Episode 58 Homes Under the Hammer

-Hello. Welcome to the show.

-We've been dealing in property

for many years now, and we've witnessed

the fluctuations in the market.

But through it all, one thing you can be certain of is you can

always get some intriguing properties at the auction!

MUSIC: "Homes Under The Hammer Theme"

Well, we've always been fascinated by buying properties

under the hammer.

Yes, the speed, the excitement,

and the potential to bag a bargain are really attractive.

So, what's got people hot under the collar on today's show?

How do you fancy a commercial property

in trendy Battersea, London? Auction guide price, £190,000.

Could it be someone's home?

What about this three-bed

end-of-terrace in County Durham for around 35 grand?

Bear in mind, there's a strong rental market in the area!

Or this development opportunity in South Wales, guided at 110 grand.

We first visited the site six years ago. But what's there now?

All of these properties have been sold at auction.

We'll find out who bought them and what they paid for them

when they went under the hammer!

It's yours, Sir, thank you very much.

Battersea is one of the most popular areas in South West London, so

not the kind of place you'd usually expect to find a property bargain.

But amongst all this loveliness, I think

we may have lucked out and found something rather tantalising!

You might think I'm in a residential spot

due to the properties around me but, actually,

at the end of this road you've got a lovely row

of independent shops and cafes.

Today, I'm not viewing a house or a flat.

No, the property I'm here to see is on the corner here.

It's a former office premises which had a guide price of £190,000.

Intrigued? And interested? I am! I'm going to have a look inside.

Well, this is a really bright, light, pleasant space to walk into.

And what lovely balustrades. Look! How gorgeous!

There's a certain amount of character in here.

You've got that wonderful big window which lets in so much light.

All of this space here.

It looks like it's been recently painted as well.

A bit of storage space. Oh, every bit of space in London counts!

So, you know, it's good you've got that!

Downstairs, you've got a little loo and a sink area.

So once you've got over the fact that you're in a fantastic area,

you've got a lovely space to work in. I'm now going to tell you,

ha-ha, there's a basement downstairs as well!

On this floor, there are almost 200 square feet of space.

Not huge, but it will certainly make a bright and pleasant place to work.

Downstairs is a bit bigger. Almost 300 square feet.

And while not all of it is full height,

it's a very attractive space.

One potential stumbling block here is that the property is

leasehold and there are only 74 years left on the lease.

That may cause problems if you want to take out a mortgage.

So, it might not be cheap, but I'd look into extending that lease

if possible. On the outside, well, it looks as though it could do with

a bit of a freshen up if it's to be an eye-catching shop front.

But there is parking allocated for two cars here and the fact that

there's a flat above, which is not part of the auction lot,

has set my mind racing.

So, what are our options here?

Well, this might not be the busiest Battersea spot,

but there's certainly passing footfall

and I think it could appeal to a more independent niche market.

Perhaps a gift shop, a clothing store,

or a sandwich bar would work well here.

Or, now, what about applying for planning permission

and creating a one-bedroom flat here?

You could have the lounge, kitchen and bathroom up there,

with this basement as a bedroom.

There's already a flat above us in this building,

and plenty of residential accommodation all around us.

So I don't think this would be out of place, or out of the question.

Now that is exciting me!

There certainly are options here.

We asked a local expert for his thoughts on this property

and its £190,000 plus guide price.

What would HE do with the place?

As a long-term investment, I'd convert it

into a one-bedroom flat. It will rent all day long.

Ha! A man after my own heart!

And if you did convert it into a one-bedroom flat?

What might it be worth then?

Converting into a one-bedroom flat, it would be a quite quirky one-bedroom flat.

I think that would work for it where it's located.

So I think you would be looking to achieve around £300,000.

And if you rented it out as a flat?

I believe it will achieve between £1,000 per calendar month

to £1,200 per calendar month.

If you kept it as a commercial premises,

what kind of rent might it achieve then?

I think you'd be looking somewhere between the £1,500 to £2,000

per annum, in terms of rent.

This property is situated on a corner spot,

which straddles both a residential and a commercial road.

Which route do you take?

Well, there's certainly a couple of options to consider here.

Let's head to the auction

and find out who was ready to take on this dilemma!

Move on now to lot 114. Office premises with car parking.

200 anywhere? If not, you tell me.

What about 170, then? 170 I've got.

Thank you. £170,000.

On my left. Anybody else?

171. 172.

173. 174.

-The bidding started slowly...

-185.

..but it did keep on creeping up past the guide price...

190. 190.

191. 191.

..and it kept going.

-216.

-We rejoin the action at £250,000.

Bid's £250,000. It's against the gentleman standing up.

So lot 114, bid's £250,000. Anybody else?

If not, 250 for the first...

250 for the second... I knew you'd be back!

251. Back in, nearly.

252. 253.

254. 255.

256. 257.

No? OK. It's with you, sir. Bid's £256,000.

It's against the lady and gentleman in the front. Anybody else?

If not, 256 for the first... 256 for the second...

256 for the third and final time...

All done? Sold! 256,000.

That successful bid of 256,000 was placed by Louis, who lives locally.

He runs a company which designs and manufactures furniture

and other objects made of metal.

His wife Maggie works in publishing

and their son James has shown an interest in working with jewellery.

I met them at the property to hear about their plans.

First up, Mum and Dad.

Louis and Maggie, it's great you could join me today here. Well done.

Congratulations. Are you thrilled that you got this on auction day?

Yeah. A little bit surprised as well.

I've never bought a property at auction before! It's very...

