Episode 28 Homes Under the Hammer

Welcome to Homes Under The Hammer.

Buying at auction has become increasingly popular.

It could be the place to bag yourself a bargain and exchange contracts quickly.

But it can be risky, so we're here to show you how other people have got on and guide you through.

The profits are still there to be had for the savvy property developer,

but it's really important to keep a tight rein on the budget and not get carried away.

It's worth sticking to the rules, keep it neutral and don't spend more than you can recoup.

So here are the projects we're featuring today.

'In East London, this mid-terrace may be hiding some secrets.'

Hidden behind...there, I hope, a nice fireplace.

'This two-bed house in Sevenoaks, Kent, makes me pine for some neutral decor.'

Look at all that wood cladding in there!

'And in Stoke-onTrent, this shabby, run-down bungalow may be on its last legs, but step out back...'

And it all changes. Look at this plot of land!

'All these properties have been sold at auction.

-'We'll find out who bought them and what they paid when they went under the hammer.'

-Your lot. Well done.

This is Walthamstow to the east of London,

an area well served by transport links to the centre of the city,

making it a handy base for commuters.

This is Lloyd Park and this part of Walthamstow is named after it.

It's a lovely recreational area

and in fact, William Morris, the Victorian designer and champion of the Arts and Crafts Movement,

had a house in here.

The property I'm here to see is just round the corner.

It's a lovely part of the borough to live in and is a very popular area with renters

as it's a good blend of value and convenience,

so it could be an ideal area if you were thinking of investing some of your money.

So, what property delight am I about to see today?

Well, up for auction was a three-bedroomed mid-terrace.

The guide price was 175,000.

The front garden could do with a bit of trimming back

and the house itself looks like it needs a bit of tender, loving care. Let's take a look.

# Better run through the jungle

# Better run through the jungle... #

So, what have we got?

It looks like a fairly standard layout for this kind of property.

A little entrance area here,

stairs up to the bedrooms and then, basically, two sitting rooms,

one at the front and one at the back.

Now, you can see straight away it's not in the best of condition.

However...it's all right.

But when it comes to the state of this place, we're not out of the woods yet.

There are signs of damp on the back wall and the kitchen has very dated units. And worse, it's pretty small.

But there is potential here and when it comes to finding space,

there are never problems, just solutions waiting to be found, and this one is outside.

At the rear of the property, at the moment, this rather unsightly sort of lean-to, conservatory bit.

You want to get rid of that, but what do you replace it with?

Current planning regulations say that you could put a single-storey extension three metres long on here

and that's what some neighbours have done.

It would give you much needed extra space at the rear of the property.

Whether you do it comes down to financials.

If you're looking to rent it out, how much more would you get back?

If you're looking to sell it, how much would you get back compared to how much it will cost to do it?

But one thing which is not in dispute is the fact that the back garden is absolutely massive.

# Jungle boogie, jungle boogie... #

It's going to take more than a pair of secateurs and a weekend to tame this garden.

Who knows what's lurking in there?

But I can tell you that at the front of the house,

that rampant shrub was hiding some lovely features,

such as the original sash windows and this period front door.

So, upstairs, three bedrooms and a bathroom which is good news.

Whenever you see an old door which has got a panel that has obviously been stuck on the front like this,

it's likely to be covering up an original door behind there and that can give real character to a house,

so take the doors off, have them dip-stripped and beautiful.

Again hidden behind...there, I hope, a nice fireplace.

I can't actually take it off.

Again original features hidden away, just waiting to be uncovered,

and I bet, if you take up all these carpets, a nice wooden floor you could strip back to.

It would certainly go some way to restoring a bit of character back here.

Aside from the refurbishment needed downstairs,

it won't surprise you that the bathroom needs a complete overhaul,

but with its three bedrooms, two doubles and a single, plus that sizeable garden,

this place would be perfect to attract a family buyer.

Time to ask a local estate agent for his opinion

on this three-bed terraced house in Walthamstow with its guide price of 175,000.

The property is in need of full refurbishment.

It would need full re-decoration throughout, including new carpets, new plastering.

It would need a new gas central heating system and bathroom suite,

and if we're going to be aimed at the family market, I would go for a lower ground extension.

What could this house be sold on for once renovated?

If this property was refurbished to a reasonable standard without the extension,

I believe it would be on the market for £300,000.

If the extension was added to the rear, I believe we could achieve £330,000.

If you bought this as a buy-to-let, would there be a healthy demand in the area?

Three and four-bedroom houses are very rare on the rental market

and this would rent for £1,400 to £1,500 per calendar month.

Well, it's a good-sized house in a popular location close to the school and the park

and I think there's money to be made on this one. Let's see who fancied it when it went under the hammer.

Lot 2. I've got a proxy bid on it,

but let's see if I've got to use it or not.

Right, I'll start. 200 with me on my proxy.

200. 201 anywhere?

201.

202 with me.

203, yeah?

204 with me. 205?

