Episode 33 Homes Under the Hammer

In these turbulent times, people shy away from the property market.

But often people still choose to take a risk

because bargains are there to be had in the auction if you're careful.

Join us now on the Homes Under The Hammer rollercoaster of property ups and downs.

Well, the atmosphere in the auction rooms can be electric with a real buzz in the air.

You might grab yourselves a bargain by raising your hand, nodding or even just a wink of the eye.

So what did people bid for today?

This warehouse in Cornwall is definitely destined for demolition, but what then?

This is a very interesting opportunity.

In Walthamstow, London, I'm on the hunt for original features.

Look at all this going on. I want to see what's under there.

And talking of improvement, there's a lot of that needed at this Lancashire property.

But I'm liking what I'm seeing.

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.

This is Camborne in Cornwall, which is actually one of the largest Cornish towns.

Dig below the surface and you'll find a rich seam of industrial heritage here.

Mining plays a huge part in Cornish history, particularly tin mining,

and the Dolcoath mine here in Camborne is a perfect example.

Believed to be one of the deepest and richest mines in the county

it became known as the Queen of Cornish mines.

# Maybe if I told you the right words

# Ooh, at the right time

# You'd be mine... #

Well, the lot I'm here to see sounds really interesting.

It's an old warehouse. It had a guide price of £30,000-£50,000.

Sounds quite a lot for an old warehouse? Not when I tell you that it has outline planning permission

for the creation of four sizeable three-bedroomed houses.

Suddenly it sounds like it could be a bit of a bargain.

'It may not be much of a looker right now, but that outline planning permission turns this warehouse

'from an ugly carbuncle into a completely different proposition.'

# You don't know you're beautiful

# If only you saw what I can see You'd understand why I want you so desperately

# Right now I'm looking at you and I can't believe

# You don't know You don't know you're beautiful

# That's what makes you beautiful. #

So what lies behind the roller door?

Well, that is one big space, that's for sure.

Nice thing to see straight away is it's got a flat floor and the other thing that's really important

is that it's detached, so you haven't got any adjoining buildings.

The importance of that is if you did have, you'd need approval from people adjoining the walls

before you did any work. But that's not the case. It could be taken down quite easily.

Outline planning permission was granted, not full permission.

Basically, somebody has approached the council and said, "In principle, would you allow X, Y and Z?"

And they've said, "We would allow four properties to be built here, roughly looking like this."

You'd have to apply for full planning permission and then they'd look at architectural design,

whether it fitted in with the area, et cetera. You're not all the way there, but you've gone a long way.

And I reckon this is a very, very interesting opportunity.

The planning consent is for a terrace of four good-sized homes.

We're talking master bedrooms with en suite shower rooms,

two downstairs reception rooms plus a downstairs loo, parking and landscaping. The guide price?

£30,000-£50,000.

So what does a local property expert think of the current plans

for this warehouse?

The planning at the moment is for a terrace of four three-bedroomed houses.

To be frank, they're almost too big for this setting.

I'd probably try and squeeze a fifth one in to try to max out the site.

# I like to move it, move it I like to move it, move it

# I like to move it, move it We like to move it! #

What could the proposed houses fetch if sold on after refurbishment?

The finished houses, depending on their specification,

as per the current consent, would have a value in the region of £135,000-£145,000.

And on the rental market?

All four houses are essentially the same, although two are the bookends to the terrace.

You'd be looking at about £600, £625 per calendar month.

Well, what is there not to like about this project?

A lot of land, it's flat, you've got this building to demolish and get lots of materials.

Most importantly, you've got that outline planning permission.

Maybe not one for somebody who hasn't done any building before, but if you're looking for that project

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

I do like this one.

It's got planning consent in place.

Start on at 60. 60 anywhere?

50? OK, 40. That's 40. We're away.

At 40,000. At two.

42. 42. 44.

-At 44. Against you, sir.

-This lot took a while to warm up.

-We return to the bidding at £80,000.

-At 80. At 80.

81 I'll take, sir. 81 it goes.

82. And three. And four.

84. Back left. For the first time, then. Serious stuff. At 84.

For the first, second... 84,000. Third and final time.

Selling.

It was developer Simon, on the left, and his business partner and site foreman, Del,

who secured this one with that successful bid of £84,000.

# Go, DJ, pump this party Why waste your time You know you're gonna be mine

# You know we're gonna be mine... #

'I met Simon and Del back at the warehouse to hear their plans.'

Simon, Del, great to meet you both. Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this place.

-We're always looking for little projects...

-Little?!

-Well, this is a nice little project.

It's an easy one. And...it was cheap.

-We thought it was quite cheap and we went for it.

-Right. So you're experienced in this kind of world?

-We've been doing this for many years. Too many years, in fact.

-We've done one or two before.

-So you're a building firm?

-Yeah.

-In this area or...?