-My heart was sort of pounding away!

-So, you really wanted this?

-Yes.

Who spotted it?

-Well, the hairdresser over the road!

-Oh, what's the story?

Yeah, well, she basically has been looking for somewhere for us and

a place came up before and she said,

"Well, you know, this place is up for auction." This was on Saturday.

So I rang the estate agent. There was a viewing in 15 minutes!

Amazing, I know! And then the auction was on Monday.

So, you'd literally popped over there for a set of highlights

-and that was it?!

-Yeah, that was it! Absolutely, yeah.

So, the big question is, what are you going to do with it?

Why have you bought it?

We're going to make it a jewellery shop upstairs and furniture

and other things downstairs. That's the idea.

So, what's your involvement with this?

Well, I make metal furniture anyway, so as the space is quite big,

it sort of made sense for me to put some pieces in there.

It started off as a jewellery shop concept,

but we've got a whole downstairs area, so I'm going to be

putting in tables, chairs, lamps, one-off pieces.

We'll have to see!

# There will be tables and chairs

# There'll be pony rides and dancing bears

# There'll even be a band... #

So Louis's furniture and metal pieces will grace the basement,

and upstairs will become a jewellery shop.

Louis will design and make some of the jewellery,

but most of the decisions about those creations will be

made by their 23-year-old son, James.

He'll run the shop.

I mean, he didn't know what he wanted to do.

He got a job in sales and marketing.

That sort of went pear-shaped and he said, "Oh, I'm really..."

Actually, I took him to Birmingham Spring Fair.

And he had a look around and the only thing

he was interested in was jewellery. So that's how it started.

How do you think James is going to feel running this business?

Getting up every day, stock-taking, being in charge of the shop?

Think it's going to be a bit of a shock to the system?

It is going to be a wake-up call, I think!

It should be very interesting to see how he copes with it.

He does three days a week, at the moment,

in our little workshop where we make the jewellery.

And he finds that, you know, a lot!

-Oh, he'll be fine.

-He'll be fine, yeah.

I mean, it's a wonderful thing you've done for him

and it really is...

I love this place as a shop, I think it's fabulous.

Are you going to make any changes?

One thing I'm going to do is get rid of this hideous wooden banister.

-Oh, I quite like that!

-You don't?!

-Do you think that's hideous?

-Say that again!

-I don't mind that. I think that's...

you know, got lots of character. I quite like it!

-Trust me, it's hideous.

-Really?

It is fake old, though, it's not really...

You could turn it into something beautiful.

I'm sure that is a speciality of yours, isn't it?

Well, I do do staircases.

I don't do as many as I used to, but I obviously can do.

I just did a bronze handrail staircase in North London recently.

Which I said I'd never do again, but anyway...

And having done that, I thought it would be lovely

if we had a brass handrail and everything.

Anyway, I was looking around the factory

and there's this bit of old, reclaimed brass which I'd

completely forgotten where it came from.

And it's absolutely perfect, you'll see.

It's a great big thick, chunky, brass handrail from...

-So, that's going?

-That's going.

-And a beautiful brass handrail will be in its place?

-It will.

-Oh, I can't wait to see that!

-And glass finials.

Oh, I can't wait to see that!

And someone's going to have to polish it!

OK, yeah, that is hideous, yeah! OK! So, what's the budget, then?

How much are you going to spend?

-Our target is £20,000, but we don't know if that's realistic or not.

-OK.

-Of course the brass handrail is free.

-OK!

And that's going to be the best bit of the whole shop!

And all the metal stock is free and...

Louis and Maggie hope to have the shop up and running,

complete with the new balustrade, in just ten weeks' time.

Hopefully, there won't be too many obstacles in the way!

So, have you read the legal pack? Have you got any issues with this?

Yes, there was a weird thing, actually, when we saw it,

that basically there were service charges,

and the lawyer asked for clarification,

but we haven't received it yet.

So there is an annual service charge and repairs.

OK, so there could be a bit of a black cloud looming

over your heads with the unpaid service charges?

-Well, that's right.

-Is that something that's worrying you?

Well, a little bit.

Because I said to her, "Well, you know, presumably if it's already been

"done, we wouldn't be liable." And she said, "Well, no, not necessarily.

"It depends on the period of, you know, charges on the lease."

It's an old property here, so the roof, for example.

Yeah. And the outside's just been done.

-So, you've yet to find out?

-Yes.

-Yeah.

Well, fingers crossed it all checks out OK

and they're not stung for a big bill.

So, if dad Louis is going to be working downstairs, what

about their son James, who'll be running the jewellery shop upstairs?

-James, congratulations!

-Thank you.

-This is exciting times ahead for you!

-It is, it's really good.

-Very exciting.

-So, how do you feel about running your own shop?

-Your own business?

-It's going to be a lot more responsibility.

I'm really excited, though. Going to give it my all.

So, what's the feel of the shop going to be like?

Well, round at the back,

it's going to be sort of a very old-fashioned, I think.

It's going to have some really cool little things, you know,

like mannequins with the jewellery being showcased on.

It's going to have a nice vibe to it, you know.

It's not going to be really flashy and in-your-face.

So I think it's going to be really cool.

Are you actually going to be designing the jewellery?

Or just choosing the pieces?

I think I will have some design input,

but I think mainly I'm just going to be the sales.

So, anything I can think of that might help, you know.

What are you most looking forward to?

Yeah, just getting used to a bit more independence, you know.

More responsibility.

James, good luck with this project

-and I'm sure it's going to be a winner. Well done.

-Thank you.

