Episode 48 Homes Under the Hammer

Hello. Now in the current tricky market conditions

it can be quite hard to find your own piece of house heaven.

-Whether it's large or small, auctions are often a very good place to start.

-Yes.

That's why we follow them here on Homes Under the Hammer.

Well, if you've decided to take a gamble and place a bet on property,

-then you may want to buy at auction.

-Yes, the atmosphere is electric

and the action, well, it's fast and it's furious.

So here are the properties we're featuring on today's show.

First up, there's a surprise up this path in Devon,

which leads to this. Enormous.

But you know what? It doesn't stop there.

I'll be in Thornton Heath, Surrey,

brewing up some ideas to extend the kitchen here.

Just think of all the lovely delights you could then cook up.

While this grand mansion house in Cumbria isn't so grand inside.

We've got wet rot, we've got dry rot,

what else is in store?

These properties have been sold at auction.

We'll find out who bought them

and what they paid when they went under the hammer.

Selling away.

I'm in Honiton, East Devon, an area built on the lace industry.

In fact, Queen Victoria had her wedding dress made out of Honiton lace.

It's a lively spot with a good selection of shops and markets.

A good place to buy a property.

# It's a nice day for a white wedding

# It's a nice day to start again! #

It may not now be the place for wedding dress material,

you're more likely to find a wedding cake,

but it could be a good place to start again, particularly when you see what's on offer.

The auction lot I'm here to see is literally right off the high street.

You access it along this little road here,

underneath some kind of like an archway underneath the buildings.

Very interesting it sounds indeed. £75,000 was the guide price

for what sounds like a lot of buildings.

I mean, this is one of them. This is a single storey.

But that's only the start of the story.

The rest of it, it's back onto the high street.

So, part one is this single storey tin roof barn

that currently houses, well, quite frankly,

just junk, but it's been used as a workshop in the past.

And although some of the other parts of this lot are just next door,

currently it's a bit of a trek to get round to them.

I can already see that getting large machinery to the site could be a problem.

There's a second access to the property down this road here,

which leads to this two-storey barn. Enormous. But you know what?

It doesn't stop there.

As well as the single-storey building,

there's also this large, two-storey barn

which comes with parking spaces and a reasonable amount of land.

Wow! And, as if that wasn't enough...

Finally you've got this big bit of land at the back.

So all in all,

this is a very large plot.

And a very large jigsaw. It's partly the access that makes this site

more complicated than it really is,

because, in fact, this land is at the rear of the two buildings,

and the two barns/workshops are attached internally.

That final bit of land is adjacent to the buildings,

so it's actually one large site, it's just accessed from different points.

But what could you do with it? At present there's no planning permission,

but the local council aren't averse to seeing a residential development.

So with its position so close to the town centre,

this looks like a developer's dream.

What does the auctioneer who sold it think will happen here?

And who might this lot appeal to?

I think two categories. Either someone who's going to make

light industrial, storage, warehousing use

of the existing buildings and the land behind,

or residential developers who, instead, will see this as a chance

of nearly half an acre in the middle of a town

to scat over the existing buildings

and try and get as many new dwellings,

or flats, as possible on the land.

With what was a £75,000 guide price,

on the face of it you get a lot for your money.

But with site clearance and building costs, is it a good investment?

If you just took the point of view that somebody could perhaps get

three detached bungalows or houses,

you're going to be looking at, say, a hundred a plot, for example.

If the council say, OK, we'll let you have four,

they're probably going to be worth 85 or 90 a plot.

If they said, we'll let you have five,

they're going to be worth 75 or 80 a plot,

so each extra plot would be worth a little bit extra

but not another £100,000.

So there could be some money to be made here.

But without planning permission, this site is a risk. It's quite a lot

to pay for some scrubland and two ramshackle buildings.

So all in all, a very interesting development opportunity.

It doesn't have planning permission, but I reckon, given the location,

it wouldn't be too much trouble to get it, and if you did that,

boy oh boy, the numbers really do start to stack up.

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

So, who's going to say to us 40,000?

40 we've got. 40 we're away. I've got 40. 45?

45. Have I got 50?

I've got 55. I've got 60. I've got 65.

65. 70. Hell's bells. 70.

75. 75. 75. At 75.

Are you sure? This gentleman here has got it at 75.

And 80 I'm asking of you, sir.

At 80. A wry smile there, at 85. 85.

90? 95.

96, 97, 98, 99, one.

101, and... two. And three.

104. 104.

104 and a half... If you say 110, he's almost certain not to come back.

104 I've got against you. Looking for five.

105. 105. Half. And a half.

And six. 106. At 106. And a half?

And 106 and a half. 107.

107. 108? 108. Call it nine, then.

At 109.

110, 111.

111. I've got all the ones.

At 111 for the first time, then.

111 a second time. At 111, one last glance.

Going to be sold then at 111.

So, for £111,000,

the successful bidders were recently married couple Dan and Abby,

currently based in London.

Abby works for an environmental charity that's involved

in clearing up waterways with the help of local people.

Dan's a structural engineer. He's always wanted to design and be involved in building his own home,

and they've been searching for a suitable plot for a while.

