Episode 37 Homes Under the Hammer

Have you ever wanted to buy a property at auction

-but don't know where to start?

-Perhaps we can show you some tricks of the trade.

Join us now as we follow more people

who bought their homes under the hammer.

Now, auction houses aren't intimidating places to buy.

All you need is money and a side helping of good sense.

Today, we talk to some intrepid buyers who have taken the plunge.

Will they sink or swim? Here's what they bought.

'In the Vale of Glamorgan, everything's coming up roses at this former florist's.'

Given that this is a bonus attached to the property, it's pretty good!

'I get some pleasant surprises at this three-bed terrace in Chatham.'

There's more character to this place than I expected.

'And in Derby, this plot may lead you to believe

'there's nothing to see here.'

But before you go, "Eugh, boring!" Not at all.

'All these properties were sold at auction.

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

'This is Barry in south Wales.

'Originally a fishing port, Barry is now a popular seaside town.

'It's only a few miles from the Welsh capital, Cardiff,

'and that, as Barry's TV residents Gavin and Stacey would say,

'is well lush.

'Not only that, but the place I'm looking at today

'had a very reasonable guide price of £47,000.'

The property I'm here to see is on this fairly busy road,

which under normal circumstances would be bad news.

However, the lot that was up for auction

was, in fact, a four-bedroom flat and attached to it this former florist's shop.

Passing trade is a great thing to have.

Former florist's shop? Bloomin' marvellous!

So, what's it actually like?

Firstly, nice big frontage onto the road, which is a positive thing.

Then, basically, two rooms.

This front room in a bit of a sorry old state, but not a bad size.

So, you're thinking, what could you use it for?

It's A1 useage, so a shop, a newsagent's, something like that.

If you wanted to do food, you'd have to reapply for change of use.

Then you've got this rear area here, which could be an ancillary bit to the shop, as it was,

somewhere for preparing things or as back-room storage.

That is pretty much it for the shop, really.

Luckily, there's more.

On to the living quarters now.

Often with flats that are attached to a commercial premises,

there are issues of access, sometimes it's through the shop.

Not in this case. Separate door, which is good.

It's looking like it's a half-decent space.

Stairs up to your bedrooms there

and then through into this,

which is a decent-sized rear living room area.

It's the only living room in the property.

That is the kitchen and on to the bathroom.

In terms of a layout, it's not ideal.

You'd think about taking some of these walls out.

But given that this is a kind of bonus attached to the property,

it's pretty good.

'Both the kitchen and the bathroom look fairly modern,

'so that's good news.

'There's also a backyard area, which needs a tidy up.

'It's great to have some outside space.'

Up here, you can't complain about the amount of space.

Four bedrooms, pretty good sizes too, apart from one.

The only disadvantage is that your loo is downstairs.

Given that you've got four rooms, maybe convert the smaller one

into a bathroom to create the bathroom upstairs.

All in all, it's looking pretty rosy.

The only fly in the ointment might be that some mortgage companies

do not like properties which are mixed use - commercial and residential.

If you're looking to take a mortgage out on this,

you'd have to check that out with your mortgage provider before you commit to buying.

'Three of the four bedrooms are pretty spacious.

'All have modern double glazing. There's even a period fireplace.

'But as the saying goes, every rose has its thorn.'

Hm, just a small point!

Whoever decorated this house went Artex crazy!

It's all over the walls, the ceilings, wherever.

Just one word of caution - older Artex does contain asbestos.

When you're taking it off, you have to be really careful, depending on the age.

Worth checking out before you go hacking into it with a sander.

'Artex aside, everything else may be looking rosy

'to anyone who fancied this former florist's.

'There are several options.

'You could keep it as a shop and flat, convert it into one large family home,

'or there's the possibility of creating two flats.

'Any major changes would need planning consent

'and, as the property is leasehold, the leaseholder's approval.

'Bearing in mind the guide price of 47,000, which option would make the best financial sense?

'Let's hear some advice from a local estate agent.'

You could sell this property as individual units

for approximately 30,000 to 40,000 per unit.

But I would suggest you would rent it rather than sell the property,

to achieve approximately £450 per calendar month

per individual unit.

'What if you were to convert it into one single family home?'

This property with four bedrooms would be able to be rented

for approximately £600 per calendar month.

'Or if you decided to keep the shop and let that?'

I would expect the shop to achieve approximately 3,000 per annum.

'So, you'd achieve more in rent if you split this into two flats,

'but would just one house be worth less if you opted to sell it?'

If the property was converted into a four-bedroomed residential,

it would be, then, approximately between £80,00 to £90,000.

'With the refurbished flat and shop combo being worth about the same,

'you wouldn't necessarily make more by selling this as two flats.

'The next owner will have to weigh this up carefully

'before making their decision.'

So, a really interesting mixed-use development opportunity here.

Will the former florist's "bloom" again?

Will it have too much of a "stigma" attached to it? Ugh!

Or will the whole building become residential?

It's all down to who bought it. Find out who that was when it went under the hammer.