Well, I think this really is a priceless

opportunity for Maggie, Louis and son James.

What a worthwhile, if expensive, haircut that was for Maggie!

I've got everything crossed for the family

and I hope they make a real "gem" of their business here!

But I am concerned that their experience may be

tarnished by those unpaid service charges.

You can join me later on in the show to find out how they all get on.

I'm in Beamish in Country Durham, halfway between Durham itself

and Newcastle. A great spot, lovely surroundings.

And this is the Beamish Open Air Museum, a testament to

a bygone age of manufacturing, farming, and British artisanship.

Well, the Beamish Museum may be all about what life

was like in the past...

# Life in a northern town... #

..but I'm more interested in the present today.

And just three miles away in the town of Stanley is the house

I've come to see.

Well, walk down any terraced street and before long,

you come to the end-of-terrace. No surprises there.

This one, however,

had the most precise guide price I've ever heard in an auction.

£34,950.

It's nice to see the little porch there.

Keeps the cold and the weather out.

And then through into a surprisingly big front room.

Stairs up to your bedrooms

and then through into a rear sitting room and kitchen.

Looks good!

Well, that is, at first glance.

It's one of those things, you sort of start probing around a bit

and things like the laminate flooring coming up.

A bit of an alternative... Oops, hello!

HE COUGHS

Yeah... Erm, having said that,

it's not in bad condition.

I mean, obviously, reasonably new units.

But a good-sized space, through to your bathroom and loo

at the end there.

You know what? I'm not going to be put off by this.

It's still a really great start and a lot of house for the money.

If your budget's tight,

you could probably hold on to the suite in the bathroom downstairs.

But it would be a good idea to tidy up the tiling, flooring

and overall finish.

In the kitchen, the boiler looks to be quite new.

And again, rather than ripping it all out,

just a few finishing touches would work wonders.

# Come back and finish what you started!

# Uh huh

# Don't leave me hanging on

-# Hanging on

-Hanging on

# Come back and finish what you started!

# No, no, no, no

# Don't leave me hanging on.. #

So upstairs, and am I about to discover something which

makes me go, "Oh, no!

"Don't touch this with a bargepole!"?

INHALES SHARPLY

No! Actually, it carries on being really, really nice.

I mean, it's not a big property,

so the bedrooms aren't absolutely massive. But pretty decent.

One at the back there and then two at the front.

And that's it. It's in half-decent condition.

You could, if you wanted to, rent it out pretty much as it is.

That guide price is so low. Rents around here pretty good.

It's a no-brainer!

Yes, unless there really is something horrible lurking under

the floorboards, this has all the makings of a terrific buy-to-let.

MUSIC: "Daddy Cool" Boney M

As it doesn't need much work,

just a little expenditure on an upgrade, then with its rather

exact guide price of £34,950, this seems a perfect investment property.

Well, come round to the back

and it suddenly starts to make sense why the property feels

so much bigger inside than you might expect from its frontage.

This big single-storey extension at the back here,

which houses the kitchen and the bathroom and the toilet.

Now, it is single-storey.

It has got a flat roof, which might be an issue.

However, it looks like that's been recently redone, which is good news.

In fact, it's all good news!

# Give me some good news!

# Good, good, good

# Give me some good news... #

So, it just keeps getting better.

# ..Good, good, good news! #

Perhaps the one disappointment is the lack of outside space

and I would prefer the bathroom upstairs.

But, all in all, this has a lot going for it.

What does a local estate agent make of what's on offer here?

It's a decent house.

There's not really a great deal of work to do here, I think,

to get it to a good standard,

either for resale or to let.

There are one or two areas that need to be looked at, I think.

Such as perhaps renewing the bathroom,

some of the double-glazed windows need to be replaced.

And there's a little bit of work to do externally on the back

of the property.

A bit of pointing and the coping stones I think on the corner.

But overall, it's a decent house, a nice end-terrace.

And I think it should be a good buy for somebody.

Yes, my thoughts exactly. Well, what about the numbers?

Could you see much of a return on a house guided at £34,950?

Once the few minor repairs are made to the property,

I would then consider putting it back onto the market for resale.

Somewhere in the region of £50-£55,000.

So, potentially some profit, if sold on.

But it's on the rental market where I think this house will score well.

If somebody were to look to buy this to rent out, I would expect to

achieve somewhere in the region of £400-£425 a calendar month.

Well, on so many levels,

this little terraced house in the Northeast stacks up.

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

Lot number seven.

Three-bed end-terrace house.

Any bid at 30,000?

Gentleman standing, £30,000.

We're up and going at 30,000, right in the centre. 31 anywhere else?

31,000 bid. 32? 32 bid. 33?

33 bid. 34? 43 bid. 35? 35 bid.

36? 36 bid.

37? The gentleman in the centre, standing. At £36,000.

I'm selling at 36,000. I'm going once at 36.

I'm selling for the second time at £36,000.

Sold, the gentleman in the centre of the room.

He was obscured from view there,

but that successful bid of £36,000 was placed by Les.

He and his wife Jackie are based in Newcastle

and have a small portfolio of properties.

I met them at their new purchase to find out more.

-Jackie, Les, great to meet you both. Congratulations!

-Thanks.

Tell me why you wanted to buy this place?

-It was just the opportunity at the auction at the time.

-Right.

It was a good price, reasonable rent income.

Is this something then you've done a lot of before?

-Yes. Yeah, I'm a builder to trade.

-Oh, OK.

-Mostly other people's stuff,

that's what my living is. But I've done quite a few projects myself.