-Dan, Abby, lovely to meet you both.

-You as well.

-Congratulations.

-Thank you.

-Thanks.

-Tell me why you've bought this very interesting opportunity.

-Um...

Well, we've been looking for a plot

for about a year and a half, just for a single house,

and keep missing out, and then this one came up at auction and

-this is the one we got.

-Right. So what was it about it that you liked, Abby?

I liked where it was in Honiton, just off the high street.

I thought it was a nice little town, it had lots of nice little shops

and kind of a nice feel about it.

To get a plot like this, right in a town centre, was really unusual.

And there was kind of lots of potential.

It wasn't, this is exactly what you're going to do here,

-it's opened up lots of different ideas for us.

-Wow.

-So, yeah.

-You must be really excited.

-Yes, we are.

-Really excited.

We only picked up the keys today, so...

-It's the first time Abby's been into the sheds.

-It's the first time you've seen it?

I've walked around but I haven't been inside. I'd only looked at photos he'd taken.

And the photographs were much better than the actual reality of it.

Selective.

There's lots of hidden things, so it'll be interesting rummaging around

-in all that stuff that's been left behind.

-What do you think?

I think it's fantastic, and we...

We can... achieve most things we seem to put our minds to.

Dan particularly, so I think we'll be all right, whatever works out,

even if we end up converting a tiny bit of it.

We would've been quite happy just doing this little one. That was how it started off.

-"We'll do a small project," and we've ended up with this, so...

-Yes.

So after quite a long search

they've now found the site that fits their needs - up to a point.

But it's somewhat bigger than ideal, with .4 acres of land and two rundown buildings.

Here you are, you've got this large plot. What are your plans for it?

Do you have ideas right now what you're going to do with it?

-Well, um...

-Roughly, rough plans at the moment.

Yeah. I mean this... Half the site's in a conservation area but

they aren't expecting the buildings to be kept. In actual fact, I know this doesn't look like much

but I quite like parts of it, so I'd like to keep the form...

Sorry, we'd like to keep the form of the two existing buildings.

Maybe have a one-bedroom studio here that we can live in

while we're doing the work down here.

These will make quite nice garages and workshops,

and on the other side, the two-storey barn,

we're thinking of maybe a live/work unit,

so a two-bed flat above and some kind of design studio down below.

-Oh, wow.

-And we've still got the area at the back there to build a house.

Then there's the third piece of land, which we don't know what we're going to do with yet.

Once they get planning permission, sorting the studio flat will take priority.

Initially, Dan will have to stay on site in their camper van

once the build process starts.

I can't help but wonder whether they've bitten off more than they can chew.

Perhaps they'd be better moving this on and looking for a smaller plot to start their house-building dream.

If a developer came along and offered you a shedload of money for it, as it is, would you sell it?

If it was a shedload of money, yeah.

Depends how big the shed is. No. I don't know, would we?

Um... If it was a lot of money, yes, because then we'd have more money

to actually build something next time and buy a plot.

-But if it was, say, an extra ten, 20, 30 grand?

-No,

-No.

-50 grand more than you paid?

-No.

-No.

-100 grand more?

We'd maybe think about it then.

-Right.

-Why, do you want it?

-No. But, not that I don't think it's great,

but that's interesting. If somebody said, 75 grand extra, now, you still wouldn't do it.

We'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

from scratch. You invest so much time and energy working out what you're going to do,

to decide whether you want it, when you don't get it, it's disheartening.

-Now we've got this we feel like we can move on to the next stage.

-Fantastic.

-I'm delighted for you. Good luck.

-Thank you.

-I'm sure there are challenges ahead,

-but you'll face them.

-Thanks.

-Well done.

# Baby, now that I've found you I won't let you go

# I'll build my world around you

# Mmm-mm... #

Well, what a surprising turn-up for this story.

I get the feeling Dan and Abby are a bit surprised to have got this.

I'm not quite sure what they're going to do but I love their enthusiasm

and I can't wait to see how they get on. There are challenges ahead

but I'm sure they will face them with aplomb. Find out how they get on later in the show.

I'm in Thornton Heath, South London.

It's an ideal choice for commuters into the centre of the capital,

courtesy of its rail link which takes just over 20 minutes.

A short bus trip from the station

will take you to the lot I'm here to see.

It's in an area with a mixture of property types

and is really popular with families.

Now I know that two-bedroom houses are in high demand in this residential spot,

and so it's great news today that I'm here to see

a two-bedroom mid-terrace which had a guide price of 125,000.

Here it is. So far so good. Time to have a look inside.

This 1920s house looks recently repainted

and the windows double-glazed, so that's a promising start.

Well, it's certainly not as well-kept in here

as how it looks on the outside.

Very red, although it will look fantastic once you paint it some nice light-reflective colours,

and get all this off. I bet under there,

there's some beautiful spindles to reveal. First reception room here.

What I notice straight away is the beautiful cornicing.

It's really lovely. You've got a stunning fireplace there.

So once all the work is done, that will be a really nice room to sit in.

And, hello, hello, what have we got here?

Well, second reception room here, which is a great space,

but I'm not quite sure what this room is.

I think it's being used as a utility space.