-Mainly Penzance, but we're looking at Camborne now.

-Camborne's coming up pretty good now.

-There's been a lot of investment in Camborne.

-That's right.

-So we're looking there.

-So what's your relationship?

I retired about 10 years ago. He came to me and said, "Come on,

"I don't want you to end up in an old people's home.

-"Let's go and do a project." We've done four.

-He's had a new knee.

I said to the doctor, "Can't we get one more house out of the old one?"

-How old are you, if you don't mind me asking?

-74.

-74! You're looking pretty good.

-I feel good.

-I feel good.

-I call him the medical miracle!

-Quite right.

# I feel good

# So good So good, I got you... #

So Del's fit as a fiddle and happy to take on another project.

It seems as though these two work pretty well together, too.

-So how does the business relationship work? 50/50?

-Yeah.

-Great.

-Never had an argument.

-No. I keep out of his way. That's why we don't have arguments.

-He's got a little saying when we have a problem, "Don't worry. It's a doddle."

-That's nice.

And how do you split the work between you?

I'll be onsite most of the time.

I'm in the background. I sort out all the services, material costs.

If Derek wants some materials onsite, he'll give me three or four days' notice and I get them there.

-Time is money.

-No one waits for stuff.

It sounds like it's worked out really well.

-It's a good partnership.

-Our relationship is amazing. We've never had one cross word.

Talking of cross words - four across, two down, three up - have they puzzled

about what to do with the site?

# Isn't life a little bit like a crossword puzzle? #

So, then, the plan is to stick with the existing plans?

No, the existing plans... It was granted outline planning permission in a boring block of four.

So we decided to play around a little bit with them, put granite on the side,

because it's in a conservation area. Natural slate roofs and double-glazed windows.

Right. So that means you're going to have to go back to planning or not?

-The planning application's already in.

-Right. Worried that it might go through or not?

We've done pre-apps, so it should be OK. We knocked on neighbours' doors and liaised with them.

So far, so good.

Simon and Del propose to put up two sets of three-bed semis, rather than a terrace of four houses.

And they will be a little smaller than the original plan,

without the en suites or second reception room downstairs.

-In terms of the build costs, what's the build cost?

-They usually are £1,000-£1,100 per square metre.

That's the national rule of thumb.

So what does that work out as price per unit?

-At about... When you say per unit, because they're in blocks of two...

-Right.

-..we hope to come in about

-140 per unit?

-Per block of two?

-Per block of two, yeah.

The estate agent said there was a possibility of getting of getting another unit. You've gone for four.

Would you consider five or do you want to give them more space?

The reason we haven't gone for five is to stick our toe in the water and do four first

-and see how we actually get on.

-Ah.

-Then we might.

-You might keep that as an option?

-Options are always good.

-Potentially a fifth in the future.

-And what's the timescale for all of this?

-About 10 months.

Might be less, but we're looking... That's our end line.

-That sounds quite quick.

-We won't hang around on this.

-Congratulations. Good luck with it. We look forward to seeing it.

-Cheers.

Del and Simon certainly seem to know what they're doing and have a very good working relationship.

This place is destined for demolition and in 10 short months there may be four properties here.

They've still got to get planning permission, though, and will they build that fifth? Find out later.

I'm in north-east London, Walthamstow to be precise,

an area that's proving very popular with first-time buyers.

When trying to get on the ladder in the expensive London market,

the important factor is that the average price of a terraced house around here might be achievable.

Here is today's auction property. A three-bed terraced house

that had a guide price of £210,000. Not bad, but not great

because the last property to sell on this street went for £216,000.

Let's hope it doesn't require too much work on the inside.

Oh, clearly it does need quite a lot of work inside.

It's got a sort of corporate feel to it. Grey carpets, stark blue walls.

There is a certain amount of character which I love. Up there.

That ceiling is beautiful. What isn't beautiful is all this exposed pipe work.

That is not working for me.

Look at all this going on. I want to see what's under there.

It'll be a thing of beauty so I'd want to get all this off and expose all of that.

Now really big room size because the wall's been taken down,

but a fantastic space. An old fireplace there doesn't do the room much justice.

There's so much more you can do.

It could, with a lot of hard work, be quite a nice home, but you need to put some thought and effort in.

Mm, it does feel rather soulless and dated.

That very basic kitchen has something I really don't like - a bathroom next door.

There's also a separate loo here. You know where I'm going with this.

Yup, upstairs.

There are three good-sized bedrooms up here. To lose a bedroom or not, that is the question.

No one wants to lose a bedroom if they can avoid it,

but in this instance I think this room should be turned into the bathroom.

It may have a small impact on the value, but it will make it more comfortable and more marketable.

Losing this bedroom is the bad news, but the good news is there is space to create another one up there.

A loft conversion doesn't necessarily require planning permission and it could fall

into your permitted development rights. There are a whole host of conditions, but the main one to know

is you cannot exceed 40 cubic metres for terraced houses and you will need building regs.

