0:00:02 > 0:00:04Hello. Now in the current tricky market conditions
0:00:04 > 0:00:08it can be quite hard to find your own piece of house heaven.
0:00:08 > 0:00:12- Whether it's large or small, auctions are often a very good place to start.- Yes.
0:00:12 > 0:00:15That's why we follow them here on Homes Under the Hammer.
0:00:41 > 0:00:45Well, if you've decided to take a gamble and place a bet on property,
0:00:45 > 0:00:49- then you may want to buy at auction. - Yes, the atmosphere is electric
0:00:49 > 0:00:52and the action, well, it's fast and it's furious.
0:00:52 > 0:00:55So here are the properties we're featuring on today's show.
0:00:56 > 0:01:00First up, there's a surprise up this path in Devon,
0:01:00 > 0:01:02which leads to this. Enormous.
0:01:02 > 0:01:05But you know what? It doesn't stop there.
0:01:06 > 0:01:08I'll be in Thornton Heath, Surrey,
0:01:08 > 0:01:12brewing up some ideas to extend the kitchen here.
0:01:12 > 0:01:15Just think of all the lovely delights you could then cook up.
0:01:16 > 0:01:20While this grand mansion house in Cumbria isn't so grand inside.
0:01:20 > 0:01:22We've got wet rot, we've got dry rot,
0:01:24 > 0:01:27what else is in store?
0:01:27 > 0:01:29These properties have been sold at auction.
0:01:29 > 0:01:31We'll find out who bought them
0:01:31 > 0:01:34and what they paid when they went under the hammer.
0:01:34 > 0:01:36Selling away.
0:01:44 > 0:01:48I'm in Honiton, East Devon, an area built on the lace industry.
0:01:48 > 0:01:53In fact, Queen Victoria had her wedding dress made out of Honiton lace.
0:01:53 > 0:01:56It's a lively spot with a good selection of shops and markets.
0:01:56 > 0:01:58A good place to buy a property.
0:01:58 > 0:02:02# It's a nice day for a white wedding
0:02:04 > 0:02:09# It's a nice day to start again! #
0:02:09 > 0:02:12It may not now be the place for wedding dress material,
0:02:12 > 0:02:15you're more likely to find a wedding cake,
0:02:15 > 0:02:20but it could be a good place to start again, particularly when you see what's on offer.
0:02:20 > 0:02:24The auction lot I'm here to see is literally right off the high street.
0:02:24 > 0:02:26You access it along this little road here,
0:02:26 > 0:02:30underneath some kind of like an archway underneath the buildings.
0:02:30 > 0:02:34Very interesting it sounds indeed. £75,000 was the guide price
0:02:34 > 0:02:38for what sounds like a lot of buildings.
0:02:38 > 0:02:41I mean, this is one of them. This is a single storey.
0:02:42 > 0:02:44But that's only the start of the story.
0:02:44 > 0:02:47The rest of it, it's back onto the high street.
0:02:47 > 0:02:51So, part one is this single storey tin roof barn
0:02:51 > 0:02:54that currently houses, well, quite frankly,
0:02:54 > 0:02:58just junk, but it's been used as a workshop in the past.
0:02:58 > 0:03:02And although some of the other parts of this lot are just next door,
0:03:02 > 0:03:05currently it's a bit of a trek to get round to them.
0:03:05 > 0:03:09I can already see that getting large machinery to the site could be a problem.
0:03:09 > 0:03:13There's a second access to the property down this road here,
0:03:13 > 0:03:17which leads to this two-storey barn. Enormous. But you know what?
0:03:18 > 0:03:20It doesn't stop there.
0:03:20 > 0:03:23As well as the single-storey building,
0:03:23 > 0:03:25there's also this large, two-storey barn
0:03:25 > 0:03:29which comes with parking spaces and a reasonable amount of land.
0:03:30 > 0:03:32Wow! And, as if that wasn't enough...
0:03:33 > 0:03:37Finally you've got this big bit of land at the back.
0:03:37 > 0:03:39So all in all,
0:03:39 > 0:03:42this is a very large plot.
0:03:42 > 0:03:46And a very large jigsaw. It's partly the access that makes this site
0:03:46 > 0:03:48more complicated than it really is,
0:03:48 > 0:03:52because, in fact, this land is at the rear of the two buildings,
0:03:52 > 0:03:56and the two barns/workshops are attached internally.
0:03:58 > 0:04:01That final bit of land is adjacent to the buildings,
0:04:01 > 0:04:06so it's actually one large site, it's just accessed from different points.
0:04:06 > 0:04:10But what could you do with it? At present there's no planning permission,
0:04:10 > 0:04:15but the local council aren't averse to seeing a residential development.
0:04:15 > 0:04:17So with its position so close to the town centre,
0:04:17 > 0:04:20this looks like a developer's dream.
0:04:23 > 0:04:26What does the auctioneer who sold it think will happen here?
0:04:26 > 0:04:28And who might this lot appeal to?
0:04:30 > 0:04:33I think two categories. Either someone who's going to make
0:04:33 > 0:04:36light industrial, storage, warehousing use
0:04:36 > 0:04:40of the existing buildings and the land behind,
0:04:40 > 0:04:44or residential developers who, instead, will see this as a chance
0:04:44 > 0:04:47of nearly half an acre in the middle of a town
0:04:47 > 0:04:49to scat over the existing buildings
0:04:49 > 0:04:51and try and get as many new dwellings,
0:04:51 > 0:04:54or flats, as possible on the land.
0:04:54 > 0:04:57With what was a £75,000 guide price,
0:04:57 > 0:05:00on the face of it you get a lot for your money.
0:05:00 > 0:05:05But with site clearance and building costs, is it a good investment?
0:05:05 > 0:05:09If you just took the point of view that somebody could perhaps get
0:05:09 > 0:05:12three detached bungalows or houses,
0:05:13 > 0:05:17you're going to be looking at, say, a hundred a plot, for example.
0:05:17 > 0:05:19If the council say, OK, we'll let you have four,
0:05:21 > 0:05:25they're probably going to be worth 85 or 90 a plot.
0:05:25 > 0:05:28If they said, we'll let you have five,
0:05:28 > 0:05:30they're going to be worth 75 or 80 a plot,
0:05:30 > 0:05:33so each extra plot would be worth a little bit extra
0:05:33 > 0:05:36but not another £100,000.
0:05:36 > 0:05:39So there could be some money to be made here.
0:05:39 > 0:05:43But without planning permission, this site is a risk. It's quite a lot
0:05:43 > 0:05:46to pay for some scrubland and two ramshackle buildings.
0:05:46 > 0:05:51So all in all, a very interesting development opportunity.
0:05:51 > 0:05:55It doesn't have planning permission, but I reckon, given the location,
0:05:55 > 0:05:58it wouldn't be too much trouble to get it, and if you did that,
0:05:58 > 0:06:01boy oh boy, the numbers really do start to stack up.
0:06:01 > 0:06:05Let's see who fancied the opportunity when it went under the hammer.
0:06:08 > 0:06:10So, who's going to say to us 40,000?
0:06:11 > 0:06:1540 we've got. 40 we're away. I've got 40. 45?
0:06:15 > 0:06:1745. Have I got 50?
0:06:17 > 0:06:21I've got 55. I've got 60. I've got 65.
0:06:21 > 0:06:2565. 70. Hell's bells. 70.
0:06:25 > 0:06:2875. 75. 75. At 75.
0:06:28 > 0:06:31Are you sure? This gentleman here has got it at 75.
0:06:31 > 0:06:34And 80 I'm asking of you, sir.
0:06:34 > 0:06:37At 80. A wry smile there, at 85. 85.
0:06:37 > 0:06:3990? 95.
0:06:39 > 0:06:4396, 97, 98, 99, one.
0:06:44 > 0:06:47101, and... two. And three.
0:06:48 > 0:06:51104. 104.
0:06:51 > 0:06:56104 and a half... If you say 110, he's almost certain not to come back.
0:06:58 > 0:07:00104 I've got against you. Looking for five.
0:07:00 > 0:07:03105. 105. Half. And a half.
0:07:04 > 0:07:08And six. 106. At 106. And a half?
0:07:08 > 0:07:10And 106 and a half. 107.
0:07:11 > 0:07:15107. 108? 108. Call it nine, then.
0:07:15 > 0:07:17At 109.
0:07:17 > 0:07:19110, 111.
0:07:20 > 0:07:22111. I've got all the ones.
0:07:22 > 0:07:25At 111 for the first time, then.
0:07:26 > 0:07:30111 a second time. At 111, one last glance.
0:07:30 > 0:07:32Going to be sold then at 111.
0:07:33 > 0:07:36So, for £111,000,
0:07:36 > 0:07:40the successful bidders were recently married couple Dan and Abby,
0:07:40 > 0:07:42currently based in London.
