Episode 65 Homes Under the Hammer

-Hello and welcome.

-For many, buying at auction offers the chance

to get hold of properties that need a lot of work.

People like to put their own stamp on what they buy

and hopefully make a bit of a profit along the way.

And you can often manage that if you buy your home under the hammer.

We love the thrill and the excitement of an auction room.

You can sometimes sense the hope and frustration in the air.

You never know quite how it's going to go until the very last second,

so let's see what tempted the buyers on today's show.

In Lewisham, south-east London, there's a battle to combat

the mould creeping through this top-floor two-bedroom flat...

And another battle, this time against the elements.

Could the weather be getting the better of this

mid-terrace in Gilesgate, County Durham?

And the hard-won fight to redevelop this ambulance hall in Wales.

It even went before the Welsh Assembly to get approval.

Five and a half years on, was it worth it?

All these properties went to auction.

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

when they went under the hammer.

GAVEL BANGS Sold.

This is Lewisham in south-east London.

It's an area that could be described as up and coming.

That means it's still more affordable than

some of its neighbours such as New Cross and Blackheath,

and there are regeneration plans aplenty.

So, investing your money in Lewisham before prices start to escalate

could be a wise move.

Now, the property I'm here to see is on this tree-lined

residential street and it's a two-bedroom first-floor flat

which had a guide price of 130,000.

Let's head up those steps and see what we've got to greet us inside.

There are two other flats in the property

and the big back garden has been divided into three,

so that each flat has some valuable outside space.

Once through the front door, a second door gives

access to the flat I'm here to see at the top of the property.

What I love about these properties is the feeling of space.

Look, that's double, triple, quadruple height.

You really have got a lot of space all around you.

It needs a lot of work, though. Bathroom, a complete refit.

Same goes with the kitchen.

You've got a little window over here with a nice view of the garden.

But looking around, you know, you are going to need to spend

some time and energy, and there is mould, damp...

I'm not sure what it is.

It's not looking fantastic and it is worrying me.

I'm going to investigate further.

Well, there's me thinking the mould in the kitchen was bad -

have a look at this! It is everywhere.

All over the walls and the ceiling,

even the back wall. It's dripping down.

Now, I'm not sure whether there's been a big leak.

I think it's condensation,

but it's definitely worth getting in a specialist to sort that out

because you wouldn't want to buy this at auction to later on

find there are whole heaps of problems with this property.

Now, if you try to wash it off and paint it,

mould and its accompanying aroma will come back to haunt you,

and it's not just the fabric of the building you need to worry about.

Mould spores settle on your clothes and in your wardrobe, too.

It can also trigger chest problems and allergies.

It's a classic sign of poor ventilation,

which I think may be the problem here.

But you need to ensure it's not the roof.

If so, that could be a much more expensive cause.

# You got to crack that mould... #

But whatever you do, you've got to crack that problem.

# Crack that mould, yeah. #

The two bedrooms don't seem quite as badly affected.

The large double and the single both have high ceilings that I love,

and I love that original woodwork that remains in both the rooms.

The only downside is that both bedrooms overlook the road,

so that could be noisy.

I think I've found the solution and it involves

the living room, which is currently serving as a third bedroom.

Through here, we've got a fantastic space. Look at this.

It really is a wonderful room.

Again, one of the bonuses with this flat is the space you have.

I'm just wondering, is it worth moving that kitchen into this room,

and having a kitchen, little dining area, sitting room,

and then you could call that bedroom number three?

That is food for thought.

Another ingredient that might be worth thinking about is the loft.

This is a leasehold property, so it's vital to know

whether you would own this as well.

If it is included for that guide price of 130,000,

you could really add value if you get a room up there.

Outside, the property looks to be in pretty good condition.

The bit of garden allocated for this flat is overgrown

and hidden right behind the shed.

Be prepared to get your boots on to clear it before you can sit

and enjoy the lovely sunshine.

Look what I have found.

It's not often you find these little, original, hidden features

like these. What a gem, have a look.

Bit of a boot clean for me? No, no mud on my boots. That is brilliant.

Could the new owner of the flat be about to clean up,

or will they end up stuck in the mud with this lot?

We asked a local estate agent to come and have a look

and get his opinion on the flat.

I think the property needs a lot of work, it's got a lot of damp.

Needs a new bathroom, a new kitchen, new flooring, quite a lot to be done.

Once the mould has been treated and a new bathroom

and kitchen installed, would the agent try to add a third bedroom?

In the hallway, it's got quite a lot of space

to lead a stairway up into the loft,

so you could quite easily convert another room up there,

and possibly a bathroom.

OK, so let's talk figures.

How much could the flat be worth after a refurbishment

if it remained a two-bedder?

When this property is renovated, I think it could reach

-a maximum of around £230,000.

-And with a third bedroom?

If you extended up into the loft,

I think this property could sell for £285,000.

Wow. Even if you take into account the building costs,

this could be worthwhile.

Would it make any difference if you were going to rent the property?

I think this property could rent between £1,000

and £1,100 per calendar month.

And the effect a third bedroom could have?

If you were to extend into the loft, I think this property,

as a three-bedroom, could rent for up to £1,300-£1,400 per calendar month.

This flat is a great size

and you might even be able to squeeze in a third bedroom.