Check your council website for a full checklist.

It's great to know you have options to increase the square footage.

And that is the quickest way to add value.

'Typically, a loft conversion would cost around 30 grand,

'but I reckon the return would be worth it.

'Out the back there's a good-sized garden, but it could do with new fencing, a new shed

'and certainly a bit of weeding.

'What does a local property expert make of this place and taking away that downstairs bathroom

-'and creating a middle floor one instead?'

-Sacrificing a bedroom for a ground-floor bathroom

would have a massive impact on the value. Bedrooms increase value

more than locations of bathrooms, but it could be overcome by cutting the second bedroom up

to put in an internal bathroom or converting the loft space.

'But if the new owner didn't do that conversion, how much could the property be worth?'

As a three-bedroom property, renovated throughout, I'd put it on the market for £275,000

with a view of achieving £270,000.

So, to compare, what would happen if they did take away the bedroom

and replaced it with a bathroom on the first floor?

If the property was a two-bedroom property with a first-floor bathroom,

I would suggest putting it on the market for £270,000

with a view of achieving a figure between £250,000 and £260,000.

What if the new owner did a loft conversion, giving them back a third bedroom?

I would recommend putting it on the market for £320,000 with a view of achieving £310,000.

So moving the bathroom upstairs and creating a third bedroom in the loft does see a real return.

So it will require more cash and more work, but you will see your money back, which is key.

Let's see who wanted this east end house when it went under the hammer.

Lot Seven, where do you want to start? 200?

200 there. 205.

205. 210. 215.

220. 225?

220. 225. 230?

230. Yeah?

235. 240.

New spot down here. 241.

242. 243?

244? 244.

245.

Must go one more.

Well done. Now the acid test.

246? He knows the value. 247? No?

246 down here. Anyone else?

At 246. First time.

Second time.

247, yeah? 248?

250, good bid. 251?

250. First time.

Second time. Third and last time.

Have you all done? Sold, 250. Well done.

The final bid of £250,000 has certainly brought smiles to the faces

of Delphine and her partner Johnny.

Johnny's a filmmaker from London and Delphine, who's French, is a dancer.

# Go, Johnny, go, go... #

This three-bedroom terrace is going to be their home, leaving behind their rented flat in Spitalfields.

Johnny and Delphine, lovely to meet you.

-You were so excited and happy on auction day.

-Yeah, it was a rush. It was a total...

-Emotions were running high.

-It's so exciting.

You don't want to believe in it before the hammer goes down,

then it goes so fast, it's yours before you have the chance to think, "Oh, my God! Is it really mine?"

That was just, for me, really exciting.

-So come on, tell me, how badly did you want this house?

-Very badly. Otherwise, I don't think

we would have put ourselves through it. I saw it only once, but we had seen so many properties in the area

and I felt like that was it. I loved the upstairs.

Downstairs felt like there was a lot of potential for it.

We'd been looking in the area a lot and hadn't seen anything in our price range

anywhere near as nice as this.

They fell in love with it so much that it drew them to the auction room, a first for both of them.

We weren't planning to buy at auction. We were looking

and I didn't know anything about auctions, so I spent that week going to them to see what they're like.

It was really scary! And then Del saw it the Saturday before the Monday of the auction,

so we really didn't have much time to get used to the idea.

# But don't think twice, it's all right... #

Buying at auction is completely different from buying via the more usual channels.

You also have to be prepared for the different way you may have to raise money.

This is where Delphine and Johnny found themselves on a learning curve, like paying the seller's fee.

-Unfortunately, there was also a bigger issue.

-Beforehand,

we'd found the perfect mortgage and thought, "We don't really need a broker." We'd the perfect product.

But we didn't adapt our strategy to buying at auction. You only have 28 days to complete.

Two weeks into that completion time, the lender refused to give us any money at all.

-Why was that? Do you know the reasons?

-Mainly because we're both self-employed.

And a lot of Del's earning is from abroad, some of mine is dividends from my company.

It's complicated to find a lender to accept those means of income.

How did you come up with the money?

It was hard, but we said, "Help!" And we phoned... I phoned a very good couple friend of mine

who have done this in the past. They gave us great names of brokers who could help us.

We called our families, who have been incredible.

Thanks to them, basically, we have bought ourselves more time

to find the right mortgage and finance it. But we got given help by the family.

'So family and friends came to the rescue and they narrowly avoided a sticky financial situation.

'That's an important point about buying at auction. Check that your lender will lend fast enough

'or it could mean an expensive bridging loan. As it was, they had to use their budget of 20 grand

'as well as the money they'd got from their families.' What changes do you hope to make?

I ask, "So, guys, what's your budget?" But I don't think I can ask that at this stage!

-There is no money!

-No more budget for a little while.