0:07:42 > 0:07:45Abby works for an environmental charity that's involved
0:07:45 > 0:07:49in clearing up waterways with the help of local people.
0:07:49 > 0:07:54Dan's a structural engineer. He's always wanted to design and be involved in building his own home,
0:07:54 > 0:07:58and they've been searching for a suitable plot for a while.
0:08:02 > 0:08:07- Dan, Abby, lovely to meet you both. - You as well.- Congratulations.- Thank you.- Thanks.
0:08:07 > 0:08:11- Tell me why you've bought this very interesting opportunity.- Um...
0:08:11 > 0:08:13Well, we've been looking for a plot
0:08:13 > 0:08:16for about a year and a half, just for a single house,
0:08:16 > 0:08:20and keep missing out, and then this one came up at auction and
0:08:20 > 0:08:26- this is the one we got.- Right. So what was it about it that you liked, Abby?
0:08:26 > 0:08:30I liked where it was in Honiton, just off the high street.
0:08:30 > 0:08:34I thought it was a nice little town, it had lots of nice little shops
0:08:34 > 0:08:36and kind of a nice feel about it.
0:08:36 > 0:08:40To get a plot like this, right in a town centre, was really unusual.
0:08:40 > 0:08:43And there was kind of lots of potential.
0:08:43 > 0:08:46It wasn't, this is exactly what you're going to do here,
0:08:46 > 0:08:50- it's opened up lots of different ideas for us.- Wow.- So, yeah.
0:08:50 > 0:08:53- You must be really excited.- Yes, we are.- Really excited.
0:08:53 > 0:08:55We only picked up the keys today, so...
0:08:55 > 0:09:00- It's the first time Abby's been into the sheds.- It's the first time you've seen it?
0:09:00 > 0:09:04I've walked around but I haven't been inside. I'd only looked at photos he'd taken.
0:09:04 > 0:09:08And the photographs were much better than the actual reality of it.
0:09:08 > 0:09:10Selective.
0:09:10 > 0:09:14There's lots of hidden things, so it'll be interesting rummaging around
0:09:14 > 0:09:18- in all that stuff that's been left behind.- What do you think?
0:09:18 > 0:09:20I think it's fantastic, and we...
0:09:20 > 0:09:26We can... achieve most things we seem to put our minds to.
0:09:26 > 0:09:30Dan particularly, so I think we'll be all right, whatever works out,
0:09:30 > 0:09:32even if we end up converting a tiny bit of it.
0:09:32 > 0:09:37We would've been quite happy just doing this little one. That was how it started off.
0:09:37 > 0:09:41- "We'll do a small project," and we've ended up with this, so...- Yes.
0:09:41 > 0:09:43So after quite a long search
0:09:43 > 0:09:47they've now found the site that fits their needs - up to a point.
0:09:48 > 0:09:54But it's somewhat bigger than ideal, with .4 acres of land and two rundown buildings.
0:09:55 > 0:09:59Here you are, you've got this large plot. What are your plans for it?
0:09:59 > 0:10:02Do you have ideas right now what you're going to do with it?
0:10:03 > 0:10:07- Well, um...- Roughly, rough plans at the moment.
0:10:07 > 0:10:11Yeah. I mean this... Half the site's in a conservation area but
0:10:11 > 0:10:16they aren't expecting the buildings to be kept. In actual fact, I know this doesn't look like much
0:10:16 > 0:10:21but I quite like parts of it, so I'd like to keep the form...
0:10:21 > 0:10:25Sorry, we'd like to keep the form of the two existing buildings.
0:10:25 > 0:10:28Maybe have a one-bedroom studio here that we can live in
0:10:28 > 0:10:31while we're doing the work down here.
0:10:31 > 0:10:34These will make quite nice garages and workshops,
0:10:34 > 0:10:37and on the other side, the two-storey barn,
0:10:37 > 0:10:40we're thinking of maybe a live/work unit,
0:10:40 > 0:10:44so a two-bed flat above and some kind of design studio down below.
0:10:44 > 0:10:48- Oh, wow.- And we've still got the area at the back there to build a house.
0:10:48 > 0:10:52Then there's the third piece of land, which we don't know what we're going to do with yet.
0:10:52 > 0:10:57Once they get planning permission, sorting the studio flat will take priority.
0:10:57 > 0:11:00Initially, Dan will have to stay on site in their camper van
0:11:00 > 0:11:02once the build process starts.
0:11:02 > 0:11:06I can't help but wonder whether they've bitten off more than they can chew.
0:11:06 > 0:11:12Perhaps they'd be better moving this on and looking for a smaller plot to start their house-building dream.
0:11:12 > 0:11:17If a developer came along and offered you a shedload of money for it, as it is, would you sell it?
0:11:17 > 0:11:20If it was a shedload of money, yeah.
0:11:20 > 0:11:24Depends how big the shed is. No. I don't know, would we?
0:11:24 > 0:11:28Um... If it was a lot of money, yes, because then we'd have more money
0:11:28 > 0:11:31to actually build something next time and buy a plot.
0:11:31 > 0:11:33- But if it was, say, an extra ten, 20, 30 grand?- No,- No.
0:11:33 > 0:11:36- 50 grand more than you paid?- No.- No. - 100 grand more?
0:11:36 > 0:11:38We'd maybe think about it then.
0:11:38 > 0:11:42- Right.- Why, do you want it?- No. But, not that I don't think it's great,
0:11:42 > 0:11:47but that's interesting. If somebody said, 75 grand extra, now, you still wouldn't do it.
0:11:47 > 0:11:53We've spent a year and a half trying to find a plot and it's so... Each time you don't get one you start
0:11:53 > 0:11:58from scratch. You invest so much time and energy working out what you're going to do,
0:11:58 > 0:12:01to decide whether you want it, when you don't get it, it's disheartening.
0:12:01 > 0:12:05- Now we've got this we feel like we can move on to the next stage. - Fantastic.
0:12:05 > 0:12:10- I'm delighted for you. Good luck. - Thank you.- I'm sure there are challenges ahead,
0:12:10 > 0:12:12- but you'll face them.- Thanks.- Well done.
0:12:12 > 0:12:17# Baby, now that I've found you I won't let you go
0:12:17 > 0:12:20# I'll build my world around you
0:12:24 > 0:12:26# Mmm-mm... #
0:12:26 > 0:12:29Well, what a surprising turn-up for this story.
0:12:29 > 0:12:32I get the feeling Dan and Abby are a bit surprised to have got this.
0:12:32 > 0:12:36I'm not quite sure what they're going to do but I love their enthusiasm
0:12:36 > 0:12:40and I can't wait to see how they get on. There are challenges ahead
0:12:40 > 0:12:44but I'm sure they will face them with aplomb. Find out how they get on later in the show.
0:12:50 > 0:12:52I'm in Thornton Heath, South London.
0:12:52 > 0:12:56It's an ideal choice for commuters into the centre of the capital,
0:12:56 > 0:13:00courtesy of its rail link which takes just over 20 minutes.
0:13:02 > 0:13:04A short bus trip from the station
0:13:04 > 0:13:06will take you to the lot I'm here to see.
0:13:06 > 0:13:09It's in an area with a mixture of property types
0:13:09 > 0:13:12and is really popular with families.
0:13:12 > 0:13:17Now I know that two-bedroom houses are in high demand in this residential spot,
0:13:17 > 0:13:20and so it's great news today that I'm here to see
0:13:20 > 0:13:25a two-bedroom mid-terrace which had a guide price of 125,000.
0:13:25 > 0:13:29Here it is. So far so good. Time to have a look inside.
0:13:29 > 0:13:32This 1920s house looks recently repainted
0:13:32 > 0:13:36and the windows double-glazed, so that's a promising start.
0:13:37 > 0:13:40Well, it's certainly not as well-kept in here
0:13:40 > 0:13:42as how it looks on the outside.
0:13:42 > 0:13:48Very red, although it will look fantastic once you paint it some nice light-reflective colours,
0:13:48 > 0:13:50and get all this off. I bet under there,
0:13:50 > 0:13:55there's some beautiful spindles to reveal. First reception room here.
0:13:55 > 0:13:58What I notice straight away is the beautiful cornicing.
0:13:58 > 0:14:02It's really lovely. You've got a stunning fireplace there.
0:14:02 > 0:14:06So once all the work is done, that will be a really nice room to sit in.
0:14:06 > 0:14:08And, hello, hello, what have we got here?
0:14:08 > 0:14:12Well, second reception room here, which is a great space,
0:14:12 > 0:14:15but I'm not quite sure what this room is.
0:14:15 > 0:14:19I think it's being used as a utility space.
0:14:19 > 0:14:22I would take all this out and really open this room up.
0:14:22 > 0:14:25Then again you've got a lovely room to work with.
0:14:25 > 0:14:28You could have a kitchen/breakfast room.
0:14:28 > 0:14:31A very small sort of galley kitchen, not fantastic.