However, I still have my concerns, as it needs plenty of updating

and there's that worrying mould to consider.

Let's head to the auction and find out who was prepared to take it on.

I move on now to Lot 133.

It's a two-bedroom raised ground floor flat, in need of updating.

It's got its own section of garden.

Who'd like to get me started on this? What about 150?

OK, we'll start there, 150 I've got. Thank you.

151, 152, 153, 154, 155.

Considerable interest at the auction,

and we rejoin the bids at £180,000.

180, 181, 182, 183, 184.

185? Yeah? 185, 186?

LAUGHTER

Anybody else? If not, 185 for the first,

185 for the second,

185 for the third and final time. Are we all done?

-GAVEL BANGS

-Sold, 185, well bought.

That successful bidder, paying £185,000, was Grant.

He and his partner Dawn have bought the flat as an investment.

The couple have recently had a lifestyle change

after Grant decided it was time to quit his job in the City.

# But all-all-all

# All things must change

# So don't look back

# Just walk away. #

I met them back at the flat to find out more.

Dawn and Grant, congratulations. I want to know the whole story

-and how you've ended up with this property.

-It was our first auction.

-Yep.

-Which was interesting. We'd had about five properties on the go

that we were looking at on the day. This one ended up

a lot more over guide, but it had potential and I liked it.

Are you a property developer?

Is this something you've been doing for a long time?

We started this a year ago, finished a place down in Hampshire

in Liss Forest, which is just under offer now.

A lot of work. Moved kitchens, bathrooms, the lot, so...

What was it that you did before you started the houses?

It's always been project management but in banking and insurance

and financial services.

Why did you want to stop that and move into this?

-Just a complete lifestyle change.

-Yeah, just a complete change

and just potentially do something different.

He's much happier. Although he's using the same skills,

if you will, project management, but it's obviously a different area.

Plus, you are your own boss.

It's also planning, and having a proper plan,

whether it's finding new people if someone doesn't turn up...

What's it like living with him? Because project-managing,

making sure you're on time... I mean, is he quite strict?

-Spreadsheets!

-SHE LAUGHS

-There are spreadsheets.

-Yes.

You've got to laugh. Poor Grant!

He doesn't stand a chance between us, does he?

But he will have the last laugh, because being organised

and keeping tabs on everyone, well, that's the way to go.

# I go my own way... #

I wonder WHY the couple have bought the flat.

Is the intention to sell or rent?

To...as a long-term investment.

So the intention is to... having bought it and renovated it,

we'll put it onto the rental market. That's the plan.

So are you going to try and reconfigure the space,

or leave it as it is?

The bathroom is quite small.

There is a partition wall between that and the kitchen

which we'll take down anyway cos it's rotten,

so there might be configuring to be done there,

but I like the landing space and I just like the size of it.

Potentially there could be other changes.

I've seen people move the kitchen into the lounge,

and then create a third bedroom. You could have that at the back.

-That could work, yes.

-That could work, just...yeah.

Hopefully the plumber can work the pipes.

We'll have a think about it.

Grant intends to take on a lot of the work himself

using the skills he learned on his previous project.

Dawn will provide crucial backup,

helping to source materials and tradesmen.

Now to tackle the problem that could scupper all those well-laid plans.

I have noticed a lot of black mould all over the walls.

What do you know about it?

We had a surveyor come in recently

and he confirmed it was just condensation.

He tested it with a damp meter and the walls aren't damp.

So it's just a bad case of condensation.

Hopefully nothing to get too steamed up about, then!

And one less expense for that spreadsheet.

How much does Grant think the work is going to cost?

We've said 20,000 to do it,

which incorporates new windows, new kitchen, bathroom,

new heating. 20,000 should be enough.

How long do you think this project, start to finish, will take you?

-Erring on caution, probably three months.

-Yeah.

Guys, congratulations. It's been lovely talking to you both

-and I can't wait to see what you do with it!

-Thanks.

-Thank you.

Grant has his spreadsheets at the ready!

And with the help of Dawn, I hope they can transform this flat

without too many issues along the way.

Will we come back and see a spacious two-bed,

or will they have squeezed in that third bedroom?

You can join me later on in the programme to find out.

There's certainly all the space you could want here,

taking to the water and paddling down a peaceful river.

# In a one-seat canoe You're the skipper and crew

# Messing about on the river. #

We're in the lively and historic university city of Durham

in the North-East of England.

The property I'm here to see is a 15-minute walk away

from the city centre, in a suburb that retains a lovely village feel.

So this is Gilesgate, very close to Durham city centre.

And more importantly, to its student population.

Yes, we are in Studentland, which makes this property

potentially very interesting. It's got three bedrooms,

it's terraced - let's take a look.

The guide price in the auction catalogue was £49,950-plus.

OK. Well, through the front door

and straightaway I'm thinking "Mmm, yes, bit of work required."

Look at that fuse board. The old fuses...not good.

So apart from electrics, what else is required?

Well, down here, glancing into that downstairs room

which would have originally been the lounge, you can see

that it has already been used, I think, as some kind of a let,

because that is laid out as a bedroom.

A fairly untidy one,

but a bedroom nevertheless.

But this room, suddenly, I'm thinking is ideal.

This is a very large kitchen/living area.