I'll go to 211.

212? 212 with you.

213 elsewhere?

213 with you...

'This property attracted a lot of interest at the auction.

'We pick it up when the bidding reached 238,000.'

238, sir.

239. And 240.

241?

241.

242?

242?

241, back to you, might have it.

242?

241, first time, second time, third and last time. Are you all done?

BANGS GAVEL Sold, 241.

'That successful bidder was Jonathan.

'He lives in Essex and already has two properties in his rental portfolio,

'but he and his girlfriend Charisse plan to sell this terraced house on.

'I met him to find out more.'

-Jonathan, great to meet you. Congratulations.

-Thank you.

-How was the auction?

-Nerve-wracking.

It was the first one I've ever been to, so I made sure I got there on time.

Luckily, it was quite an early lot, so I got there, got a good position, so I could be seen

and sat there sweating for a bit.

-We got into a good bidding war and, luckily, I got it.

-Yeah.

-Tell me why you wanted to buy this place.

-We saw it in the brochure.

I've got friends in the local area. One of them is a rental agent locally as well.

From that point of view, it looked like a good opportunity to go for

and knowing about the Lloyd Park area, we thought it was a good investment.

-What did your friend who's a rental agent say?

-Excellent opportunity if we went down the rental route.

He gave me some good figures, but hopefully, we'll sell it on.

-Is this what you do?

-No, I work for a dental equipment company.

Right. What do you mean, "dental equipment"? What kind of stuff?

We manufacture ultrasonic units and things like that for the dental surgery.

Not like toothbrushes or anything like that!

I cover the south of England, so this is completely different to my day job.

-Just filling in the time?

-Yeah, absolutely.

'He must be fed up to the back teeth with puns like that,

'but moving from selling dental equipment to buying property

'isn't as huge a leap into the dark as it might seem.'

A long time ago, I used to be an estate agent, when I started off working.

Then I went to manage a rental office as well

and I have done one project similar to this about ten or eleven years ago

which was back up in Cambridgeshire,

which was a smaller, little refurb that I did, so I've had a small taste of it,

but I like it and this is something that I'd like to hopefully move into

if everything goes right with this one and we find a suitable next one.

'It looks like Jonathan knows the drill when it comes to property.

'With his girlfriend Charisse, he's hoping to establish a sideline business in development.

'As for the development of this particular place,

'the house will have a complete refurbishment from top to bottom.

'The walls separating the kitchen and the dining room will be knocked down to create a kitchen/diner.

'He plans to add space internally.'

The chimney breasts are coming out in the lounge, dining room and upstairs.

I thought about keeping it in here and I want to keep as many original features as I can,

but I think the modern-day buyer is looking for the space more

and that will give you a lot more space in this room.

That opens it up for the bedrooms upstairs as well.

I'm always a bit unsure about chimney breast removal because it's quite...

It's not a difficult job, but it's got lots of skips...

It's lots of labour which probably means lots of money.

-Have you been given an idea of what it's going to cost?

-We've got an idea on our budget.

-We work it out at around 30,000 for everything.

-Right.

A building firm have done the quotes. I'm just getting those back now.

I don't think we'll be too far wrong with that sort of budget.

'£30,000 sounds a fairly healthy budget,

'although Jonathan is also considering adding an extension at the back.

'That would increase his outlay by £15,000.

'With a 12-week timescale, he's taking a very considered view of this renovation,

'weighing up the costs and taking advice from the estate agents before deciding what to do.'

What's next on the agenda?

We'll keep our eye on the next auctions coming up, just to see if there's anything suitable in there.

Anything in this area would be good. It's a great area.

-Yes, see what the future brings in the auctions.

-Congratulations. Good luck with it.

Thanks very much. Thanks.

So, will Jonathan's latest denture...sorry, venture go well

and will it be his crowning achievement?

Does he have the palate for it? How will it all turn out?

-HE LAUGHS

-You can find out later in the show.

Sevenoaks in Kent is an attractive, historic dormitory town, only 13 minutes from London by train.

That accessibility means house prices here are hot and some of the most expensive in the country

with the average detached home coming in at over £500,000.

However, just a short drive away is Dunton Green,

an area that may suit lighter wallets.

The detached house I'm here to see had a guide price of 195,000 to 205,000

which seems much more in line with what you'd expect from a two-bedroomed home in need of work.

The house itself though looks more Scandinavian than Kentish.

I wonder if inside is quite so Nordic?

Yes, more Nordic than North Kent

and it's not just the wood cladding on the outside as the building is timber-framed too.

I think it's charming, but not the concrete garage right outside the front door.

Yes, a little bit flimsy is my first impression of this property.

You know, it feels a little bit boxy.

A-ha, the alpine theme continues! It doesn't disappoint. Look at all that wood cladding in there!

It needs to be a bit modernised, but you have got double glazing, so that's really good.

You have storage heaters. This house doesn't have gas central heating.