Right.

And what's your involvement in the whole thing, Jackie?

I came to help out in the business with admin and things like that.

And I quite often help out with colour schemes and choosing

different bits and pieces, depending on if it's furnished or unfurnished.

-Yeah.

-And what's the idea for it? Is it to do it up and sell it on?

-Or are you going to rent it out?

-Purely to rent it out, yeah.

Have you had any indication of what you might get, rental-wise?

I spoke to... A couple of signs up round the streets, so...

I spoke to a couple.

For a three-bedroomed, they say about 450, 475.

I'd be quite happy to get about 400 a month for it.

-That's an amazing return.

-Yeah. Yeah.

-Isn't it? Phenomenal return.

So, Les and Jackie have done their research.

They knew that, provided they didn't pay too much for it at auction,

this house would be a very healthy rental vehicle,

with yields well in excess of 10%.

So, with Les's experience as a builder,

finishing off the work here should be pretty straightforward.

# Easy as pie!

# There is nothing to it, baby... #

What are you planning to do to the house?

Well, first of all, the bathroom needs changing. Tiling.

I've measured it, and I'd get a shower in there as well.

Then there's a bit of structural work up on the top wall,

which isn't a lot,

but the parapet's peeling away a little bit from the roof.

So that needs sorted.

Rebuilding. The floors are...

There's laminate's been put down on the floors.

So I just need to check the floors.

And the central heating, check that out.

And there's a boiler and stuff, just get that all checked out.

Decoration's pretty good.

-Put a wood-burning stove maybe in this dining area.

-Oh, nice.

-But no major changes to the layout?

-No, I don't see anything like that.

So, what's the budget for the renovations?

-£4,000 to £5,000.

-Mm-hm. And that's with you doing most of it yourself?

-Yeah.

-And what about a timescale?

-About four to five weeks.

It's great to hear that they're going to spend some money on it.

It would have been so, so tempting just to tidy it up,

sort a few problems, and get it let.

But these two are no strangers to buying property at auction,

and not just in the UK.

-A couple of properties I've bought online at auction.

-Online?!

-In Bulgaria. Just recently.

-Right. You bought properties in Bulgaria?

-Yes.

-Online? In auction?

-Yes.

-So, have you seen them?

-We have friends out there who went and visited for us.

-Right.

What kind of places are they?

One's quite a big house, with outbuildings

-and half an acre of land.

-Right.

-In quite a nice rural area.

-Wow.

-The other one's a cottage.

-Right.

-Just under half an acre.

So, what are you going to do with houses in Bulgaria?!

Well, the plan is in the future, is for holidays for the family.

-And do a bit of work there.

-Right.

-With a bit better weather!

Well, yes, it's a beautiful country!

THEY LAUGH

How much were they, if you don't mind me asking?

-Erm, the big house was 5,700.

-Pounds?

Pounds.

And the cottage was £2,000.

-Right. OK, so if it all went horribly wrong...

-Yeah.

-..you're not going to lose a fortune.

-Mm.

Well, listen, congratulations. Good luck with it.

-Thank you very much.

-I look forward to seeing how you get on.

Cheers.

Well, I think Les and Jackie have done extremely well with this place.

A good little property, nice location and for that price,

with that yield...ha!

You can see how they get on later in the show.

Coming up, find out how this development opportunity in South Wales

could become worth almost £900,000.

We catch up on Les and Jackie's renovation in County Durham.

Do they realise the full rental potential

of their three-bed end-terrace?

But first, to Battersea,

to see if Louis, Maggie and son James are ready for business.

Anxious to start, which is a very, you know, very good sign I think.

We return to Battersea now, and this commercial property.

Sold.

It was bought by Louis, for 256,000.

The plan was for Louis, his wife Maggie and their son James

all to work together on turning the premises

into a showcase for Louis's metalwork downstairs,

whilst upstairs would be a jewellery shop run by James.

But the piece de resistance would be a balustrade,

or should that be...

-FRENCH ACCENT:

-..balustrade, designed by Louis himself.

I love this place as a shop. I think it's fabulous.

Are you going to make any changes?

The one thing I'm going to do is get rid of this hideous wooden...

-Oh, I quite like that!

-You don't?!

-Do you think that's hideous?

-Say that again.

-I don't mind that!

I think that's got lots of character. I quite like it.

-Trust me, it's hideous.

-So, that's going?

-That's going.

-And a beautiful brass handrail will be in its place?

-It will.

-Oh, I can't wait to see that.

-With glass finials.

Oh, I can't wait to see that!

With an optimistic budget of 20,000, excluding the stair,

and a ten week timescale,

it was all systems go to get the shop up and running.

Three months after our visit,

we're back to see how they fared.

# Stop and stare

# I think I'm moving but I go nowhere

# Yeah, I know that everyone gets scared

# But I'll become what I can't be

# Oh, oh

# Stop and stare

# You start to wonder why you're here not there

# And you'd give anything to get what's fair

# But fair ain't what you really need

# Oh, oh, can you see what I've seen? #

And there it is, staring at you as you walk into the shop,

the stair that puts the lustre into balustrade.

Originally, we were just going to take out the wooden balustrades.

But when we took them out,

it turned out that it was pretty rotten underneath

so the whole thing came out.

And as a metalworker, I put in a metal staircase.

But I've always liked the brass and stainless steel combination

but never had a chance to do it before,

so this was my chance!

I think it's come out quite well.

-And the little glass finial?

-Ah, yes.

-The truth about that?

-Yeah, go on.

It's our curtain rod from our bedroom!

