Episode 79 Homes Under the Hammer

Hello. Buying property can have its highs and its lows.

-It's not always as easy as it looks.

-No.

But there is one part of the process that you can eliminate -

skipping the dreadful property chain by buying at auction.

Well, there are all sorts of properties sold at auctions these days.

There certainly are. And it's the variety that keeps us all riveted.

So here are the three properties that sold at auction on today's programme.

In Derbyshire, this house seems to be suffering from split ends.

Tipping the extension away from the main body of the house.

That's bad.

Whereas in Kent, there's a property that could be a cut above the rest.

You know, for the guide price of 30 to 35,000, I think it's a snip.

But could this place in Shropshire be the highlight of the show?

For a flat, holy schmoly, lots and lots of room.

All these properties are being sold at auction,

we'll find out who bought them and what they paid

-when they went under the hammer.

-You bought it, sir, well done.

Are you a bit of a townie,

someone who goes pale at the thought of having no shops

or pubs on your doorstep?

Or are you a little bit country, preferring peace and scenery?

This pretty place could be the ideal location for both.

You wouldn't believe you were just five miles from Derby city centre.

I'm in Burnaston, an idyllic rural hamlet.

Yet you've got great access to the motorway networks.

What a great place to live.

The property that was up for auction also sounds like an really interesting opportunity.

£240,000 plus, detached, three bedrooms, 1970s house.

It's certainly of its time, even with the mock Georgian style window

grafted onto the red brick frontage.

MUSIC: "Brick House" by The Commodores

Oh, yeah, straightaway, very classic '70s design.

Big open entrance hall area,

they tended to do that in the '70s, have lots of big communal areas,

sometimes at the expense of the rooms.

I quite like it, it gives a very open-plan feel to a property.

Large sort of dual aspect living room on that side.

Downstairs loo which is useful. Bit of a cloakroom there.

Stairs up to your bedrooms and then through to the kitchen.

This is a really nice living space as well as a kitchen,

so that fits in very well with modern living styles.

And a sort of a throughway into the rear end of living room area.

Nice size, obviously in need of refurbishment

and bringing up to date.

A bit of a crack there

which on its own wouldn't be an issue, but there's another one

basically at the same point on the other side of the wall there.

My guess is, something is going on here, this maybe an extension.

I need to explore further.

Well, the answer may well be around the side of the property here.

This is the original building and here at the back,

this is the extension.

You can see the different colour of the bricks,

they've tried to match them, but not quite.

And look at this crack.

It's along the line of where the new extension is,

so what is happening...my guess is that the

foundations of the extension are sinking and they're basically

tipping the extension away from the main body of the house.

That's bad. I mean, that is bad.

You either are going to have to underpin the existing foundations

or do something else, cos that's only going to get worse and worse.

How annoying.

Eventually it could lead to a parting of the ways

of the main structure and its extension,

giving the house something of a split personality.

MUSIC: "Go Your Own Way" by Fleetwood Mac

But luckily if the new owners are going to shell out for an extension,

then at least they'll have some gorgeous views to make up for it.

Upstairs and lots more open space. You know what?

I actually love it, it gives a really nice feel to the house.

Although what it does mean is you've only got three bedrooms.

If this was a modern house,

I bet you'd get four or five in a house this size.

But one thing I've got to let you see is the bathroom up here.

At this point what we're going to do is

we're going to turn off the colour.

Now you're watching me in black and white.

Right, what colour do you think it is?

Let's turn on the colour again.

Fantastic.

Well, it's not quite your classic 1970s avocado,

but this turquoise suite and tiles are groovy.

Unfortunately, it is very likely that a coloured suite like this

could devalue your property.

So, when it comes to bathrooms, you can have any colour you like

as long as it's white.

Another problem is the huge hole in the ceiling,

which does look like a water tank problem in the loft.

So it's best to get that looked at.

And get the roof checked out too, just in case.

All in all, though, for that £240,000 guide price,

there's a lot of house and garden in a lovely location.

We spoke to the auctioneer who sold the property for a second opinion,

starting with his thoughts on the problem with the extension.

I think you would replace it

with something either single-storey or double storey.

You've got a large garage attached to one side of the house

and there are distinct opportunities in my view to go out over

the top of that, subject to doing some foundation checks.