I would take all this out and really open this room up.

Then again you've got a lovely room to work with.

You could have a kitchen/breakfast room.

A very small sort of galley kitchen, not fantastic.

I'm going to have a look outside and see how we can improve that.

So the kitchen might be a bit small but you do have a decent-sized garden out here.

Now, you could view this in one of two ways.

On face value it's a lovely bit of outside space for a barbecue

and it could be a great play area for the kids.

Or you could think about the extension potential it offers

and demolish these outbuildings.

Then you could extend over the side return to increase the size of that kitchen.

Just think of all the lovely delights you could then cook up.

# I see the moonbeams on your forehead there

# And I think about the garden of delights... #

A small extension like this

would be allowed within permitted development.

That means you wouldn't need to apply for full planning permission.

However, I'd always advise you to have a chat with

your local planning department before you do anything structural,

as it's better to be safe than sorry.

I'm not sure if an extension would add much to the house's value

by the time you've factored in building costs,

but I do think it could totally transform the living space here.

Let's see what's upstairs.

Up to the first floor and you've got your bathroom.

There. Can't open the door properly because the bath is in the way,

so you will need to rearrange that space a little better.

A good-sized bedroom at the back of the house.

And then, through here, well, it's a huge master bedroom.

You could think about having a partition wall in here, you know?

You could put a wall along here, and that would allow you to create a third bedroom just here.

But I'm not sure whether three-beds is the way to go here.

And these two rooms would be really small. There's a part of me

that would love to make the most of this as a fabulous master bedroom.

Making this into a three-bedroom means you'd have to knock through a new window.

Some of the houses along the street already have

two windows at the front rather than one,

so that might be a precedent if you wanted to go with that option.

But if you're determined to get a third bedroom, I think there's a better option.

I reckon that the loft might hold the answer.

It would be worth seeing what the space was like and checking out if any neighbours have done it.

Could three be the magic number here?

Neither option would come cheap, so you'd have to calculate carefully

whether the return would justify the outlay.

There's already a pretty penny to be spent here, between holes in the plasterwork,

walls needing to be stripped, a kitchen and a bathroom...

Oh, the list just goes on.

And you'd have to hope you'd bought it for

somewhere near that guide price of 125,000.

We invited a local estate agent along

to hear what he makes of it all.

Space sells. I think people like to have good-sized rooms,

so I think if one can avoid it, keep it as a two-bedroom.

If, however, you need that extra third bedroom, the option is there.

So let's work out the finances here. Firstly, if the layout was

left as it but the house given a full makeover,

what could it sell for?

Once the property's refurbished,

we would put the property on the market at £225,000.

Going with those same options, what about the rental?

This property would rent for approximately £1,000 per calendar month.

OK. How about if the buyer were to go down the route of

creating another bedroom here?

If one were to split the front bedroom, one could ask perhaps

a little bit more. You know, perhaps try it at £229,000.

By going up into the loft you could potentially create a three double-bedroom house,

and hence one could probably try around £260,000.

What impact would an additional bedroom have on the rental potential?

If we split the master bedroom we could try £1,150 per calendar month.

If one were to extend into the loft,

one could rent the property for around £1,350 per calendar month.

Not quite as simple and straightforward as it seemed from the outside,

this two-bedroom house does need a lot of updating

and there are a few more structural options to consider.

Let's see who saw the potential when we went to the auction.

Right, lot 38

is a two-bedroom mid-terraced house.

I like this one. Good value, excellent value.

Who's going to kick off on this? 146. 147, yeah?

148. 149?

This proved a popular lot at the auction.

We rejoin as someone was deliberating

over making a bid of 180,000.

I can't wait much longer. 180, well done.

181?

182?

181 standing up. Looking for 182. If not, 181, standing up.

First time, second time,

third and last time. Have you all done?

Sold at 181, standing up.

The hammer finally fell

at a whopping 56 grand over the guide price.

That £181,000 bid was placed by

IT consultant and Thornton Heath resident Umar,

who I met back at the property.

-Congratulations.

-Thank you.

-So what's the story behind you wanting to buy this at auction?

I've actually been looking for a two-bedroom property in the area for some time.

I was thinking about a flat but I was a bit put off my the service charges.

Then I thought, let me a buy a two-bedroom freehold property. This one came along.

I liked the area, it's quite close to where I live. It looked like a good property to go for.

-Why were you so determined to buy a two-bed property?

-They are really good because they are in demand,

almost of the most demand compared to three or four-bed properties.

And I wanted to go for freehold as opposed to a leasehold.

Just because it means it's independent and I've got the property.

-You're an IT consultant. Why property?

-It's a good income to have on the side.

That's why I've been going into this over the last few years.

I can invest my money and it's a nice passive income on the side.

This is Umar's second investment project.

A couple of years ago he invested in a similar property,

which he tackled in the same way.

It's great that he has some experience to bring to this place.

So now you've got the property, where are you going to begin?

There's structural changes I want to make.

On the ground floor I want to knock this wall out and make it into a big square room.

It's been extended and the kitchen has moved into the extension. I want to upgrade it, a new bathroom.

The electrics are old and unsafe, so I'll replace those.