So if we are hopefully going to come back and see what you've done,

-what changes do you hope to make when you get the money together?

-Actually, quite a few.

On the cosmetic side, we just want to take it back to the floorboards and something more original.

There's really nice original features on some of the ceilings and the fireplace upstairs.

-We'd like some of that character back.

-We're hoping to bring the bathroom upstairs

and to create... We figured we spend a lot of time in the kitchen and we love having people around,

so to have a bigger kitchen space at the back and maybe even to open this wall

to open even more of the house towards the kitchen area and have this end as the diner, basically.

'Big plans, but the main aim is to get the really messy jobs done in four weeks, then move in

'and get on with it gradually. It'll be a dusty building site,

'but they're so passionate about the house, will they notice?'

This house could be wonderful, but it's stuck in a time warp. It needs to be released.

Yes, completely. And we're ready to do that. We love it.

-We love the house!

-You've just got to find a way of paying for it now!

It's been so lovely meeting you. I cannot wait to see it. Good luck.

-Delphine.

-Thank you so much.

-Thank you.

Oh, I do love a happy ending!

It could have been so, so different for Johnny and Delphine

if they hadn't been able to secure the cash to buy this house.

Will they move in in just four weeks? The pressure is most definitely on.

Find out how the couple get on later in the programme.

Coming up: I make some discoveries in Lancashire.

Oh, there's a huge gap behind there. I'd love to see a massive great fire.

The owner of this property in London has been on a steep learning curve.

I know a bit about plumbing, electrics, my carpentry is better.

But first priorities at this project in Cornwall have been skewed.

We decided to have a month off cos we wanted to go surfing.

'Back now to Camborne in Cornwall and this warehouse with outline permission to build four homes.

'Business partners Simon and Del bought it at auction for £84,000.

'They hoped to tweak the designs and put up two sets of three-bed semis and possibly a fifth property, too.'

-So how's the business relationship? Are you 50/50 partners?

-Yeah.

-Never had an argument.

-No. I keep out of his way. That's why we never have arguments.

He has a little saying. "Don't worry about it. It's a doddle."

Simon and Del were planning to spend up to 10 months and £280,000 on this particular doddle.

But will it be rave reviews all round for the demolition of this warehouse?

Will they stay true to the four to the floor roots of the outline plans

or will Simon and Del sneak a cheeky extra little beat into this particular bar?

Seven months later, we're back.

# Bring the action. #

'Fantastic.

'Not only have they managed to fit in their two lots of two three-bed semis, but work has also started

'on a fifth, detached property.

'The four semis are nearly complete, three months ahead of schedule.

'In fact, the whole build appears to have gone swimmingly.'

We knocked the warehouse down. That came down in 2½ days.

Within a week, we'd had the whole groundwork done and the drains.

Then we got the slab in, got the slab down,

got it all polished up and decided to have a month off to go surfing.

There was some great surfing off Africa, so we all decided to go over there to surf.

We closed up for a month, so the whole of September it was closed down.

We had a lovely time. I tell a little fib - I never went!

I stayed at home, but the firm went surfing.

I didn't have you down as a surfer dude, Del, but once they all got back to business,

the buildings went up in no time. The team are hard at work on the fifth, detached house

which will have the same floorplan as the semis. They hope to have that finished in six weeks.

While there's still a bit of decorating to do, the overall finish really is pretty good.

Everything is really well done here. We've left a space here so you can have a table

with probably three or four chairs round.

And this is all plumbed in for dishwashers and washing machines

so everything's spot-on here. Absolutely superb kitchen.

Well designed, lovely light and airy. Beautiful.

Simon and Del paid £84,000 for the plot

and planned to spend £280,000 on the four semis,

so how much has it ended up costing?

The four properties cost 220,000 to build.

It was then 110,000 for the price of the purchase with the demolition

and the utility connections

and all the administration costs of solicitors, architects,

so if you put 110 and 220,

they stand us in at the moment at 330,000 for the four.

I reckon that £330,000 spend

means Simon and Del are actually under budget on the build for the four semis.

Simon hopes to bring the fifth three-bed, detached house in for around 60,000

which would bring their total outlay here to 390,000.

We asked two local property experts,

including the one who sold this warehouse,

to tell us what they make of the development.

The original planning consent

was for houses that, quite honestly, were too large for the spot.

He's shrunk them economically just enough

to the point where they still provide what they need to provide, but are good business for him.

The finish is very good. Nice modern kitchens and bathroom fittings.

And obviously conveniently located for the town.

What might the finished properties fetch on the rental market?

For the semi-detached houses, I'd be hoping to get pretty close to £600 per calendar month.

For the detached house, I'd want to get £600 per month.

The rental value would be in the region of £650 per calendar month for the semi-detached

and maybe up to £700 per calendar month for the detached.

Those rental valuations would mean a yield on the semis of around the 9% mark.