Now, if you're thinking about using this as a student let,

this is an ideal room as a kind of common room -

it has a cooker in here. You'll have to look at lots of things,

depending on the number of people you have in here,

in terms of things like fridges and cookers.

You need a certain ratio for the number of people who are in here,

but it's a good-sized space.

I can see this as a really nice communal area.

It carries on through the back - a bit of a utility area

and on to the loo, and then upstairs to the bedrooms.

Erm... Oh, that's nasty.

Yes. It was all looking quite good until that.

Moving swiftly on. It's great.

Well, maybe not. But I'm prepared to give it time to grow on me.

The mould certainly has.

There is significant damp here.

I think our old friend the flat-roof extension is at fault.

I need to check outside.

Well, when you're looking at properties,

it's really important to look at them from all angles -

literally, in some cases, to take a step back.

If you head out the front here, and take a look at the roof,

you can see something which could be a problem.

The joint in between the two houses there,

this one and the one next door,

you can see the tiles look like they've got some problems with them.

The ridge, to me, looks like

it could have a few problems with the cement,

and if you look at the chimney stack,

again, the pointing on that looks like it's in need of some attention.

Now, any work on the roof is going to need scaffolding

if it's to be done safely, and that is going to be expensive.

So, as I said, whenever you view a property,

make sure you come outside and give it a good look.

And while we're talking about maintenance, at the back

you can see on this unusual elevation more signs of trouble.

Look at those missing tiles.

Back inside, on the first floor, there are three bedrooms.

We've established already that downstairs is let as a bedroom,

so a student let does look like a possible option.

However, if you're going to rent this out as an HMO

- that's a house of multiple occupancy -

then among a lot of other regulated issues, like fire alarms,

gas certificates and so on,

HMO inspectors would look at the suitability of the rooms.

At the front of the house, there is a good-sized double,

but the single room is small.

The third at the back is very small,

and only has this skylight.

Would they all qualify as habitable, lettable rooms? I'm not sure.

This work to comply is something you should research

and cost out when you're totting up your figures.

We invited a local estate agent along to find out what

he would advise for this property

that was guided at £49,950.

If it were my own property, I'd take it from a three-bedroom,

as it is currently upstairs, to a two-bedroom property,

purely for the reasons that the three bedrooms that we have

are too small, to my mind, for appealing to a rental market.

Knocking down walls and so on would cost a bit of money,

but would it be worth it?

What if we left the configuration just as it is?

Under the HMO licensing laws,

you can still have the three letting rooms within a property,

utilising what would otherwise be used as a lounge as a third bedroom.

Any developer buying this would need to weigh up the best returns

before deciding which way to go - family or student rental.

Two bedrooms or three? Or sell on?

How do the figures look for all options?

If you were to look at owner-occupier values, a resale price could be

somewhere in the region of £90,000 as a two-bedroom property.

If it were to go on the open student market for sale, you would be able

to achieve somewhere in the region of £110-£115,000.

On a family rental basis,

I would suggest somewhere in the region of £500 per calendar month.

On a student market, we rent on the basis of £80 per room per week,

which would equate to £240 per week,

a total of £960 per calendar month.

Don't forget that although this might sound like a no-brainer,

you have all those regulations to comply with for an HMO let,

and also, students don't rent for 52 weeks a year.

Well, this is a good-sized house with masses of potential.

Yes, there is work to be done,

but get it right and this really could be a bit of a gold mine.

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

We're going to go to a three-bedroom mid-terraced property.

It's got the gas-fired central heating, it's got the double glazing.

We've got it advertised with a price guide of 49,950 plus.

Can I ask for 50,000?

I'll take £46,000. 47 anywhere else. One bid on the left-hand side of 46. Do I have 47?

47 on the telephone. 48. 48.

49. 50.

Shaking your head.

I'll take 500 if it will help.

49 and a half. Do I have 50,000? 50,000 on the telephone. 50,500.

Definitely shaking. Going once at 50,000.

Sorry. 50,500. 51.

51 bid. 51 and a half. 52.

52 and a half bid. 53. 54.

54 bid. 55.

55 bid.

55 and a half. 56. 56 bid.

56 and a half. 57. Do I have 57 anywhere else?

Going once at 56 and a half, going for the second time at £56,500.

Sold to the gentleman standing.

That final bid of £56,500 was made by Andre

and Hillary here with daughter Sophie.

They are both art and design tutors

and already have a small property portfolio. They are from Halifax.

They were persuaded to buy this property in Durham by Sophie.

I met them to find out more.

-Hillary, Andre, lovely to meet you both. Congratulations.

-Thank you.

-Good place.

-It's got character.

-Tell me why you wanted to buy it.

Sophie is studying philosophy at Durham University and is

renting a house a couple of streets away.

She thought this might be a good area to buy in. We have let out houses before.

We have done them up and let them out, but not to students.

-Right. You bought it for your daughter?

-I want more rent than that!

-You are going to be ruthless, are you?

-We're not ruthless.

What we've done in the past is bought a couple of houses

to do up in Wales because we like the Gower Peninsula, and it is as an excuse

for going down and spending time down there. And Durham I really like

and it would be an excuse to spend more time in Durham.

And Sophie could help us do this up.

-It's more than just a property? It's a lifestyle decision.

-Yes.

-Tell me about you two. What do you do?

-We teach at York College.

-Great.

-Art and Design.

-Fantastic.