0:14:31 > 0:14:35I'm going to have a look outside and see how we can improve that.
0:14:37 > 0:14:42So the kitchen might be a bit small but you do have a decent-sized garden out here.
0:14:42 > 0:14:44Now, you could view this in one of two ways.
0:14:46 > 0:14:50On face value it's a lovely bit of outside space for a barbecue
0:14:50 > 0:14:53and it could be a great play area for the kids.
0:14:53 > 0:14:56Or you could think about the extension potential it offers
0:14:56 > 0:14:58and demolish these outbuildings.
0:14:58 > 0:15:03Then you could extend over the side return to increase the size of that kitchen.
0:15:03 > 0:15:06Just think of all the lovely delights you could then cook up.
0:15:06 > 0:15:10# I see the moonbeams on your forehead there
0:15:10 > 0:15:13# And I think about the garden of delights... #
0:15:14 > 0:15:16A small extension like this
0:15:16 > 0:15:19would be allowed within permitted development.
0:15:19 > 0:15:23That means you wouldn't need to apply for full planning permission.
0:15:23 > 0:15:25However, I'd always advise you to have a chat with
0:15:25 > 0:15:29your local planning department before you do anything structural,
0:15:29 > 0:15:32as it's better to be safe than sorry.
0:15:32 > 0:15:35I'm not sure if an extension would add much to the house's value
0:15:35 > 0:15:38by the time you've factored in building costs,
0:15:38 > 0:15:42but I do think it could totally transform the living space here.
0:15:42 > 0:15:44Let's see what's upstairs.
0:15:44 > 0:15:47Up to the first floor and you've got your bathroom.
0:15:47 > 0:15:51There. Can't open the door properly because the bath is in the way,
0:15:51 > 0:15:54so you will need to rearrange that space a little better.
0:15:54 > 0:15:57A good-sized bedroom at the back of the house.
0:15:57 > 0:16:01And then, through here, well, it's a huge master bedroom.
0:16:01 > 0:16:04You could think about having a partition wall in here, you know?
0:16:04 > 0:16:09You could put a wall along here, and that would allow you to create a third bedroom just here.
0:16:09 > 0:16:13But I'm not sure whether three-beds is the way to go here.
0:16:13 > 0:16:17And these two rooms would be really small. There's a part of me
0:16:17 > 0:16:22that would love to make the most of this as a fabulous master bedroom.
0:16:22 > 0:16:27Making this into a three-bedroom means you'd have to knock through a new window.
0:16:27 > 0:16:30Some of the houses along the street already have
0:16:30 > 0:16:32two windows at the front rather than one,
0:16:32 > 0:16:36so that might be a precedent if you wanted to go with that option.
0:16:36 > 0:16:40But if you're determined to get a third bedroom, I think there's a better option.
0:16:40 > 0:16:43I reckon that the loft might hold the answer.
0:16:43 > 0:16:48It would be worth seeing what the space was like and checking out if any neighbours have done it.
0:16:48 > 0:16:50Could three be the magic number here?
0:16:51 > 0:16:55Neither option would come cheap, so you'd have to calculate carefully
0:16:55 > 0:16:58whether the return would justify the outlay.
0:16:58 > 0:17:02There's already a pretty penny to be spent here, between holes in the plasterwork,
0:17:02 > 0:17:06walls needing to be stripped, a kitchen and a bathroom...
0:17:06 > 0:17:08Oh, the list just goes on.
0:17:08 > 0:17:10And you'd have to hope you'd bought it for
0:17:10 > 0:17:13somewhere near that guide price of 125,000.
0:17:14 > 0:17:17We invited a local estate agent along
0:17:17 > 0:17:19to hear what he makes of it all.
0:17:20 > 0:17:24Space sells. I think people like to have good-sized rooms,
0:17:24 > 0:17:28so I think if one can avoid it, keep it as a two-bedroom.
0:17:28 > 0:17:31If, however, you need that extra third bedroom, the option is there.
0:17:31 > 0:17:36So let's work out the finances here. Firstly, if the layout was
0:17:36 > 0:17:40left as it but the house given a full makeover,
0:17:40 > 0:17:42what could it sell for?
0:17:42 > 0:17:45Once the property's refurbished,
0:17:45 > 0:17:49we would put the property on the market at £225,000.
0:17:49 > 0:17:53Going with those same options, what about the rental?
0:17:53 > 0:17:57This property would rent for approximately £1,000 per calendar month.
0:17:57 > 0:18:00OK. How about if the buyer were to go down the route of
0:18:00 > 0:18:03creating another bedroom here?
0:18:04 > 0:18:08If one were to split the front bedroom, one could ask perhaps
0:18:08 > 0:18:12a little bit more. You know, perhaps try it at £229,000.
0:18:12 > 0:18:17By going up into the loft you could potentially create a three double-bedroom house,
0:18:17 > 0:18:22and hence one could probably try around £260,000.
0:18:22 > 0:18:27What impact would an additional bedroom have on the rental potential?
0:18:27 > 0:18:32If we split the master bedroom we could try £1,150 per calendar month.
0:18:32 > 0:18:34If one were to extend into the loft,
0:18:34 > 0:18:38one could rent the property for around £1,350 per calendar month.
0:18:41 > 0:18:45Not quite as simple and straightforward as it seemed from the outside,
0:18:45 > 0:18:49this two-bedroom house does need a lot of updating
0:18:49 > 0:18:52and there are a few more structural options to consider.
0:18:52 > 0:18:55Let's see who saw the potential when we went to the auction.
0:18:58 > 0:19:00Right, lot 38
0:19:02 > 0:19:06is a two-bedroom mid-terraced house.
0:19:06 > 0:19:09I like this one. Good value, excellent value.
0:19:09 > 0:19:14Who's going to kick off on this? 146. 147, yeah?
0:19:14 > 0:19:16148. 149?
0:19:16 > 0:19:19This proved a popular lot at the auction.
0:19:19 > 0:19:22We rejoin as someone was deliberating
0:19:22 > 0:19:24over making a bid of 180,000.
0:19:24 > 0:19:27I can't wait much longer. 180, well done.
0:19:27 > 0:19:29181?
0:19:29 > 0:19:31182?
0:19:31 > 0:19:36181 standing up. Looking for 182. If not, 181, standing up.
0:19:36 > 0:19:38First time, second time,
0:19:38 > 0:19:40third and last time. Have you all done?
0:19:42 > 0:19:44Sold at 181, standing up.
0:19:44 > 0:19:46The hammer finally fell
0:19:46 > 0:19:49at a whopping 56 grand over the guide price.
0:19:49 > 0:19:52That £181,000 bid was placed by
0:19:52 > 0:19:57IT consultant and Thornton Heath resident Umar,
0:19:57 > 0:19:59who I met back at the property.
0:20:02 > 0:20:07- Congratulations.- Thank you.- So what's the story behind you wanting to buy this at auction?
0:20:07 > 0:20:11I've actually been looking for a two-bedroom property in the area for some time.
0:20:11 > 0:20:15I was thinking about a flat but I was a bit put off my the service charges.
0:20:15 > 0:20:20Then I thought, let me a buy a two-bedroom freehold property. This one came along.
0:20:20 > 0:20:25I liked the area, it's quite close to where I live. It looked like a good property to go for.
0:20:25 > 0:20:30- Why were you so determined to buy a two-bed property?- They are really good because they are in demand,
0:20:30 > 0:20:34almost of the most demand compared to three or four-bed properties.
0:20:34 > 0:20:37And I wanted to go for freehold as opposed to a leasehold.
0:20:37 > 0:20:41Just because it means it's independent and I've got the property.
0:20:41 > 0:20:45- You're an IT consultant. Why property?- It's a good income to have on the side.
0:20:45 > 0:20:49That's why I've been going into this over the last few years.
0:20:49 > 0:20:53I can invest my money and it's a nice passive income on the side.
0:20:54 > 0:20:57This is Umar's second investment project.
0:20:57 > 0:21:00A couple of years ago he invested in a similar property,
0:21:00 > 0:21:03which he tackled in the same way.
0:21:03 > 0:21:07It's great that he has some experience to bring to this place.
0:21:07 > 0:21:10So now you've got the property, where are you going to begin?
0:21:10 > 0:21:13There's structural changes I want to make.
0:21:13 > 0:21:17On the ground floor I want to knock this wall out and make it into a big square room.
0:21:17 > 0:21:22It's been extended and the kitchen has moved into the extension. I want to upgrade it, a new bathroom.
0:21:22 > 0:21:26The electrics are old and unsafe, so I'll replace those.
0:21:26 > 0:21:29It's not got any central heating, so I need to put a new boiler in.
0:21:29 > 0:21:32Also a full renovation throughout the property.