But Simon and Del's preferred option is to sell the properties on.

So, what do the experts think they could fetch on the re-sale market?

The semi-detached properties would be worth somewhere in the region of 125,000

with the detached property maybe up towards 145,000.

For the semi-detached houses,

I would expect to put them on the market at £134,950

and aim to get as much over 130,000 as the market would bear.

For the detached, I'd be asking about £140,000 and wouldn't want to come too far back from it.

I think that's what we expected, really.

The 125 is a couple of grand short, I think, but apart from that...

But 140, 145 for the detached, very pleased indeed.

The experts' re-sale valuations

would mean a pre-tax profit on the semis of between £170,000 and £190,000

which is very good indeed.

That's four properties almost finished, another on its way

and all of them now under offer.

So, has this really been the doddle that Del thought it would be?

Yeah, a doddle. Yeah.

It went as sweet as a nut.

Del's taken the words out of my mouth. A doddle!

I'm in the beautiful county of Lancashire, 19 miles away from the buzz of Manchester.

# I'm in the middle of nowhere Come and show me the way... #

You might be forgiven for thinking you've travelled a million miles if you came across a halo.

This futuristic sculpture is just one of a series dotted around the Pennine peaks

and it hovers over the town of Haslingden where I am today.

Haslingden is a former mill town and lots of the properties here

are former millworkers' cottages and terraces like the one that was up for auction.

One thing I really like about it is it's on this little private drive.

There's even somewhere to hang your washing,

although talking of driving, you can hear a fairly busy nearby road.

The property itself is an end terrace. I like that. It means you've got a lot more space.

It looks in reasonable condition and it benefits from some nice views. Let's look inside.

The house had a guide price of £30,000 to £35,000

and I'm already very taken by the lovely surroundings.

So, does the interior match the rather impressive location? Well, let's find out.

The first thing to say, really nice, high ceilings.

That makes such a difference in how a property feels,

so we like this room straight off.

A nice, big... In fact, a huge, great gap behind there.

I'd love to see a massive, great fire on there. That would be such a feature.

There's some original stuff going on too which is good news.

Through to the rear of the property where it's a bit dark, partly because the windows are boarded up,

but look at the size of this room! The high ceilings...

The huge, great... I guess this is a fireplace area, but I imagine a cooker was in there at some point.

But, er... I'm liking what I'm seeing.

On the other side of the boarded-up window and door

is a terraced patio with access to the back of the row of houses.

On the first floor, there are two bedrooms.

The small one is at the rear.

The master bedroom at the front is a good-sized double.

I don't know if the wallpaper has been pulled off as a start on decorating or if damp has caused it,

so I'd advise checking that out.

Across the landing, the bathroom suite is very dated, but could be salvaged

if your budget was really tight.

And there's more accommodation in this house.

Up on to the top floor and a really useful attic space.

You couldn't call this a bedroom as it doesn't meet building regulations -

the stairs, the banister, no escape route out of the windows,

probably doesn't have enough support in the floors, etcetera.

But it probably would be worth upgrading it, so that it would be able to be used as a bedroom

or you could keep it like this, a really useful extra space.

I like properties which give you options and that's exactly what you have here...

..as this two-bed could potentially become a three-bed.

Down the two flights of stairs, you can go deeper still to the basement.

It's no more than a storage area at the moment, but someone has added some extra doors.

I wonder where they lead?

When it comes to making the most of underused parts of any property,

it's really important to think outside the box,

but it's also really important to know what is achievable for not too much money,

so if it's worth doing or not.

In this case, the good news is that on the other side of those doors in the cellar is this.

There is an access existing. It's already got the lintel over the top

and you could put some more doors in there and create some steps up on to this patio area.

You'd have the views. Suddenly, you've got a really nice space that you can use for whatever you fancy -

a cinema room, a kids' play area...

It's all good news and I don't think it would cost too much money.

# We've got to open up and change our point of view... #

The views from this elevated house are fantastic.

Just across the path, a bonus feature is the garden.

OK, it's overgrown and on a steep incline, but it is a great asset to the property.

I'm really excited about this place that went to auction guided at £30,000 to £35,000.

We asked a local property expert

to come and tell us what he thinks of it.

Yeah, this street is a little bit different

in that there's no vehicle access to it.

The gardens at the front give it a bit of a stand-out position

and certainly the views are superb.

So far, so good, but what about the house itself and the potential to go down into the cellar?

There's an opportunity here for somebody to look at the basement and convert that into a kitchen.

Other properties on this street have done just that and you'd get two reception rooms on the ground floor.

There are options available to the new owners,

depending on what they want to spend, but would it be worth it?

How much could it be worth after refurbishment?

Once done, depending on how far the work goes, you could easily see £75,000.

And the numbers buy-to-let investors are always interested in, the rental potential?