Second reception room, great for eating, a big family space.

A dark corridor leading to the back of the property where you've got a nice, bright, sunny kitchen,

so it's clean, it's neat, it's tidy, but it needs a lot of work.

But with that neat and tidy look, it's fair to say that the house appears well maintained.

It just hasn't been updated.

Anyone taking it on will want to rip out the cladding, slap on modern colours and re-fit the kitchen.

Outside, there's a fantastic, long back garden, but it's also a bit shed-tastic.

I know a man likes to have a shed, but three?!

Back indoors, there are two bedrooms. They're a good size, but again rather dated,

though we seem to have reached the end of the cladding.

# I'm feeling glad all over

# Yes, I'm glad all over

# Baby, I'm glad all over

# So glad you're mine... #

Cladding all over a room like that is best suited to just saunas,

but what's getting me steamed up is the layout.

To sum up, you've got a wonderfully large bathroom, but only two bedrooms.

It's not really working for me.

That bathroom's got lovely views over the garden. I would like to use that as a bedroom.

You'd have three wonderful bedrooms upstairs, but where's the bathroom going to go?

You could slot it in between these two bedrooms here.

Now, it's a good idea, but the only problem with that

is the only bit of brickwork in the whole house is that chimney breast

and you'd have to knock it down.

It may seem ludicrous, but it would make this house so much more saleable.

I know taking out the chimney breast would be complicated,

but I really think it's the best way to improve this house, its layout and value.

However, it's not the only complication here.

We're not very used to timber-framed buildings here in the UK, but there are plenty of them dotted around

and they can make very good, solid homes.

It's when it comes to securing a mortgage, things get a bit tricky.

Banks aren't keen on lending on anything that's not bricks and mortar

and you can find your options are limited when it comes to finance.

Houses of non-typical or non-standard construction can be hard to finance, but not impossible.

"Non-typical" simply means not typical for the area

and lenders tend to stick to building materials they know.

However, timber-framed houses are environmentally sound and warm in winter and cool in the summer.

There are plenty of them around in Scotland, Scandinavia and parts of the USA just for starters.

We asked a local estate agent

what he made of this two-bed timbered house, guided at 195

to 205,000.

It's unusual as a house. It's not a traditional build.

With that it brings some attractiveness. It's got a lovely plot.

And apart from the stigma attached to timber-framed houses within the UK,

it's a super little house.

Considering all the issues with the mortgages on this kind of property,

would it be worth taking a punt and refurbishing it?

If it was refurbished, it would probably be up to £275,000, maybe a little bit more.

Very difficult because of its construction.

-As a rental?

-The rental value, once refurbished, would be just under a £1,000 per month.

If you made this space into that third bedroom,

moving the bathroom to between the two bedrooms, what could it sell for then?

To add a third bedroom could increase the value. I think £300,000 would be the maximum.

If you forget the fact it's made out of wood, this house is a great home.

Tons of space in the garden, room to extend, a lovely location, scope to add value...

It's just that timber frame will always make it a tricky sell.

Let's see who wanted it at the auction.

And on to Lot number 37.

£200,000 to start me? At 200?

Start me at 180? 180, I'm on the way. £180,000.

-185 I'm looking for... Sorry, I didn't hear that.

-181.

-181.

181. And 2? 182.

Can I say 184 perhaps, get it going a little bit? 184.

And 6.

And 8. 189 I've got. 190 if you like.

190 I have. 191 with you, madam? 191...

'Two very interested parties were battling for this lot.

'We rejoin the auction when the bidding reached 210,000.'

At £210,000 to the lady sitting down. 212 I'm looking for.

It's in the room to sell it. 212 if you want? 212 I've got.

214,000? 214?

Is that yes? 214. And 16? 216?

At £214,000... He said "no". At 214 then for the first time sitting down.

214 for the second time. 214, third and final time...

It's yours, madam, at 214,000. Well done.

'That successful bidder was Louise.

'She's a mother of three from nearby Beckenham in Kent.

'Louise and her brother Ray, a builder, bought this house for 214,000.

'They already have one property renovation under their belts.

'I met them at their purchase to hear about the plans for this one.'

-Louise and Ray, congratulations. It all worked out. You've got the house you wanted.

-We have.

So what was it about this house you liked so much to want to buy it?

Well, we had looked at a couple and I just fell in love with this to start with.

It just had a really nice feel about it,

-then I said to my brother, "Come and have a look, see what you think," and we both agreed.

-Yeah.

So, Ray, through the eyes of a builder, what could you see here, what were the good points?

It's unusual. It's a timber-framed house, so obviously...

Selling it, it won't be a problem, but it's going to take more time than a normal house.

-Let's not beat around the bush. A timber-framed house is a drawback.

-Yeah.

Have you done much research about timber-framed houses?

I've done a bit. More and more companies are building timber houses. America's built on timber.

I don't think it'll be a problem. I think it's in good condition.

No rot anywhere. So I think we'll be OK.