Moving on to the next lot, this is a shop with four-bedroom flat over.

It's an investment opportunity.

Who's going to put me in there, ladies and gentlemen, at...

47,000?

Who's going to start me off at 47,000, to get things moving?

Who's got 45 to start things off? Thank you. 45,000 is bid.

45,000 I've got. Six, I'm looking for. 45,000 I've got.

Six, thank you. 46. And seven. And eight?

Eight. Nine. 50?

50,000 is bid. And one? And two?

52,000 is bid. 52,000 I've got. 52.

52,000 I have. 52,000's in the market. 52,000.

And three. 53. Four. Five.

Six? 56,000. And seven?

Eight? 58,000.

And nine? 60? 60,000 is bid.

And one? Two?

62,000. Three?

63. And four?

63,000 on you, sir. Any advance on 63,000?

63,000 is bid. 63,000.

Last chance. Be quick. 63,000.

64. 64,000. And five?

64,000 is bid.

Any advance? 64,000...

65. And six?

65,000 on you, sir. 65,000 I'm going to sell it at.

Any advance? Be quick. 65,000... Last chance.

BANGS GAVEL 65,000.

'So, with his successful bid of 65,000,

'the new owner of the flat and florist's shop is Barry-based businessman Ian.

'Regular viewers may recognise him,

'as he's been on Homes Under The Hammer a couple of times.

'He owns 16 rental properties in Barry, as well as a pleasure park.

'He's got outline planning permission to develop that by adding 190 apartments.

'Busy man! Time to meet up with him again

'to find out why he's bought this former flower shop.'

# Cos you, you and I

# Back together again Got the world in a spin... #

-Ian, good to see you again.

-Thank you.

-Congratulations. You've done it again!

-I've done it again.

It's three years since we last saw you. How's things gone since then?

Yeah, not too bad, to be honest.

-This is number 17.

-Oh, wow!

-Yeah.

Tell me why you wanted to buy this place.

I looked at the building and thought

-maybe I could split it into two living accommodations.

-Right.

And maybe have one two-bedroom flat downstairs

and a two-bedroom flat upstairs.

-You've got to get planning permission.

-Yeah.

-How do you think that'll go?

-Hopefully, it won't be a problem.

But, you know, everything I do is a learning curve.

MARTIN LAUGHS So we'll see what happens.

What kind of budget? Talk me through the two options.

If you just convert it as it is, if you like,

what would it cost and what would you get in return?

To convert it as it is, staying with a commercial shop,

um...it'd be in the region of about £6,000, maybe £8,000.

-OK.

-To do the extra bits that I need to do to break it up into two living accommodations,

we'll be looking at maybe 15,000, 20,000.

-Not a lot more to give you two saleable properties, or rentable properties.

-No. That's right.

-And timescale for all of this?

-Depends on the planning.

Subject to planning, I'd say 12 weeks' turnaround.

'There's no guarantee that planning permission will be granted

'and Ian still has to make contact with the freeholder, too.

'But this, it seems, is the least of his worries.'

-The idea is to sell one...

-Oh!

-..and rent one.

-Right.

The idea behind that is just to pull the money back in that I've paid for the property.

Having said that, I haven't paid a penny out yet,

apart from the deposit because, unbeknown to me, it was...

I knew it was a commercial mortgage but I didn't realise under 75,000 people won't lend.

So, at this moment in time,

-we haven't actually exchanged contracts.

-Ah!

So I might have to try and find... some money from somewhere.

Is there any danger you won't complete on it?

No. There's no danger of that.

I've got the monies in place, if I need to use it.

I just don't want to buy it cash.

-Gosh. So another slight headache that you weren't expecting?

-Bit of a learning curve, isn't it?

# Worry, worry, worry

# Worry's all I can do... #

'It's common for commercial mortgage lenders to require a large deposit

'and have minimum loan amounts.

'Let's hope that, with a bit more shopping around, Ian can find a lender.'

After this, then, are you going to sit back and enjoy things

or are you after another property?

I-I... I'm always on the lookout for properties.

It just depends where a deal comes up. I'm always on the lookout.

-If the pleasure park comes off, it's happy days?

-Yeah.

I'll be able to go to auction every day!

-Listen, good luck with it. Nice to see you again.

-Nice to see you.

So, it seems that it's not all plain sailings

in the world of pleasure parks and property for Ian.

An unexpected issue here that could have serious connotations.

Thankfully, he's got the money to complete on the purchase.

Otherwise it could get really nasty. Lessons to be learned.

Will he get the planning permission? Will he get it sorted out?

You can find out later in the show.

'I'm in Chatham in Kent,

'the historic town which once housed naval dockyards

'and was home to a young Charles Dickens.

'While maritime and literary history are important here,

'the town is undergoing something of a sea change.

'Is all this regeneration keeping property prices afloat?

'Today's lot sounds promising.'

I do love a "no through road".

No-one using your lane for cut-throughs,

quieter, peaceful even.

Although in this case, the peace is shattered by the mainline trains

that rumble past pretty frequently just there!