But you've got to make it at least four bedrooms with an ensuite or two.

Probably even preferably five.

But would adding those extra bedrooms really be worth

the extra investment?

What sort of returns could the house make?

In value terms, if you renovate what's here,

address the issue of the garden room extension,

it would have a value of probably towards £400,000.

If you extended to make it into four bedrooms, I think

you're probably push that up to nearer £500,000.

If you made it into five bedrooms, I would say probably around £550,000.

Well, there's money to be made here whatever you decide to do.

But what about the rental market?

If we renovate what we've got now, it would have a rental value

in the order of £800 to £850 per calendar month.

Extended, four bedrooms, more desirable probably,

you could push that up to nearer £1,000 per calendar month.

If there was a fifth bedroom here, it would probably be about the same

as the four-bedroom rental value, it won't have a great effect.

Well, this is a classic '70s house in need of its 40-year makeover.

But you know what, the great news is, the location

and the size of the plot and the property itself means

that whatever you do to bring it up to date,

you are going to get your money back.

The area, the property, will bear it.

Let's see who fancied the opportunity

when it went under the hammer.

The house was the second to last lot, so it was a relatively

small auction crowd who prepared to do battle over it.

Lock 76, 240 is the guide price,

£240,000, start me.

240 I've got, thank you.

At 240, 42, 242?

244?

244.

46. 246. 248?

248 I have. 250.

252.

253. 254.

255.

256. 257?

257. 258...

The bidding battle was finally down between two interested parties,

and we rejoin the auction as the bidding reaches £301,000.

301, thank you. 302. 303?

Half? £302,500. 303.

£303,000. Half somewhere else?

And a half.

And four. 304.

Once at 304, twice at 304.

Third opportunity.

The hammer is down, it's sold, 304.

It's yours, thank you very much.

And that successful bidder finally getting the lot

for £304,000 was Andy.

Andy runs a property development company with his wife Julia

and father Brian.

And he has a taste for tackling executive-style homes.

So why did he take on this house from the 1970s?

-Andy, great to meet you.

-And you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this house.

It's the worst house in the best street. It's a very desirable area.

We've just sold a house, which we developed,

so we've got nothing to do for our team.

So I went yesterday to an auction to buy two plots of land.

It fetched more than I wanted to pay.

I viewed this before, just in case, so this was a backdrop.

-So I bought it for that.

-Right. As a what, then? As a project?

Yes, we will knock all this extension because it's broke its back,

we'll knock that down.

We'll knock some of the walls out, we'll extend it two storey.

Make it four-bed, one ensuite.

Big dining-kitchen, new bathroom, new kitchen obviously.

And flog it on.

-Right. So this is something you do, is it?

-Yes, professionally.

So general house refurbishments or bigger projects like this?

Normally new builds and we've done a grade II listed farmhouse,

a barn conversions with 18 acres.

-Wow.

-This is probably one of the smaller units we do.

So this, just because it's ready to go,

I completed two days ago and we'll start on Monday.

-Right. Bing, bang, boom, in and out.

-Yeah.

With seven years' experience in buying, renovating

and selling properties, Andy has also built up

a small portfolio of three rental properties.

All that experience means he not only knows when he's going to start,

he knows exactly what he's doing and how he's going to do it.

I'm a plumbing-heating engineer by trade.

I've been in the trade for 30 years.

-I trained to be an architect for two years.

-Right.

My father's half in the business. He's an architect.

And we look around and we saw that, and it means it's unmortgageable.

They'll only lend a certain amount on this house.

-That's why there wasn't many people bidding for it.

-Right.

There's two things in life that are an absolute certainty.

You've got to pay tax and flat roofs leak.

-So that's it, it's gone.

-You've got it.

So, it's bye-bye to this extension.

It's literally on the way out.

Andy plans to build a new double-storey extension

which will add another bedroom, making this a four-bed house,

and also create two ensuite bathrooms upstairs.

Because it's at the rear, it falls under permitted development rights,

so no planning permission will be required.

On the ground floor, it will also house a kitchen-diner,

with bi-folding doors overlooking that beautiful countryside.

So when you're not doing building works, do you have any hobbies?