It's not got any central heating, so I need to put a new boiler in.

Also a full renovation throughout the property.

The kitchen is very small. You could really improve that by going across

and creating a side extension. I've looked at the street and some of

-the properties have done that.

-I had a quick look in the garden and you're right,

some of the neighbours have done that. There's three old sheds we could completely get rid of

and just use that space a bit more wisely.

But, on the other hand, I'm actually thinking that I plan to let this out,

and if I start increasing the costs

that'll change the profit margins for me.

I'm probably not going to make huge structural changes.

I'll leave the kitchen structure as it is, replace the inside and make it nicer.

Umar wanted to purchase a two-bedroom property,

and he's got one. So no splitting the master bedroom or going up into the loft.

Hopefully that will keep his budget in check. It's 15 to £20,000.

This is a large house, and that does sound a tad tight.

However, even tighter is his timescale,

which he wants to keep within six to eight weeks.

This man must relish a challenge.

-Is there anything worrying you about this?

-I need to be aware of the large tasks,

so, for example, the electrics. The roof is still the original.

I need to make sure those thing are working and functional.

We haven't had a good look at them so there's a small chance work's required.

-I can't wait to see the finished product. Good luck. Well done.

-Thank you.

So technical man Umar has turned his hand

to the more practical task of property developing,

although he is going to have a rather hands-off approach here.

He's bought sensibly, in an area that he knows.

But will this IT consultant manage to keep a tab

on the optimistic six to eight week timescale?

You can find out how he gets on later in the programme.

Coming up. Whoever bought this old mansion house in Cumbria will need a big budget.

Deep pockets. That... That ain't the half of it.

There's been a discovery in these outhouses in Thornton Heath.

One of them was actually an external toilet so we just left it as it is, just as another feature.

But first, how have things gone in Devon?

The new development will hopefully knit into the existing fabric,

and in ten years' time will feel like it's always been here.

We return now to Honiton in Devon,

where earlier we saw that behind this picturesque high street

lay a potential goldmine of a plot.

On this large site was a single-storey tin-roof barn,

a huge two-storey barn with parking at the back,

and finally two plots of land, all ripe for developing.

They were all bought for £111,000 by Dan, a structural engineer,

and his wife Abby, who works for an environmental charity.

The couple currently live in London but have decided to move to the West Country.

They'd spent a year and a half searching for the right plot

so that Dan could realise a long-cherished dream to design

and build his own home. It looked like this was going to be that plot,

although Abby hadn't dreamt the interiors would be so run down.

-What do you think?

-I think it's fantastic.

And we can achieve most things we seem to put our minds to.

Dan particularly, so I think we'll be all right whatever works out,

even if we end up converting a tiny little bit of it.

We would've been quite happy just doing this little one.

That was how it started off.

"We'll do a small project," and we've ended up with this.

Dan and Abby had a plan to create a small studio to live in while

they converted the two-storey barn into a live/workspace.

As for the other bits of land, well, they were a bit vague about those.

However, it was all a bit risky as there was no planning permission for the site

and it skirted a conservation area.

But they did have enthusiasm by the skipload.

Three years later we're back to see if their enthusiasm paid off.

Well, the single-storey barn has been transformed into a cottage with great character.

The render has been removed to expose some of the original stonework,

which the couple had to have restored.

The wooden beams and cladding add a real touch of class to the exterior.

By the looks of it, Dan's done just as good a job on the inside.

We met up with him to hear what's happened over the last three years.

It sounds like he's had his hands full - and not just with the project.

Since then we've had twin girls, so the family has doubled.

A couple of toddlers will keep anyone busy.

So how far have they got with the building plans?

This is the two-bedroom cottage which we've completed, which is phase one of the project.

Where we are now is the main living space, kitchen, dining area.

It's a double-height space with the original roof trusses,

which we took down, repaired, and put back up again.

It's got a wood burning stove which heats the whole cottage.

Underfloor heating under the concrete slab, which needs to be finished and tiled.

And then through to here we have an area

which can be used as part of the living room,

but it also closes off, with sliding doors,

to create an extra bedroom for guests.

Upstairs we have a mezzanine bedroom overlooking this space.

And beyond that we've created an additional bedroom over the garage.

Though it's not finished off yet,

it's possible to see what a lovely home this will be.

But as for the rest of the site, the two plots are still scrubland

and the barn's still untouched.

But Dan and Abby have got planning permission to turn the barn into a three-bedroomed house

and to build a total of seven houses on the plots of land.

The local authority were quite supportive.

We went to them prior to putting in a planning application,

so we liaised and consulted with them,

and the reason why they liked the scheme was the fact it wasn't

over-developing the site and it was in keeping with the density and

the massing of the existing buildings in the surrounding area,

so the new development will hopefully knit into the existing fabric

and in ten years' time it will feel like it's always been here.

Dan has had to juggle his full-time work commitments with doing the renovations.

Although no budget was set,

the couple reckon that the finished cottage will have cost them £100,000.

So what are they planning to do with this building

once they've finished all the work?