# Bring down the curtain

# We'll be moving on... #

It may be curtains for the symmetry of their curtain rod at home

but the glass finial certainly finishes of the stair beautifully.

And there's been a certain amount of curtain twitching

in the neighbourhood

while the work's been going on.

The locals have been very interested in what's happening.

All the time, every day when we're in here and the lights are on,

they come over and people come in.

I think that they are absolutely thrilled

and they can't wait for us to open.

So lots of interest, lots of support locally.

And I think there's a feeling

that it will make a difference to the street,

to have one more shop actually open and selling things

as opposed to being converted into a flat or empty,

which some of them are.

As for what the shop will actually sell,

it'll be a mixture of Louis's metal furniture

and other handmade craft pieces

made by contacts Louis and Maggie have met at trade fairs.

Then of course, James will be on hand with the jewellery,

which he hopes will be a big hit.

I'm feeling very excited. A bit nervous.

Confident as well, though.

You know, I think we can do it

if we put the same enthusiasm that we've done so far.

So, yeah, anxious to start, which is a very, you know,

very good sign I think.

James will manage the shop

but there will be help close by if he needs it.

We're going to have me and my brother.

We're going to do separate days

but it's going to alternate as a rota for, you know, each week.

My mum and dad are going to be there initially helping out, you know.

And they're absolutely fantastic, of course.

Daisy the jewellery designer, she's going to be there.

She's going to be working at the previous premises as well

so it's all going to be a bit, you know,

finding our stride, as it were.

So once we get it, it'll be great.

There's more stock to gather in before the grand opening

but the building work itself is complete

and they very nearly stuck to their ten week schedule.

The good news is that the unpaid service charges Maggie was worried about

only came to a few hundred pounds,

rather than thousands.

But what about their optimistic £20,000 budget?

Budget-wise, it was always a range, with 20 being the lowest estimate.

But actually, it's been...

it is spot-on the top end of our estimate.

40,000 is what the whole thing has cost.

Which is more than we wanted to spend but, fortunately,

-we did have that money set aside.

-And that's without the staircase.

-That's without the staircase.

-So we should add another ten, really.

-So...

-Well, fortunately we don't have to.

-Yeah.

-So...!

If we did take the stair out of the equation for now,

a renovation cost of 40,000

on top of their purchase price of 256,000

brings their total outlay here to £296,000.

We asked two local property experts to give us their take

on the refurbished property.

First up, the estate agent who saw the shop before work began.

I think the changes are amazing.

I mean, a property that was quite rundown

and you really didn't know what you would do with it

has now been turned into a very, very nice shop.

The finish is fantastic.

The finish is very, very good.

Someone could in theory move in tomorrow

and not have to do anything at all.

The basement is very, very usable

and I think it's done to a very high standard.

Clearly Louis, Maggie and James have a plan for the shop

but if they did want to let the premises,

what kind of rent could they achieve?

Rental wise, it would achieve

between £20,000 and £25,000 per annum.

I think the value of this property would be

close to £20,000 a year.

Given the local area and comparable evidence

that we've actually been looking at recently,

£20,000 a year does seem like a good rate you could achieve here.

Those rental figures would give a yield of around 7 or 8%,

which is pretty healthy.

But what if they decided to put the shop back on the resale market?

I think the current market value for this,

if this was to come to the market on a for sale basis,

would be £175,000.

Ouch!

That valuation could see Louis and Maggie

making a substantial loss on the property.

Commercial valuations are hard to pin down

but the estate agent was clear that the value should increase

as and when they start trading and making profit.

All the more reason for the whole family to pull together

and turn this into a successful business.

Definitely.

Definitely.

-Good.

-Yes.

It was on a grey autumn day back in 2007

when I first travelled to Mid Glamorgan

to see a rather intriguing auction lot.

Property investment opportunities come in all shapes and sizes.

You could buy a two-up, two-down terrace

and do it up and then sell it on.

You could buy a commercial property, do it up and then rent it out.

Or, how do you like the idea

of buying a ramshackle old building, knocking it down

and then building a block of flats on it?

Well, that is one option in the place where I am now,

Treorchy in the Rhondda Valley in South Wales.

It is the former Treorchy Workingmens Club.

Looks like it's now a car park.

But you can tell straightaway

this is a knock-down and rebuild job.

Guide price 110 grand?

Sounds like it could be a goer.

-CAR HORN TOOTS

-Oh, now there is one slight problem,

you can't actually get into the building

because it's pretty derelict.

So I'm going to have to make do with walking round the outside.

With the decline of the coal mines in this area

came the loss of the miner's lifestyle.

And this former social club is now sadly looking pretty anti-social.

However, with 1,500 square metres to offer,

this plot could get a whole new lease of life.

Now, first impressions aren't always right but in this case,

I'm pretty sure that they are.

What we've got here is a huge plot of land,

you know, pretty much in the centre of the town.

Obviously, we've got a hodgepodge of buildings going on.

The facade at the front, well,

bits of that you could probably think about keeping.

But what we do like about this is the size of the land.

It's huge and it goes right back over there.

Thing to consider though, it's only 110,000 quid

and that's because it hasn't got planning permission.

So you can have all the wild ideas in the world

about what you might do with this place

but until you get planning permission,

it ain't worth diddly squat.

It's a very interesting opportunity in PRINCIPLE, therefore.

Whoever buys this is taking a punt with the planners.

The only certainty is that nothing can be built

until they make their decision.

In the meantime,

this imposing property is a reminder of the past.