From a rental point of view, something in the region of £425 to £450 per calendar month.

What of this end terrace in Haslingden?

Well, lots of space already. I think you could expand it even further. There's the cellar to work on.

Nice views, a bit of noise from the road, but for the money, a really good one to go for.

Who agreed when it went under the hammer?

Lot 167. Start me at 20,000? £20,000?

20 I've got, far left-hand side.

20,000. 22? 22 here.

At 24? 24 we've got. At 26?

And I've got it. 28?

28 I've got. 30? New bidder here further forward at 30,000. 32?

No, shaking his head.

So, it's with you... Is that 32 stood? 34 sat down.

I'll take one if it helps you. It does. Gentleman stood at the back, 35,000. 36. 37.

New bidder on my left at 38. 39 sat.

40? Got it. 41?

41,000. Gentleman sat on my right at 41. Are we all done at 41,000?

First time at 41, second time... At 41,000, are we all finished?

Yes, we are. Your paddle, 240. Well done.

'It was Paul who made that final successful bid of 41,000.

'He lives in Haslingden and is a qualified electrician.

'This is his first property purchase.

'I met up with him back there to find out why he had a light-bulb moment for this one.'

-Paul, lovely to meet you.

-Hello.

-Congratulations.

-Thank you.

Interesting house. Tell me why you wanted to buy it.

We've been looking for a while to buy a house, me and the missus. We've been together nearly four years.

We just thought the time was right, looking for somewhere for the right amount of money.

We got into the auction thing. This place came up and we got it. First one we went for.

-This will be your home?

-Yeah, we want to do it for me and the three kids.

Did you know about this interesting line of properties here?

Not really. I know the area pretty well.

I've done a million paper rounds, milk rounds, so I know most of the houses around here.

But I've never had a look down here.

-What was it about it that you really liked?

-The garden, the views.

There's plenty of room in it. It needs lots of work doing to it, but it can be a perfect home for us.

# Gonna move right in

# Gonna move right in... #

'It's great that this quirky house is going to be a family home, but Paul certainly has a lot to do

'just to get it up to standard for his family.'

What will you do to sort it out?

Convert the loft properly, so that will be a bedroom.

The daughter's room directly above this will be made bigger to make that a sizeable room,

then this kitchen is going into the cellar.

This will turn into a bedroom and an en-suite in that corner.

Having a bedroom in the cellar is like a dungeon almost,

but we can put French doors in down there which will give some natural light to the kitchen.

It's a good size for a kitchen.

'I love the idea of a cinema room,

'but putting the kitchen in the basement is a very clever use of the space this house has to offer.

'The bonus is that it will allow a bedroom on the ground floor without losing the living room.

'But all that moving around, plus taking the whole place back to a shell is a lot of work,

'plus it sounds very expensive.'

How much to do what you're planning?

Well, we've got about £12,000 to do it up.

It probably needs about 20, but I'm going to be calling a lot of favours off a lot of friends.

There's 12 grand just in the window of the kitchen and putting up the walls where we need 'em, insulation.

I'm not going to have a lot of money left for labour.

Are the rest of the family old enough to help?

My lad's ten. He's the eldest. He'll be able to pick stuff up and put it in the skip,

but not on a grand scale, no, unfortunately.

What standard of renovation are you going for?

Pretty high. We want a good finish, all the work to be carried to a good level,

which will be hard because I'm doing it for favours, but I've got a good bunch of friends,

so that's the standard we're looking for.

'Now I'm concerned. Paul's going for a high standard of finish with a small budget.

'He hopes to have the work done in six months, pulling in favours from mates and doing his full-time job,

'but I'm excited by his plans

'and maybe this property could spark a new career path for electrician Paul.'

We hope to get some equity out of this.

At the end if it, if we've made some money, we can borrow on top of it and do it again.

I probably should have done it a long time ago, but it took me to now to jump on it.

I think it's a good time because properties are pretty low again,

so, yeah, I think it's going to be the future...

I'm hoping it's a good future for me.

-We wish you all the best with that. Good luck.

-Thanks.

-I look forward to seeing how you transform it.

-Cheers.

Will Paul the electrician find turning this house into a home an electrifying experience?

Or will the realities of renovation bring him back down to earth?

You can find out later in the show.

So, did our buyers have their eyes wide open when they made their bids?

Or were they blind to the hidden pitfalls?

Let's go back and see just how clear their vision was.

Now we're back in north-east London in this three-bedroom, mid-terraced house in Walthamstow.

Johnny and Delphine bought it for 250,000 at auction.

Johnny's a film-maker and Delphine's a dancer.

They had to borrow money from friends and family

after the loan they thought they had arranged and secured fell through.

They were going to need to come up with some more money to fix this place up.

This house could be wonderful, but it's just stuck in a time warp and it needs to be released.

-Yes.

-Yeah.

-Completely. And we're ready to do that. We love the house.

