Episode 57 Homes Under the Hammer

If you want to invest in property, make sure that you buy

at the right price - but that's not always easy.

How do you know what the market is doing? Is it rising or falling?

One way to gauge demand is to take a trip to your local auction house.

Auctions are really exciting and you can easily be tempted to buy,

but to guarantee success, you have to do your homework first.

Let's see what properties created interest at auction on today's show.

'In Staffordshire, we meet a Hollywood cameraman

'whose new project is sure to be an absolute blockbuster.'

'In East Ham, London, a fashion designer's first auction buy

'sees him investing more money on a home for less time on a lease.'

'And a blast from the past on Homes Under The Hammer,

'as we revisit a property bought in 2007,

'and check in to see how the owner's got on since.'

'All these properties were bought at auction.

'We find out who bought them and for how much

'when they went under the hammer.'

'Welcome to Wolstanton in Staffordshire.

'The buoyant property market is helped by the lovely parks, friendly small-town feel

'and having Stoke-on-Trent and Newcastle-under-Lyme an easy commute away.'

We have established we like the area. What is the property like?

It's a three-bedroom terrace. Has a guide price of 70,000 quid.

That's if I can find it, fighting my through the buddleia.

# Hey, hey, hey I'm beating around the bush. #

'This house looked to me like a traditional two-up, two-down terrace

'so it'll be interesting to find out where that third bedroom is.

'To begin with, trimming back the foliage will help improve this property's kerb appeal.'

So, first investment, a pair of pruning shears!

What have we got, in terms of the house?

Through the front door into the lounge.

Lots of light pouring in from the bay window area.

That's pretty reasonable.

Fairly standard layout. Stairs up to your bedrooms.

Through to your rear sitting room.

This is where the house would have ended - a classic two-up, two down.

Oh, dear. Just before we go on,

don't like the look of that.

Nasty bits of damp going on.

We'll have a look outside and see what's causing that.

Need to get that checked out. Also, do check the floor joists.

They may have been affected by whatever's causing that.

Then the house continues

into this, which is... It's a half-decent sized kitchen.

But it feels very cramped, partly because of the layout.

If you did this with more care, you could create something

a bit more friendly and not as claustrophobic feeling.

Then it carries on! Here you've got a loo.

Come on, come on.

Down this little corridor, it continues and continues

to this bathroom.

-CHUCKLING:

-Suddenly, this little terrace is going on and on and on.

In an ideal world, you'd clearly prefer a bathroom and loo upstairs.

If you could achieve that,

then knock this through, taking out the bathroom and the loo,

you've got an amazing space

with French doors out onto the garden. Wow!

'This property is chock-a-block with potential.

'Remodelling it will improve the profit margins.

'The back garden, like the front, is in need of serious hacking back.

'There is rear access to a driveway and also a garage.

'As for the damp in the back reception room,

'I spy what I believe to be the cause - blocked and leaky gutters.

'It may be worth getting an expert to verify that,

'but if it proves to be the case, it's inexpensive to fix.

'Let's investigate upstairs.

'At the front is a good sized double and at the back, the master bedroom.

'Unfortunately, the third bedroom is accessed through the master

'in the first-floor extension.

'That's far from ideal, but no need to worry, as I have a cunning plan.'

Upstairs, the smallest of the three bedrooms here

would be an ideal location for an upstairs bathroom and loo.

The only problem is, A, you lose a bedroom, which isn't good,

and B, the only way to access it is through one of the bedrooms.

You could put in a corridor or even change the stairs round,

but that's quite a lot of expense.

It's desirable to have the bathroom upstairs.

That desirable? I'm not so sure.

However, something which is even more exciting is here.

As somebody else has been thinking, it's worth looking into the loft.

There's a lot of space and you might consider a third bedroom up there.

Under normal circumstances, in a terraced property

it's debatable whether it's worth it, in terms of how much it costs

and how much you're going to add to the resale price.

But in this case, because the area's so desirable

and the house is a good size, I think adding that would be worth it.

If you got this at the guide price, it could make you quite a bit of money.

'This terraced house is almost 100 years old.

'Renovating it to ensure it lasts another 100 years is something to be proud of.

'But making money is the name of the game in property development.

'We asked a local estate agent for her opinion on this place,

'which had a guide price of £70,000.'

It's got a lot of potential,

but does need modernising throughout.

It is on a very sought-after road.

'If this property was modernised, how much could it then be worth?'

If the property was fully renovated, I would look at achieving in the region of £115,000 to £120,000.

'If the bathroom was moved upstairs and the attic converted?'

With the third bedroom in the loft and a family bathroom on the first floor,

I would look at achieving in the region of £140,000 to £150,000.

'What about rental?'

If the property was modernised, you could look at achieving

in the region of £495 to £525 per calendar month.

With the third bedroom in the loft, you could look at achieving £600 per calendar month.

As auction lots go, this is a good'un.

Nice area and the property could do with a few internal modifications,

but spend some cash and you'd get more in terms of your money back.

Let's see who agreed and went for it at the auction.