Yes, I'm into camper vans.

-We go to the camper van festivals, the meetings.

-Oh, great.

There's one on the Isle of Wight next weekend so we'll be going down there.

-Lots of lots of camper vans?

-Yes, loads.

It's good that Andy can find time to relax

because he's aiming to do all the works here in six months.

He'll be getting in his regular team of workmen to do the job

and he set a fairly open budget of between is £60,000 and £100,000.

Even if he does go to that top figure,

this would mean his investment will be just over £400,000.

However, with average house prices in this desirable area

hitting the £500,000 mark,

he should still be in for a pretty decent profit of £100,000

and the house could be dragged kicking and screaming into this century.

-And the bathroom suite.

-Lovely.

-Are we going to keep that?

-No.

-It's an amazing, colour, isn't it?

-It's amazing.

-When I was an apprentice, I used to fit that colour.

-Did you?

-How many years ago was that?

-At the beginning of the '80s.

It was probably just going out.

Bally brown, they had, and avocado was really in and pampas.

So yeah, everyone wanted those colours.

-Right, something like Californian blue.

-Something like that, yes.

-Listen, congratulations, good luck with it.

-Thank you.

-We look forward to seeing how you get on.

-OK.

Well, bing, bang, boom, Andy seems to know exactly what he's doing.

A six months' timescale, 100 grand profit.

It's good money if you can do it. How will he get on?

I can't wait to see how the place turns out.

You can find out later in the show.

While Martin might have faith that Andy is on the right road

to doing a successful property development,

I'm on my own property pilgrimage in Teynham, Kent,

on the Pilgrims' route to Canterbury.

Teynham is a very ancient village.

The land here once belonged to Christchurch in Canterbury,

and in medieval times, there used to be a palace here,

built for the archbishops.

It was also an area known for its cherry orchards,

and fruit from Teynham orchards graced the table of King Henry VIII.

Today, the village is still surrounded by lovely countryside.

And yes, the main road runs right through it. But it means Teynham

is in easy reach of the towns of Faversham and Sittingbourne.

That busy road might be a blessing for the property I'm here to see,

because it's a commercial property.

And the guide price is £30,000 to £35,000.

You can tell from the outside this used to be a hairdressers.

And you can definitely tell from the inside it used to be a hairdressers.

It's in really good condition. Very red.

You've got all these lovely mirrors lined up already.

A little basin at the back. You've even still got the price list up.

A cut and blow dry, 20 quid.

I really like it.

Somebody could come in here and set up a business straightaway.

It's got A1 business usage,

so it doesn't actually have to stay as a hairdressers.

And for the guide price of £30,000-£35,000...

I think it's a snip.

As well as the main shop floor, there's also a toilet,

a small kitchenette area, and a conservatory at the back.

So as far as square footage goes, it's not massive, but would suit

any number of small businesses, from a retail shop to office space.

But there's more.

It's no great stretch of the imagination to see

there is potential here to build on top of the current property.

Add another storey,

you could turn this place into a house, like next door.

But it would all depend on being granted planning permission, of course.

And one crucial step to persuading the planners

would be to provide parking, which at the moment is non-existent.

But let's check what's behind this wall.

Ah, now it is a road.

That's great news because you could knock this wall down,

section off part of this garden

and then you would have off-street parking.

That's exciting.

Permission to change use from business to residential

could take time, and build costs could be substantial.

Whether it's to add a storey, or demolish, or rebuild,

you would have to be sure of your figures.

And to help with the maths,

we called in a local estate agent to evaluate all the options here.

As an alternative,

certainly the property could be residential premises.

It would need complete redevelopment

and that would involve knocking down the shop

and rebuilding, potentially for a house, or even two flats.

The local authority would generally be in favour,

but the owners are going to have to prove a case to the council

that there isn't a use for commercial premises of this nature any more.

But is there value in the shop as it stands, in rent or if sold on?

For premises of this nature, it would achieve a rent of

around £250 per calendar month.

The value could be around £50,000.

And what about mixed residential and commercial use?

Keep the shop and build a flat above.

If the owners decided to keep the shop and have one flat above,

they would not get quite as good a return on their investment

as if they had two one-bedroom flats or a two-bedroom house.