Oh, well! You can't win 'em all!

The property I'm here to see might make you a bit of cash, though.

It's this three-bedroom terrace. It had a guide price of £65,000.

There's a bit more character to this place than I expected.

Look at those lovely sash windows. They could be original.

They're not double glazed. It's a lovely room, spacious.

You need to take down the wallpaper, but look, a second reception room.

Perfect for that big dining table.

You've got some storage space over here and look!

You've even got some doors leading out to the garden,

which I really like, although they're old and look a bit rotten,

so they'll probably need replacing.

And then you've got the kitchen.

Not quite sure about the, er, wedding cake effect.

Artex is one thing - not a personal favourite of mine.

I'd be inclined to get rid of it.

Also, the kitchen cupboards resemble a bit of old chipboard.

Again, it all needs replacing but it's a brilliant space.

As I'd expect, you've got a downstairs bathroom here.

This gap between the bathroom and kitchen isn't a legal requirement any more,

but I think it's a great space to put your washing machine,

keep your smalls tucked away.

We've also got a downstairs door that leads out to the garden.

I'd block that up and you could put some more units here.

So, overall, for around 60 grand?

Well, I can't help but think you get a lot for your money.

'Under the stairs, there's a large cellar.

'This wouldn't need too much work to turn it into living space

'or another bedroom, if a window can be made.

'However, bedrooms are something this property is not short of.

'There are three on the top floor.

'Two are well-proportioned doubles and the other a single,

'which you may be tempted to turn into a bathroom.

'But with lots of cosmetic work needing to be done here,

'conversion of the cellar and adding another bathroom won't come cheap.

'You need to find a calculator and work out if it's worth it.'

# Was it worth it?

# Yes, it's worth living for... #

I've seen many terraces like this in Chatham.

Usually, you'd expect just a yard.

But with this property, look!

You get all of this - a really nice sized garden.

One of the bonuses is, if you can't park at the front of your house,

well, look, there's the other street so you could park there

and come all the way in through the back door.

I think that is a great selling point.

'This extra space at the back

'may make up for the train line outside the front door.

'What are the prospects for this property?'

Done up, this house is probably worth around 120,000.

So, with a guide price of 65 grand, you're thinking, "Hm! There could be cash in this."

Well, on paper and in theory, yes, there is.

The problem that you're likely to face is actually selling the thing.

The resale market in Chatham is flat as a pancake at the moment.

If you're intent on recouping the cash and pocketing the profit,

you may very well end up disappointed.

# See these lines?

# Truly disappointed

# Truly, truly, truly

# A-a-ah. #

'We asked a local estate agent what he truly, truly thinks

'of this auction lot guided at 65,000.'

My first impression is that there is an awful lot of work here.

It looks to me like there's issues with floorboards, the stairs, wiring

and the windows may need to be replaced.

I would think you'd need to spend 10,000 or 15,000 on this property.

That might be more if there's other issues uncovered, such as damp.

You never know until you start on a project like this.

'He's absolutely right.

'There is obvious cosmetic work to be done, but scratch the surface

'and there could be more worrying issues to tackle.

'Once all these were fixed, however, how much could this place be worth?'

Done up, depending on the standard of finish,

I think you could achieve something in the region of £115,000.

I think the rental per calendar month on this property

would be £650 to £700.

This is a fabulous rental with a decent profit built in for sunnier market conditions.

I just hope whoever bought it was prepared to keep hold.

Let's find out who that was at the auction.

Lot 29. We've got a guide of £65,000-plus.

Start me where you will. 65,000? It'll be worth all of that.

Three bedrooms. 65,000 anywhere?

Hands should be springing up like mushrooms. £65,000, thank you.

68? 68 is bid. And 70?

70 I have. 72?

74 is bid. 76. 78.

And 80. £81,000 I have. 82 I'm bid at the back.

And 83? 83. And four?

84 is bid. 85?

86. And 87? 87.

88? 88 is bid. And 89?

And a half. And 89? 89.

And a half. And 90?

And 90. And a half? And a half.

91? And a half. And 92?

And 92 and a half?

92,000, gentleman's bid. 92,000 for the first time.

At 92,000 for the second time.

92,000, third and final time?

At £92,000. Are you all done...?

BANGS GAVEL Sold at 92,000...

'First to cross the finish line with his bid of £92,000,

'27 grand over the guide price, was plumber Ian.

'He lives around 30 minutes away in Brands Hatch.

'So, it was a race back to the property for the two of us

'to hear what he believes is the winning formula for this place.'

-Ian, congratulations.

-Thank you very much.

-Why did you want to buy this at auction?

-Cos I need to earn some money, basically.

-You need to earn some money, so that means that you need to get this at a good price.

-That's right.

-But you paid £92,000.

-I did and it was a bit more than I wanted to pay.

-It wasn't exactly a steal.

-No, it wasn't.

I see this house as a great little renter.

-What are you going to do with it?

-My intention is to sell, actually.

-I'm not into renting.