I'd like to retain this building

because I've put so much sweat and hard work into it

and I'm not sure I can let go of it, so financially, if we kept it,

we would need to rent it out,

potentially as holiday lets,

cos that would allow us to use it at other times.

Remember that Dan and Abby are still living in London with the twins.

They plan to sell their city home to fund the new-build development

and finally convert the barn into a three-bedroom home for themselves.

But that's all up ahead.

Meanwhile, let's find out what they've made

from all their hard work on the cottage.

We asked two local property experts, including the auctioneer who sold it,

to have a look at it and tell us their thoughts.

A really pretty cottage he's created. The stone elevation on

the chimney there is just so beautiful, really eye-catching.

The easy way would've been to just render it,

but he's gone to the effort of pointing it and making it a feature of the cottage,

and he's done a cracking job all round.

The exterior of this particular property is really taking shape

and it's been done very sympathetically.

It's a real pleasure to look at.

Dan and Abby paid £111,000 for the two buildings

and the two plots of land.

With the renovated cottage nearing completion,

one of the estate agents reckoned it could sell for £180,000.

£180,000, that's... I spent about £100,000 on the build,

so that's a reasonable... That's quite a good return.

There's a possible rental return of £700 per calendar month,

but the real meat in the sandwich here are the planned new-builds.

How much could Dan and Abby make from the seven houses

they have planning permission to build?

What do the estate agents think a two-bedroomed new-build

on the site might sell for?

I would want to ask between £155,000 and £165,000.

I could well see an average asking price of about £144,950.

And a three-bed?

I think, for the smaller ones, we could ask around 200, £205,000.

And for the largest one, £225,000.

I can see an average asking price on each of about £179,950.

The plans the couple have had approved are for four three-bedroomed houses

and three two-bedroomed houses.

The top figures of those valuations

would net them just under 1.4 million pounds.

So added to the valuation of £180,000 for the cottage,

the total's just over one-and-a-half million pounds,

minus bill costs, fees and tax.

Hm, not bad for an initial investment of £111,000 at auction,

and that's without considering the barn which the couple plan,

eventually, to turn into their family home.

A site like this, with planning permission in place,

is a potential goldmine.

Dan and Abby plan to proceed with the development,

but they do also have the option to sell, as it is,

with the planning permission, and make a tidy profit.

So a lot to think about there.

Who knows what the future will bring?

After all, Dan still has to finish phase one.

My mind has been preoccupied with the new family

and building the cottage, so, to be honest,

at the moment I haven't even really thought that much about this phase.

It'll take at least a year for me to be thinking about the next project.

And depending what Abby says, maybe I won't be allowed

to think about the next project. We shall wait and see.

During the Georgian era, Whitehaven, on the Cumbrian coast,

was home to many rum and tobacco traders.

Their fortunes financed the building of grand mansions and townhouses.

Only a short stroll from the seafront is the property I'm here to see.

Well, reflecting on Whitehaven's opulent past has brought me

to a very fitting property in a conservation area.

An elevated position and you find this incredible, but faded,

Georgian house. You almost imagine this would be owned by

one of the shipyard owners of the day,

or possibly even a rum trader.

Six self-contained flats in here, believe it or not.

The guide price was 99,000 quid.

Yes, just 99,000.

While the exterior cannot fail to impress,

its faded grandeur is just as evident.

Once you're inside,

the explanation of the low guide price is all too obvious.

Wow. Well,

yes, it's grand.

HE LAUGHS

But you know what, you don't have to go more than about

one centimetre through the door to start seeing

the fact...

Look, we've got wet rot,

we've got dry rot.

What else is in store?

It is an amazing property from the outside,

but step through the front door and you see a whole heap of potential

and a whole pile of potential problems.

But let's just relish the joy this property is before we get into

the nitty-gritty details of trying to bring it back to life.

A huge great lounge there with shuttered windows,

massively high ceilings.

You can almost imagine a Victorian ball taking place there.

And that's just the start.

This property presents me with a dilemma.

Do I allow the romantic in me fall in love

with the magnificent period features,

the ornate cornice and the statuesque arched windows?

Or do I listen to my business brain, which tells me to turn and run from

the nightmare of its dry rot and damp-ridden walls?

# What kind of dream is this?

# You can be a sweet dream or a beautiful nightmare

# Either way I don't want to wake up from you

# Turn the lights on!

# Sweet dream or a beautiful nightmare... #

This is just flat number one.

One down, five to go.

This two-bedroom apartment is the largest of the six

and has its own private entrance.

The other five are accessed from the side of the building,

but their communal entrance is no less imposing.

Such intricate craftsmanship and fine detail deserves to be restored

to its former glory.

# But your eyes will return to their former glory! #

This section of the building is four two-bedroomed apartments

and a single one-bedroom.

Each flat is in dire need of major renovation.

At first I was lovestruck by this place,

but now I'm awestruck by quite how much work it needs

to bring it up to scratch.

I've come through to another of the flats,

and just the overwhelming amount of work required here becomes apparent.

I mean, look at this above the fireplace.

Serious indications that the roof is leaking,

how else would this become so badly,...

..well, in the state that it is.

But it's other details that scare me in this place. Little things you might not think about.