A two-bedroom house in this location with off-street parking available

would probably achieve between £650 and £675 per calendar month.

A one-bedroom flat here would probably rent

at around £500 per calendar month.

OK, so that's a much higher return than if you just kept the shop.

But what about sale values?

A two-bedroom house in this location with off-street parking

would probably achieve somewhere between £125,000 and £130,000.

One-bedroom flats, if there were two here,

one on the ground floor and one on the first floor,

then the sales values would be somewhere around £70,000 each.

But remember, not only would planning permission be needed,

you'd also need the change of use from commercial to residential.

So the numbers might sound good,

but there would be an awful lot of work to convert this building.

This is an interesting property at a reasonable guide price,

with some good old potential.

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

A former hairdresser's, a snip of a price at £30,000-£35,000.

And what may I say? Start me at £30,000.

A little lock-up shop, 30. Thank you very much. On the right, sir.

32?

32 I'm bid. And four. And four I have.

And 36, no. £34,000 I am bid.

£34,000 on the right.

At £34,000 I'm bid. 36 do I see?

At £34,000 I'm bid. Take 1,000 if it helps. At £34,000, the bid.

34 I have.

35 do I see?

35 is bid. And 36?

No, at £35,000 I have, anybody else can join in.

At £35,000, a little lock-up, at £35,000.

36 do I see?

For the first time then, if there is no further increase,

you are out of the back.

At £35,000, the gentleman with the yellow tie.

At £35,000 for the second time.

£35,000 for the third and final time.

At £35,000, are you all done?

Sold at £35,000, well done, sir.

Well, regular viewers may just recognise one of those bidders.

It's Sunil, who's appeared on the show before way back in 2005.

Back then, Sunil was a busy property developer

who also ran a letting agency.

He bought a house in Stoke to do up and rent out.

But Sunil and his wife Geeta actually live in Kent,

so they not only buy property in Stoke in the Midlands,

they also buy closer to home. Hence the purchase of the shop in Teynham.

So, eight years on and they are obviously

still busy purchasing property.

I met a couple back at their latest buy

to find out how business is going.

Sunil and Geeta, congratulations.

I know you've appeared on the show before with Martin.

-Yes, it was really good.

-First time I've met you two.

Well done, this is great. Why did you want to buy this?

Location is really good, it's on a high street,

so I think there's a lot of potential here.

When we saw it, we thought it could be rented out

just as it is, or we could build on it,

or we could convert it into a house.

So it did actually have a lot of potential.

And the price was pretty good too.

Yes, £35,000 for all this.

They look like they've bagged a bargain to me.

Guys, day-to-day, what do you do to keep yourselves so busy?

We've got an office in Sittingbourne which looks after

our properties here in Sittingbourne

and we help landlords let their properties,

so we've got a letting agency

in Sittingbourne and it manages the properties from here.

So that's our day-to-day job, really.

Sunil, do you buy a lot of commercial property,

or is it residential that you specialise in?

It's 99% residential, but over the last year or 18 months,

we've found lots of little shops like these that are good value,

good potential for rental as well as development.

And there are many of them available,

so we're moving into that market more.

Over the dinner table, what do you talk about - property?

We do, I've been brought up in the property business 20, 30 years,

so yes, it's part of our blood now.

Sunil used to work as an operations manager for service stations

and started buying property back in 1989.

By 2003, he'd worked up a big enough portfolio

to enable him to leave the day job.

Wife Geeta helps in the business

and also teaches at a business school.

So these two are definitely an experienced property power couple.

The big question is, what are you two going to do with this?

Firstly, our plan is to rent out the shop.

And then make a planning application for a flat upstairs.

If we can get an apartment upstairs, one bedroom,

that would bring us an income upstairs as well as downstairs.

-Fantastic. So you get two bites of the cherry?

-Absolutely, yes.

Really clever idea.

How much do you think it would cost to do something like that,

and would it be worth it?

Our budget is around £60,000 to bring the overall building into 100.

And if we could get to that budget, it would be well worth doing.

So, plan A is to build a flat above the shop

and keep the ground floor as commercial premises.

So it's going to be let as a hairdressers.

-Whatever anybody wants.

-It could be.