Well, I always like to try and find out a bit

about the history of the properties that I look at for the show.

This particular place was once owned by a local doctor, apparently.

But the thing which people most remember about it nowadays

is the fact that it is so yellow.

I don't think it'll be yellow for much longer!

# Oh, you had better go now

# Go now, go now

# Go now... #

I'm pretty certain this building's a goner

but what to build in its place?

Well, its prominent position in the town

means any planning application needs to be sympathetic to the area.

I think maybe flats or a small housing development

might be looked on pretty favourably by planners.

But I'd want to do some research to make sure.

So there you have it, it's a big plot,

it's got a fairly low guide price of 110 grand.

However, it doesn't have planning permission

and it is going to be one shed-load of work

for whoever takes it on.

It's not a project for the first-time developer.

Let's find out who did buy it when it went to auction.

I go on now to a very interesting lot.

Potential development site, now. Who's got 150,000?

Or 120, if you like?

100? 90? 90, I'm bid, sir.

Thank you, I should think so. At 90,000. And 5 bid, thank you.

There was a lot of interest in this lot.

So we rejoin the auction when the bidding reached £150,000.

At 150, I'm selling it, 150. And 5 more, can I? 5. 155.

Make it 160, it's still very cheap.

At 150... 160, standing in the back.

At 160. Give him a nudge, madam. Five. 165.

165. You're out, sir, and behind. 170.

At 170. And 5 more, if you like?

At 170,000, standing in the back, yes or no? 5.

175. 180, please, sir? Quick, if you want it, the hammer's up, then.

At... 80. 180. I'll take them two-by-two, if it helps you, sir.

At 180. "No," he says. The bid's in the back at 180.

Anybody else coming in at £180,000?

Standing in the back. Hammer's up. Done. It's against you, sir.

At £180,000, it's yours in the back, sir.

That successful bid of 180,000

was made by Vaughan and his business partner Julian.

Julian's brother Alex is also a part of the Treorchy trio,

and he's come along to tell me more.

-Lovely to meet you.

-And you.

Thank you for joining me on this rainy day.

-MARTIN LAUGHS Welcome to Wales!

-Thank you.

I don't recognise you from the auction.

No, my brother was there. And the other business partner, Vaughan.

I was unfortunately tied up.

So, it's a business? Tell me more.

Myself and my brother started the groundworks building business

a number of years ago, when he first left school.

So, we kind of got into that, got stuck into it, kept us quite busy.

We decided to take it a step further and start to develop a little bit.

-Is this the first big development project you've taken on?

-It is.

This size, anyway.

We've done single properties before. But not multiple units.

What's the plan?

-Demolish.

-I kind of knew that.

-It's got to go, unfortunately.

It is not the most appealing building at the moment,

the state it's in. So, that's got to go.

-And, possibly, put 10, maybe 12 apartments.

-Oh, flats.

-Yeah, yeah.

-There's no planning permission at the moment.

-No.

How hopeful are you of getting that?

I don't think there'll be that much of a problem,

simply because the site is developed anyway. It's got a property on it.

It's not greenfield, so we're not starting totally from scratch.

Do you have any design ideas at this point?

Nothing at all.

Once it's demolished, it'll be a nice, blank canvas to start with.

So, the decision to demolish is unanimous.

It seems a shame not to keep a small memento from the building.

What about saving any bits of it? Like, the facade at the front?

-The stone on there, it's yellow, but it's nice stone.

-It is.

The dressed stone is hard to come by.

But, then, you've got to take into account the time and the cost,

labour-wise, to get it cleaned up.

And there's not a massive amount there.

If the property was dressed stone complete,

then it's definitely worth doing.

So, what's the timescales for the whole thing?

We've given ourselves a year from when planning's gone in

and we've kicked off. So, I would say,

possibly, 18 months from now.

And the biggest challenges you face, you think?

-Money, normally!

-As usual.

-MARTIN LAUGHS

Starting off and ending up with some.

No, I don't think there is any. It seems reasonably straightforward.

Planning is the main issue.

Obviously, the locals are going to want their input,

they're not going to want a power station here or something stupid.

They're going to want something that will brighten up the area

and something that's needed for the area.

They estimate each flat will cost £40,000 to build,

and hope to sell them at £80,000.

That sounds very promising

but, of course, there are plenty of potential pitfalls.

Something this lot in the building trade are well aware of.

Bound to have little hiccups on the way. Nothing runs smooth.

-MARTIN LAUGHS

-It makes the day more entertaining.

-The weather provides that.

-Yeah, lovely(!)

Yeah, I think it could be a good, little project to kick off with.

And, obviously, profit-wise, we'll just push it into the next project,

and hopefully go up the scale, and do more and more.

Thank you so much for standing in the pouring rain

in the Welsh Valleys with me.

-I hope the project goes well.

-Yeah. And, good luck with it all.

-Thank you very much.

-Nice to meet you.

Thank you. MARTIN LAUGHS

Well, that was back in 2007.

When we first returned just under one year later, well,

it hadn't moved on much.

But workers were on site, painstakingly picking apart

the buildings before the big machinery could move in.

The biggest challenge at the moment is

just getting the building down and getting it safe.

And then, the site is clean and secure then.

The boys had submitted plans to the council,

and they were hoping to raise the number of flats to 14.

Main road coming down. A complete row of two-bed flats.

An underpass coming through, with parking,

and garden areas out the back.

Which would enable us to get 14 flats in there.

Clearly, there was plenty to do to get to that stage.

We can see how it went from destruction

to a very impressive construction later in the programme.