The coving there, that's going to need a specialist to sort it out

cos this is a listed building, so something like that, a specialist,

around ten to £50 per foot just to restore that.

So let's say, this room alone,

that's about 1,800 quid just to do the coving.

The windows, again you can't just stick plastic in there

or something that's mass produced, they're going to have to be handmade.

Every single time you look at a window and think, it's going to need a new one of those,

including the shutters around it, that's another £2,000.

It's a fantastic place but... deep pockets,

that ain't... that ain't the half of it!

This is the catch-22 of listed buildings.

The restrictions the conservation order imposes

has kept the beauty of this building intact,

but it's also preventing developers from investing in its restoration.

Some buildings simply become uneconomic.

The back garden is of a similar scale and in a similar state.

It's a grand old mess. But all in all, this is an impressive place.

We invited the auctioneer who sold it to give us his opinion on it,

bearing in mind it's guide price of £99,000.

A tremendous amount of work needs doing in this property,

and you'd have to start with the roof,

I think the roof in this particular property needs looking at.

And then you'd work your way down from there.

He does not believe there is profit to be made by renovating and then

selling the six flats on the local market.

However, on the rental side, they could be real money-spinners.

Each flat would probably achieve in excess of £300 per calendar month.

Well, this faded, elegant lady of a property

may well have seen better days and is in desperate need of a facelift,

but she's got a few tricks up her sleeve.

The income generation potential is enormous,

but then so is the potential bill for doing it.

Let's see who fell in love with her when it went under the hammer.

So, all the nines, 99 is a guide. 90 anywhere?

Not going lower at 90, anybody... £90,000 I've got. Thank you, madam.

92 I've got... 94.

96... 98... 99.

100.

It's what every seller hopes for.

The bidding was steady and consistent.

We rejoin it at £122,000.

122, 123. 124.

And 125. 125 I've got,

126 may I see? 127, 128.

At 129, are you in? Shake of the head, it's with you at 128.

At £128,000 then...

129 I've got, back in.

130.

Shake of the head at 131.

It's with you now, madam, at 130 for the first time.

It's with you, madam, at £130,000 for the second time.

Are you out, sir? You're out. At £130,000, selling away.

It was Carol who made the successful bid.

She's a project manager in building developments

but has been adding to her own property portfolio in recent years.

She currently lives in Newcastle,

but has, in the past, developed properties in Whitehaven.

-Lovely to meet you. Congratulations.

-Thank you.

-Bit of a weekend repair job, then?

-Couple of days(!)

What an amazing property. Tell me why you wanted to buy it.

I've got a property in Whitehaven already and

I love the people here. So I've been looking for another property

I could end up eventually living in.

-Right, so are you a property...?

-Yeah, I've got a few.

-Expert type thing.

-Oh, expert's such a difficult word, isn't it?

-I've got a few properties.

-Right, and in terms of a renovation of this kind of magnitude,

anything like this you've taken on before?

Pretty much every one of my properties I've done from,

not as bad a state as this but not a great state,

-cos I've always tried to buy them in a rubbish situation.

-Right.

Then will you sort of act as a project manager and bring in people to do the work?

Yeah, yeah. Because I've already done one here,

I've already got all the local trades,

I know individuals, and they're used to me, and I'm used to them.

-So I know the crew that's going to deal with this.

-Hm, that's good to know.

-Have they seen the house yet?

-Yeah.

HE LAUGHS

And did they wring their hands

at the thought of all the money that's going to be coming their way?

Well, not exactly.

One of them said, "Oh, it's a beauty house," when he stood outside.

And then he walked round and he walked up the stairs

right the way to the top and he went,

"Oh, we're going to be fit!"

That was it, that was all he said. I said, "Remember I want it coved!"

Carol certainly seems to be confident

that she can meet the challenges of this renovation head-on.

She intends to live in the flat with the private entrance,

so what are her plans for that?

So what are you going to do with this flat?

The Georgians and the Victorians went in for their colour,

and they liked their gilt and that sort of thing.

So maybe not all of the rooms but I think one of the rooms

I'll put in quite an extravagant style.

Normally I just look at the figures and I say,

How much does it cost? How much will it make me? Do it or don't do it.

You know, and I'm that clear-cut.

-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.

It also needs to be done in a businesslike fashion as well,

because, whilst I might have a heart in the flat at the front,

the rest of the house has got to pay for it,

and it's got to pay for it pretty well.

Can Carol really have the best of both worlds?

A passion project with no expense spared,

and a financially beneficial investment?

How much is she planning to spend here?

My low estimate is 65 grand, my high estimate is 110.

-Wow, almost double!

-Yeah. It depends on this flat.

If I get this one for myself, I'll do it a different spec

than I'll do for the ones that I rent out.

-So the time scale then?

-Um, I think 12 months.

I think, hopefully, I'll get some of them done before that for sure,

and rent it out. But to get everything finished, 12 months.

Well, I can't wait to see what you do with the place.

-Yeah, me too.

-Good luck with it.

-Thank you.

-Lovely to meet you.

-Nice to meet you.

Well, I can completely understand why Carol fell in love with this place.

And financially, once it's all sorted out, it does make brilliant sense.