0:21:32 > 0:21:36The kitchen is very small. You could really improve that by going across
0:21:36 > 0:21:40and creating a side extension. I've looked at the street and some of
0:21:40 > 0:21:44- the properties have done that.- I had a quick look in the garden and you're right,
0:21:44 > 0:21:49some of the neighbours have done that. There's three old sheds we could completely get rid of
0:21:49 > 0:21:51and just use that space a bit more wisely.
0:21:51 > 0:21:56But, on the other hand, I'm actually thinking that I plan to let this out,
0:21:56 > 0:21:58and if I start increasing the costs
0:21:58 > 0:22:00that'll change the profit margins for me.
0:22:00 > 0:22:03I'm probably not going to make huge structural changes.
0:22:03 > 0:22:07I'll leave the kitchen structure as it is, replace the inside and make it nicer.
0:22:07 > 0:22:11Umar wanted to purchase a two-bedroom property,
0:22:11 > 0:22:16and he's got one. So no splitting the master bedroom or going up into the loft.
0:22:16 > 0:22:21Hopefully that will keep his budget in check. It's 15 to £20,000.
0:22:21 > 0:22:25This is a large house, and that does sound a tad tight.
0:22:25 > 0:22:28However, even tighter is his timescale,
0:22:28 > 0:22:31which he wants to keep within six to eight weeks.
0:22:31 > 0:22:34This man must relish a challenge.
0:22:34 > 0:22:38- Is there anything worrying you about this?- I need to be aware of the large tasks,
0:22:38 > 0:22:42so, for example, the electrics. The roof is still the original.
0:22:42 > 0:22:45I need to make sure those thing are working and functional.
0:22:45 > 0:22:49We haven't had a good look at them so there's a small chance work's required.
0:22:49 > 0:22:53- I can't wait to see the finished product. Good luck. Well done.- Thank you.
0:22:53 > 0:22:56So technical man Umar has turned his hand
0:22:56 > 0:22:59to the more practical task of property developing,
0:22:59 > 0:23:02although he is going to have a rather hands-off approach here.
0:23:02 > 0:23:05He's bought sensibly, in an area that he knows.
0:23:05 > 0:23:09But will this IT consultant manage to keep a tab
0:23:09 > 0:23:13on the optimistic six to eight week timescale?
0:23:13 > 0:23:16You can find out how he gets on later in the programme.
0:23:17 > 0:23:22Coming up. Whoever bought this old mansion house in Cumbria will need a big budget.
0:23:22 > 0:23:25Deep pockets. That... That ain't the half of it.
0:23:27 > 0:23:32There's been a discovery in these outhouses in Thornton Heath.
0:23:32 > 0:23:37One of them was actually an external toilet so we just left it as it is, just as another feature.
0:23:38 > 0:23:41But first, how have things gone in Devon?
0:23:41 > 0:23:45The new development will hopefully knit into the existing fabric,
0:23:45 > 0:23:48and in ten years' time will feel like it's always been here.
0:23:49 > 0:23:52We return now to Honiton in Devon,
0:23:52 > 0:23:56where earlier we saw that behind this picturesque high street
0:23:56 > 0:23:58lay a potential goldmine of a plot.
0:23:58 > 0:24:02On this large site was a single-storey tin-roof barn,
0:24:02 > 0:24:06a huge two-storey barn with parking at the back,
0:24:06 > 0:24:09and finally two plots of land, all ripe for developing.
0:24:10 > 0:24:15They were all bought for £111,000 by Dan, a structural engineer,
0:24:15 > 0:24:19and his wife Abby, who works for an environmental charity.
0:24:19 > 0:24:24The couple currently live in London but have decided to move to the West Country.
0:24:24 > 0:24:27They'd spent a year and a half searching for the right plot
0:24:27 > 0:24:30so that Dan could realise a long-cherished dream to design
0:24:30 > 0:24:35and build his own home. It looked like this was going to be that plot,
0:24:35 > 0:24:39although Abby hadn't dreamt the interiors would be so run down.
0:24:39 > 0:24:41- What do you think?- I think it's fantastic.
0:24:41 > 0:24:45And we can achieve most things we seem to put our minds to.
0:24:45 > 0:24:49Dan particularly, so I think we'll be all right whatever works out,
0:24:49 > 0:24:52even if we end up converting a tiny little bit of it.
0:24:52 > 0:24:55We would've been quite happy just doing this little one.
0:24:55 > 0:24:57That was how it started off.
0:24:57 > 0:25:00"We'll do a small project," and we've ended up with this.
0:25:00 > 0:25:04Dan and Abby had a plan to create a small studio to live in while
0:25:04 > 0:25:07they converted the two-storey barn into a live/workspace.
0:25:07 > 0:25:11As for the other bits of land, well, they were a bit vague about those.
0:25:11 > 0:25:15However, it was all a bit risky as there was no planning permission for the site
0:25:15 > 0:25:18and it skirted a conservation area.
0:25:18 > 0:25:20But they did have enthusiasm by the skipload.
0:25:20 > 0:25:25Three years later we're back to see if their enthusiasm paid off.
0:25:28 > 0:25:33Well, the single-storey barn has been transformed into a cottage with great character.
0:25:36 > 0:25:39The render has been removed to expose some of the original stonework,
0:25:39 > 0:25:42which the couple had to have restored.
0:25:42 > 0:25:46The wooden beams and cladding add a real touch of class to the exterior.
0:25:48 > 0:25:51By the looks of it, Dan's done just as good a job on the inside.
0:25:55 > 0:25:59We met up with him to hear what's happened over the last three years.
0:25:59 > 0:26:04It sounds like he's had his hands full - and not just with the project.
0:26:05 > 0:26:10Since then we've had twin girls, so the family has doubled.
0:26:12 > 0:26:14A couple of toddlers will keep anyone busy.
0:26:14 > 0:26:17So how far have they got with the building plans?
0:26:18 > 0:26:23This is the two-bedroom cottage which we've completed, which is phase one of the project.
0:26:23 > 0:26:28Where we are now is the main living space, kitchen, dining area.
0:26:28 > 0:26:31It's a double-height space with the original roof trusses,
0:26:31 > 0:26:34which we took down, repaired, and put back up again.
0:26:35 > 0:26:38It's got a wood burning stove which heats the whole cottage.
0:26:38 > 0:26:42Underfloor heating under the concrete slab, which needs to be finished and tiled.
0:26:42 > 0:26:45And then through to here we have an area
0:26:45 > 0:26:48which can be used as part of the living room,
0:26:48 > 0:26:50but it also closes off, with sliding doors,
0:26:50 > 0:26:52to create an extra bedroom for guests.
0:26:52 > 0:26:57Upstairs we have a mezzanine bedroom overlooking this space.
0:26:57 > 0:27:01And beyond that we've created an additional bedroom over the garage.
0:27:01 > 0:27:03Though it's not finished off yet,
0:27:03 > 0:27:06it's possible to see what a lovely home this will be.
0:27:06 > 0:27:10But as for the rest of the site, the two plots are still scrubland
0:27:10 > 0:27:12and the barn's still untouched.
0:27:12 > 0:27:17But Dan and Abby have got planning permission to turn the barn into a three-bedroomed house
0:27:17 > 0:27:20and to build a total of seven houses on the plots of land.
0:27:23 > 0:27:26The local authority were quite supportive.
0:27:26 > 0:27:29We went to them prior to putting in a planning application,
0:27:29 > 0:27:31so we liaised and consulted with them,
0:27:31 > 0:27:35and the reason why they liked the scheme was the fact it wasn't
0:27:35 > 0:27:39over-developing the site and it was in keeping with the density and
0:27:39 > 0:27:43the massing of the existing buildings in the surrounding area,
0:27:43 > 0:27:47so the new development will hopefully knit into the existing fabric
0:27:47 > 0:27:50and in ten years' time it will feel like it's always been here.
0:27:51 > 0:27:56Dan has had to juggle his full-time work commitments with doing the renovations.
0:27:56 > 0:27:58Although no budget was set,
0:27:58 > 0:28:02the couple reckon that the finished cottage will have cost them £100,000.
0:28:02 > 0:28:05So what are they planning to do with this building
0:28:05 > 0:28:07once they've finished all the work?
0:28:08 > 0:28:11I'd like to retain this building
0:28:11 > 0:28:15because I've put so much sweat and hard work into it
0:28:15 > 0:28:18and I'm not sure I can let go of it, so financially, if we kept it,
0:28:18 > 0:28:22we would need to rent it out,
0:28:22 > 0:28:24potentially as holiday lets,
0:28:24 > 0:28:27cos that would allow us to use it at other times.
0:28:28 > 0:28:32Remember that Dan and Abby are still living in London with the twins.
0:28:32 > 0:28:36They plan to sell their city home to fund the new-build development
0:28:36 > 0:28:40and finally convert the barn into a three-bedroom home for themselves.
0:28:40 > 0:28:42But that's all up ahead.