-We've been teaching life drawing the last couple of days.

-Life?

-Life drawing. Nude model.

-This is something different, doing up properties.

I would have thought you'd be able to bring some of your art

and design into this.

-Do you want a mural on the walls?

-That would be good.

In our house at home he has painted lilies on doors and on the walls.

Good. I'd be disappointed if you don't. Make a feature of it.

It makes a change from magnolia. But no life drawing please, we're British.

The couple already rent five properties in Wales

and Yorkshire, but with Sophie studying here at university

maybe this could be her next student pad.

-She could be living in this next year?

-She could. She could.

-If she pays us enough rent.

-Come on. It's your daughter.

-This is business.

I think he's joking.

They have a budget of £7,000 set aside for the project

and they've got a local management company to take

care of the letting side of things for a 10% commission.

But given the condition of the place, there's a lot of work to

do before this property can be rented out.

-What are the plans for it?

-The roof at the back probably needs replacing.

-The roof needs a good looking at.

-Roofs can be expensive.

-You could blow seven grand on the roof.

-I don't think so.

We have actually got some quotes and it won't be that much.

-Don't worry.

-We need to check the boiler out. We need to check the electrics.

-Yes.

We're hoping you're not going to come back and say, "They said seven

"and now it's 20."

No, no.

The last house we did a heck of a lot of work.

But I wouldn't want to get up on a roof.

A wise decision. Some jobs should be left to the professionals.

I'm glad to see that these two creative people have a sensible

and practical approach.

As property development goes, this could be a work of art.

MUSIC PLAYS

The couple are hoping to have the house ready in about six

months, in time for the next student academic year.

As they both teach, they'll have time off in the summer to do some

finishing touches.

It could work out just fine.

What are you most looking forward to?

The point where the roof is done and all the major stuff's done

and we can just paint and make it look nicer.

Listen, lovely to meet you both.

I'm exhausted after that interview. But it's fantastic.

-Sorry. We can talk for England. You can cut a lot out.

-We can cut a lot out.

But we won't want to. It's all charming. Brilliant. Good luck.

-Thank you.

-Thank you.

And breathe.

Wonderful.

Andre and Hillary have got themselves a great buy here.

The charming thing is, I kind of don't think they really realise

quite what a fantastic investment it is.

I can't wait to see how they go on sorting it out.

Will there be a special mural painted when we get back?

Oh, yeah, and will she end up on the roof? Hopefully not.

You can find out later in the show.

Coming up...

What has finally been the fate of this ambulance hall in Wales,

since we first visited in 2007?

Our creative couple in Durham didn't have anywhere near that much

time, but did they manage to dash off a mural, or even a Muriel?

-LUCY:

-But first, in Lewisham,

did Grant get to the bottom of those black walls?

All the windows probably had been locked up

so there was just moisture everywhere.

Lewisham in south-east London has begun attracting buyers who have

spotted that it's still a little more affordable than its neighbours,

even though it has good train access to Docklands and Central London.

Earlier in the programme, on this tree-lined street,

the two-bed first-floor flat in this property was

bought for 185,000 by Grant and his partner Dawn.

They were about to sell another property they'd already

refurbished after Grant gave up a job in the city a year ago to

go into property developing full-time.

But for this flat, they had other plans.

The intention is to, having bought it and renovated it,

put it onto the rental market. That's the plan.

The most obvious issue about this property was that horrible, black

mould everywhere, but I wondered what else they were going to tackle.

So, are you going to try to reconfigure this space

-or leave it as it is?

-The bathroom is quite small.

There is a partition wall between that

and the kitchen which we'll take down anyway because it's currently

rotten, so there might be some configuring to be done there.

But I like the landing space, and the size of it.

Potentially there could be other changes. I don't know.

They'd set a budget of 20,000 and hoped to have the flat ready

to let in three months.

It is now four and a half months later and we're back.

Wow. The flat has really undergone some major changes.

The staircase now welcomes you into this flat and the beautiful

open-plan kitchen/living area is at the front of the property.

They removed the walls that had formed the two front bedrooms

and this lush, light room is the result.

But where did the two bedrooms go?

Well, the former kitchen has become one, as I suggested, and with

the kitchen relocated to the very front of the flat, the middle

room that I thought would make a kitchen-diner is now also a bedroom.

This is the master bedroom.

Originally, this was one large bedroom, and we decided that

we wanted to have an en suite in this main bedroom.

Very happy with the shower, with the tiling.

The other good thing about this is the pocket doors,

which I'd never heard of before.

They save a lot of space because you can just slide them in and out.

And I think it looks really good.

It's been a case of change and change about for the flat.

The only room that remained where it was is the bathroom.

Same location, but totally refurbished.

But weren't Grant and Dawn planning to create that third bedroom?

There was no way we could have had a third bedroom.

If we'd put in a third bedroom, we would've had to put in another

window and we didn't go for planning permission for that.

So we just kept it at two bedrooms, added an en suite and went open-plan.

And what about that black mould? Was there any damp? What was the cause?

It was literally just condensation.

All the rooms were locked up, all the windows were locked up,

so there was just moisture everywhere.

It was pure condensation.

Following the expert's report, they cleaned the mould with bleach

and white vinegar, and then replaced a lot of the ceilings anyway.