Oh, you're not sure, it might not be, it could be something else, with its A1 usage.

We've had interest.

-Really?

-We've had somebody who wants to turn it into a restaurant

and a takeaway shop, so that's another possibility.

What we like about this place is that there's

so much you can do to it. It's got so much potential.

It's going to be exciting finding out what business takes place here

and if you do get the permissions to go above and turn it into a flat.

-Well done.

-Thank you.

-Thank you.

Sunil and Geeta have 24 years of property experience.

That's a lot of know-how to bring to the table.

But buying commercial property, it's a relatively new venture for them,

and then there's the tricky planning process to get through for the flat.

Will this couple be allowed to build what they want above the shop

and will they be able to find a tenant for their business premises

that's happy to live with building work going on?

You can find out how the couple get on later in the programme.

Coming up, we see a Shropshire flat

that unexpectedly could be the cat's whiskers.

What a surprise. And there's more.

Back in Kent, we find out

how Sunil and Geeta's snip of a purchase became top dog.

I think they've done a fantastic job.

Now we return to the quite village of Burnaston.

It was here where we first saw a three-bedroomed detached house

with good-sized gardens to the front and rear.

And lovely views of the surrounding countryside.

It was somewhat tired and dated, with signs of damp and disrepair.

And an extension that was making a break for freedom.

The foundations of the extension are sinking.

They are basically tipping the extension away

from the main body of the house.

That's bad.

For experienced property developer Andy,

this was all pretty straightforward.

After all, he specialises in new-builds and barn conversions.

So to have a watertight shell to start with was a bonus.

Mind you though, he seemed intent on destruction before construction.

There's two things in life that are an absolute certainty.

You've got to pay tax and flat roofs leak.

So that's it, it's gone.

We'll knock some of the walls out, extend it two-storey,

make it four-bed, one ensuite.

A big dining-kitchen, new bathroom, new kitchen, obviously.

And flog it on.

Having paid £304,000 at auction, Andy hoped he could do the extensive

renovation on a £70,000 budget and a timescale of six months.

But it seemed some family members had other ideas.

# Hey, brother

# There's an endless road to rediscover... #

My sister wanted to buy it and she came in at the early stage.

She'd sold her house. We actually did it in 14 weeks.

And that was our main problem, the time schedule,

because she had nowhere to live.

So, Andy's sister was hoping that big brother could provide her

with a new family home. Has he come up with the goods?

Well, he sure has. With extensions both front and back.

Inside, a magnificent open-plan layout.

Well done, bro!

Right, so this is the kitchen, obviously.

This is in the new part, the extension we rebuilt.

So basically we put patio doors in, replaced the window,

replastered, new electrics.

We've put a high-gloss kitchen in with a quartz top.

Tiled the floor and we've got a wooden floor in the dining area.

I think it looks very pleasant.

Yes, downstairs is looking fantastic.

And the new extensions have allowed Andy

to turn what was a downstairs toilet into a study area.

But more importantly has enabled him

not only to add another bedroom,

to make this now a four-bedroomed house,

but the master bedroom is now twice the size.

With an ensuite to boot.

And remember that lovely coloured bathroom suite?

Well, just look at it now.

# Colours are changing

# Colours are changing

# Colours are changing

# Colours are changing... #

And, as the array of boxes show, his sister moved in just two days ago.

So, while she may have some sorting out to do, it seems

that for Andy this project is nearly done, two months ahead of schedule.

How on earth did he manage that?

I am by trade a plumber, but I'm the project manager.

I hate that word, it's a glorified van driver.

I make sure that everyone is fed the materials they need.

I'm on the phone to make sure they're here when I want them here.

And I pre-book everybody,

the plasterers, the electricians, everybody.

It's pre-booked, give me a week in six weeks' time,

I need you for a week or two weeks.

And that's the secret of it. And don't change your mind.

Undoubtedly, Andy has thrown a lot of resources

and effort to meet his new deadline, but at what cost?

The original budget was about £70,000, we thought.

But to be honest, we went over it. It's about £100,000.

The budget, what we spent, including the stamp duty, which was

the best part of 10,000 quid, lawyers' fees, building control fees,

so there's all sorts of fees as well as not just materials and labour.

So, a bit of an overspend.