60 to start me on this?

55, then? Get me going at 55.

55 bid, thank you. At £55,000. 60 can I say now?

60. At 60,000.

65?

62,000. Two to you, sir. 64?

64,000.

66?

66. Do you want to go in ones?

You do. 67.

68.

69. 70.

At £70,000. Bid's left at 70,000.

Another one? First time at...

New bidder. £71,000. At 71.

72. 73?

73.

74? 74.

75. At £75,000. Bid's there. Pointing at him now.

At 75,000 against you, sir.

Against you, sir. Bid's there. Green shirt, no mistake.

At 75, then, first time.

At 75, second time.

Third and final time at 75,000.

76.

77.

78. 79.

80. 81.

82. 83. 84.

85. Shaking his head.

Still with you, sir, £85,000.

85 for the first time.

85 for the second time.

Third and final time at £85,000.

'It was Trevor who made the successful bid at 85,000.

'He has experience of property renovation,

'having worked in the building trade in his early 20s.

'However, the glitz and glamour of Hollywood movies enticed him away

'and he currently works as a film cameraman.

'So, it's lights, camera, action - and I'm ready for my close-up.'

-Trevor, good to meet you.

-And you.

-Congratulations.

-Thank you. I think.

-Tell me why you wanted this place.

-We'd been researching this area for six months.

We started property dabbling down south, but suddenly realised...

-Not suddenly! ..that you could get more for your money up here.

-Wow!

-How did you do that?

-Well, research on the internet.

-Oh.

-Yeah.

Download the catalogues of every auction in the country,

discount 90% of them,

examine the other 10% a little bit more closely, elbow 90% of those,

come up with a couple per auction and this ticked all the boxes.

There's no wet rot, dry rot. There's a bit of damp, but not rot.

And it needs improving. It needs the bathroom moving upstairs.

-We're going to change these stairs around.

-You are?

-They're so steep!

Does that give you the corridor to access the bathroom?

Yes, we will build walls in the back bedroom.

Because they're quite big rooms for a small house,

it will still be a small double.

'Trevor has a budget of £30,000 to £40,000,

'depending on whether he decides to convert the attic into a bedroom.

'This would increase the chances of a quick sale.

'He's based in London, but will hire local builders to do the renovation,

'which he hopes to have completed within four months.'

How do you manage the renovations of properties from a distance?

I'll be coming up a couple of days a week.

I work in the film industry, and if I'm not on a movie or TV series,

I have a lot of rest periods in between!

I can take days off to come up and make sure they're pulling their weight.

-What exactly do you do?

-I'm a freelance camera operator and director of photography.

-It depends what I do.

-What do you work on?

-My career's based in large features, Harry Potter and Star Wars...

-No?

-Yeah.

-Harry Potter and Star Wars?

Yes. Indiana Jones, that sort of stuff.

-No way?

-Absolutely.

'Trevor has worked with famous stars of the silver screen,

'including Marlon Brando, Harrison Ford, Tom Hanks, Brad Pitt

'and now, at last, yours truly, Martin Roberts.

'Well, maybe not quite!'

# Could you be a teenage idol?

# Could you be a movie star...? #

So, the move from movies to property, is that...?

It's not a move. When I left school, I was a partner in a building firm for eight years

while I was trying to make my way in the film industry.

I had to make a decision to either go full-time building or full-time film.

The lure of Hollywood, or Pinewood, was greater than the lure of the local builders' merchant!

-Listen, good luck. Congratulations.

-Thank you.

-I look forward to seeing how you get on.

-Yes, in three months or five months or whatever it is.

So, as well as lights, camera, action,

it's now research, renovate and sell for Trevor.

With this property, I think he's got a really good one.

Will he end up doing that loft conversion?

You can find out later in the show.

'Looking for an affordable property in London can be a struggle,

'but the borough of Newham might be a good place to start,

'as it currently has the cheapest homes in the city.

'The average price there is 220,000.

'That's a lot of money, but if that is in your price range,

'East Ham in the middle of the borough is worth investigating.'

Just ten minutes or so from the Tube is the property I'm here to see.

It's in this block. It's got three bedrooms and it had a guide price of £105,000.

'OK, not a looker from the outside,

'but it does have a communal area,

'plenty of space for the kids to play and to hang out your washing,

'plus loads of off-street parking, which in London is a bonus.

'Inside, the communal area looks fine.

'So, what about the interior?'

Well, I'm not expecting character in this property,

but hoping for good proportions and so far, so good.

Lovely space here. Very welcoming.

A bedroom with some big windows, although they will need replacing.

The decor has seen better days. Little bedroom through there.

A bathroom, where a bit of investigation needs to be going on,

because there might have been some sort of leak.

In here, I thought it was the lounge,

but it's actually a kitchen/lounge area.

I am wondering whether you could put the kitchen in here.

You'd need to look into this space carefully.

My guess is there's been a huge leak from upstairs

because the walls look rather damp.

Would you want to relocate the kitchen here? You lose a bedroom.