The flat had new fire doors installed, plus a replacement

boiler, and the flat roof over the dormer window's been fixed.

Grant has been on site every day,

project-managing the team that he's employed, and

he's been doing a lot of the hard work himself to reduce the costs.

The loft space is jointly owned by all the flats in the property,

so Grant and Dawn couldn't make use of it for a third bedroom.

Although we have lost a bedroom, I think the space works

a lot better - really open it all up,

use the double width of the house to make a really huge space

for living and dining,

and we've got all the light coming in through both of the windows.

All the windows in the flat have been replaced,

and energy-saving lights have been installed throughout.

Outside, the overgrown garden has been partially cleared,

and money is being included in the budget to finish the job.

Talking of funding, how did the initial 20-grand budget fare?

We've run over - we're ready 4,000 over,

so we're looking at 24,000.

The overspend is largely down to adding an en suite

and relocating the boiler from the original kitchen,

and with the 185,000 they paid at auction,

it takes the total investment to £209,000.

And it sounds like the original plan to rent the property

-has now changed.

-We ideally want to sell it.

We don't want to keep it as a rental property.

We would like to just take the profit and then move on to the next one.

But will there be a profit?

Don't forget, they paid 55 grand over the guide price,

and they've gone over the renovation budget.

Not by a drastic amount, though, but it all adds up.

We asked two local estate agents what they thought

of the new configuration.

Changing the layout has dramatically improved the property.

They've made a big open space here now, a living space,

two good-sized bedrooms, and, yes, it's a good improvement.

What I like about the property, it's light and airy,

he's kept the original features, the windows he's changed -

double glazed - keeps the flat nice and warm,

and he's added a nice en suite bathroom.

How much do the experts think the flat could now be worth?

More than the total 209,000 that Grant and Dawn have invested?

If I was to put this property on the market, I'd hope to achieve

£255,000 to £260,000.

If I was to put this property on the market today,

I would put it on for £260,000.

Well, a possible profit of £46,000 to £51,000 before taxes

and expenses, if they were to sell.

That's roughly fine. I mean, obviously, the garden needs work,

and we're not in any rush.

The next place will be somewhere at auction,

so we'll hold off to the most... maximum value you can get.

-Or rent it for a year and let it appreciate.

-Yeah.

Well, if there just isn't enough profit for them yet,

could those rental values prove more attractive?

If I was to put this property up to rent,

I would expect it to achieve £1,200 per calendar month.

If I was to put this property on the market today,

it would achieve £1,200 per calendar month.

And that would generate a yield of nearly 7% if they do decide to rent.

This has been the second property that the couple

have invested in, after Grant's career change.

So do they see this as a sustainable business model?

We need to be pushing three a year.

I think the next project we'll probably hand over to a builder.

I'll take far less of a role.

We'll lose more profit, but we'll turn more...

-..per year, and then we will...

-Yeah, more properties.

More properties will be done a year, so... Right now, it's one to two.

If we can do three to four, that'd be great.

Yes, with property, it can pay to take the long view,

like this one we first saw back in 2007.

I'm in Skewen, just outside Neath in South Wales.

The area around Neath is famous as the birthplace of, amongst others,

Richard Burton and Anthony Hopkins, but more specifically,

Bonnie Tyler was born just a few streets away from here.

The big question is, will the property I'm here to see

cause the future purchaser any heartache?

# It's a heartache

# Nothing but a heartache... #

The property's in the middle of a residential street.

For years, it's been at the heart of village life,

but it now needs someone to give it some attention.

What's on offer is this, the former St John Ambulance hall in Skewen.

Interesting project, potentially. Guide price - 32 grand.

Let's take a look inside.

So, through the front door, small foyer there.

Gents' and ladies' loo, and then through into what is basically

the primary part of the building, one big room.

Presumably this is where the St John Ambulance would hold

their events and do their training.

There's all sorts of mementos of the time when they did that -

the old screen there.

But primarily, this is what you've got.

Sadly, this building has been out of use for over a year,

but it has played a vital part in the community, not only as a venue

for St John Ambulance, which trains people in both first aid

and health and safety, but it also served as a community hall

in more recent years - a valuable centre

for lots of local get-togethers and activities.

It's always sad to see a community facility disappear,

but buildings like this often become eyesores when they're left empty,

and this site offered interesting possibilities.

At the rear of the property, two really nice bonuses -

the first is the amount of land that the property comes with.

It's almost double the size of the actual building itself,

and it's reasonably flat, which makes development quite easy.

The next bit of good news is that on either side you've got residential

development, so when it comes to getting planning permission,

a precedent has been set.

But the second bit of really good news is the fact that at the rear

of the property there, behind that hedge, is a small alleyway.

That gives you really vital rear access to the property.

That's great when it comes to redevelopment. You can get

the building materials in and the rubbish out, but when

it comes to what you build here, you'll be able to offer somebody,

say, a way of getting the car into a garage or something like that.

Really good news.

I thought it was prime development material.

With a guide price of just £32,000, there was

a chance of spinning it into a moneymaking venture.

Well, sad though it is to say it, I'm afraid that

the old St John Ambulance hall in Skewen

is probably destined for the portfolio of a property developer.

Let's find out who bought it at the auction.

Lot 28, ladies and gentlemen is the former ambulance hall,

with redevelopment potential now. Who has got 50 for it to start?