-What are you going to do to turn it around?

Well, it needs, obviously, a new kitchen, new bathroom,

cosmetic works completely, new heating system.

I'm a plumber, so the heating's not a problem.

Partial electrics. Fuse board's in a bad way.

Generally needs updating, bringing up to scratch.

-I detect that you're going to be doing most of the work.

-I'll do 99% of the work.

'Ian has flexible working hours and hopes to manage most of the work himself.

'That will save him money, but as he's more keen to sell than rent,

'I want to hear how he's organising the finances to make a return on his investment.'

What is your budget for the work?

I estimate about 12,000 to 15,000.

What do you think you could sell this property for?

-Well, I know that one sold for 116,000 recently.

-Hm.

-So, maybe 116, 120.

-OK. So that's not a lot of profit.

-There's a little bit.

-It's not a great earner.

But at the minute, work-wise, in the outside world,

it's pretty tight.

I was looking for something to give me some income, basically.

I'm going to put this to you, then you can tell me to shut up.

The market is quite flat for sales. This would rent really well.

You can achieve as much as 650 per calendar month for a property like this.

Have you not thought about holding on to it?

I'm not ruling out renting at all.

If I can sell for the price I need to sell for, fair enough. If not, then I will rent.

'Although Ian has a history of working in properties,

'this is his first solo development project.

'If this goes well, it may be the first of many.'

How many of these a year are you hoping to turn over?

I'd like to do two, I suppose, in between other things I'm doing.

It should produce a reasonable amount of turnover.

-What are you most worried about with this project?

-Keeping the budget in!

My worry for you is that you stick to the budget and there's enough profit in it for all your hard work.

Yeah, well. I mean, profit's profit and earnings are earnings.

As long as I get what I think I should get for it, that's fair enough.

I'm not looking to make loads of money. I know it's not going to be a big earner

Ian, you have got a great work ethic and, like you say, any profit is a profit.

In these hard times, it's worth grafting over.

It's lovely to meet you. Good luck with this project.

-I can't wait to see how it turns out.

-I hope it's nice. Thank you.

I'm pleased Ian doesn't think he'll retire on this one, but he's right.

Some profit is much, much better than none.

I'm also pleased he'll consider renting, if he has to,

as this could be a really nice slow-burning earner.

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

'Coming up, I'll have to hedge my bets in Derby.'

The actual plot itself...

..is somewhere behind those bushes!

'We return to Kent to find out if Ian did buy a money-spinner.'

This job was a lesson in budget control!

'But first, back in Barry, was the work here a pleasure?'

It's just been one adventure after another, if you like.

'Time to wend our way back to Wales and the seaside town of Barry.

'This shop was sold at auction and included a four-bedroom flat above.

'It was bought for £65,000 by Ian, a pleasure park owner,

'who was planning a development of 190 flats there.

'But remind me, what did he plan to do here?'

-Maybe I could split it into two living accommodations.

-Right.

And maybe have one two-bedroom flat downstairs

-and a two-bedroom flat upstairs.

-But you've got to get planning permission.

-Yeah.

-How do you think that'll go?

-Hopefully, it won't be a problem.

But everything I do is a learning curve.

MARTIN LAUGHS So we'll see what happens.

'So, how did he get on with those pesky planning permissions?

'We're here to catch up with Ian seven months on.

'It looks like the shop is closed for good.'

It's a brand new house.

It's a building within a building, to be quite honest.

We've created two two-bedroom flats.

Downstairs, we've knocked all the way through to put two bedrooms

where the lock-up shop was and its bit of warehouse.

It's now become two bedrooms.

Just really blasted all the way through from top to bottom.

Plastered all the walls, rewired, et cetera. Yeah, the whole works.

'What a great job he's done.

'It's clean, bright and modern with brand new bathrooms and kitchens

'in each of the flats.'

There used to be a wall along here, which we've opened up

to make it a kitchen/living room.

There's a bathroom next door. This used to be the master bedroom.

It's worked out quite well. I'm very pleased with the kitchen.

'It hasn't all been plain sailing.

'Ian had a bit of difficulty getting the planning approval,

'but not for any of the work inside.'

There was going to be two doors to the front of the premises,

so each flat would have its own access.

But again, the council decided

that they wanted to keep it within keeping of the street.

So it had to be the one entrance.

We had to amend, if you like, and just put the one doorway in.

So the two flats have got a shared hallway coming into the premises.

'Originally, he'd hoped to get the work done in three months,

'but it's just over double that time.

'The issue of the front door set him back a few weeks.

'What else delayed him?'

I didn't realise there was so much work involved with the property.

It's an old-build. All the walls are skew-wiff.

The floors were out. It's just been one adventure after another.

'What about his budget?

'He had thought he'd need to spend between £15,000 and £20,000

'to convert the property into two flats.

'How's that figure looking now?'

I've ended up spending around 40... £45,000 it'll be.

Around that figure.

Too much. LAUGHS

'Hm, indeed! Over twice the original estimate.

'Hopefully, he'll at least make his money back.