You're right, it is in good condition.

My only concern is whoever wants to buy this off you guys when you sell it, they'll have to get a mortgage.

It's the mortgage lenders. You can get mortgages.

But it will put probably half the people off that want

-to walk through the door.

-If someone really wants it, they'll buy it.

# You can get it if you really want

# You can get it if you really want

# But you must try, try and try

# Try and try

# You'll succeed at last... #

'Louise and Ray plan to sell the house on,

'although Louise does have a plan that one of her three daughters might move in.

'Either way, though clean and tidy, it needs a thorough refurbishment to bring it up to date.'

We're thinking about opening this all up and having a great, big kitchen-diner

-and just keeping the front room...

-As a little chill room.

-Yeah.

And putting in French doors. Yeah, I've got lots of ideas. I'm very excited.

-What about upstairs? Big negative, it's only two bedrooms.

-It is.

You could squeeze three bedrooms in, but would it be worth it?

-We're not going to.

-We'll stick to two bedrooms.

I don't think you can SQUEEZE another bedroom in. You've got a bedroom looking at you in the face.

I think it's "squeeze in a bathroom" time. I think that would really work.

Yeah, it probably would, but would it be worth the expense of going that far?

I know in a timber-framed building it's easy to move walls...

We have talked about it a lot over the last couple of days.

Yeah, since we had it.

Costings and things like that, my brother does, Ray does all that,

and I have to go with... "I'm on a tight budget sometimes".

It's so boring being on a tight budget!

What is a budget?

'What IS a budget indeed, a question often asked by developers.

'Their budget is 18 grand, but they're not planning to do anything major in terms of reconfiguration.

'They're going to explore sorting a gas supply and getting rid of the storage heaters.

'They also plan to give the garage the heave-ho which should definitely improve the kerb appeal.

'18,000 for all that should be enough, but it definitely helps when your brother's a builder.'

He's so precise, he does this all the time and his work is excellent.

We haven't got to get other people in. We only get people to help us.

Friends and family to help, no other trades. I do all that myself.

-What about stuff outside your lives?

-I do a lot of running, ultra-marathons, marathons.

-I'm training to run London to Brighton in four weeks' time.

-Wow! What's an ultra-marathon?

-More than one in one go.

-Really?

I've just completed the Jungle Marathon which was six marathons in six days in Brazil.

-It's absolutely crazy.

-So this is nothing for you?

-No.

-No, it's not.

-You need to expend that energy. This is the project for you.

-Yeah.

-Good luck. Lovely to meet you.

-And you too.

-Thank you.

-Thank you.

-Cheers.

So, Louise and Ray are planning to wow with the renovation of this wooden house

and they will need to to get those hesitant buyers through the door.

I like their plans, but will they make this a three-bedder and widen the market that bit further?

You can find out later in the programme.

'Still to come, in Penkhull, Stoke, this worn-out bungalow gives me a wobbly moment.'

As you walk around, the floors seem to give way.

'In Sevenoaks, Kent, builder Ray discovers the true beauty of wood.'

If you find a bit of rot in timber, you can cut the timber out and replace it.

'But first, in East London, did Jonathan's renovations stay within budget?'

We spent more on the bathroom than we anticipated, more on the kitchen.

Earlier, we were in the Lloyd Park area of Walthamstow in East London

where we saw Jonathan buy this three-bedroomed, terraced house at auction for £241,000.

He works for a dental equipment company, but hopes by renovating this house and selling it,

he'll kick-start a new career in property developing.

He also owns two properties which he currently lets out, so he's not a complete novice.

A long time ago, I used to be an estate agent,

then I went to manage a rental office as well

and I have done one project similar to this about ten or eleven years ago,

-so I've had a small taste of it.

-Right.

I like it and this is something I'd like to move into

if everything goes right with this one and we find a suitable next one.

Jonathan's plans for the house included removing the chimney breast upstairs and downstairs

and knocking through the two rear ground floor rooms.

He had a healthy £30,000 for this and an additional £15,000 for a possible back extension,

so how has that and the 12-week timescale fared?

When we returned three and a half months later, the large shrub had been cut down to size,

showing off a bright new face to the house,

but it's the inside that counts.

And this is much better.

The front room has had a wonderful-looking facelift

and I'm happy to see that the chimney breast is still intact

with a beautiful, original fireplace exposed.

The warm tones of the new flooring flow into a welcoming hallway

while at the back...

Jonathan has had the wall taken down

to create a new, spacious kitchen-dining area.

What we did in the kitchen... The original kitchen had a wall up here, so that was the kitchen in there.

We've opened that up into the dining room.

We've bricked up the doorway from the hallway into the kitchen as well.

There was a big window here, a large window here,

which we've opened up at the bottom and put in double doors, so we've got good access outside.

We moved this window from its position to the left.

We moved it here to make way for the boiler in there and bricked up that.

We installed a brand-new kitchen with the oven and hob and nice under-cupboard lighting.