0:28:44 > 0:28:47Meanwhile, let's find out what they've made
0:28:47 > 0:28:50from all their hard work on the cottage.
0:28:50 > 0:28:54We asked two local property experts, including the auctioneer who sold it,
0:28:54 > 0:28:56to have a look at it and tell us their thoughts.
0:28:57 > 0:29:01A really pretty cottage he's created. The stone elevation on
0:29:01 > 0:29:04the chimney there is just so beautiful, really eye-catching.
0:29:04 > 0:29:06The easy way would've been to just render it,
0:29:06 > 0:29:11but he's gone to the effort of pointing it and making it a feature of the cottage,
0:29:11 > 0:29:13and he's done a cracking job all round.
0:29:13 > 0:29:17The exterior of this particular property is really taking shape
0:29:17 > 0:29:20and it's been done very sympathetically.
0:29:20 > 0:29:22It's a real pleasure to look at.
0:29:22 > 0:29:26Dan and Abby paid £111,000 for the two buildings
0:29:26 > 0:29:27and the two plots of land.
0:29:27 > 0:29:30With the renovated cottage nearing completion,
0:29:30 > 0:29:34one of the estate agents reckoned it could sell for £180,000.
0:29:35 > 0:29:40£180,000, that's... I spent about £100,000 on the build,
0:29:40 > 0:29:44so that's a reasonable... That's quite a good return.
0:29:45 > 0:29:49There's a possible rental return of £700 per calendar month,
0:29:49 > 0:29:52but the real meat in the sandwich here are the planned new-builds.
0:29:52 > 0:29:55How much could Dan and Abby make from the seven houses
0:29:55 > 0:29:58they have planning permission to build?
0:29:58 > 0:30:01What do the estate agents think a two-bedroomed new-build
0:30:01 > 0:30:03on the site might sell for?
0:30:04 > 0:30:10I would want to ask between £155,000 and £165,000.
0:30:10 > 0:30:15I could well see an average asking price of about £144,950.
0:30:15 > 0:30:17And a three-bed?
0:30:17 > 0:30:24I think, for the smaller ones, we could ask around 200, £205,000.
0:30:24 > 0:30:27And for the largest one, £225,000.
0:30:27 > 0:30:34I can see an average asking price on each of about £179,950.
0:30:35 > 0:30:39The plans the couple have had approved are for four three-bedroomed houses
0:30:39 > 0:30:42and three two-bedroomed houses.
0:30:42 > 0:30:44The top figures of those valuations
0:30:44 > 0:30:48would net them just under 1.4 million pounds.
0:30:48 > 0:30:52So added to the valuation of £180,000 for the cottage,
0:30:52 > 0:30:55the total's just over one-and-a-half million pounds,
0:30:55 > 0:30:58minus bill costs, fees and tax.
0:30:58 > 0:31:03Hm, not bad for an initial investment of £111,000 at auction,
0:31:03 > 0:31:06and that's without considering the barn which the couple plan,
0:31:06 > 0:31:09eventually, to turn into their family home.
0:31:09 > 0:31:12A site like this, with planning permission in place,
0:31:12 > 0:31:14is a potential goldmine.
0:31:14 > 0:31:17Dan and Abby plan to proceed with the development,
0:31:17 > 0:31:20but they do also have the option to sell, as it is,
0:31:20 > 0:31:24with the planning permission, and make a tidy profit.
0:31:24 > 0:31:26So a lot to think about there.
0:31:26 > 0:31:28Who knows what the future will bring?
0:31:28 > 0:31:30After all, Dan still has to finish phase one.
0:31:31 > 0:31:35My mind has been preoccupied with the new family
0:31:35 > 0:31:38and building the cottage, so, to be honest,
0:31:38 > 0:31:42at the moment I haven't even really thought that much about this phase.
0:31:42 > 0:31:46It'll take at least a year for me to be thinking about the next project.
0:31:46 > 0:31:49And depending what Abby says, maybe I won't be allowed
0:31:49 > 0:31:53to think about the next project. We shall wait and see.
0:31:58 > 0:32:02During the Georgian era, Whitehaven, on the Cumbrian coast,
0:32:02 > 0:32:05was home to many rum and tobacco traders.
0:32:05 > 0:32:11Their fortunes financed the building of grand mansions and townhouses.
0:32:11 > 0:32:14Only a short stroll from the seafront is the property I'm here to see.
0:32:17 > 0:32:22Well, reflecting on Whitehaven's opulent past has brought me
0:32:22 > 0:32:26to a very fitting property in a conservation area.
0:32:26 > 0:32:31An elevated position and you find this incredible, but faded,
0:32:31 > 0:32:35Georgian house. You almost imagine this would be owned by
0:32:35 > 0:32:38one of the shipyard owners of the day,
0:32:38 > 0:32:41or possibly even a rum trader.
0:32:41 > 0:32:44Six self-contained flats in here, believe it or not.
0:32:44 > 0:32:47The guide price was 99,000 quid.
0:32:47 > 0:32:49Yes, just 99,000.
0:32:54 > 0:32:57While the exterior cannot fail to impress,
0:32:57 > 0:33:00its faded grandeur is just as evident.
0:33:02 > 0:33:04Once you're inside,
0:33:04 > 0:33:07the explanation of the low guide price is all too obvious.
0:33:10 > 0:33:12Wow. Well,
0:33:12 > 0:33:14yes, it's grand.
0:33:16 > 0:33:17HE LAUGHS
0:33:17 > 0:33:22But you know what, you don't have to go more than about
0:33:22 > 0:33:25one centimetre through the door to start seeing
0:33:28 > 0:33:30the fact...
0:33:30 > 0:33:32Look, we've got wet rot,
0:33:32 > 0:33:35we've got dry rot.
0:33:35 > 0:33:37What else is in store?
0:33:37 > 0:33:39It is an amazing property from the outside,
0:33:39 > 0:33:44but step through the front door and you see a whole heap of potential
0:33:44 > 0:33:48and a whole pile of potential problems.
0:33:48 > 0:33:51But let's just relish the joy this property is before we get into
0:33:51 > 0:33:55the nitty-gritty details of trying to bring it back to life.
0:33:55 > 0:33:58A huge great lounge there with shuttered windows,
0:33:58 > 0:33:59massively high ceilings.
0:33:59 > 0:34:03You can almost imagine a Victorian ball taking place there.
0:34:03 > 0:34:05And that's just the start.
0:34:08 > 0:34:10This property presents me with a dilemma.
0:34:10 > 0:34:13Do I allow the romantic in me fall in love
0:34:13 > 0:34:16with the magnificent period features,
0:34:16 > 0:34:21the ornate cornice and the statuesque arched windows?
0:34:21 > 0:34:25Or do I listen to my business brain, which tells me to turn and run from
0:34:25 > 0:34:28the nightmare of its dry rot and damp-ridden walls?
0:34:30 > 0:34:32# What kind of dream is this?
0:34:32 > 0:34:36# You can be a sweet dream or a beautiful nightmare
0:34:36 > 0:34:39# Either way I don't want to wake up from you
0:34:39 > 0:34:41# Turn the lights on!
0:34:41 > 0:34:45# Sweet dream or a beautiful nightmare... #
0:34:45 > 0:34:47This is just flat number one.
0:34:47 > 0:34:50One down, five to go.
0:34:52 > 0:34:54This two-bedroom apartment is the largest of the six
0:34:54 > 0:34:57and has its own private entrance.
0:34:57 > 0:35:00The other five are accessed from the side of the building,
0:35:00 > 0:35:04but their communal entrance is no less imposing.
0:35:09 > 0:35:14Such intricate craftsmanship and fine detail deserves to be restored
0:35:14 > 0:35:16to its former glory.
0:35:16 > 0:35:22# But your eyes will return to their former glory! #
0:35:29 > 0:35:33This section of the building is four two-bedroomed apartments
0:35:33 > 0:35:35and a single one-bedroom.
0:35:35 > 0:35:40Each flat is in dire need of major renovation.
0:35:40 > 0:35:43At first I was lovestruck by this place,
0:35:43 > 0:35:46but now I'm awestruck by quite how much work it needs
0:35:46 > 0:35:48to bring it up to scratch.
0:35:51 > 0:35:54I've come through to another of the flats,
0:35:54 > 0:36:01and just the overwhelming amount of work required here becomes apparent.
0:36:01 > 0:36:03I mean, look at this above the fireplace.
0:36:03 > 0:36:07Serious indications that the roof is leaking,
0:36:07 > 0:36:10how else would this become so badly,...
0:36:11 > 0:36:13..well, in the state that it is.
0:36:13 > 0:36:18But it's other details that scare me in this place. Little things you might not think about.
0:36:18 > 0:36:22The coving there, that's going to need a specialist to sort it out
0:36:22 > 0:36:26cos this is a listed building, so something like that, a specialist,
0:36:26 > 0:36:31around ten to £50 per foot just to restore that.
