip the lot out,

replaster, and get rid of the gas fire. That's one less thing to worry about.

End result, we're really happy, because it's a modern, clean finish.

It looks like all has gone well,

but with Stephen working full-time, how involved in the project was he?

I mostly worked in the property on weekends,

because I work Monday to Friday.

I had a bit of help from family and friends, which was nice.

Other than that, it was contractors,

which I managed to get in through the week.

I left them with keys, let them get on.

And that was successful.

There are some minor cosmetic jobs to do,

mainly in the bathroom, and generally some tidying-up.

It's certainly been done on time.

What about his £4,000 to £5,000 budget?

On the actual renovation, we spent just under £4,000.

It would have been great if we could have spent less than that,

but really, considering what we've done, I think we've done quite well.

As Stephen kept the budget just below £4,000

and bought the property for £87,000,

his total outlay will be £91,000.

But has his minimal approach paid dividends?

What do two local estate agents think?

The interior condition is quite adequate.

Perfect for letting.

If it was a home to be lived in,

maybe the kitchen, bathroom could be of a higher quality.

I think what works quite well is it's quite a spacious property,

with two reception rooms downstairs

and the kitchen at the rear,

which for a modest-sized or medium-sized family,

would work rather well.

Stephen's already let the property.

But as he invested £91,000 in the house,

what kind of return could he have got if he'd sold it?

In the current climate, I would expect to achieve

probably circa £90,000 to £100,000 for this property.

In the current market, I would estimate the value of this property

to be in the region £95,000 to £100,000.

I feel around about 100K is good,

cos it means we've added some value to the property.

As long as it's worth what we paid, we're happy, cos we'll keep it for quite a long time.

So there isn't much of a profit to be had on the resale market.

Stephen's clearly right to hang on to it

and stick to letting it.

In the current rental market, I would estimate the value of this property

to be in the region of £500 to £525 per calendar month.

The rental market is going really good right now. I would expect the property to achieve

circa £500 to £550 per calendar month.

Both rental figures seem reasonable.

We've achieved a figure in the middle, so we're happy.

And we've got a good tenant, so it's a good end result, really.

Even on the lowest rental value of £500 per calendar month,

Stephen will see an annual yield above 6%.

So this will be a nice little nest-egg for him and his family.

Will he do it again?

I've enjoyed it. It was hard work.

We've got a baby due in four weeks' time, our second child,

so I probably won't be doing anything like this for a good while,

but if the opportunity came up again, yes, we would.

Well, that's it for now.

We'll be back next time with more dispatches from the front line of property developing.

-We'll look forward to seeing you then.

-Goodbye for now.

-Goodbye.

-Bye.

Subtitles by Red Bee Media Ltd