We've kept a neutral tile throughout the kitchen and dining room

and we've put new doors in here, as we have done throughout as well.

Removing that downstairs chimney breast has also led to the removal of the one in the bedroom above,

but luckily, the front bedroom has retained its stack

and again with the bonus of a beautifully restored, original fireplace.

All the bedrooms have been carpeted and refurbished to a good standard,

but it's the bathroom that really takes pride of place up here.

Originally, the bathroom was the other way around,

so the bath was down this wall here, the toilet under the window and the sink was on the wall over there.

We took out a small chimney stack in the corner of the room to allow us to get this slightly larger bath in.

We put in a new shower, new toilet and basin and a heated towel rail.

We fitted nice, grey tiling which we feel gives it a high-end look.

We also finished that along on the floor

and on the panel of the bath as well.

The bathroom has definitely come out better than we thought, so we're very, very happy.

There's a pleasing blend of old and new here

and I'm glad that Jonathan decided to keep the original fireplaces,

but the desire to maintain character didn't stop with the interiors.

Once we took all the carpets up, we found there was original floorboards.

Obviously, we uncovered the fireplaces as well.

On that basis, we decided to keep the original sash windows and the original front door.

It certainly gives the house some charm from the front,

however, unfortunately the original floorboards were too damaged, hence new flooring throughout,

but it's not just the house that Jonathan revived.

The garden has been given a new lease of life by tidying up the shrubs and laying new turf.

The lean-to was wisely consigned to the tip to be replaced not by an extension, but a tiled patio.

We considered putting the extension on. It probably wasn't worth us doing it from a monetary point of view.

And we looked at potentially extending into the loft space,

but again we decided it wasn't worth us doing it. We feel leaving it like this gives a buyer a chance

to put their own stamp on it.

There were no major problems during the renovation, which Jonathan left to a local building firm.

They carried out a full refurbishment.

It was done within the 12-week schedule, but was it done within Jonathan's £30,000 budget?

We spent more on the bathroom than we anticipated, and the kitchen.

We probably went to about £35,000. We're waiting for a couple of bills, but we think that's it.

Add that to Jonathan's original purchase price of £241,000

and his total outlay is £276,000.

So was it money well spent?

Time to ask two local estate agents what they think of Jonathan's entry in the Walthamstow property market.

First impressions are excellent.

It's been decorated very tastefully with a lot of thought.

You've got lovely wood flooring in keeping with the age of the property.

It makes you think, "Hey, let's look at the rest of it."

The property has been very nicely renovated. It's a compact property,

but offers spacious accommodation and is finished to a good standard with nice retained features.

Jonathan plans to sell this one, so bearing in mind his £276,000 outlay, will he turn a profit?

If I had to put this on the market to sell, I'd expect it to achieve around £300,000.

We would expect it to achieve between £330,000 and £340,000.

A big difference between the two. We are going to market it at the higher end of those valuations.

If Jonathan were to get the highest figure of 340 grand,

that would give him a profit of around £64,000 minus tax and expenses.

But could he be tempted by a possible rental return of £1,400-£1,500 per calendar month,

meaning an annual yield of around 6%?

Selling's our first option, but that's good to know.

This renovation has gone well for Jonathan. No problems or delays

and a potentially good profit when he sells the property on.

So after this success will he give his dental career the brush off?

Hopefully, one day, yeah. It would be nice to give up the day job,

but we have to see what happens in the future.

I'm in Stoke on Trent and the area of Penkhull. It's a conservation area and became a Royal Manor

under William the Conqueror. I hope the property wins me over as well.

Well, Penkhull is still considered a highly desirable area

with lots of large Victorian and Edwardian properties and people making the most

of the really good transport links. The property I'm here to see could attract all sorts of buyers.

Not the most attractive building. It's this bungalow, guide price £125,000.

Let's explore.

'From the road, the bungalow may look imposing and grand,

'but get up close and there are signs its best days are behind it.

'I just hope the interior tells a different story.'

It really is the oddest design. Not the prettiest of houses, you have to say.

For instance, this is a massive porch on the front.

I'm sure it gets lots of sunshine, but you're overlooking the road.

Into the main body of the bungalow and it's almost like it's a small bungalow that's got wet

and expanded dramatically. Everything is disproportionately large. Look at this entrance area!

It's absolutely huge! And then off it you've got the rooms.

They all look in a fairly poor state, so take your pick.

Let's go that way.

It's interesting. It's almost like someone's had a go at trying to renovate it.

The electrics have been replaced in part, but it is in a dreadful state.

As you walk around, the floors seem to give way

and some floorboards have been taken. It's a suspended floor.

The issue with that, well, the good news is that it's a long way for the damp to get up,

but the bad news is if there is any damp, who knows what's happened to the joists?

And I don't normally say this, but it's tending towards

the...knock it down and start again camp.

There are two front bedrooms and a back sitting room,

but given its shabby, decaying state, demolishing the whole lot might be the best thing for it.