Can I see 50, anybody? Can I see 40? Well, bid me 35. Let's start.

Who has got 35? 30 then? 30, thank you, sir. 30,000, I am bid.

32 I'm bid. At 32. Four. At 34. Half then. 34 and a half.

-Five if you like now. At 35.

-35.

Lots of interest on the auction day,

and we rejoin the bidding at 54,000.

At 54. 55. 55 and again, 56. At 56. Can I make it eight, sir? 58.

Thank you. And 60 if you like, please. 60 bid. And two. 62.

Four, will you? Four is bid. 64. 66.

At 66, he's going to get it, then. At 66. 68.

At 68, 70 on the aisle.

Two I'm bid. At 72, 74, at 74, and again, please.

Are you all done at £74,000?

Five, thank you. At 75. 76. 76,000.

The hammer is up. I'm not going to take all day. Seven. 77. 78.

And again, sir. 78, please. Nine if you like. Nine. 79. 80 I'm bid.

I will take one more if you're quick. At 81. 81, 82.

At 82, three, can I? At £82,000.

Yes or no? At £82,000.

-GAVEL DROPS

-Yours, sir, thank you very much. 82,000.

And after that hard-fought auction,

the successful bidder paying £82,000 was Gethin, a former builder

and now an enthusiastic property developer.

Will he rescue this building? I met him to find out.

# Rescue me

# Or take me in your arms... #

All of my family are in the building trade.

I've grown up through the building trade.

Decided to take the jump and bought my first property eight,

nine years ago.

Renovated it, rented it out. That worked well. Moved on to the next.

Moved on to the next.

Just as everyone else seemed to be getting to grips with buy-to-let,

and the competition started getting a bit more fierce,

we looked at land.

And the first development went well, the second went well.

And now, where everyone is looking at land, we are

looking at something else. But what it is, I don't know yet.

Not only do Gethin and his wife Sally run a property business,

they also own a shop fitting company

which funds their development projects.

And Gethin has spotted the potential here straightaway.

As soon as I saw the property coming up for sale, I came down

and kind of measured the area to see what we could do with it, so we

had a good plan of what we were going to do before we purchased it.

Which is what?

We're going to put on a pair of semidetached houses,

quite like a pair I have built in another area of Swansea.

Hopefully, subject to planning, we should get it through.

We literally put the planning application in a couple of days

after the auction, before we completed, just to get the heads up.

That's how confident we are in getting something on here.

Using his building background,

Gethin had planned to build the semis himself with

the help of several employees to get the costs down.

We're looking at 180, £190,000 total outlay for two semidetached houses

hopefully that we're going to retain and rent out as a return.

Now, this obviously was a fairly important

part of the community at some stage. The whole St John Ambulance

and everything they do is marvellous, obviously.

-Is there any sort of sense of sadness at that?

-Yes, there is.

It's not realistic to keep it running as a community centre.

Someone has got to come in and do something with it,

otherwise it is just going to be boarded up and will go into disarray.

If I provide two new homes for people, from the area, hopefully,

then I think we will have made good use of the land.

# Rescue me Rescue me. #

When we returned five months later, there was

no sign of two semis thus far,

despite Gethin 's initial confidence about getting planning permission.

The council turned us down on the basis that they think

we were over-developing and a cramped development of the site.

That wasn't the only issue. The council also had reservations

about how the semis looked and how they fitted into the streetscape.

It's very hard to blend a property into a street that has predominantly

terraced houses, detached dwellings, detached single-storey bungalows.

We thought that a pair of semis fits in just right.

Buildings like these have been a focal point for the local

community and arouse strong feeling,

so maybe you can understand the local resistance.

But Gethin was keen to show us the plans that had so far been rejected.

This is an artistic impression of what we intend to put here,

and this went in with our original application.

It's basically two three-bedroom semidetached

houses, utilising the attic for the third bedroom.

We kept it back off the road to allow for a car-park spacing,

as well as a detached garage to the rear of the property.

I think this is the design that should be sat in the street.

Gethin was so sure that it was the right property to replace

the old ambulance hall, that he had appealed to the Welsh Assembly.

What if it was bad news?

# I don't want to wait in vain. #

Plan B, if we lose our appeal, is to develop this into one property,

reflecting more or less the property to the right of us,

a large, 4/5 bedroom property. However, it is

not a property that we would want to keep on our stock for rental.

For that reason,

Gethin was determined to pursue his plan A, through the appeal

process, and he had other reasons to believe he was on the right track.

The development that we intend to put here, basically,

it sits on the footprint of the original building behind me.

The garages will be at the back of the property and then we have

two long, private gardens

with two feather-edge-fence retained walls.

It should give a nice kind of privacy to each dwelling.

Gethin had already spent several thousand

pounds on his planning application and appeal over

and above the original £82,000 purchase price.

But his build costs had come down from what he first anticipated.

If we win the appeal and we get the two dwellings that we want,

we're looking at construction costs

in the region of £100,000-£120,000 for the pair of semidetached.

If we do not win the appeal and we subsequently then apply for one

dwelling, then we would be looking at £80,000-£90,000 in costs.

It meant Gethin was looking at a total

investment of around £170,000 for a single property and £200,000

for the semidetached properties that he really wanted to build.

Join us later in the programme, five and half years later, to find

out what, if anything, Gethin did build.