But then the £100,000 does include all his costs.

So, with that £304,000 purchase price,

his total investment stands at £404,000.

Value for money?

What do two local property experts think?

What's happened here has probably been one of the best schemes

you could think of.

Maybe some people would have made it five bedrooms as opposed to four,

but everything that has been done is high quality.

It's had a lot of thought into it. And it really has produced the goods.

The property is lovely.

It's been extended very well, and presented to a high standard.

Fantastic view. A lovely place to live.

This is now his sister's new home and he sold it to her at cost.

But how much is the family's £404,000 investment currently worth?

If this went up for sale now,

I would expect to achieve something in the order of £480,000-£490,000.

In the current market,

I would expect this to be approaching half a million.

£499,950 as an asking price would be sensible.

That's a very good price. I thought it would be about that.

That's a potential pre-tax profit of anywhere between £76,000

and £96,000. Not bad for four months' work.

But more importantly, this is now a family home.

And after four years unoccupied, it's ready to be lived in again.

So despite all the time pressure, did Andy enjoy doing this project?

I enjoyed it because the last...

We've done eight before

and most of them have been barn conversions or new-builds.

It's been a renovation, a bit different.

It's nice having a garage so you can have a cup of tea

and you've got water and the toilet. On a building site, you don't.

Welcome to Wem, a small market town in Shropshire,

within commuting distance of both Crewe and Shrewsbury.

The annual Sweet Pea Show attracts flower fans from all over the world.

# Sweet pea, apple of my eye... #

But it wasn't always so sweet and PEAS-ful.

In 1643, during the English Civil War,

a band of 5,000 Royalist troops under one Lord Capel,

invaded the town against only 40 or so Parliamentarians from Wem.

Luckily, the women of the town came to the rescue

and saw the Royalists off.

Hence the legendary battle song,

"The Women of Wem and a few Musketeers

"Beat the Lord Capel and all of his Cavaliers."

Well, I do love a place with a bit of character,

and apparently that's what I'm here to see.

It's a three-bedroomed flat, lots of period features, apparently

It is though on the high street, with a lot of traffic.

So not a particularly good start.

Let's hope it improves once we go inside.

I'm looking at a top-floor duplex flat in this lovely listed building.

It's one of three self-contained flats

that share this communal staircase.

The guide price for the flat

was originally posted as just £29,000 plus.

But this was changed on auction day to £60,000.

More of that later.

Meanwhile...

Whoa!

I was not expecting that.

What a fantastically grand entrance.

And immediately you are thinking this must have been, well,

a pretty grand flat in its day.

A big entrance hall there, with an amazing sweeping staircase.

And then into your living room, I mean, look at the floorboards.

Oak floorboards, absolutely gorgeous if they were stripped back.

A big regal fireplace.

These nice windows looking out onto the high street.

It's very noisy,

so you'd want to put double glazing at least in there.

So that's not ideal, but in terms of layout, really nice.

High ceilings, shuttered windows, lots of original features.

Yes, well, not an original kitchen, thank goodness.

But some work needed in there. But overall, what a surprise.

And there's more.

# There is so much more

# Ba-da-da-da-da

# There is so much more

# There is so much more... #

So, up this really quite spectacular staircase,

which really does give the flat a lovely sort of open feel to the upper floor.

And lots, lots more space.

Bedroom that way, in fact two bedrooms that way.

Obviously floorboards and everything seem a bit rickety,

but lots of original features again.

Large bedroom there, lots of light flooding in, that's an ensuite.

Again, lots of windows to double glaze

because again, very noisy from that traffic.

Down this little corridor, two little rooms there, a shower room.

I mean, for a flat, holy schmoly, lots and lots of room.

Now, so far so exciting.

But there has been a partial renovation to this flat already.

That ensuite and shower room

and the kitchen look like they've been started.

But as with any partial renovation, I'd always want to check out

how well jobs like plumbing and wiring have been done.

But back along the other wing, there's a nice surprise.

Planning permission has already been granted to create double doors

out of that back bedroom onto what would be a lovely balcony

with a very present outlook.

Outside to the rear of the building, you've got a private parking space,

along with those belonging to the bank.

And not only that,

you've also got shared access to this sizeable communal garden.