Thankfully, you've got the semblance of a bathroom, but you can't say the same for the kitchen.

This is where the kitchen was. Apart from one large cupboard, there is very little.

Boiler, clearly that needs to be thrown away. It's a start again job.

'Getting a mortgage for a property without a working kitchen or bathroom can be tricky.

'There are specialist companies who will lend on development projects but you'd have to do some research.'

Now you might think it's all looking a bit dismal in terms of this as a potential purchase.

However, come to the rear of the property and it all changes.

Look at this plot of land.

A big garden? Well, it's much more than that.

The potential here is huge. Firstly, you've got an access road.

That means there's potential for bringing cars into another property down at the bottom, perhaps.

You've also got, surrounding this property, lots of new builds.

So the planners are probably going to look fairly favourably on the idea of building

one, two, three - who knows? - properties here.

So do we care about the state of that bungalow any more? No, we don't!

The options here are a) total refurbishment, b) demolish and build the house of your dreams

on a fantastic plot or c) build more than one house.

What does a local estate agent think of this bungalow, guided at 125,000?

First impressions are that it is in a run-down, derelict state.

Generally would be appealing to a professional developer,

due to the amount of work needed.

Although you could actually refurbish this property, we would recommend to demolish and rebuild

a detached executive home.

But how would the returns look after developing the property?

If this bungalow was totally renovated using the existing footprint, what's the resale value?

We would be looking to achieve in the region of £220,000.

And that second option, if the bungalow was demolished and a new 4-5 bedroom house

put in its place?

Figures could range anywhere between £300,000

and £450,000,

obviously depending on the planning permissions gained and the finish.

There's certainly lots of options with this one and one of them should be to seriously consider

knocking it down. Money to be made? All depends on that planning issue.

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

Lot number 32. 110, then. Can we start it at 110?

110 bid, thank you. At £110,000.

115, can I say now? 115.

At 120? 120.

125?

122. At 122.

To you, sir. 124. 126. 128.

130. Right on the back wall. At 130.

New bidder. 131.

132. 133.

134.

135?

Shaking his head. 134,000 on the back row standing. 134 for the first time.

134 for the second time.

134 for the third and last time. You've bought it, sir.

-Well done.

-The successful bidders were hidden from our cameras at the back,

but we caught up with them at the bungalow. They're brothers Tom, on the left, and Ben.

They live locally and this purchase of £134,000

is their first development project. And what a large one to take on.

-Great to meet you both. Congratulations. Why did you want to buy this?

-Big place, good area.

And we just really liked it.

What prompted this sort of purchase?

Been looking for somewhere for a while, didn't want the usual find a place, renovate, rent or sell it.

I wanted something that has land. A bigger project, really.

'Tom's a plumber and Ben's just returned from working abroad as a ski guide.

'They're working together as a way of getting closer as it's not always been brotherly love.'

My dad's involved. He's a peacemaker, really. He's trying to keep it all together.

He wants us to have a future, so we're doing this.

-Growing up, you two scrapped a bit?

-You could say that.

-A lot?

-Every day. But we'll put that behind us.

Move on.

'Well, teamwork will be required to get this off the ground.

'The brothers and their dad have been looking for the right property for several months

'and while their father runs his own pottery business, he's always had a hand in developing

'so has experience to share.' What was it about this place that you thought "Yes"?

I just think the size of the plot. It's a very good plot.

The area's very nice.

Good links with schools and roads.

What are you going to do?

If we could get planning, we'd like to knock this down, have a five-bedroom detached house.

We've spoken informally with the local planner who assures us if we can get access at the bottom,

-he would grant us maybe a bungalow down there.

-Oh, wow.

Or we could build four townhouses at the front of the property, have the back as parking.

Plenty of options. We may just renovate it as is. One of us would live here, if it didn't work out.

'Their budget will depend on what they finally decide to do.

'They estimate that renovating the bungalow will cost £40,000

'while a demolition and new build would set them back around £140,000-£150,000.

'Of course, the timescale would depend on which course of action they take,

'but getting this build done might be the easiest aspect.'

I'm interested in this working together. What do you think the points of contention will be?

Just decisions on what to do with it, what to build

and where to build.

-That's it, really.

-Time. I like everything done today.

He's more tomorrow, if you don't mind me saying.

So great. And once you've done this, is this a bit of a test case for you working together?

-Yeah.

-I think so.

-We're looking for others as well.

-Yeah, at the moment.

-If it works out, we can do another one.

-Yeah.

-Congratulations. Good luck. We look forward to seeing what you do.

-Cheers.

Well, so many options and possibilities for this one,

but it all comes down to that planning permission.

Will the planners let Tom and Ben do what they'd ideally like to

and will they complete the project without falling out? You can find out later in the show.

So did it all go swimmingly? Did our buyers go in with their eyes wide open or tight shut?

There's no escape now. We're coming back, ready or not.