Now, finding good tradesmen is often the key to getting a property

done up well and on time.

But some people choose to do it themselves to keep the budget down.

So, have our buyers been getting stuck in or just stuck?

Let's find out.

We're now returning to the city of Durham in the north-east

of England where, earlier in the programme,

in the suburb of Gilesgate, this three-bed semi was

bought for £56,500 by arts tutors Andre and Hillary.

They already have properties in Wales, which they love,

and in Yorkshire where they come from.

Their daughter, Sophie, is a student in Durham,

and she persuaded her parents that this would be a good place to

add to their portfolio.

We have let out houses before, done them up and let them out,

-but not to students.

-You bought it for your daughter then, or...?

Well, I want more rent than that, so...

-Oh, you're going to be ruthless, are you?!

-No, we're not ruthless!

The couple had a budget of £7,000 and hoped to have the property

ready for the next academic year in about six months.

Well, it's now ten and half months after our first visit

and we return to meet the family again.

The former kitchen at the back has been cleared

and the room is now a living area once again, because the

kitchen has been relocated into the utility room

in the rear extension.

You still have to go through the kitchen to get to the bathroom

where the suite has been retained and new flooring laid.

But the plans for the property have taken a detour.

Well, when we originally bought the property

we planned to rent it to four students,

and that all looked great, and then, we found

out that there are HMO regulations which mean room sizes have to

be a specific size in communal areas, so, in the end,

we realised that we couldn't do it, even if we shifted walls

and sorted things out.

We ended up having to keep it as more of a family home,

and we're actually renting it out to a couple now, which is great.

Yeah, and they are lovely, so, I feel good about that.

# Gonna make you feel Gonna make you feel good. #

It means upstairs

the three bedrooms have remained in their original configurations,

decorated, and the damp doors dealt with.

Downstairs, the living room has been returned to its original use.

So, originally, this was going to be a bedroom,

but now, we have turned it into a family house,

and we have made this a cosy sitting area,

put a nice settee in, got a coffee table, cleaned the fireplace up,

and we hope that the tenants really enjoy it.

But treating the damp in the former kitchen threw up some

unexpected problems.

Well, when we came to this wall, we had real problems with the damp.

There was poor guttering and it was letting in a lot of water,

the slates on the roof needed sorting.

There was also another problem - there were some units here

and when they took them out, they found some dry rot.

That had to be sorted and that was quite costly and time-consuming.

Now it's been plastered and redecorated, I think it's got

a much homelier feel. I just hope the tenants enjoy it.

The work took longer than expected. A replacement builder

had to be found and the couple didn't have much time

to travel up from Halifax as Andre had extra work commitments.

But with Sophie's help, they did a lot of the decorating themselves.

Unfortunately they didn't get

a "wet paint" sign up in time for their viewings.

Oh, it was really funny. We got a lovely couple

that came to have a look at the property and they're going to take the property on.

And it was so funny because we'd just recently painted the door frames,

and the chap walked through the door frame, got paint on his shoes

and we were so desperate that we were knelt on the floor wiping his shoes.

He was going, "No, no, don't, you're the landlord."

We were both running and getting cloths and rubbing his shoes madly.

-They were laughing their heads off.

-I don't know, it just seems...

It's probably really odd. Especially when you don't know people.

# Didn't want to leave you with the wrong impression

# Didn't want to leave you with my last confession, yeah... #

Well, let's just gloss over that. Time to "brush up" on the budget.

Did that stick to what it said on the tin?

Well, I think we originally estimated about 7,000,

but with solicitors' costs, auction fees, unexpected things that happened like the dry rot, the roof,

it ran to about 11,000 at the end.

With the 56,500 they spent at auction,

it takes the total investment to 67,500.

Time to see what two local estate agents think of the finish

-they've achieved.

-I think it was a good idea not to pursue

the student route for this property.

The sizes of the three bedrooms upstairs would always

make it difficult for student occupation.

Overall, the property is deceptively spacious.

I think the property could be improved

by refitting the kitchen and also the bathroom.

Before marketing, I'd definitely recommend that the owner would spend money on improving the outside,

so people have some outside space to enjoy.

For both rental and sale, downstairs is now a very good size, creating two

good-sized reception rooms and moving the kitchen into the utility room.

However, I still fear there's an issue upstairs

with the sizes of the bedrooms.

OK, let's see if that could impact on the valuation.

Could the property be worth more than the £67,500 invested?

In the current configuration for the property, I'd recommend

an asking price in the region of 80-£85,000.

If the upstairs was to be reconfigured into two good-sized bedrooms,

then I would recommend an asking price in the region of £90,000.

I'd currently value the property at £75,000.

If the owner were to improve the upstairs layout to create two bigger bedrooms,

this would increase the valuation to £85,000.

That valuation range for the current three-bedroom configuration

would generate a profit of £7,500-£17,500

before taxes and expenses, with the potential to increase it

to £22,500 if the bedrooms were changed to two large rooms.

I'd be happier with the kind of 80-85 estimate and looking at maybe

-doing things to add...

-Work towards, you know, sort of like

achieving the 90,000 figure.

Interestingly, both agents agreed the rental income would be

£450 per calendar month in its current configuration

or with two large bedrooms - a yield of 8%.

And Hillary and Andre are achieving a slightly higher figure.