However, to get to that point, there is the restoration to do,

and I think she has wildly underestimated the budget.

This place could be a money pit.

You can find out how her bank balance gets on later in the show.

-The moment of reckoning has arrived.

-Have those property gambles paid off,

-or have our buyers backed the wrong horse?

-Let's find out.

Back to sunny Surrey now to catch up with Umar in Thornton Heath.

He bought this two-bedroom property at auction for £181,000.

It was his second development, which he planned to rent out

once he's done a good renovation.

But he also has a full-time job in computing.

So you're an IT consultant. Why property?

It's a good income to have.

That's why I've been going into this over the last few years. It means

I can invest my money, and it's a nice passive income on the side.

Passive? Well, only once you've completed all the work, Umar.

He hoped that his team of builders would get the house ready

for tenants within six to eight weeks. We caught up with him

just at the end of that timeframe to see what had happened.

Not quite finished, but as you can see it's almost there.

So what exactly has he done in here?

In terms of the changes we've made in the property,

we carried out full renovation of the electrics.

We put in a new central heating system and boiler.

We replaced the bathroom and kitchen,

and throughout the house we've redecorated.

We wanted a very neutral look, so we've gone for cream walls and just white woodwork,

and the flooring's very neutral as well.

# A little bit brighter!

# Lighter, every day! #

It's perfect for renting out. Clean, modern, fresh, and neutral enough

to let tenants start with a blank canvas.

Structurally, there has been one change on the ground floor.

Before, there was a kitchen here and the dining room here.

There was a wall in-between.

A door connected the kitchen and dining room, and there was a cupboard underneath the stairs.

So we took all the doors, walls and the cupboard out

and opened up the space, levelled the floor.

It's looking a lot brighter and more pleasant now.

# A little bit brighter!

# Lighter, every day! #

I thought there might be an opportunity to extend that side return,

but Umar decided the cost of it didn't add up.

So instead he's put the outbuildings to good use.

I wasn't sure what the outbuildings were.

One of them was an external toilet,

so we've just left it as it is, as another feature.

And the other two we've left as just storage areas, as small sheds.

Busy with other work, Umar left his team of builders to get on with it.

And it looks like they've done a cracking job!

It's so important for a property developer to be able to trust his building team.

It really takes the stress out of a project.

But then it doesn't seem as though anything would stress out "cool-as-a-cucumber" Umar.

I was a bit busy with other projects so I probably wasn't here as much as I wanted to be.

But, overall, I had a great team that were really helpful.

They understood the way I wanted them to work and got on with it really well,

so I tried to sort of manage the work from a distance.

So what about the budget, then?

His original estimate was between 15 and 20,000.

The overall spend now is at about 16,000.

There's probably a few hundred still to spend,

so things like curtain poles,

cabinets and mirrors in the bathroom, etc.

But I think we're probably looking at 16 to 17,000.

A grand or two more isn't bad at all in the grand scheme of things.

But what about timescale? It looks almost ready to move into.

But exactly how long has it taken to get to this stage?

He told us he was hoping to finish it in six to eight weeks.

I was hoping it'd be a tiny bit sooner.

Probably hoping for about five to six weeks. Building work

does typically overrun. Things take a bit longer than expected.

I think we've probably just got a few days worth of work left,

so I'd estimate, it looks like just six to eight weeks it has taken.

It's been a fairly straightforward renovation, there is potential here

to extend into the loft or even out the back.

So does Umar plan to do anymore work here in the future?

There's probably a few things we could consider about the property,

for example the box room upstairs, making it into three-bedrooms,

and possibly putting a conservatory in the garden.

That would work quite well because

it's an L-shaped ground floor and we'd fill in the gap. However,

I think, for now, I'm just going to let it out and see how it goes.

And maybe in a few years' time we might consider that.

Umar has always planned to rent it out and, in fact,

he already has tenants lined up.

Is he getting the market rate, though?

Let's find out from two local property experts.

First, what do they think of the work?

The last time I was here it didn't feel so spacious

and now it really does. So the vendor's done an excellent job.

It's a good property. Good-sized rooms.

I'm quite impressed, it looks bright and airy.

I particularly like the kitchen.

What about that all-important rental figure?

Has Umar negotiated the best rate from his new tenants?

We would attempt to rent this property

at around £1,100 per calendar month.

This property would rent for approximately £1,100 per calendar month.

I'm happy with that, that's what I was expecting.

I did my research about a month or so ago.

And the tenants that I've managed to secure agreed to pay £1,100.

That would give Umar a yield of 6.5 percent.

But what about resale value? Don't forget, he paid 56,000 grand

over the guide price when he bought it.

If you add his purchase price of 181,000 to his £17,000 spend,

that means he's invested £198,000. What could he sell it for?

We could market this property at £225,000.

I think this property would achieve

somewhere in the region of 200,000 to £210,000.

I'm quite pleasantly surprised.

I was actually expecting the value would be between 200 and 210.

So that's spot on, but I'm pleased somebody valued it up to £225,000.

So a good yield if he lets it and a good profit if he sells it.

Plus, he's brought the project in on time and on budget.

Has the success here made him want to pack up the day job

and do this full time?