0:36:31 > 0:36:33So let's say, this room alone,
0:36:33 > 0:36:36that's about 1,800 quid just to do the coving.
0:36:36 > 0:36:39The windows, again you can't just stick plastic in there
0:36:39 > 0:36:43or something that's mass produced, they're going to have to be handmade.
0:36:43 > 0:36:47Every single time you look at a window and think, it's going to need a new one of those,
0:36:47 > 0:36:51including the shutters around it, that's another £2,000.
0:36:51 > 0:36:55It's a fantastic place but... deep pockets,
0:36:56 > 0:36:58that ain't... that ain't the half of it!
0:37:01 > 0:37:04This is the catch-22 of listed buildings.
0:37:04 > 0:37:07The restrictions the conservation order imposes
0:37:07 > 0:37:09has kept the beauty of this building intact,
0:37:09 > 0:37:14but it's also preventing developers from investing in its restoration.
0:37:15 > 0:37:17Some buildings simply become uneconomic.
0:37:19 > 0:37:23The back garden is of a similar scale and in a similar state.
0:37:23 > 0:37:28It's a grand old mess. But all in all, this is an impressive place.
0:37:30 > 0:37:34We invited the auctioneer who sold it to give us his opinion on it,
0:37:34 > 0:37:38bearing in mind it's guide price of £99,000.
0:37:38 > 0:37:41A tremendous amount of work needs doing in this property,
0:37:41 > 0:37:44and you'd have to start with the roof,
0:37:44 > 0:37:47I think the roof in this particular property needs looking at.
0:37:47 > 0:37:49And then you'd work your way down from there.
0:37:52 > 0:37:55He does not believe there is profit to be made by renovating and then
0:37:55 > 0:37:58selling the six flats on the local market.
0:37:58 > 0:38:02However, on the rental side, they could be real money-spinners.
0:38:05 > 0:38:10Each flat would probably achieve in excess of £300 per calendar month.
0:38:13 > 0:38:16Well, this faded, elegant lady of a property
0:38:16 > 0:38:20may well have seen better days and is in desperate need of a facelift,
0:38:20 > 0:38:22but she's got a few tricks up her sleeve.
0:38:22 > 0:38:25The income generation potential is enormous,
0:38:25 > 0:38:28but then so is the potential bill for doing it.
0:38:28 > 0:38:32Let's see who fell in love with her when it went under the hammer.
0:38:33 > 0:38:37So, all the nines, 99 is a guide. 90 anywhere?
0:38:38 > 0:38:43Not going lower at 90, anybody... £90,000 I've got. Thank you, madam.
0:38:43 > 0:38:4592 I've got... 94.
0:38:46 > 0:38:4996... 98... 99.
0:38:49 > 0:38:51100.
0:38:51 > 0:38:53It's what every seller hopes for.
0:38:53 > 0:38:56The bidding was steady and consistent.
0:38:56 > 0:38:59We rejoin it at £122,000.
0:39:00 > 0:39:02122, 123. 124.
0:39:03 > 0:39:06And 125. 125 I've got,
0:39:06 > 0:39:09126 may I see? 127, 128.
0:39:10 > 0:39:14At 129, are you in? Shake of the head, it's with you at 128.
0:39:15 > 0:39:17At £128,000 then...
0:39:17 > 0:39:20129 I've got, back in.
0:39:20 > 0:39:21130.
0:39:21 > 0:39:23Shake of the head at 131.
0:39:23 > 0:39:28It's with you now, madam, at 130 for the first time.
0:39:28 > 0:39:32It's with you, madam, at £130,000 for the second time.
0:39:32 > 0:39:37Are you out, sir? You're out. At £130,000, selling away.
0:39:38 > 0:39:41It was Carol who made the successful bid.
0:39:45 > 0:39:49She's a project manager in building developments
0:39:49 > 0:39:53but has been adding to her own property portfolio in recent years.
0:39:53 > 0:39:55She currently lives in Newcastle,
0:39:55 > 0:39:59but has, in the past, developed properties in Whitehaven.
0:39:59 > 0:40:02- Lovely to meet you. Congratulations.- Thank you.
0:40:02 > 0:40:05- Bit of a weekend repair job, then? - Couple of days(!)
0:40:05 > 0:40:09What an amazing property. Tell me why you wanted to buy it.
0:40:09 > 0:40:13I've got a property in Whitehaven already and
0:40:13 > 0:40:16I love the people here. So I've been looking for another property
0:40:16 > 0:40:19I could end up eventually living in.
0:40:19 > 0:40:21- Right, so are you a property...? - Yeah, I've got a few.
0:40:21 > 0:40:26- Expert type thing.- Oh, expert's such a difficult word, isn't it?
0:40:26 > 0:40:31- I've got a few properties.- Right, and in terms of a renovation of this kind of magnitude,
0:40:31 > 0:40:34anything like this you've taken on before?
0:40:34 > 0:40:37Pretty much every one of my properties I've done from,
0:40:37 > 0:40:41not as bad a state as this but not a great state,
0:40:41 > 0:40:44- cos I've always tried to buy them in a rubbish situation.- Right.
0:40:44 > 0:40:48Then will you sort of act as a project manager and bring in people to do the work?
0:40:48 > 0:40:51Yeah, yeah. Because I've already done one here,
0:40:51 > 0:40:53I've already got all the local trades,
0:40:53 > 0:40:58I know individuals, and they're used to me, and I'm used to them.
0:40:58 > 0:41:02- So I know the crew that's going to deal with this.- Hm, that's good to know.
0:41:03 > 0:41:05- Have they seen the house yet?- Yeah.
0:41:05 > 0:41:06HE LAUGHS
0:41:06 > 0:41:08And did they wring their hands
0:41:08 > 0:41:12at the thought of all the money that's going to be coming their way?
0:41:12 > 0:41:14Well, not exactly.
0:41:15 > 0:41:20One of them said, "Oh, it's a beauty house," when he stood outside.
0:41:20 > 0:41:23And then he walked round and he walked up the stairs
0:41:23 > 0:41:25right the way to the top and he went,
0:41:25 > 0:41:28"Oh, we're going to be fit!"
0:41:28 > 0:41:31That was it, that was all he said. I said, "Remember I want it coved!"
0:41:31 > 0:41:34Carol certainly seems to be confident
0:41:34 > 0:41:38that she can meet the challenges of this renovation head-on.
0:41:38 > 0:41:41She intends to live in the flat with the private entrance,
0:41:41 > 0:41:43so what are her plans for that?
0:41:44 > 0:41:46So what are you going to do with this flat?
0:41:46 > 0:41:50The Georgians and the Victorians went in for their colour,
0:41:50 > 0:41:53and they liked their gilt and that sort of thing.
0:41:53 > 0:41:56So maybe not all of the rooms but I think one of the rooms
0:41:56 > 0:41:59I'll put in quite an extravagant style.
0:41:59 > 0:42:02Normally I just look at the figures and I say,
0:42:02 > 0:42:06How much does it cost? How much will it make me? Do it or don't do it.
0:42:06 > 0:42:08You know, and I'm that clear-cut.
0:42:08 > 0:42:13- This one grabbed my heart a bit. - It's going to be a labour of love, isn't it?- Yes, I think it will be.
0:42:13 > 0:42:17It also needs to be done in a businesslike fashion as well,
0:42:17 > 0:42:21because, whilst I might have a heart in the flat at the front,
0:42:21 > 0:42:23the rest of the house has got to pay for it,
0:42:23 > 0:42:26and it's got to pay for it pretty well.
0:42:26 > 0:42:29Can Carol really have the best of both worlds?
0:42:29 > 0:42:32A passion project with no expense spared,
0:42:32 > 0:42:35and a financially beneficial investment?
0:42:35 > 0:42:37How much is she planning to spend here?
0:42:39 > 0:42:43My low estimate is 65 grand, my high estimate is 110.
0:42:43 > 0:42:47- Wow, almost double!- Yeah. It depends on this flat.
0:42:47 > 0:42:50If I get this one for myself, I'll do it a different spec
0:42:50 > 0:42:52than I'll do for the ones that I rent out.
0:42:52 > 0:42:56- So the time scale then?- Um, I think 12 months.
0:42:56 > 0:43:01I think, hopefully, I'll get some of them done before that for sure,
0:43:01 > 0:43:05and rent it out. But to get everything finished, 12 months.
0:43:05 > 0:43:08Well, I can't wait to see what you do with the place.
0:43:08 > 0:43:11- Yeah, me too.- Good luck with it.
0:43:11 > 0:43:13- Thank you.- Lovely to meet you.- Nice to meet you.
0:43:16 > 0:43:21Well, I can completely understand why Carol fell in love with this place.
0:43:21 > 0:43:25And financially, once it's all sorted out, it does make brilliant sense.