With a bit of careful planning, it might be worth leaving it as it is

and just spending some money on doing it up.

'Keeping it in this configuration needs some thought.

'The layout of the open-plan room could be better.

'That third bedroom might have been the original kitchen.

'You would have to weigh up what was most important to you - a separate kitchen or a third bedroom.

'But it is very flexible.

'So far, so good, then,

'but alas, there is a catch.'

We all know it's important to do your research.

You don't go by a little pic in the catalogue or the brief description.

You visit the property, you read the legal pack and, on the day, you check if there were any addendums,

a list the auction house produces

with additional information about the lots going under the hammer.

It's all there for you, if you just read it.

And in this case, that's uber-important

because the length of the lease in the catalogue was nice and long.

On the website, the legal pack and the addendum, it was different.

It had been amended to a very short 57 years.

Ouch!

# Please release me, let me go... #

'Time is of the essence when it comes to re-leasing a property.

'With only 57 years left, few mortgage companies would lend on it.

'So if you planned to sell it on, you could be in trouble.

'The less time the lease has left, the more expensive those years can be to add on.

'Unless you're prepared to fork out a lot more money to extend the lease

'I'd steer clear of this flat.

'The addendum on the auction house's website did correct the details,

'so it pays to check and double check before you bid.

'Could it work better as a rental?

'We asked a local estate agent for her thoughts.'

East Ham is a very good area for rentals at the moment

because of the Olympics and we have Newham University Hospital

about 15 minutes away from here.

And then we have Newham College.

It's a very populated area.

Also, we do have Eastern European communities,

which improved the rental side in the area.

'This sounds like a real rental machine with a hospital nearby

'and a community looking for rental properties.

'So, that all sounds promising. What might this flat achieve on the rental market?'

If the property would be modernised,

the rental income would be in between £1,050 and £1,100 per calendar month.

'As I said, trying to put this up for sale after refurbishment

'might be tricky with the lease issue.

'If it was refurbished to a good standard,

'what could it make, if sold on?'

If the lease would be renewed and the property modernised,

we're looking at a figure around £165,000 and £170,000.

At the guide price, there's probably still money in it

after a lease extension, if you wanted to sell this on.

If not, it's a very, very decent rental.

Let's see who went for it at the auction.

'On the day of the auction, the bidding started at £140,000.'

Three-bed flat. 140?

140 with you. Can't let him have it on his first bid.

140,000. 141?

141 on the phone.

142?

143 elsewhere? If not, 142.

First time.

Second time.

Third and last time... Where?

You should be jumping up and down. Where?

There.

143. Just.

144?

144 elsewhere? If not, 143...

First time.

Second time.

Third and last time. If you're all done...

Sold, 143.

'That was a bit of a struggle!

'The winning bidder hidden from our view

'who made that successful bid of 143,000 was Ali.

'He runs a designer men's wear shop.

'I met him at the three-bedroom flat to find out more.'

-Congratulations.

-Thank you.

-Why did you want to buy this flat?

I'm quite used to this area. I live local.

Not far from this flat.

I've been looking for a house in this area,

but I ended up with a flat.

And it looks quite nice, very spacious.

Also, I was very happy with the communal garden

and it's ground floor.

-You wanted a house, but you bought a flat.

-That's right.

-Did you look inside the property?

Yes, I had a quick view the week before the auction

and I was quite happy with it.

'This wasn't Ali's first choice at the auction.

'Failing to get one he wanted led him to being caught out on this.'

Did you get a chance to read the legal pack?

I didn't get a chance to read the legal pack on this one.

And what about the addendum they put in on the day?

Did you have a look at that?

Initially, as the lot number was going, I was looking at it.

-But this particular one got me excited, I didn't read it.

-Ah!

-It is so important that you read those.

-Yeah.

Now you've fallen down hugely. You bought a flat and you've got a very short lease.

-Yes.

-Did you know about the short lease?

No, only once I purchased it.

After going home, reading the addendum paper, I realised it's a shorter lease.

-Tell me honestly, how did you feel?

-I felt really bad.

-Oh, did you?

-Yes, I did.

'I do feel for him, but that's why Martin and I nag about the pitfalls of not doing thorough research.

'However, the good news is that Ali's consulted his solicitor,

'who believes an extension of the lease should be possible

'for £10,000 to £12,000, but he'll have to wait and see.

'Putting that aside, what are Ali's plans for the flat?'

Once I do my refurbishment, I'll see if I can find a buyer.

If not, I'll put it into the rental market.

-How much would you like to market the property for?

-Around 190, 195.

-So you need to take it up a notch?

-That's right.

What are you going to do and how are you going to change the layout, if at all?

I won't be changing the layout. Just new windows, new flooring.

All the paintwork has got to be done.

Do you think you'll put the kitchen back where it originally was,

or market this as a three-bedroom property?

I think I'll market it as a three-bedroom property,

if I can get away with it.

I'll probably have the kitchen, the dining and living together.

Around here, especially on the rental side,

three-bedder is popular, so I might be going for a three-bedder.