It's very unusual that you find out a two-bedroom gets the same rent

as a three bed, but this demonstrates that sometimes

people do value just space.

They haven't added a student let to their portfolio.

I wonder if they'll be trying again.

I think we'll maybe do another one, but give it a bit of time.

Yes. All the complications have made us think it is perhaps a little

bit harder renting to students than you actually first think.

It's true. Things rarely are quite as easy as they look in this game,

as we discovered in Skewen, South Wales, when back in 2007

this former St John Ambulance Hall was bought for £82,000

by Gethin, who comes from a family of builders.

He and his wife run a business building new properties.

He submitted a planning application for a pair of three bedroom semidetached houses.

Unfortunately, when we returned five months later,

there was bad news.

The council turned us down on the basis that

they think we're over-developing and a cramped development of the site.

There had been strong local objections to the two houses

and the change of use of the hall.

Gethin had appealed to the Welsh Assembly and was considering

submitting a revised plan for one detached house if the appeal was unsuccessful.

If we win the appeal and we get the two dwellings that we want,

we're looking at construction costs in the region of 100, 120,000.

If we don't win the appeal and we subsequently then apply for one dwelling, then we'd be looking at

about 80 to £90,000 in costs.

So, was it one house, was it two? In fact, did Gethin manage to build anything at all?

# It's been a long time But now we've come home... #

It's now five and a half years since we last met him

and back in Skewen, there are now two semis where the former St John Ambulance hall once stood.

# It's been a long time But now we've come home... #

Even allowing for the appeal process,

this has obviously been a protracted building project for Gethin.

So, why the delay?

We successfully won the appeal. Just when we were gearing up to start with the build,

there was a big economic downturn in the housing market

and we basically put it on the back burner

until the timing was right, which we felt about 18 months ago,

and now we're at completion.

The two semis are mirror images of each other, each one having

a rear bedroom on the first floor,

plus a family bathroom in the middle of the house

and a smaller second bedroom at the front.

My favourite is bedroom three up in the attic area.

Back on the ground floor, the living room feels surprisingly spacious

and they've even squeezed in a downstairs loo.

Feeding off the lounge is a kitchen, with a small area for a kitchen table and chairs.

We have an area here for the dishwasher or washing machine,

the fitted appliances. I'm very pleased with

the way the kitchen's come out.

We haven't got a lot of room to play with to start with.

Quite a workable kitchen really for the size of the property.

One change to Gethin's original planning application

was to bring the houses forward

to be in line with the neighbouring properties.

But there was no leeway on the side of the build.

We couldn't really maximise anything on the width of the plot. The only thing

we had to play with was length and the aided benefit of the back access to the back of the property.

So we put in a reasonable-sized garden,

a decking area which is block paved

and a very nice detached garage to complement the property.

# It's been a long time coming

# It's been a long time coming... #

After waiting for the property market to show signs of recovery,

how long did the build actually take?

We've done it as a bit of a gap-fill between projects.

So 18 months to two years' development,

where we could normally turn these round in about five to six months.

What effect did all that have on Gethin's build costs?

He had anticipated a spend of around 100-£120,000 for the two semis.

The total cost of the build came in approximately about £100,000

for the two properties including the garages.

With the £82,000 he paid at auction,

it takes Gethin's total investment to £182,000.

I'm not tempted to sell these properties at all.

They're purposely designed for the rental market.

I'm just looking for the right tenants now to move in.

We asked two local estate agents to cast their eyes over the properties.

-What's their verdict on this pair of semis?

-Very nice. It's nice to see

something's been done here after all these years.

Lovely finish on the outside. Very attractive.

I think the size and shape of the property is desirable for the area.

It's well laid out and there's a nice flow to the property.

They seem very spacious. They've managed to include a cloakroom

and a lovely kitchen-breakfast area,

and the standard of finish seems excellent.

There's a good-size rear garden, and the off-road parking to the rear

is a bonus as the road is quite narrow.

The outside space here is tremendous.

The garden's a great size and finished to a very high standard.

A positive response, then, from the agents.

But how much rental income do they envisage the properties achieving?

For rental, each property could achieve between

500 up to £525 per calendar month.

For rental purposes, we would look to achieve £525 per calendar month

for each property.

If both houses were let at £525 per calendar month,

that would produce a yield of almost 7%.

I think 525 I'm quite happy with. I would rather push for 550.

Given that they're new properties, I think there's a little bit of a premium to be had,

but I'm comfortable with 525.

And do the agents value the houses

at more than the £182,000 Gethin has invested?

If we were to put these properties up for sale,

we would look to achieve £125,000 per property.

Each individual property, I would put on the market

for between 120 and £125,000.

That top value of £125,000

would give Gethin a profit of £68,000,

minus, of course, the usual taxes and expenses.

Spot on to what I think to the property prices. 125,000 ballpark.

It's now almost six years since our first visit. What with

the planning appeal and the delayed start following the recession,

does Gethin think that the project has been worthwhile?

Yes, definitely. I'm able to give two nice properties to the locality.

I know the locality very well.

And I think I'm happy to move on to the next one.

And might he now sell?

No. Not tempted to sell at all.

Well, that's it for today.

Join us next time for more Homes Under the Hammer.

-We'll look forward to seeing

-you then. BOTH: Goodbye.