0:43:25 > 0:43:29However, to get to that point, there is the restoration to do,
0:43:29 > 0:43:33and I think she has wildly underestimated the budget.
0:43:33 > 0:43:36This place could be a money pit.
0:43:36 > 0:43:41You can find out how her bank balance gets on later in the show.
0:43:44 > 0:43:48- The moment of reckoning has arrived. - Have those property gambles paid off,
0:43:48 > 0:43:52- or have our buyers backed the wrong horse?- Let's find out.
0:43:54 > 0:43:59Back to sunny Surrey now to catch up with Umar in Thornton Heath.
0:43:59 > 0:44:03He bought this two-bedroom property at auction for £181,000.
0:44:03 > 0:44:07It was his second development, which he planned to rent out
0:44:07 > 0:44:09once he's done a good renovation.
0:44:09 > 0:44:11But he also has a full-time job in computing.
0:44:14 > 0:44:17So you're an IT consultant. Why property?
0:44:17 > 0:44:19It's a good income to have.
0:44:19 > 0:44:22That's why I've been going into this over the last few years. It means
0:44:22 > 0:44:26I can invest my money, and it's a nice passive income on the side.
0:44:26 > 0:44:31Passive? Well, only once you've completed all the work, Umar.
0:44:31 > 0:44:34He hoped that his team of builders would get the house ready
0:44:34 > 0:44:39for tenants within six to eight weeks. We caught up with him
0:44:39 > 0:44:42just at the end of that timeframe to see what had happened.
0:44:53 > 0:44:57Not quite finished, but as you can see it's almost there.
0:44:57 > 0:44:59So what exactly has he done in here?
0:44:59 > 0:45:02In terms of the changes we've made in the property,
0:45:02 > 0:45:05we carried out full renovation of the electrics.
0:45:05 > 0:45:08We put in a new central heating system and boiler.
0:45:08 > 0:45:10We replaced the bathroom and kitchen,
0:45:10 > 0:45:13and throughout the house we've redecorated.
0:45:13 > 0:45:17We wanted a very neutral look, so we've gone for cream walls and just white woodwork,
0:45:17 > 0:45:20and the flooring's very neutral as well.
0:45:20 > 0:45:23# A little bit brighter!
0:45:23 > 0:45:25# Lighter, every day! #
0:45:27 > 0:45:31It's perfect for renting out. Clean, modern, fresh, and neutral enough
0:45:31 > 0:45:34to let tenants start with a blank canvas.
0:45:34 > 0:45:37Structurally, there has been one change on the ground floor.
0:45:40 > 0:45:43Before, there was a kitchen here and the dining room here.
0:45:43 > 0:45:45There was a wall in-between.
0:45:45 > 0:45:50A door connected the kitchen and dining room, and there was a cupboard underneath the stairs.
0:45:50 > 0:45:53So we took all the doors, walls and the cupboard out
0:45:53 > 0:45:55and opened up the space, levelled the floor.
0:45:55 > 0:45:58It's looking a lot brighter and more pleasant now.
0:45:58 > 0:46:01# A little bit brighter!
0:46:01 > 0:46:04# Lighter, every day! #
0:46:05 > 0:46:08I thought there might be an opportunity to extend that side return,
0:46:08 > 0:46:11but Umar decided the cost of it didn't add up.
0:46:11 > 0:46:15So instead he's put the outbuildings to good use.
0:46:15 > 0:46:17I wasn't sure what the outbuildings were.
0:46:17 > 0:46:19One of them was an external toilet,
0:46:19 > 0:46:22so we've just left it as it is, as another feature.
0:46:22 > 0:46:26And the other two we've left as just storage areas, as small sheds.
0:46:26 > 0:46:31Busy with other work, Umar left his team of builders to get on with it.
0:46:31 > 0:46:33And it looks like they've done a cracking job!
0:46:33 > 0:46:38It's so important for a property developer to be able to trust his building team.
0:46:38 > 0:46:40It really takes the stress out of a project.
0:46:40 > 0:46:45But then it doesn't seem as though anything would stress out "cool-as-a-cucumber" Umar.
0:46:45 > 0:46:50I was a bit busy with other projects so I probably wasn't here as much as I wanted to be.
0:46:50 > 0:46:53But, overall, I had a great team that were really helpful.
0:46:53 > 0:46:57They understood the way I wanted them to work and got on with it really well,
0:46:57 > 0:47:00so I tried to sort of manage the work from a distance.
0:47:01 > 0:47:03So what about the budget, then?
0:47:03 > 0:47:07His original estimate was between 15 and 20,000.
0:47:07 > 0:47:10The overall spend now is at about 16,000.
0:47:10 > 0:47:13There's probably a few hundred still to spend,
0:47:13 > 0:47:15so things like curtain poles,
0:47:15 > 0:47:17cabinets and mirrors in the bathroom, etc.
0:47:17 > 0:47:21But I think we're probably looking at 16 to 17,000.
0:47:21 > 0:47:25A grand or two more isn't bad at all in the grand scheme of things.
0:47:25 > 0:47:29But what about timescale? It looks almost ready to move into.
0:47:29 > 0:47:32But exactly how long has it taken to get to this stage?
0:47:33 > 0:47:37He told us he was hoping to finish it in six to eight weeks.
0:47:37 > 0:47:39I was hoping it'd be a tiny bit sooner.
0:47:39 > 0:47:42Probably hoping for about five to six weeks. Building work
0:47:42 > 0:47:46does typically overrun. Things take a bit longer than expected.
0:47:46 > 0:47:49I think we've probably just got a few days worth of work left,
0:47:49 > 0:47:53so I'd estimate, it looks like just six to eight weeks it has taken.
0:47:54 > 0:47:58It's been a fairly straightforward renovation, there is potential here
0:47:58 > 0:48:01to extend into the loft or even out the back.
0:48:01 > 0:48:04So does Umar plan to do anymore work here in the future?
0:48:07 > 0:48:10There's probably a few things we could consider about the property,
0:48:10 > 0:48:14for example the box room upstairs, making it into three-bedrooms,
0:48:14 > 0:48:17and possibly putting a conservatory in the garden.
0:48:17 > 0:48:19That would work quite well because
0:48:19 > 0:48:23it's an L-shaped ground floor and we'd fill in the gap. However,
0:48:23 > 0:48:26I think, for now, I'm just going to let it out and see how it goes.
0:48:26 > 0:48:29And maybe in a few years' time we might consider that.
0:48:30 > 0:48:33Umar has always planned to rent it out and, in fact,
0:48:33 > 0:48:35he already has tenants lined up.
0:48:35 > 0:48:37Is he getting the market rate, though?
0:48:37 > 0:48:41Let's find out from two local property experts.
0:48:41 > 0:48:43First, what do they think of the work?
0:48:43 > 0:48:46The last time I was here it didn't feel so spacious
0:48:46 > 0:48:51and now it really does. So the vendor's done an excellent job.
0:48:51 > 0:48:53It's a good property. Good-sized rooms.
0:48:53 > 0:48:56I'm quite impressed, it looks bright and airy.
0:48:56 > 0:48:58I particularly like the kitchen.
0:48:58 > 0:49:01What about that all-important rental figure?
0:49:01 > 0:49:05Has Umar negotiated the best rate from his new tenants?
0:49:05 > 0:49:08We would attempt to rent this property
0:49:08 > 0:49:11at around £1,100 per calendar month.
0:49:11 > 0:49:15This property would rent for approximately £1,100 per calendar month.
0:49:15 > 0:49:18I'm happy with that, that's what I was expecting.
0:49:18 > 0:49:20I did my research about a month or so ago.
0:49:20 > 0:49:25And the tenants that I've managed to secure agreed to pay £1,100.
0:49:25 > 0:49:28That would give Umar a yield of 6.5 percent.
0:49:28 > 0:49:33But what about resale value? Don't forget, he paid 56,000 grand
0:49:33 > 0:49:35over the guide price when he bought it.
0:49:35 > 0:49:41If you add his purchase price of 181,000 to his £17,000 spend,
0:49:41 > 0:49:47that means he's invested £198,000. What could he sell it for?
0:49:48 > 0:49:52We could market this property at £225,000.
0:49:52 > 0:49:55I think this property would achieve
0:49:55 > 0:49:58somewhere in the region of 200,000 to £210,000.
0:49:58 > 0:50:00I'm quite pleasantly surprised.
0:50:00 > 0:50:04I was actually expecting the value would be between 200 and 210.
0:50:04 > 0:50:08So that's spot on, but I'm pleased somebody valued it up to £225,000.
0:50:08 > 0:50:13So a good yield if he lets it and a good profit if he sells it.
0:50:13 > 0:50:16Plus, he's brought the project in on time and on budget.
0:50:16 > 0:50:19Has the success here made him want to pack up the day job
0:50:19 > 0:50:21and do this full time?