'Ali has a budget of 10,000 to 12,000.

'While he needs to keep his spend low, due to the lease extension,

'he also needs to do a really top quality job

'if he wants to get that 190 grand he was talking about.

'He'll keep an eye on the project by checking in every other day,

'and hopes to finish in four to six weeks.

'This is a world away from his day job running a men's designer wear business.

'While he has dealt in property before, this was his first auction buy.'

-Do you enjoy this or men's fashion?

-Men's fashion.

-More so than this?

-Yeah, this is new to me.

I've got to see how enjoyable this is, but I love the men's fashion.

-Ali, good luck. It's going to be great to see what you do.

-Thank you.

So, it's as I feared.

Ali missed the short lease!

That is just such a shame.

Still, it can be fixed and if he's clever, there could be a bit of profit.

Find out if there is later in the show.

'In Derby, we reveal the tooth... Sorry. ..truth behind this dentist's office.'

The temptation when you take on a project like this is to start again.

'Ali's lease issues aren't the only damp squibs,

'as he tries really hard to make more out of this flat in East Ham, London.'

'But first, cameraman Trevor's plans are still very much in production.'

It's a completely new house in an old frame.

'Back now to Wolstanton, Staffordshire,

'and this three-bed mid-terrace,

'which Trevor bought at auction for 85,000.

'In a previous life, he was a partner in a building firm,

'and already has a portfolio of rental properties.

'His day job is working as a camera operator on some pretty high-profile blockbusters.'

My career's been based in large features - Harry Potter, Star Wars.

-No?

-Yeah.

-Harry Potter and Star Wars?

-Yes.

-Indiana Jones and that sort of stuff.

-No way?

-Absolutely.

'Trevor was planning to rejig the layout of the mid-terrace,

'moving the bathroom to the first floor and possibly converting the loft.

'He had a budget of up to £40,000,

'and a three to five month timescale to do the work.

'11 months later, we went behind the scenes,

'to get a peek at what could be a masterpiece in the making.'

MUSIC: "More Like The Movies" by Dr Hook

'There's still a bit to do before Trevor lays any carpet here,

'red or otherwise,

'but it's well on the way to becoming an up-to-date family home.

'Knocking through the kitchen and downstairs bathroom

'has created a wonderful dining kitchen.'

I'm particularly pleased with the kitchen.

It's worked out very well indeed. Probably the best room in the house.

As you can see, it's all integral units,

fridge-freezer, eye-level oven.

It's a kitchen I'd like to move into!

And this end down here, which was the original bathroom,

is now a breakfast area with enough room for a table and four chairs.

The floor-to-ceiling windows, I'm particularly pleased with.

I think the kitchen-breakfast room has worked particularly well.

'This is a fantastic space,

'and the newly landscaped garden makes a great backdrop.

'Moving the super-steep stairs and opening them up works a treat.

'Up on the first floor, the layout is much improved.

'The family bathroom is a good size, as are the two bedrooms.

'Up more stairs, the third bedroom in the loft space is taking shape.'

Although when you look around, you won't feel it's nearing completion,

we're only three or four weeks away from completion.

The bathroom is 90% finished.

The loft has got quite a bit of work to do.

But all the structural stuff, we've had five RSJs...

'Cut! Let me explain.

'RSJ is industry speak for a rolled steel joist, a structural support.

'And - action!'

..put into various places to replace walls or chimney breasts or whatever that have gone.

There's been a lot of structural stuff. There was no central heating.

That's all been put in.

It's basically a completely new house in an old frame.

We've literally taken everything out and put it all back again.

'Delays in getting started meant that Trevor's builder of choice had to take other work.

'That in turn meant it took six months for things to get under way.

'Hence, the slip in timescale.

'The damp in the second reception room led to the extra expense

'of having the wall tanked,

'but has he managed to keep to keep to his £30,000 to £40,000 budget?'

We will have spent about 41 by the time we've completly finished.

'A £41,000 renovation cost on top of his purchase price of 85,000

'will bring Trevor's total outlay to £126,000.

'We asked two local property experts for their take on this mid-terrace.'

First impression is they've done quite a lot of work to it.

They've stripped it back to brick and renovated the property entirely.

The renovation's been carried out to a very high standard,

which I'm really pleased with.

It's maximised its potential. I don't think there's much more you could do.

'What do they believe that the completed mid-terrace would fetch on the resale market?'

Once the property is renovated in full, I'd expect it to go on the market for £135,000.

I'd have no problem placing this property on the market for £150,000.

So either side of what we were hoping for, a minimum of 140.

If it gets nearer the 150 mark, so much the better.

If it's down at the 135 mark, we would almost certainly put it into the rental market.

'The estate agents' resale valuations would give Trevor a profit before tax and expenses

'of between 9,000 and 24,000.

'What about rental estimates?'

Should the owner lease the property, a rental value of £550 per calendar month should be placed.

If I were to place this property on the rental market,

I'd happily place it on the market at £550 per calendar month.

'Those rental valuations would give Trevor a yield of just over 5%.