Doing up property can be a very time-consuming undertaking.

Especially if things don't go according to plan.

So, did our buyers get things moving,

or actually get stuck on first base? Let's find out.

It was in the County Durham town of Stanley that we first saw

this three-bed end-of-terrace house which, quite frankly,

just needed to be finished.

Yes, the bathroom needed some work.

Yes, there were some snagging issues.

Start prodding around a bit,

and things like the laminate flooring coming up.

-A bit of an alternative... Hello!

-HE COUGHS

And, yes, there were some areas where the general finish

needed to be improved.

But, otherwise, this place was fairly tickety-boo.

It was bought for £36,000 at auction by Les and Jackie.

Is this something you've done a lot of before?

-Yes, I'm a builder by trade.

-Oh, OK.

Mostly, other people's stuff.

That's where my living is.

But I've done quite a few projects myself.

So, making good this house was going to be as easy as pie

for as experienced a builder as Les.

# Easy as pie There is nothing to it, baby... #

With Jackie's help, a £4,000 to £5,000 budget,

and four to five week timescale,

they hoped they could do the relatively minor work

and prepare it for the rental market.

# ..As easy as pie! #

Now, eight weeks later,

we're back to see if it's completely ready to go.

# I'm ready for you I hope you're ready for me. #

The most notable change is the flooring in the front reception.

While the rear reception room has acquired a wood-burning stove.

And the kitchen?

With the kitchen, we decided that we were going to put a range in.

What we've done was we've brought our range from home

and installed that here, and we got a new one.

So that was rather nice!

So, a definite upgrade in the kitchen,

whilst retaining most of the original kitchen units.

What about that rather sad-looking bathroom?

We took all the old bathroom equipment out, and the flooring up.

We put underfloor heating in.

New tiles right through.

New shower-bath. I was going to put a separate shower in,

but it was a little bit of a squeeze

so everything was in the same place but new stuff.

Yes, that really is so much better.

And upstairs?

Well, the three bedrooms have just had a tidy-up

but, then, that's all they really needed.

They've put some fencing at the back of the house,

and the pointing issue on the roof has been sorted.

So it does seem this place is now good to go.

But, was it as straightforward as it appears?

The biggest challenge was the floor.

We took the laminate up,

which was new laminate which had been covered over.

And there was quite significant fungus right across the floor.

So, we had to lift the floors up as well.

The air bricks had been covered over.

So we had to clean them out, and we put new air bricks in as well.

We treated the floors, put a membrane down,

and then put the new engineered oak flooring down.

The issues with the flooring, and a two-week trip to Bulgaria

to see the two properties they'd bought at an online auction

delayed the renovation by a few weeks.

But how was it working together?

Do they get on like a house on fire?

THEY LAUGH

Oh, he's good.

We get on well together, working. We get plenty done, don't we?

-Yeah.

-We get lots done.

-I get more cups of tea than when I'm working on my own.

-Yeah.

And it seems the finished house is also someone else's cup of tea too.

A couple of the neighbours, we had been chatting to them,

and they told somebody very locally,

so it's already going to be rented out very soon, within two weeks.

And they absolutely love the flooring,

they love the new bathroom,

and they really love the log-burning stove, the log-burning fire.

That will mean it was finished and rented out

in a total of ten weeks. Not bad!

But, did they keep to their £4,000-£5000 budget?

It's actually, I totted it all up, it's come to £4,000

including the labour, that's excluding two weeks of my time.

So it's not far away from what we originally expected.

Well, a £4,000 spend on top of that £36,000 purchase price,

takes their total to £40,000 before tax and fees.

So, have they done enough tweaks and upgrades

to maximise this house's potential?

What do two local estate agents think?

Overall, I think the refurbishment has been done

to a reasonable standard, although I think it's been a fairly quick job.

Some of the highlights of the property, I think,

maybe the wood-burning stove in the dining room,

and the new cooker in the kitchen is quite a nice touch as well.

I think it's very deceiving.

When you approach it from the outside,

it looks a very small, two-bedroomed house.

You come inside, it's a spacious, well-proportioned house.

They've put sensible floor coverings down, for practical purposes.

So, yes, there's a lot of nice points about it.

Sounds encouraging.

Although this was always bought as a rental property.

Have they invested their £40,000 wisely?

On the current market, I would expect it to achieve

somewhere in the region of £50,000.

The property would sell for £50,000,

but we'd suggest an asking price of offers in the region of £55,000.

-Great.

-OK. Yeah.

-That's OK.

-Yeah.

-Yeah.

So, a potential pre-tax profit of £10,000. Good news.

But what about the all-important rental values?

On the rental market, I think this property would achieve

somewhere in the region of £400 to £425 per calendar month.

In the region of £425 per calendar month,

with a view to settling at £400 per calendar month.

-I think that's right.

-Uh-huh.

-That's, er, pretty accurate.

-Yes.

-Yes.

-Very accurate, really.

-Which is great.

-Yeah.

Yes, Les and Jackie are getting that £400 per calendar month mark

which would generate a very healthy yield of 12%.

So, what's up next for them?

-We looked at five properties this morning, didn't we?

-We did.

One of which seems particularly interesting.

It was quite a large terraced house

which we think could be converted into two one-bedroom flats.

I'll be able to use my skills a lot more than I did here.

A huge amount of cleaning for Jackie to do.

SHE GIGGLES

-And you.

-Yes!

THEY LAUGH

It was back in 2007 when we first took a trip

to the Rhondda Valley to see the Treorchy Workingmens Social Club.