0:50:21 > 0:50:25No, probably not. Maybe one day, in a few years' time,
0:50:25 > 0:50:28but probably not now. I work in IT, I'm quite happy with my day job,
0:50:28 > 0:50:31and to do this on the side, I'm quite happy as well.
0:50:36 > 0:50:39Welcome back to Whitehaven on the Cumbrian coast,
0:50:39 > 0:50:41where I viewed this Georgian mansion house.
0:50:46 > 0:50:49It had been converted into six apartments.
0:50:49 > 0:50:52Although it was rundown and dilapidated in places,
0:50:52 > 0:50:56there were also enough vestiges of its former glory
0:50:56 > 0:50:59to entice Newcastle-based property developer Carol
0:50:59 > 0:51:01to pay a £130,000 for it,
0:51:01 > 0:51:04£31,000 over the guide price.
0:51:06 > 0:51:09This was not only a business investment for her,
0:51:09 > 0:51:14she also planned to make the grandest of the apartments her home.
0:51:14 > 0:51:18Normally I just look at the figures and say, how much does it cost?
0:51:18 > 0:51:21How much will it make me? Do it or don't do it, you know?
0:51:21 > 0:51:25And I'm that clear-cut. This one grabbed my heart a little bit.
0:51:25 > 0:51:30The building was listed and in a conservation area.
0:51:30 > 0:51:33So I had been concerned the property could prove to be a money pit.
0:51:35 > 0:51:37We've returned 18 months later
0:51:37 > 0:51:41to find out if this labour of love has paid off.
0:51:43 > 0:51:48# Would you let me see beneath your beautiful?
0:51:49 > 0:51:55# Would you let me see beneath your beautiful
0:51:55 > 0:51:56# Tonight... #
0:51:56 > 0:51:59This is the bit that I'm really the most proud of.
0:51:59 > 0:52:03My sister and I spent nearly two months
0:52:03 > 0:52:08painting each one of these balustrades by hand.
0:52:08 > 0:52:12And we nearly killed ourselves, because it's easy to do it here,
0:52:12 > 0:52:15and it's really not very easy to do it right up there.
0:52:16 > 0:52:20Before any internal work could begin, Carol first contracted
0:52:20 > 0:52:23a roofing company to make the building watertight.
0:52:23 > 0:52:26She then began the process of renovating the apartments.
0:52:29 > 0:52:33So far she's refurbished the two flats on the top floor -
0:52:33 > 0:52:35and both are currently rented out.
0:52:36 > 0:52:39Work continues on the three flats on the first floor,
0:52:39 > 0:52:42and the ground floor flat which will be Carol's home.
0:52:46 > 0:52:48The big issue for Carol on this renovation
0:52:48 > 0:52:50hasn't been damp-ridden walls,
0:52:50 > 0:52:53crumbling plasterwork, or the local conservation office
0:52:53 > 0:52:57ensuring that all the work carried out meets their requirements.
0:52:58 > 0:53:01It was the crucial ingredient that all renovations require.
0:53:04 > 0:53:08The biggest problem we had was I ran out of money. Plain and simple.
0:53:08 > 0:53:12I knew that I was going to remortgage one of my flats.
0:53:12 > 0:53:15It was all done, it was all a done-deal.
0:53:15 > 0:53:18I said, "Right, I don't need that for about three months
0:53:18 > 0:53:23so I'll hold off on it." Er... I wish I'd put it in the bank.
0:53:23 > 0:53:26Because, you know, the market changes all the time,
0:53:26 > 0:53:29and I hadn't changed, my circumstances hadn't changed,
0:53:29 > 0:53:32but the mortgage company had changed their minds.
0:53:32 > 0:53:36And then I scrabbled round friends and families and, you know,
0:53:36 > 0:53:38all sorts of things.
0:53:38 > 0:53:42Despite this setback, Carol's commitment to this renovation
0:53:42 > 0:53:44has never wavered.
0:53:44 > 0:53:48As the project progresses, albeit slower than she's hoped,
0:53:48 > 0:53:51she finds a new piece of the property to fall in love with.
0:53:53 > 0:53:57This wall separates this little side area
0:53:57 > 0:53:59from the rest of the garden at the back.
0:53:59 > 0:54:03And my intention is, this is going to be my private garden,
0:54:03 > 0:54:05this is going to be like secret garden type of thing.
0:54:05 > 0:54:08The tenants have got the bit at the back.
0:54:08 > 0:54:15# There's a secret garden she has! #
0:54:16 > 0:54:19Carol is six months over the 12-month schedule.
0:54:19 > 0:54:22And with the finishing line far in the distance,
0:54:22 > 0:54:26will she manage to keep within her planned maximum spend of £110,000?
0:54:28 > 0:54:31I have spent about £60,000 at the moment.
0:54:31 > 0:54:35I've also spent roughly £20,000 in fees.
0:54:35 > 0:54:39Cos I bridged for the first seven months cos it wasn't mortgageable,
0:54:39 > 0:54:42you know, when I first took it on. Um...
0:54:43 > 0:54:49I still expect to spend something in the order of another 40,000.
0:54:50 > 0:54:52That would take her total outlay,
0:54:52 > 0:54:54including her £130,000 purchase price,
0:54:54 > 0:54:59up to £250,000. That's a hefty chunk of change.
0:54:59 > 0:55:03But Carol is sure her investment will reap its rewards,
0:55:03 > 0:55:06and she can't wait to move into her new home in Whitehaven at last.
0:55:08 > 0:55:11I love Whitehaven, the people are beautiful.
0:55:11 > 0:55:14They are absolutely friendly as anything, they help you,
0:55:14 > 0:55:16I've made loads of friends here.
0:55:16 > 0:55:20And we're no more than two hours away from my family in Newcastle,
0:55:20 > 0:55:22so it's perfect as far as I'm concerned.
0:55:23 > 0:55:27We asked two local property experts for their opinions,
0:55:27 > 0:55:29including the auctioneer who sold it.
0:55:30 > 0:55:34My first impression is, walking back in the door today, is
0:55:34 > 0:55:37I think a lot of the work that has been done is unseen,
0:55:37 > 0:55:39the foundations have been laid.
0:55:39 > 0:55:42It's now a matter of working through the property
0:55:42 > 0:55:44and getting the rest finished.
0:55:45 > 0:55:50The owner has put the top two flats into a rental state in order that
0:55:50 > 0:55:52they can start generating an income,
0:55:52 > 0:55:55which will help fund the rest of the project.
0:55:57 > 0:56:01The expert's agree that the highest value of this property would lie in
0:56:01 > 0:56:03selling it as a going business concern
0:56:03 > 0:56:07once the renovation's complete and all the apartments are let.
0:56:07 > 0:56:11Carol's estimated total investment in this building is 250,000.
0:56:13 > 0:56:19We've put the property at between £200,000 and £250,000.
0:56:19 > 0:56:24I would estimate that the resale value at the current time
0:56:24 > 0:56:28would be in the region of 200 to £250,000.
0:56:28 > 0:56:33I really hope my mortgage company doesn't hear that before this show goes out
0:56:33 > 0:56:38because they've already said that the end value is likely to be 278.
0:56:38 > 0:56:42So I'm, for the moment, going to stick with what the mortgage company said.
0:56:42 > 0:56:46I think that's probably a better place to be in my own head as well.
0:56:47 > 0:56:49Rental-wise, the experts value the flat
0:56:49 > 0:56:52at between 300 and £400 per calendar month,
0:56:52 > 0:56:54depending on their size. However,
0:56:54 > 0:56:57Carol is letting the two top floor flats,
0:56:57 > 0:57:00which are the smallest apartments in the building,
0:57:00 > 0:57:03for a combined figure of £1,000 per calendar month.
0:57:03 > 0:57:06If her estimates for the other flats are met,
0:57:06 > 0:57:09she'll earn a cracking rental yield of around 14 percent.
0:57:15 > 0:57:19Looking back at everything Carol's achieved, and all she has yet to do,
0:57:19 > 0:57:21how does she feel about this project now?
0:57:23 > 0:57:28For me, the experience has been, at times, overwhelming.
0:57:28 > 0:57:30It's a bit of a rollercoaster really, I think.
0:57:30 > 0:57:34My intention is always to take everything I can from it,
0:57:34 > 0:57:41from a positive sense. And... most of the time I'm OK with that.
0:57:41 > 0:57:43Yeah, most of the time I get there.
0:57:43 > 0:57:48I'm positive Carol will overcome the challenges she has ahead of her,
0:57:48 > 0:57:52and hopefully, one day, we'll see the finished renovation.
0:57:56 > 0:58:00Whether you're an old-time property developer or a complete novice,
0:58:00 > 0:58:04join us next time for more stories from the auction rooms.
0:58:04 > 0:58:07- Yes, we'll see you then on Homes Under the Hammer.- Goodbye!- Goodbye!
0:58:29 > 0:58:32Subtitles by Red Bee Media Ltd