-We're going to release it.

-You've just got to find a way of paying for it now!

-Yeah!

Let's join them almost a year and a half later

to see if they did manage to rustle up enough cash to get this renovation done.

And I'm pleased to see they have!

So, since you were last here, we've installed a bathroom upstairs.

We've redecorated the remaining two bedrooms.

We've finished the living room, redecorated that, and we've started work on the kitchen.

We've done all the construction, but we need to tile and build the units.

None of the corridors are done yet and there's still the loft conversion to do.

Yes, a loft conversion was always going to be a great idea,

so I'm glad plans are afoot to start renovating that space.

That loft conversion will give them their third bedroom back

as they've moved the bathroom from downstairs to the first floor

and lost the middle bedroom to accommodate it.

Losing the WC and bathroom from downstairs has meant they could really open up the kitchen.

They've gone for a sensitive renovation,

making good use of the Victorian period features and mixing it with a contemporary style throughout.

I think it's pretty much what I also imagined it would be.

When you start, you try and look past what you see

and see spaces and the potential that they have and I'm really happy.

I love the floors, I love the area,

but the whole home inside, I'm super...super-super happy.

The couple did manage to get a mortgage in the end, so they could pay their friends and family back.

This meant it was a little easier to rustle up more money for the work.

So far, we've spent about 20 grand.

We didn't think we'd be able to do that, but we both had good years professionally last year,

so we were able to do more than we thought we would.

Johnny has done a lot here himself. Not bad considering he was very much a novice!

Before this, I hadn't done any DIY.

I've kind of become an expert on floors. I know a bit about plumbing, a bit about electrics.

My carpentry's getting better.

A team of professionals were on hand for the more tricky jobs,

but Delphine helped with stripping the walls and re-plastering.

Not bad when you consider she was heavily pregnant at the time!

Yes, that's right, there's another new feature in the house now - their one-year-old son Roman.

Yeah, there's a little Roman.

He was born a year and a few weeks ago.

And it's fabulous and it's also why we did this move, to be honest.

We didn't have enough space in the other place.

It was a really great push for us to just go, "Let's do it."

And so he's happy and he's got his own room. It's really brilliant. We're lucky.

How wonderful! And Roman will no doubt have years of enjoyment in this lovely house.

When they get round to doing the garden, I'm sure he'll make full use of that as well.

So, with the new baby on the scene and all that work, was it a stressful project for them?

I felt we were a really great team, actually.

I...I really enjoyed it

and it was pretty... pretty straightforward.

I can't imagine this pair letting stress get the better of them.

I think they've done a wonderful job so far.

What about some other opinions?

Let's hear from two local property experts.

The changes in the property are absolutely fantastic. It's undergone a major renovation.

I'm really impressed. It's made the property a lot more modern,

but keeping with the contemporary feel of its age.

The way they've gone about restoring or improving it is excellent.

The usage of the ground floor space

by moving the bathroom upstairs into one of the bedrooms is fantastic.

For the time being, Johnny and Delphine are going to enjoy this as their family home.

Let's find out what kind of value all their effort has added here.

They bought it for 250,000 and have spent around 20,000 so far.

That's a total outlay of £270,000.

What do the experts think it's worth now?

I would expect this property to re-sell for a figure in the region of £300,000 to £310,000.

Once completed, it will be worth about £400,000.

That's great. Yeah, that's really...

That's like the best mat leave I can ever dream of.

That's a lot more than we were thinking.

No wonder they're happy.

That top figure gives them a profit of almost 150,000,

minus the usual tax and expenses, of course.

So, what about when they complete the loft extension and get that third bedroom back?

If this property was extended into a three-bedroom house,

I would expect the value to be in the region of £325,000 to £350,000.

If the property was extended into the loft, I think you would get about £450,000 for that.

-Amazing.

-Yeah.

-Which we will do. That's totally...

-We're definitely doing the loft, aren't we?

-Exactly.

And... That's great. That's really great.

There's a difference of £100,000 between those two valuations

which just goes to show how varied even professional opinions can be.

Either way, they'd make a fabulous return if they did sell, but they'll not think about that for a while.

They seem happily settled here and so does Roman.

It's just starting to really become what we had hoped it could be.

Yeah. When we do the garden, he'll have a little space to run around.

I think he's so lucky. It's great. There's good schools, a good home, good neighbours.

There's loads of kids around us as well, so he's really well surrounded.

Yeah, I think he's a happy little one.

# Loving the alien... #

'We're re-materialising back in Lancashire now

'in the town of Haslingden

'where this tall end of terrace offered not just the standard living space with two bedrooms,

'but a loft space and a large basement too

'and a garden Sherpa Tenzing might have found challenging!

'Electrician Paul bought it for £41,000 as a first home for himself,

'partner Laura and their three children. He had ambitious plans.'

-What are you going to do to sort it out?