'How has he enjoyed focusing on builders in Staffordshire

'rather than movie stars on film sets?'

It's quite exciting. Every time I come up, there's new bits done

and it's nearer to completion, probably three or four weeks away.

So, yes. Basically, I'm very pleased with it.

'It was way back in 2007

'when I visited a very unusual auction lot in Derby.

'The catalogue description was enough to get me really excited.'

It's a five-bedroom Victorian villa, guided at 200,000 quid.

I can't wait to have a look inside.

'I don't come across this type of property every day -

'a really grand frontage with a nice corner plot set back from the road.

'One problem is immediately apparent.

'There is no off-street parking.

'As a five-bedroomed house, this is likely to attract a two-car family,

'so I'd want to solve that issue.'

There's always a sense of anticipation

coming into a house like this - and wow, it doesn't disappoint.

Lovely entrance area with this etched glass.

You've got a drawing room there with shuttered windows.

Through this large entrance hall.

You've got great big archways.

You've got more original features than you could ever wish for.

All this needs to be cleaned off.

The feeling you get looking up the stairs, more arches on that doorway,

absolutely beautiful.

This is the main part of the house. You go this way into a separate annexe.

The place is obviously full of someone's belongings.

It's not an unhappy story in this instance.

It's just that the current owner hasn't moved out yet.

We've got a nice living area here.

Fireplace there, again, loads of character.

This place is SO full of character I don't know where to start.

You've got a bathroom there.

Through here, a conservatory. That's nice to see.

A kitchen off it there. It's fairly small, but it's one of two kitchens in the house.

What this whole area does is give the house great flexibility.

It's a nice start.

'The advantage of the current owner's furniture being here

'is that you can see how the rooms work,

'how a mixture of new and old can be married

'and gives a flavour of how the house could be.

'The configuration is a bit higgledy piggledy,

'but that offers a range of options which I really like.'

Back over in the main body of the house,

you've got lots of lovely practical rooms.

This is a sitting room area with a real fire.

The cats, presumably the current owner's, seem to be enjoying it.

Through there into what I suppose is the only downside of the house.

Well, the only downside inside.

The kitchen, it's way too small for the size of the house.

Fairly old-fashioned units, but that's not the main issue.

It's the fact that it really is not what it could be, which is the focal point of a house like this.

You would need to do some thinking in terms of knocking down walls

and integrating this into the rest of the house.

Apart from that, there's a lot of house for the money.

There's a lovely blend of old and new here

and potential to change the layout.

Then this place really would be the cat's whiskers!

Upstairs, and on this mid-landing area,

one issue with the property - a bathroom.

That is the main bathroom and it's only got a shower,

so it's disproportionately small in relation to the property.

But what you have got is wonderful big bedrooms, five of them in total.

They've all got wooden floors, lots of storage space,

features oozing out of them.

In this one, we've got a real fireplace. It's lovely.

What it also throws open is a possibility of using it for a variety of uses.

You could have it as a family home, but so many rooms like this,

maybe it could be an HMO, a house of multiple occupancy,

rent it out to students.

I don't know. It's got options.

But what a great place to live in just as a family home!

At the rear of the property, a bit of a bonus, there is a garden.

It's low-maintenance, no grass or anything, just paving stones.

For a town-centre house like this, not a bad size space.

The biggest issue, though, is parking. There isn't any.

On the other side of that wall there is on-street parking.

What you might want to consider, this was the case in the past,

somebody knocked down that wall, so you could bring cars in here.

That's an issue if you're looking at it as a residential home.

If you are considering it as a kind of office or commercial use,

parking would be a major issue and you would have to address that.

'There are plenty of options with the right permissions,

'or then again, it could just be a cracking family home.'

These are the original deeds of the house,

handwritten on parchment with the old wax seal and everything.

How much did it originally sell for?

£105. Brilliant!

It's an example of the kind of history of this place.

Not only have you got the original features, you've got a great old-fashioned wonderful home here.

The reality is, somebody will probably split it up,

which will be a real shame.

You never know, though. Let's find out who did buy it at the auction.

Lot number 38. Double-fronted detached period residence.

Very handsome property. What am I saying for this? £220,000?

220 is bid. Thank you. £220,000 bid. 22. 222.

24 is bid.

226. 28, sir? 228.

230. 230. 232?

At 230,000. 32 is bid.

A fresh bidder. 232. 234. 234.

236. 236.

38? 238?

At £236,000. All done with it?

For the first time at 236.

For the second time at 236. Third and last chance.

That, ladies and gentlemen, is withdrawn.

'The lot failed to reach its reserve on the day,

'but a deal was struck after the auction.

'Pete, who has worked in the motor trade and as an electrician,

'paid £240,000 for the Victorian villa.

'He's taking this one on with his partner, Karen.'

Pete, nice to meet you. Why did you want to buy this place so much?

It's got a lot of character and we're looking at somewhere

for conversion into a dental practice - Karen's a dentist.

-A dental practice?

-A dental practice.