'Before we find out,

'what's the plan for the flats when they're finished?'

I always had it in mind for me daughter to have the bottom flat,

Rebecca.

She's excited to move in.

Unfortunately, the bathroom is not finished downstairs.

This one on the top floor, I'm either selling or renting.

'Maybe some figures will help Ian decide.

'We asked along two local experts

'to give us their thoughts.'

The flats are looking very well conditioned.

Refurbished to a high standard.

Any first-time buyer, investor,

would be very interested.

Especially the ground floor, which has its own garden.

Both flats have been converted professionally

to a very good standard.

I particularly like the ground floor flat with a courtyard style garden

for someone to enjoy the sunshine.

Upstairs, even though it doesn't have outside space, is on a par presentationally.

I think they'll achieve plenty of interest, whether they be sold or let.

The standard of finish is very well presented.

It has been done to a high standard.

It is a sought-after area, especially for first-time buyers.

It's near all amenities - shops, schools and public transport.

'Let's talk figures, then.

'How much could Ian sell each flat for?

'Remember, he paid £65,000 for the property and spent £45,000 on the work.

'That's a total outlay of £110,000 on both flats.'

I would value the ground floor flat at £70,000.

It'll have the edge on the first floor, due to the garden space.

Upstairs, I would put between £65,000 and £68,000.

The ground floor flat would resale for £74,000.

It does have the garden, so it would be more sought-after.

The first floor flat would resale for...£68,000.

'If you take the top two figures for both flats, that's £142,000.

'Potentially, a profit of £32,000, minus tax and expenses, of course.

'What does Ian make of that?'

Yeah, I'm quite happy - very happy with those valuations, to be honest.

Yeah. I was expecting around the 70,000, 75,000 per flat.

So, um... I have spent a lot of money on these flats.

It's a new-build, really, you know what I mean?

So, um... I'm happy with that. That's fine.

'What about rental figures on both flats?'

Both flats, for me, would be lettable at £525 per month.

The ground floor would probably let easier because of the garden space,

but I do feel we'd get 525 for both of them because of the professional conversion that's been done.

The ground floor flat would rent for £550 per calendar month because it does have the garden.

The first floor flat would rent for £525 per calendar month.

I'm looking at 550 for both... for both flats, to be honest.

So it's not that far away.

'Have those estimates helped him decide

'what to do with the first floor flat?'

I would prefer to sell it, but it's about the right tenant.

If the right tenant approaches me, I'm quite happy to rent.

But I would prefer to sell. Get me money back in the pot.

'Keeping his options open for now, then.

'Has Ian enjoyed this, his biggest project so far?'

It's ups and downs, swings and roundabouts and it's had its ups and downs.

When I saw the carpets go in this morning, I was well lifted.

So a few beers tonight. Happy times ahead.

'I'm in the Midlands

'in a residential suburb just over a mile from Derby city centre.'

The property I'm here to see isn't a "property" at all.

It's a plot of land, but before you go, "Eugh, boring!"

Not at all.

Over 20,000 people in the UK decide to self-build every year.

It's an opportunity to build something to your own design

and it could save you a lot of money.

So "plot of land" equals "opportunity".

'Sometimes, a self-build project can cost more than buying a house

'and it is crucial to make sure you have the most suitable plot.'

One of the things you look for when you choose a plot is access.

Fantastic! You've got a bus route into the city centre.

That's a great start, a very good selling point.

This is the plot of land itself.

It's flat. We like that. It's very close to amenities.

There are probably gas pipes here, water, things to connect to.

But the actual plot itself...

..is somewhere behind those bushes.

# I can't look at hovels and I can't stand fences

# Don't fence me in... #

'The front of the plot has been used for parking and has a dropped kerb,

'giving good access for any building equipment.

'Unfortunately, the rest of the plot is off limits,

'so it's tricky to see what the layout might be like.'

The rest is over this fence and, as you can see, terribly overgrown.

When you combine it with this bit at the front, it's not a bad size.

And it gets better.

It has outline planning permission for the building of two properties.

'That's right, two, with integral garages.

'Let's get an idea of the dimensions of this plot.

'It's actually 232 square metres.

'If you're of a different vintage and prefer feet and inches,

'it's 2,497 square feet.

'That's very roughly the size of a tennis court.

'So, what are we talking here? What could you build?'

The plot currently has this outline planning permission

for two two-bedroom semis.

To be fair, getting that outline planning permission is a real big step in the planning process.

If it's going to fail, it's likely to fail at that stage.

It's not the end of the story. You have to apply for full planning permission.

They'll look at things like materials, the design of the properties.

You're not there yet, but you're a lot closer than if no planning permission was in place.

'Full or detailed planning permission

'also covers the positioning of the semis on the plot,

'plus the siting of windows and drains and the like.

'Basically, as the phrase implies, it covers all the finer detail.

'I think there's definitely some money to be made here.

'With that guide price of £17,000,

'this is a different proposition to buying a house.