-Convert the loft properly, so that will be a bedroom.

The daughter's room directly above this will be made bigger to make that a sizeable room.

This kitchen is going into the cellar. This will turn into a bedroom and an en-suite in that corner.

'Turning this into a four-bedroomed house was a big plan,

'so I was worried that Paul's budget was rather small.'

How much to do what you're planning?

We've got about £12,000 to do it up. It probably needs about 20.

But I'll be calling a lot of favours off a lot of friends.

With help from friends, Paul hoped the work would be completed in six months.

Well, it's now 18 months later and we meet Paul,

Krystle and Abby in pink back at the property to find out what's been happening.

A great deal of work has been finished.

The bathroom has been enlarged with space gained from the landing.

Krystle's bedroom at the back has been decorated.

The front bedroom has this feature wall

and up in the loft, Abby's bedroom has gained extra space.

We've done a lot of work up here, as you can see.

We've taken these walls back - that wall, that wall and that wall.

We've added an en-suite. We've put an extra window in.

We've dropped the ceiling, we've put a new floor in, so we've done an awful lot of work up here.

The en-suite will also have a roof light installed to act as a fire escape,

so the room will meet building regulations, and both girls are pleased with the progress.

It is a bit messy, but it has improved a lot since we first saw the house.

It was all messy, but we offered to clean it up and make it better.

We got to choose the colours and the wallpapers that we wanted.

Electrician Paul has re-wired the house.

Progress on the ground floor has been slower.

In the corner of the living room under the stairs, there's a new opening to a ground floor bathroom

and access down to the cellar.

And the back of the ground floor has seen another change.

Originally, we were going to make this a bedroom and move the kitchen downstairs,

but because there's no waste water out the front which is that side,

we've had to keep the kitchen where it is as that's where the waste is.

We've dropped the ceiling, insulated it.

This won't be the finished kitchen. We'll put a new one in. This one is just temporary to keep us going.

This room looks pretty good, but it'll look better when it's finished.

Come on, Paul. If the kitchen is going to stay in situ, what's going down below?

The basement now is going to be a bedroom for the eldest son.

With a separate access to the cellar, it means Paul's son will be able to get in and out

without disturbing the rest of the family.

But we can't get in the basement as it's being used for storage.

Most of the windows have already been replaced, but the front and back doors are yet to change.

Paul has had loads of help from his friends, other tradesmen and his apprentice Toby,

but he discovered that it wasn't just the lack of hours in the day

that can hold up a refurbishment like this.

I've tried to do this work around my day job, but the biggest factor about time has been money,

getting the money together to buy skirting boards, paint, everything,

so that's been the biggest difficulty really.

What effect did that have on the initial £12,000 that Paul had to spend?

I should imagine I've spent about £15,000 so far and I feel there's another 15 to 20 to spend,

but that's because we're going to put a high-end kitchen in

and some decent front doors and French doors downstairs.

It's a big house and garden. It has eaten up the budget and then some.

Apart from Paul still working full-time, another reason for the lengthy renovation might be

that he has been a bit of a perfectionist.

His high standards have meant the costs have risen from his original estimate and so has the timescale.

I would have liked to have been in 12 months ago, but I'm really happy with the job and the finish.

If Paul spends a total of 35,000,

that, coupled with his initial purchase price of 41,000,

will mean a total outlay here of £76,000

to create a great, four-bedroom family home.

What do two local property experts make of the work done so far?

I think the work done up to now has been done to a very good standard.

And I think the way that the accommodation has been laid out is probably the best format for it.

Right decision to keep the kitchen on the living accommodation floor,

rather than in the basement. The basement room has multiple uses,

so, as the children grow older, that room becomes accommodating for all the family, not just one use.

Paul's looking to move in and make it home, but how much rental income could it generate?

Once finished, we would be able to rent this property for between £500 and £600 per calendar month.

If it was available at this moment, you'd be looking at about £550 per calendar month.

Based on a rent of £550 per calendar month, that's a very healthy annual yield of 8.5%.

That's brilliant. I'm glad it can get that much. It's good for future reference.

What about sale valuations once it's all finished?

More than the £76,000 total that Paul will have invested?

I think this property could be marketed for £95,000.

The price in the current market would be between 115,000 to 130,000, dependent on time of sale.

That's quite a broad range in valuations there.

The first one was based on a similar nearby property's asking price, although that hasn't sold yet.

Valuing properties is far from an exact science,

but even that lower estimate would give Paul a pre-tax profit of £19,000,

while the top end could mean a profit of 54,000.

I like the second one a lot better!

I just wonder - could Paul be tempted to sell if that offer was actually on the table?

No matter how much it's worth, we'll be living here. There's too much blood, sweat and tears involved.

That's it for today's show. Join us next time for more auction action

-on Homes Under The Hammer.

-Goodbye.

-Goodbye.

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