-Karen your partner?

-Yes.

-Would this make a good dental practice?

-I think so.

There's a lot of good-sized rooms, areas for reception rooms,

waiting rooms, but it needs a lot of organisation to work out the layout.

We've got to work it for disabled access, due to the regulations.

Also, car parking. The back wall, I understand, used to have a hole to get cars into the back.

Now it's all bricked up and the back area's been raised.

We'll have to get permission off the council, get the kerb dropped, a gate put in.

Car parking for staff is one of the requirements for conversion.

'Over and above that, it needs a change of use from residential to commercial,

'so there's a lot to sort out.

'Apparently, it's not that different from Karen's current practice in Derby.

'She rents that, which is why she now wants a place of her own.'

What are you going to do to it, subject to getting all the permissions?

Subject to planning, at least three surgeries, dental.

We hope to put some other healthcare things in as well,

maybe a chiropodist, something like a chiropractor or a beautician,

something you can do in a residential area without upsetting anyone.

What would you need to do to convert it in such a fashion?

With the dental thing, we'll put compressors in the cellar.

There's got to be water and electrics changed.

You have X-ray machines that need connections to a central computer

for collection of data.

It sounds like the conversion could be a quite specific and expensive process.

Oh, yeah. Anything dental is very expensive.

Ballpark figure, once you've got the room fitted,

just to put the equipment in there, the chair's £8,000, £9,000.

You're looking about £30,000 just to put the cabinets in the one room.

-Wow!

-Put three of those in, there's £90,000 for a start.

-To kit it out!

-We haven't put a compressor in the cellar yet,

or changed the wiring or even thought about doing reception out.

'Pete hopes he can retain as many original features as possible.'

I've been looking at the floors, stripping those, varnishing those,

not just putting modern floor coverings over the top.

The nice staircase and the mouldings in the hallway.

We're trying to retain as much as we can.

If you feel comfy, it's like someone's front room, you feel more relaxed.

You never feel relaxed going to the dentist.

You can get somewhere near feeling more relaxed.

You can try and do your best to put someone at ease.

'Well, that was in September 2007.

'When we went back six months later,

'converting the villa to a dentist surgery was proving to be like...

'pulling teeth - for want of a better phrase.

'Pete and Karen were on hand to show us around the cleared-out house,

'but things were still very much at the planning stage.

'However, Karen's vision for the new practice was quite clear.'

OK, what we've got here is a set of existing plans.

This is the building, as it's mapped out at the moment.

This room, we want to maintain this as a waiting room.

It has some lovely features, the original fireplace and the beautiful floor.

We'll put a corridor across the back of it.

That allows access to the conservatory, which will make a great staff sitting room.

Off that, we have the second kitchen and a staff bathroom.

For the remainder of the ground floor, access would be through the back of the house.

We would have disabled access from the car parking facility.

The two other rooms on the ground floor would be surgeries with disabled access.

On the upper floor, we have two surgeries

and a central sterilisation area.

We still have two rooms, which we could use for other practitioners.

We may have those as consulting rooms, which we may rent out to other people.

'There were still many issues to sort out with the council,

'not least that disabled access and the car parking.

'But Pete, who was going to project manage the conversion,

'had uncovered a nasty surprise.'

The damp problem, as you can see

from the state of this wall, all the salt's coming out, is quite severe.

We've had to knock off the plaster quite a way up.

I think we're going to have to have this wall repaired,

possibly damp-injected and membranes and things.

'The dental surgery-to-be was at something of an implant.

'Sorry, I mean impasse.

'Find out what happens when we return over five years on.

'Had Karen and Pete bitten off more than they could chew?

'Or did they hold their nerve and scale the heights of dental reconstruction?

'Brace yourselves! I'm rooting for them!'

It's always easy to put things off till tomorrow,

but time is money and delays can be very stressful - and expensive.

Have our buyers been busy or letting the grass grow under their feet?

Let's check them out.

'Back to East Ham in London.

'Clothes shop owner Ali bought this three-bedroom ground floor flat

'for 143,000.

'Although he owns one other property it was Ali's first time buying at auction.

'There was one rather vital detail that he really should have known.'

-Did you read the legal pack?

-No, I didn't get the chance to read the legal pack on this one.

-This particular one got me excited. I didn't read it.

-Ah!

-Did you know about the short lease?

-No. Only once I purchased it.

After going home, reading the addendum paper,

I realised it's a shorter lease.

-Then tell me honestly how you felt.

-I felt really bad.

-Oh, did you?

-Yes, I did.

# Holding back the years... #

'Ali had every reason to feel bad.

'A last-minute addendum to the catalogue that he didn't read

'was going to cost him dear.

'With only 57 years left on the lease,

'selling the property on was going to be tricky.

'His choices were either to rent it out or negotiate with the lease holder to extend the lease.

'The latter would put paid to his hopes of keeping his budget between 10,000 and 12,000.

'On top of that major issue, there were the usual

'trials and tribulations of property development - damp and dingy decor.