'If you're not a developer and this is a self-build,

'you'll need to find a specialist who deals in mortgages for home building and a deposit.

'The lender usually provides the cash in instalments

'at agreed stages of work.

'Would it be worth taking a punt in this location?

'I think so, but what does a local property expert reckon?'

This is a very tight plot of land.

I think it would be difficult to build a residential property

of any note here.

The shops opposite also detract

from the area as a residential area.

It's not the right place to build a commercial property, either,

so the council are quite happy with the residential pair of semis.

I think that's the best use of the land.

'Hm, that's not hugely positive.

'Could there be any other option for a developer?'

The alternative to the proposal here would be a block of flats.

I think there'd be room to put four flats on.

It's quite an inexpensive area. It's good for renting and it's close to the city centre.

'Opting for flats would mean going through the whole planning process again

'and there's no guarantee you'd get permission.

'This is a case where homework is required.

'Not least about whether you'd want to live in, sell or rent the properties.'

Once built, they will almost certainly be rental properties.

It would be difficult to sell a property here in the current climate.

'He sounds very definite.

'What returns might be possible for this place,

'that had a guide price of £17,000 plus building costs?

'What would a semi rent out for?'

The rental income would be approximately £450 per calendar month.

'And if things changed in the market,

'what could a new two-bedroom house achieve, if sold on?'

If these properties were marketed for sale,

they'd make around £90,000 each.

Certainly a lot of work involved with a self-build,

but for some people, a bit of a dream to take on such a project.

As you're building two houses, maybe you could build one and sell it to pay for the other.

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

Lot 43, a nice little site

with consent for a pair of semi-detached houses - start me where you like.

Can I say 20,000 for it? 20,000?

18?

£18,000?

15 to start me? 15,000?

15 is bid here. Thank you.

At 15, my opener. 16 is bid. At 16. 17?

17,000? At 17.

£18,000?

At £17,000. 500. 17,500?

17,500. 18?

At 18,000. 500. 18,500. 19.

19,000. It's in the market, no mistakes. We're selling it.

At £19,000... 500.

20,000.

20 and a half. 21? 21,000.

500. No.

21,500. 22 somewhere else?

At £21,500 going once. Twice, third time...

Sold at 21,500. Thank you.

'That final bid of 21,500

'was placed by Burton-on-Trent based builder, Rob.

'He was at the auction with his wife, Karen,

'who was clearly pleased with their plot purchase.

'I met him at the site

'to hear if he was going to play it safe and build the two semis,

'or if he was planning to go off-plan.'

Rob, congratulations. Tell me why you wanted to buy the plot.

Basically, as an investment so we can carry on working.

We've got one or two plots that we buy and build.

-That's your background and your job, a builder?

-Yeah.

And why a plot of land rather than a refurbishment?

-We find it easier to do a new-build than refurbing.

-Really?

-Yeah.

-In terms of what?

-You put in what you want to.

You start from afresh and it's all OK.

They say that sometimes knocking a house down and starting again is cheaper than patching it up.

-That's what you're obviously buying.

-We think so, yeah.

-How many thing like this have you done?

-About 19.

-19?!

-Yeah.

-And how have they gone?

OK. Sold most of them. Kept a couple back, rented them out.

-Are they mostly in this area?

-Burton, south Derbyshire and Derby.

-How many years have you been doing this?

-About 12 years.

-Right.

-Do you still get satisfaction seeing things come out the ground?

-A lot of satisfaction.

Let's talk about this particular plot.

It's not the most obvious choice. There's some issues about it.

What attracted you to it?

It was available and it was cheap at the time!

'Short and to the point, but at least he's honest.

'Rob will stick to the planning permission and build two semis,

'but he's hoping to reuse some old plans he had drawn up

'for a previous project.

'He feels that, with a few minor tweaks, those plans could work just as well on this site.'

So, from your point of view,

using existing plans saves in terms of architect's fees.

-It does, yeah. Saves quite a bit.

-And also time.

-This is the ground floor.

-We've got parking spaces in front.

Front door into sitting room. Kitchen in the back. WC.

Then upstairs, you've got your two bedrooms and a bathroom.

The plans that had outline approval had an integral garage. You decided not to go for that?

We're trying to get two parking spaces on the front of each property and get more living space.

'So, other than a few tweaks here and there, Rob is ready to go.

'As he's built from these plans before,

'he should know if there are any potential pit-falls.

'All going well, he's hoping to complete each house

'for a maximum of £50,000.'

# If you want it Go out and get it

# You've got to do it yourself Do it yourself... #

Talk me through how the £50,000 per property comes out.

You've got your main materials, your sewer connection, electric connection, gas, water.

That'll eat into a lot of the money.

What's the timescale for getting this sorted out?

Three months for planning, then nine months to build them.

-So a year from now we should see something on the plot?

-Yeah.

The plan for these, is it to sell them or to keep them?

We're hoping to sell them, but if the market's still as bad then we'll rent them out.

-What's next on the agenda for you? More plots of land?

-Oh, yeah.

We're looking for another plot.