Back now to Sevenoaks in Kent where we saw this two-bedroom timber frame house

sell at auction for £214,000.

Louise is a mother of three and bought it with her brother, Ray.

He's a builder, which is always handy when you're developing. He better watch for splinters!

I was worried that its present layout might make it too difficult to sell on.

-What about upstairs? Big negative. It's only two bedrooms.

-It is.

-I think you could squeeze three in, but would it be worth it?

-No.

-We'll stick to two bedrooms.

'I really thought a third bedroom would give this house a fighting chance.

'However, Ray thought it wouldn't be a problem because timber frame houses are the norm in the USA.

'So the pair allocated 18 grand and four months to do the work.

'Eight months later and it seems Ray has followed that American dream

'by creating his own little White House.'

# Turn a whiter shade of pale... #

Straight away it's more appealing now that they've got rid of the garage at the front,

so let's take a look inside. The first big change is downstairs

where one reception room has been opened up into the kitchen, creating a very appealing living/dining room.

A complete change. Completely opened the kitchen and living room

into a big kitchen/diner with bi-fold doors opening it to the massive patio.

It's completely transformed.

The kitchen is a lovely family room. I love the bi-folding doors.

When we do get a bit of sunshine, it'll be lovely folding them back

and enjoying the kitchen and going outside to the garden.

# Turn a white shade of pale... #

It's a high spec kitchen, too, with granite worktops, stone flooring

and stylish gloss units. The front room layout remains the same,

but now has a lovely wood-burning fire.

Upstairs is where it gets interesting.

I thought a third bedroom was crucial, but they didn't want to go there.

So did they change their minds? Yes, they did.

And they came up with a very clever idea which meant they didn't have to knock down that chimney breast.

When we bought the property,

there was a wall here and here and this made the second bedroom.

This was the hallway down into the bathroom at the back of the house,

which we've now brought forward and taken a bit of the second bedroom.

The bathroom is now the third bedroom, so now it's three bedrooms.

Lucy said change it to a three bedroom. We listened in the end.

# And that was good advice Good advice

# Good advice costs nothing and it's worth the price! #

Well, I'm glad they took my advice and hats off to them for that very clever solution.

We had some agents round and everybody said that's going to help sell it,

so we decided to do it.

A three-bedroom house is always going to be more appealing and that new bathroom is very stylish.

The finished result will appeal to any buyer, but did the timber frame cause any problems

when it came to the renovation?

I've not done work on one before, but it was quite simple.

If you find a bit of rot, you just cut the timber out and replace it.

The only major problem was taking walls down. We had to put steel in,

which I found a bit odd, but that's what building regs required.

The schedule has only gone over by a month, which included delays in getting the gas supply in

and some holidays, not to mention some marathon running.

Ray did most of the work himself, with his partner and his sister.

What about that budget they'd set at £18,000?

The budget was slightly over as well because of the high-end kitchen and changing it to three-bedroom,

plus the natural stone on the patio. We were a tad under 25 when we last added it up.

We've got a couple of little bills to come in, but it'll be about 26.

That's about £8,000 over, but they've put some passion in here and done it to a high standard.

And they didn't just improve inside. Remember that shedtastic garden with not one, but three sheds?

The garden was hard work, but I think we've done a good job.

The patio looks amazing

and anybody else coming in can make it more their own.

But, yes, it was very hard work to get it looking like it does now.

Hard work indeed, but let's find out how much value they've added

to their investment of £240,000.

What do two local property experts reckon?

The kitchen/dining area is a great space, the heart of the kitchen, and it's a lovely job.

Adding a third bedroom was a very good use of space and will help them achieve a higher rental.

It's very impressive. They've done a tremendous job. It's a complete transformation.

I think the property will appeal to quite a wide audience. It's probably out of the first-time buyer market,

but certainly a young family and possibly an older couple looking to downsize

because it's got all the right ingredients and is in good condition.

They bought the place for £214,000 and spent £26,000 on the work,

making a total outlay of £240,000.

They definitely want to sell it on, so what could they expect for that?

I'd recommend a marketing price of £325,000.

I'd expect it to achieve around £300,000.

I think we were expecting around the 300 figure. If we can sell it at that, we'd be happy. 325 is good.

-Very good.

-Yeah, we'd be very happy with that.

And no wonder. There's a fabulous profit of £85,000, minus the usual tax and expenses,

if it sells for that top price of £325,000.

And with a possible rental income of up to £1,200 per calendar month,

giving the pair an annual yield of around 6%, I reckon this brother and sister team

-make a solid business partnership. Will they work together again soon?

-Definitely.

-Yeah.

-This is our second one now and everything's going fine, so we'll do another.

-He does as he's told.

-No, that's not true.

-Yeah?

We now return to the Penkhull area of Stoke on Trent where earlier we saw this rundown, shabby bungalow

that had little going for it in its present state.

But set on a huge plot of land, the property still attracted the interest of Tom on the left

and his brother Ben, along with their father Douglas,

who paid £134,000 for it.