'Two months later, we're back to see if he's transformed the flat

'and managed to reel in the years of that lease.'

MUSIC: "Reeling In The Years" by Steely Dan

'Ali kept to his plan of keeping the reconfigured kitchen where it was

'with this open-plan living space, which not only kept his costs down,

'but allowed him to retain that third bedroom.

'He now has a smart kitchen-living area,

'a totally refitted bathroom

'and three bedrooms, all looking much better.'

There was a kitchen here before. It was quite in a bad state.

We have replaced the kitchen with complete new fittings,

a new oven's been put in, a new cooker, new hood.

I'm very pleased with the kitchen. It's quite nice, bright and modern.

It goes quite well.

In total, it cost me just under £1,500.

'Considering the improvements Ali's made, that sounds about right.

'He spent 12,000 in total refurbishing this property.

'He had to pay to resolve the damp issues and other expensive items.'

The money has been spread everywhere, mainly on the window, which is £2,450.

Apart from that, the flooring was reasonable.

The kitchen was reasonable as well.

The work has taken six to seven weeks.

'Ali has managed to stick closely to his estimated schedule

'and also seems to be on budget.

'But of course, what's not included is the cost of extending the lease,

'if he's managed to get the freeholder even to agree on a fee.'

Initially, we found that you cannot buy a new lease.

You have to own the property for two years.

I've been in touch with the freeholder, actually,

and they have agreed to sell a new lease,

which is for 90 years and we have agreed £10,000.

'Ouch! Believe it or not, Ali has been extremely lucky

'that his freeholder agreed to negotiate so early on,

'but not so lucky about the additional cost.

'10,000 is a big budget-busting amount

'and makes Ali's opportunity for a profit ever slimmer.

'It's a costly lesson, but at least it's one he's managed to take in his stride.

'Last-minute addendums are a factor at auctions, so do watch out.

'That initial concern aside, Ali seems happy enough.'

I was very relieved. Initially, I thought it would be quite stressful.

But the freeholder has agreed a new lease

and it has been going through the solicitors.

'The leasehold issue doesn't seem to have hindered his plans for this flat.'

My plan is to sell on and move on to the new project.

Obviously, I'm going to put it on the market and see how it goes.

'We asked two local estate agents, including the one who saw it before,

'how they feel about the renovations and how they've turned out.'

The property's been refurbished to a reasonable standard.

It looks much better than before.

I think the layout works quite well.

It is big enough to have a living and dining space.

Then he's benefited from getting the extra bedroom, which is a bonus.

'They think Ali's done a good job. How would he fare if he let it?'

For rental, we're looking at achieving approximately £1,150 per calendar month.

If we have to put it up for rental,

we can achieve in between £1,050 and £1,100 per calendar month.

Yeah, I totally agree with that.

It's around 1,150, the rental figure I could achieve.

This should be the right figure.

'Even taking the cost of the leasehold extension into account,

'the property could generate a yield of around 8.5%,

'but Ali's determined to sell.

'If you add his refurbishment cost of 12,000

'to his purchase price of 143,000

'that makes £155,000.

'But of course, he then has to add the additional ten grand for the lease extension.

'That does, at least, make the flat more saleable.

'That brings the grand total invested in this flat to £165,000.

'What could it sell on for?'

If we had to put it up for sale, I think we can achieve around £175,000 to £190,000.

If we had this on the market, I'd be very confident to sell this between £180,000 to £185,000.

This is the figure I was looking for.

Obviously, it would have been more profitable without the lease extension.

That's eaten at the bit of profit,

but I was looking at that sort of figure, around 185.

'If he managed to sell this three-bed flat for 185,000,

'that would mean a profit of 20 grand before tax and expenses.

'It sounds as though the rocky road to completion has not put Ali off.'

Definitely, I'd like to get into the property market, especially on the buying and selling side.

This is something I quite enjoy and will be doing in the future.

'It's time to head back to Derby, to find out what's happened

'to the fabulous detached Victorian villa we first saw in 2007.

'It was bought then for £240,000 by local couple Pete,

'who's worked in the motor trade and as an electrician,

'and his partner Karen, who's a dentist.

'They didn't need an X-ray to see the potential the building offered.'

It's got a lot of character and we're looking at somewhere for conversion into a dental practice.

-Would this make a good dental practice?

-I think so.

There's a lot of good-sized rooms and there's good areas for reception rooms, waiting rooms,

but it needs a lot of organisation.

'Karen's dream was to create a holistic health practice,

'providing dental surgeries on the ground floor and consulting rooms

'for other health practitioners upstairs.

'When we first returned after six months, for OUR check-up,

'plans were drawn up and the property had been cleared.

'The disabled access and parking at the rear hadn't begun.

'Pete was going to project manage the work,

'and this dentist's conversion needed a big injection of money.

'They had a budget of around £150,000.

'It's now nearly six years since they bought it,

'and back in Derby Karen and Pete are now married.

'The tooth fairy's been busy as well.

'On the ground floor, two hi-tech dental surgeries

'have been installed.'