We'll go to the next auction, see if anything turns up.

-Congratulations. We look forward to seeing how things come out the ground.

-Thanks very much.

Rob's clearly got the experience to make a success of this project.

But there's still planning issues to resolve

and will he be able to sell the properties once they're built?

Find out how he gets on later in the show.

Time has passed since we last saw those properties.

Have the renovations been plain sailing

-or bumpy rides?

-Let's go back and find out.

'Back down the Medway now to Chatham and this three-bedroom terrace.

'It offered great rental potential to someone willing to invest the time and money.

'Enter Ian, a plumber by trade,

'who bought it at auction for 92,000 -

'27 grand more than the guide price.'

Why did you want to buy this at auction?

I need to earn some money, basically!

-You need to earn some money, so that means you need to get this at a good price.

-That's right.

-But you paid £92,000 for this.

-It was a bit more than I wanted to pay.

-It wasn't exactly a steal, was it?

-No. It wasn't.

'Ian may have paid more than he'd hoped to secure the property,

'but what he did have on his side was experience

'and the ability to do a chunk of the work himself.

'We've come back just over seven months since I met him

'to see how it looks now.

'The ground floor has been freshened up throughout.

'The only detail missing is carpets,

'but that's because Ian chose not to put them down.

'This allows whoever purchases the property

'to make their own choices, thus making their personal mark.

'But everything else downstairs - done.'

The kitchen's been completely renewed. Everything's nice and tidy.

The archway into the kitchen was covered in Artex and very small.

I've extended the opening, made it much bigger, replastered everything.

The patio doors did have big brick columns in the corners

and it was very much subduing the light into the room.

It's been opened up completely. All brand new.

Fresh paint to make it nice and tidy.

'Ian opted to keep the bathroom on this floor,

'as he didn't want to lose any of the three bedrooms.

'Speaking of which, let's see how they've been transformed.

'As with downstairs, everything's been freshened up.

'Throughout the whole property, Ian has replastered, rewired,

'replumbed, installed central heating and new windows.

'So, plenty of work - and there could be more.'

The house is calling out to have more done to it, but financially, it's not viable.

The cellar needs some work done to it.

The loft is amazingly large.

You could easily have a loft room put into it.

Having said all that, that's not in my budget

so what I've got is what I've got.

'Ian's done the sensible thing.

'While he realised the property's potential,

'he didn't allow himself to get carried away and always kept the budget in mind.

'His original estimate for the work was 15,000.

'Did he stick to that?'

I spent between 10,000 and 11,000.

This job was a lesson in budget control.

LAUGHS It needed to be the right budget.

It is an area that doesn't sell at high prices so the budget was important.

# It's hard to control myself It's hard to control myself... #

'But control himself Ian did!

'And a little Hammer hint to learn from him is,

'make sure you know what sort of price you'll achieve

'at the end of your project, as this should help you trim that budget.

'This house is now complete, including a tidy up of the garden

'and repainting the front of the property.

'While Ian spent less than he'd hoped, it took more time than he'd planned.

'Talking of time, did he have a good one here?'

I do this all the time, so...it's bread and butter to me.

LAUGHING: It's not a question of enjoying.

It's come out quite nicely and I'm pleased with the finish.

So no problems.

'No problem is what we like to hear.

'It's high time we asked two local property experts

'what they think of it now.

'Are they impressed by Ian's renovations here?'

First impressions are very good.

The house is smart, clean, fresh.

I think the target market will probably be impressed.

Possibly, the property's done to a higher standard than it needed to be, but very nice house.

My first thoughts coming back today

are that they've done a reasonably good job on the refurbishment.

It's as good as you can get, I think, for this type of property.

'Could it see some very healthy returns?

'Ian paid 92,000 at the auction to purchase the house

'and spent around 11,000 on the renovations.

'What could he expect to earn on this investment if he was interested in letting it?'

If this property was rented, I think it would achieve

a figure of between £650 to £700 per calendar month.

I'd expect the property to achieve around £650 per calendar month.

That's about right. That's what I thought in this local area. OK.

'So it could yield up to 8%,

'which is a more than respectable rental return.

'But right from the starting grid, Ian was keen to sell.

'What would these experts suggest he could get for it?'

I would be looking to market it around the 125,000 mark,

probably to achieve around 120,000, 123,000, that sort of price.

If I put this property up for sale, I would expect to achieve

something in the region of 115,000 to maybe 125,000 at tops.

That's a little bit more than I expected, so that's fine. That would be very good.

'With Ian's total outlay of 103,000,

'his investment could generate a pre-tax profit

'of 12,000 to 22,000.

'It's promising to hear the estate agents think he could achieve a bit more than he'd bargained for.

'This may have been Ian's first solo project, but the grand plan

'was to make property renovation part of his future career.

'Does he feel the same now this one's complete?'

I would definitely do it again. I've had a good time.

Everything went according to plan.

So, the maths works. Job works. OK. Fine.

'We're back in the Midlands and it's destination Derby,

'where earlier I met builder Rob.