Their plan was either to renovate the bungalow or knock it down for a larger house,

plus a possible bungalow at the bottom of the garden, a venture needing teamwork,

-which might be in short supply.

-My dad's involved as a peacemaker, really, trying to keep it together.

He wants us to have a future, so we're doing this.

-You two used to scrap a bit?

-You could say that.

-Like a lot?

Every day! We'll put that behind us.

'The lads couldn't have picked a tougher first project for their teambuilding skills.

'They'd set aside £40,000 to renovate the bungalow or £150,000 for a new four-bedroom house.

'When we returned 11 months later, the bungalow was still standing.

'There's a new roof with the chimney stacks removed and the front garden looks like it's been landscaped.

'However, the exterior still looks like work in progress. Let's hope there's better news on the interior.

'Ah, that's more like it. The porch has been renovated,

'while inside, gone is the sense of rundown decay.

'Instead, the hallway and two front reception rooms are replastered and redecorated,

'all lighter, airier and with a greater sense of space,

'despite the windows onto the porch being bricked up for more privacy.

'At the back, the lounge has had the same treatment with new patio doors added,

'while the chimney breasts have been removed to add more room.

'Down the hall and the bathroom is a more inviting place

'to enjoy a relaxing soak, while at the back that room with no evidence of being a kitchen

'now has new units and a cooker installed.

'So far, it looks like Tom and Ben have done a grand job,

'but what happened to their plans for the new build?'

We decided not to flatten it, not to extend for the time being, just to do a full renovation.

As you can see, everything's been re-done - rewired, new heating, courtesy of Tom,

and now we're moving to the outside.

The lads have done a great job of renovating here. Tom put in most of the labour, installing the heating,

with friends in the building trade doing the more skilled jobs.

And Tom managed it all while juggling a full-time job.

It's very difficult trying to juggle work and trying to fit this in.

That's been the main issue. When you think you've got time to do it, something will crop up

and you get put behind schedule.

Ben helped to project manage it, but with a new job making demands on his time,

he was only able to get his hands dirty in the evenings and weekends.

Their dad, Douglas, helped to get the front garden into shape, but recent developments have put

developing that huge rear garden on hold.

We put in for planning permission and got it passed for a detached house.

So we'll see where it goes from there, whether we sell it with the permission or build on it.

It's a decision we'll have to make, the three of us. And then we'll see from there.

Although they have obtained planning permission to build a detached property,

the brothers discovered a clause in the deeds preventing more than one house being built on the plot.

They are trying to overturn that, but just because you have planning permission

doesn't mean it's all plain sailing. As for the bungalow, the lads are undecided whether to sell on,

rent out or move in themselves. Whatever, it seems they've landed on their feet with this,

their first-ever joint venture. So was it all harmony?

The best bit about working with Tom and my dad is that it's brought us closer together.

We see much more of each other, which is a good thing really, although we've had odd disagreements.

But it's been great to spend time together and crack on with it.

It seems working on this project together may have extinguished their fiery relationship,

but with the bungalow completely renovated, did the team get burned on their £40,000 budget?

To do the inside of the property so far, as you see it now, is £28,000.

Add that to their purchase price of £134,000 and the team have so far spent £162,000.

Time to find out what two local estate agents make of the renovation and their plans for the land.

They've really made the most of the bungalow, taking advantage of the raised plot they had,

finishing it to this modern standard, particularly the bathroom and kitchen. It makes the most of it.

I'm very impressed with what they've done to the property internally.

It's just ready and waiting for a family.

Bearing in mind their £162,000 outlay, what sort of profit could they make if they sold it on?

If I was to place this bungalow on the market as a single dwelling, with the entire garden intact,

I would confidently place it on the market at £195,000.

The bungalow and the plot as a whole we'd value in the region of £200,000.

-Quite surprised at that, really. It's quite good.

-Yeah, I think that's reasonable.

That would give the team a pre-tax profit of £33,000-£38,000.

Then there's a possible rental income of £650 per calendar month,

giving the lads an annual yield of just under 5%.

But the real potential here lies with developing that huge garden.

The estate agents reckon the sale of the land with plans could make up to £75,000,

but what sort of profit is there in the new build?

Building a four-bed detached family home on the sub-divided plot would fetch in the region of £250,000.

I would place that on the market for £250,000.

We think we could build the house for 140, 150,

so it would be a great profit.

It's just, perhaps, the stress and finding the money to complete it.

Of course, that all depends on them being able to change that restrictive clause in the deeds.

If they do, there's real potential here. Ben, Tom and their father are weighing it up carefully,

but one thing that's in no doubt is that this joint venture is here to stay.

Yeah, we'll definitely look for another one now. I enjoy finding properties, looking at properties.

And knowing what I know now, I think the next one will be much easier.

-That's all we have time for on today's programme, but there's plenty more. Goodbye.

-Goodbye.

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