No, probably not. Maybe one day, in a few years' time,

but probably not now. I work in IT, I'm quite happy with my day job,

and to do this on the side, I'm quite happy as well.

Welcome back to Whitehaven on the Cumbrian coast,

where I viewed this Georgian mansion house.

It had been converted into six apartments.

Although it was rundown and dilapidated in places,

there were also enough vestiges of its former glory

to entice Newcastle-based property developer Carol

to pay a £130,000 for it,

£31,000 over the guide price.

This was not only a business investment for her,

she also planned to make the grandest of the apartments her home.

Normally I just look at the figures and say, how much does it cost?

How much will it make me? Do it or don't do it, you know?

And I'm that clear-cut. This one grabbed my heart a little bit.

The building was listed and in a conservation area.

So I had been concerned the property could prove to be a money pit.

We've returned 18 months later

to find out if this labour of love has paid off.

# Would you let me see beneath your beautiful?

# Would you let me see beneath your beautiful

# Tonight... #

This is the bit that I'm really the most proud of.

My sister and I spent nearly two months

painting each one of these balustrades by hand.

And we nearly killed ourselves, because it's easy to do it here,

and it's really not very easy to do it right up there.

Before any internal work could begin, Carol first contracted

a roofing company to make the building watertight.

She then began the process of renovating the apartments.

So far she's refurbished the two flats on the top floor -

and both are currently rented out.

Work continues on the three flats on the first floor,

and the ground floor flat which will be Carol's home.

The big issue for Carol on this renovation

hasn't been damp-ridden walls,

crumbling plasterwork, or the local conservation office

ensuring that all the work carried out meets their requirements.

It was the crucial ingredient that all renovations require.

The biggest problem we had was I ran out of money. Plain and simple.

I knew that I was going to remortgage one of my flats.

It was all done, it was all a done-deal.

I said, "Right, I don't need that for about three months

so I'll hold off on it." Er... I wish I'd put it in the bank.

Because, you know, the market changes all the time,

and I hadn't changed, my circumstances hadn't changed,

but the mortgage company had changed their minds.

And then I scrabbled round friends and families and, you know,

all sorts of things.

Despite this setback, Carol's commitment to this renovation

has never wavered.

As the project progresses, albeit slower than she's hoped,

she finds a new piece of the property to fall in love with.

This wall separates this little side area

from the rest of the garden at the back.

And my intention is, this is going to be my private garden,

this is going to be like secret garden type of thing.

The tenants have got the bit at the back.

# There's a secret garden she has! #

Carol is six months over the 12-month schedule.

And with the finishing line far in the distance,

will she manage to keep within her planned maximum spend of £110,000?

I have spent about £60,000 at the moment.

I've also spent roughly £20,000 in fees.

Cos I bridged for the first seven months cos it wasn't mortgageable,

you know, when I first took it on. Um...

I still expect to spend something in the order of another 40,000.

That would take her total outlay,

including her £130,000 purchase price,

up to £250,000. That's a hefty chunk of change.

But Carol is sure her investment will reap its rewards,

and she can't wait to move into her new home in Whitehaven at last.

I love Whitehaven, the people are beautiful.

They are absolutely friendly as anything, they help you,

I've made loads of friends here.

And we're no more than two hours away from my family in Newcastle,

so it's perfect as far as I'm concerned.

We asked two local property experts for their opinions,

including the auctioneer who sold it.

My first impression is, walking back in the door today, is

I think a lot of the work that has been done is unseen,

the foundations have been laid.

It's now a matter of working through the property

and getting the rest finished.

The owner has put the top two flats into a rental state in order that

they can start generating an income,

which will help fund the rest of the project.

The expert's agree that the highest value of this property would lie in

selling it as a going business concern

once the renovation's complete and all the apartments are let.

Carol's estimated total investment in this building is 250,000.

We've put the property at between £200,000 and £250,000.

I would estimate that the resale value at the current time

would be in the region of 200 to £250,000.

I really hope my mortgage company doesn't hear that before this show goes out

because they've already said that the end value is likely to be 278.

So I'm, for the moment, going to stick with what the mortgage company said.

I think that's probably a better place to be in my own head as well.

Rental-wise, the experts value the flat

at between 300 and £400 per calendar month,

depending on their size. However,

Carol is letting the two top floor flats,

which are the smallest apartments in the building,

for a combined figure of £1,000 per calendar month.

If her estimates for the other flats are met,

she'll earn a cracking rental yield of around 14 percent.

Looking back at everything Carol's achieved, and all she has yet to do,

how does she feel about this project now?

For me, the experience has been, at times, overwhelming.

It's a bit of a rollercoaster really, I think.

My intention is always to take everything I can from it,

from a positive sense. And... most of the time I'm OK with that.

Yeah, most of the time I get there.

I'm positive Carol will overcome the challenges she has ahead of her,

and hopefully, one day, we'll see the finished renovation.

Whether you're an old-time property developer or a complete novice,

join us next time for more stories from the auction rooms.

-Yes, we'll see you then on Homes Under the Hammer.

-Goodbye!

-Goodbye!

Subtitles by Red Bee Media Ltd