'He purchased this plot of land at an auction for £21,500.

'Along with the land, there was outline planning permission granted

'for two semi-detached properties,

'which was the route Rob planned to go down.'

Why a plot of land rather than a refurbishment?

-We find it easier to do a new-build than refurbing.

-Really?

-Yeah.

-In terms of what?

-You put in what you want to.

You start from afresh and it's all OK.

They say that sometimes knocking a house down and starting again is cheaper than patching it up.

-That's what you're buying.

-We think so.

'Rob had plenty of experience on his side,

'as he'd already built two similar properties.

'He hoped to combine the design with the planning permission in place,

'with the aim of getting detailed planning permission in three months.

'Then the builds would be finished nine months later.

'However, it's now 22 months since we last saw him.

'Will the two semis have risen from the jungle?

'So, two clean-cut new-build semi-detached properties.

'Each has a downstairs loo,

'a living room with access to a good sized garden

'and a kitchen on the ground floor.

'Upstairs, there are not two bedrooms but three -

'two doubles and one single -

'and there's a family bathroom, too.

'The houses are mirror images of each other,

'except that the one on the left is a couple of weeks from completion.

'So, come on, Rob, what happened to that one-year timescale?'

We went to the council with a set of plans which they wouldn't accept.

We tried to make them slightly bigger and move them back a bit,

to make the rooms squarer.

Because it had already got outline planning,

they'd got a footprint of what they wanted to work to.

We've had to keep going back until they'd accept the drawings.

It's took us nearly 16 months to get planning permission.

# I'm on a mission

# I've got a vision I'm planning permission... #

'Well, that just goes to show that even someone as experienced as Rob

'can get caught out when it comes to planning.

'While the outline planning permission is a great starting point

'things can get sticky when it comes to getting agreement on details,

'especially if you want to alter them.

'Obtaining full planning permission can cost a lot of time and that means money.

'Having been there and done that, what's Rob's advice?'

Make sure it's got full planning, where you wouldn't have a long wait like we had.

# Been a long time, been a long time

# Been a long, lonely time... #

'Once the wait was over, Rob and his crew were able to get cracking.

'There was no shortage of work to do.'

We cleared the site, excavated the foundations and concreted them,

built the brickwork up to damp proof course,

then built the shells up to roof height, put the roofs on,

then complete them, plastering internally, electrics, plumbing.

It took us about six months. The finishes are very good.

The only down side is that the master bedroom could have done with being half a metre bigger.

'Although waiting for planning permission forced Rob to go well over his one-year timescale,

'given that he'd estimated work would take nine months,

'getting it nearly done in six is impressive stuff.

'What has been the most satisfying part of the journey for him?'

Finishing it. And hopefully selling them.

'No wonder he's got a smile on his face,

'having almost reached the end of this lengthy build.

'Will he still be smiling when his properties are valued?

'This has been a tricky market and when we first met, it was suggested

'this might be best for rental.

'What do two local estate agents

'make of this project now?'

They've been done to a very, very high standard.

Obviously a little bit of work

to get them into the right state.

However, I think they are done very well indeed

and bring a welcome addition to the area.

My impression of this pair of semis that the builder's put up

is that he's created very successfully

a silk purse out of a sow's ear.

The sow's ear being the bit of scrub land, and he's created two very nice properties.

'Adding up all Rob's costs,

'including the £21,500 he spent on buying the plot,

'plus his legal, planning and other fees,

'makes a grand total of £164,000 for the two houses.

'What could these semis sell for?'

Having inspected this property and assuming next door is finished to the same specification,

I would suggest to the builder that he markets the properties at around about £105,000 each,

to achieve a final selling figure of £100,000 per property.

If we were asked to market these properties for sale,

I would suggest that we'd aim to achieve £100,000 per property.

In order to achieve that, it would be sensible to ask £103,000 per property.

That's fine. That's where we were expecting it to be.

'With both estate agents agreeing that the final sale price for each would be 100,000,

'brings the total to £200,000.

'So, Rob stands to make a pre-tax profit of £36,000.

'Although he's keen to sell,

'if he can't get the right price, he'd consider letting them.

'What might he be able to get for that?'

If the properties were not to be sold but were to be rented,

I would suggest under present conditions,

each property would attract around £450 per calendar month.

In my opinion, if the builder decided to rent the properties,

I would suggest that he rents each property out

at between £500 and £575 per calendar month.

A little bit on the high side for this particular area,

but due to the specification and the lack of other new-build properties,

I feel that this would be definitely achievable,

with young families looking to move into the area and close proximity to the city centre.

I'd have thought it'd be about £500 a month.

'So, quite varying rental valuations.

'As both of them agree that the properties would be popular,

'it seems fair to say it's not an option Rob would need to explore.

'What's next for him and his team? A well-earned break, perhaps?'

No! The plan is that we work for as long as we can for ten years.

Hopefully, we'll retire after that.

'No rest for the dedicated!'

That's it for today. We'll be back with more thrills and spills from the auction room next time.

-Join us then for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

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