Derelict and neglected, unfortunately,

there wasn't much future for the club in its current condition.

But, as it sat on a prominent and good-sized plot,

it had development potential written all over it.

Despite having no planning permission for development,

it was bought at auction for £180,000

by property developer Vaughan,

and brothers Julian and Alex, who are builders.

It was left to Alex to tell me their plans.

Do you have any design ideas at this point?

Nothing at all.

Once it's demolished, it'll be a nice, blank canvas to start on.

Due to their other work commitments,

when we first returned over a year later,

they weren't even at the blank canvas stage.

They had, at least, submitted plans to build 14 two-bedroomed flats.

But this project was still very embryonic.

The biggest challenge, at the moment, is just getting the building down

and getting it safe.

And then, the site is clean and secure then.

Well, it's taken some time, and some planning

but, nearly six years since we first saw the site, we're back.

# I came, I saw Tore down these walls. #

It doesn't look like 14 flats.

What has been going on here in the intervening years?

We've had offers put to us from housing associations

that wanted to buy the job, or the site, as a complete package.

Because of the needs for specific disability requirements,

they wanted to change from flats to single properties

with a couple of specific bungalows at the back.

And we ended up coming out with six properties.

Four semi-detached,

and two detached bungalows.

And they vary in size.

Two of the semi-detached properties have two bedrooms,

and the other two have four bedrooms.

Then, there are the two bungalows, one of which has three bedrooms,

and has been adapted for disabled use.

The other has two bedrooms,

and could be adapted for disabled use at a later date.

So, what do the properties look like inside?

This is the kitchen of the four-bed, one of the semi-detached houses.

We're nearly there with finishing.

Obviously, cleaning is the biggest thing to do.

It's not a bad-sized kitchen.

Good central heating, combi boiler.

Pretty much the same specs throughout each property as well.

So, both four-bedroomed semis have a decent-sized lounge,

a wet room,

and a downstairs bedroom.

With three more bedrooms upstairs.

And a family bathroom.

What about outside?

This is the rear garden of one of the houses.

It's a good-sized garden.

Patioed area.

We're trying to re-use water from storm water coming down,

and to collect it for watering plants and so on.

And it's reasonably flat, which is quite rare for up the Valleys.

The entire development has taken about a year to build,

and was done mainly by Alex and his brother Julian

with help from a team of subcontractors.

There's a little snagging to sort out in the houses,

and the driveways and parking areas need to be finished off.

But, overall, the six properties are almost ready.

So, have they met the brief given to them by the housing association?

Delighted with the end product. The properties are really great.

They'll meet the needs of

the tenants we're putting in.

Most of them are from very local areas

so they're looking forward to moving in.

And we're going to arrange a day so they can all get to know each other,

they can move in together, we'll have a big bang approach,

then we'll probably have some kind of celebration afterwards.

And one of those tenants is Lindsay.

She'll be moving in to a three-bedroomed adapted bungalow

with her son, Kaydar, and her four-year-old daughter Kendra.

What does she make of her new home?

31st of July I'm moving in, and I'm ecstatic. I can't wait.

This is going to be Kendra's room, because she'll have the hoists,

And then I'm opposite her.

Then, my little boy is further up.

Then, we've got the living room,

with hoists in there for when she gets older.

There's patio doors in the living room,

so it's easy access for Kendra to get out in the garden.

That's just great.

Although it may have taken time to get there,

for Lindsay and Kendra, it's certainly been well worth the wait.

But has this development been financially worthwhile,

as they've sold the development to the housing association?

But for how much?

We've got a package coming off, obviously, for the complete build,

which is coming in at 890.

We are probably going to end up with around

80, 85,000 profit.

This development was originally a joint investment between Alex

his brother Julian, and property developer Vaughan.

However, the brothers bought Vaughan out 18 months ago,

so that £85,000 profit needs only to be split two ways.

But, could this site have been more rewarding for them

if they had sold the houses separately?

What do two local estate agents think?

Really, really pleased. I didn't expect this.

I think the builders here have done a really, really lovely job.

The spec and finish is done to a very good standard. Good-sized rooms,

well spec'd kitchens and bathrooms

in all of the builds.

All in all, a very good development indeed.

So, what about an approximate market value for the properties

that Alex and his brother Julian have built and sold

to the housing association for a total of £890,000?

I would say the two-bedroomed properties,

you'd be looking round about £60,000.

The two-bedroomed semi, £95 to £100,000.

The four bedrooms, about £100,000.

The four-bedroomed semis, I think, would realise

somewhere between 140 and 150.

The two-bed bungalow, maybe, 75, 80,000.

And, pushed, maybe 90, 95,000 for the larger three-bedroomed bungalow.

We would be looking at around £150,000 for this bungalow alone.

Estate agent Maria thought the two-bedroomed bungalow

would be worth around £120,000.

There's a big difference between the valuations here.

Maria valued the whole site at £770,000.

While the other agent, Mark's valuation was only £485,000.

It just goes to show that valuing property is not an exact science.

But in this case it's all academic,

as the brothers have already sold the entire development

to a local housing association for £890,000. A fantastic result.

It's been a win-win for both the housing association -

so they can provide much-needed amenity dwellings -

and for Alex and Julian, meaning the end of a six-year saga.

I feel very proud because it's people who really need properties like this.

So, in that sense, I'm quite pleased and proud

that it is going out to tenants like that.

Well, that's it for this show.

We'll have more tales

from the front line of property development for you next time.

So make sure you join us for more Homes Under The Hammer.

-Goodbye.

-Goodbye.