MUSIC: "Dental Care" by Owl City

'They've been filling their time very well in the former hall.

'And at the end of the corridor, the dentist will see you now.'

Welcome to reception, the kitchen as was.

The biggest change in this area is the fact that we moved the doorway,

which now is positioned here.

Two reasons for that, one is flow of patients as they walk through.

The other is the need to comply with disability regulations.

Wheelchair access is throughout the premises on the ground floor.

'The damp problem in the hall's been treated and the corridor widened,

'to allow better wheelchair access to the facilities.

'Entry is from the front or back of the property.

'I'm delighted they've focused on renewable energy and ease of access.

'At least getting to this dental surgery is now pain-free.'

Here we are in one of the surgeries.

You'll notice that it's quite minimalist.

We didn't want the patients to be overwhelmed by a lot of equipment.

They're already nervous when they attend the surgery.

The other thing that I was keen on was that staff had a major choice

in the equipment and in the colours of the room.

Here we are in another surgery.

Again, it's minimalist.

The idea of having two linking surgeries

is that we'll have specialists in different rooms.

They may want to interchange equipment, so equipment may be moved from one room to another.

'I like the uncluttered minimalistic look,

'but I do miss the fish tank in the corner.

'In this high-tech practice,

'lots of equipment has been located out of sight, in the basement.

'Before your treatment, the waiting room is still comfy,

'calm and old-school traditional.'

The building itself was built in 1856.

It's a beautiful building with original features which we wanted to maintain.

This room is meant to be that people are waiting

as if they're in their own living room, they feel comfortable.

'The conservatory is now the staff room

'and they have kept the kitchen for staff use, too.

'Upstairs on the half landing, there's a beauty therapy room

'with an adjoining shower.

'And a room to sterilise equipment.

'The upstairs rooms are not quite complete.

'Pete is determined that the original character will remain.'

The temptation, when you take on a project like this,

is to rip all the features out, start again, make it look new.

Completely the opposite of what we were trying to achieve.

We've tried to retain everything we could - original covings,

the doorframes, the wooden mouldings.

It takes twice as long, if not longer, to do that, than to knock everything down.

We wanted to leave its battle scars and its character

because it's part of history.

'I totally agree. Retaining the period charm has worked really well.

'Pete's done a lot of the work himself with help from a friend.

'Specialist contractors have been employed for jobs like the roof.

'I'm keen to drill down to the raw nerve of any refurbishment, the budget.

'How much has the property ended up costing?'

I think we've come in probably about what we thought we'd spend on it.

I had a guess figure of about 150,000,

which was what I was aiming for.

We've come in under that, but we've still got some rooms to finish.

I'm sure, as happens with building projects, funds will be eaten into.

'Pete's not included the £43,000 on the dental chairs

'and other equipment in those figures.

'If the other refurbishment costs do come in around £150,000,

'then added to the £240,000 they paid at auction,

'that would take their total investment to £390,000.

'It's taken nearly six years since our first visit.

'Pete and Karen have had to be patient with this project.

'Will all their hard work have put a smile on two local estate agents' faces?'

I think the amalgamation of old and new works very well.

You've got the modern stuff where you'd expect it,

in the dentist rooms.

The waiting room's got the old features.

There's still a lot of old features.

I didn't see it originally, but today, it's quite fabulous.

The blend of old and high technology is great.

Here, you're relaxed, and that's a good start.

'Both agree that if the property was let just as a dental surgery,

'the building would generate between £20,000 and £25,000 in rental income a year.

'What could the two dental and four therapy rooms let for on a room-by-room basis?'

If you were to let the rooms on a room-by-room basis to individuals on shorter term leases,

it would produce a higher income of £30,000 to £35,000 per annum.

If the rooms were let on an individual basis,

you would generate £6,000 to £6,500 a year per room,

which would mean the building would generate £30,000 to £35,000 a year.

'So, a potential yeild of almost 9%.

'Karen's dream of a one-stop holistic health practice for the whole body

'sounds financially rewarding as well.'

The figures are around what we thought and we expected.

When we took the project on, we did some research

of what the rooms would fetch and the building as a whole,

to make sure it was economically viable.

'How much could this property achieve if it was sold on?

'More than the £390,000 they got invested here?

'Well, you might be in for a bit of a surprise.'

Taking into account the projected income we think we can generate,

I would suggest that this building could be sold for around £275,000.

If we were to take it to the market, I would expect it to achieve in the region of £240,000 to £280,000.

'That resale valuation would mean a loss of between £115,000 and £150,000!

'Of course, selling it on was never the aim.'

We've invested a lot of time and money and you've got to take that into account.

It was never about the profit.

It's about finding a place that I really cared about,

that I could put in fabulous equipment, have a lovely feel

and get the best practitioners working here who did their job to the best of their ability.

'Pete and Karen hope to open their dental practice

'in the next couple of months.'

Join us next time, when we'll have more properties being sold under the hammer.

We'll have flats, maisonettes and plots of land to follow next time.

-See you then.

-Goodbye.

-Goodbye.