Obviously, when you buy any property, one of the most

important things to check out is the legal status of that property.

Is it freehold, is it leasehold?

And if it is leasehold, what's the status of that lease?

How many years has it got to run? Any issues, etc, etc.

When it comes to flats,

often that leasehold issue can be quite complicated.

And in this case it certainly is, for various reasons.

The upshot is that this flat would really

only be suitable for an owner-occupier.

And that could explain the low guide price.

The flat was pitched at the guide price of £29,000 plus

because complicated legal wrangling and expenses

can send potential buyers running for the hills.

These particular leasehold complications mean that this flat

cannot be rented out, and reselling it could be restricted too.

And the current lease runs for over 120 years.

As it turns out, this duplex flat raised a lot of interest.

Around 100 people came to view it.

Consequently the auction house raised the price to £60,000

so as not to mislead potential buyers.

It has to be said that if somebody wants to buy it

to live in in the long term, then there are no issues.

But for the unwary and unprepared investor, this could be a minefield.

What does a local estate agent think of this lot,

guided on auction day at £60,000?

Given the complexities within the legal pack,

we thoroughly recommend prospective purchasers carefully examine

the legal documentation and also have a good solicitor on board,

just avoid any pitfalls in the future.

Now, let's just, for talking's sake, imagine that there were

no legal complexities attached to the property.

If all things were normal,

what hypothetically could be the sale value of the property?

If this property were to be refurbished,

maintaining some of its fantastic original features,

and also utilising the planning permission for the balcony,

I would be confident in putting this property on the market for £125,000.

Buyers should be aware, of course, that due to the complexities

within the legal pack, that value could be substantially reduced.

But what would be the hypothetical rental value?

If this property were to be let out,

I would confidently place it on the rental market

for £595 per calendar month.

As things stand at the moment, this property could not be let out at all.

Well, it is a spectacular flat.

But obviously the legal issues would have put some people off.

Let's find out what happened when it went under the hammer.

We now move to Wem in Shropshire.

The guide price on this has been amended to £60,000.

It's a part-converted three-bed, two-bathroom duplex flat.

40 can we say? 40 bid in the aisle.

At £40,000.

45 can we say now?

£45,000. 50?

£50,000. At 50,000, 55?

£55,000. 60? £60,000.

At 60,000. 65?

No. At £60,000, the bid's in the aisle. At £60,000.

I'll take one if it helps.

New bidder, 61. 62.

63.

64.

65. 66.

No, at 66. 67 anywhere else?

If not, £66,000 for the first time.

£66,000 for the second time. The bid's here, no mistake.

£66,000, third and final time.

You bought it, well done.

Well, despite nearly 100 people viewing the flat,

in the end, the bidding was distilled to only a few contenders.

The determined buyer of the difficult duplex got it for £66,000.

Let's ask the buyer, known to all as Scoop,

whether he thinks he got a scoop.

-Scoop, great to meet you.

-And yourself.

-Am I OK to call you that?

-Yes, certainly.

-Tell me where Scoop comes from.

-I drive diggers.

-Right.

-So that's a nickname, is it?

-Yes, I seem to have got called it.

-How long have you been Scoop for?

-About 10 years.

-OK, and is that what your friends call you, or...?

-Yes, most of them.

-Do they know your real name?

-No, many don't.

-What is it, just as a matter of interest?

-It's Keith.

Nice to meet you, Keith. So, tell me why you wanted to buy this place.

I thought it would be a very good investment.

And since buying it, I think I'll move in here myself.

-It's going to be your home?

-Yes.

What did you think when you first saw it?

I was just impressed with the size of the place.

-It seems to go on and on, doesn't it?

-Yes.

How well do you know Wem, and where we are, particularly?

I do live in the town. So I know the town very well.

So have you passed this before, this building?

-Yes, I bank with the bank below.

-OK.

You want to get some kind of shoot going down from here

-so you can drop in deposits and things.

-I am above the bank vault.

You are?! Well, there's an interesting thought.

# Every time it rains

# It rains pennies from heaven... #

Local knowledge is really useful when buying a property.

And as Scoop frequents this location on a regular basis,

he is well placed to know about things like the amenities

and the reputation and popularity of the area.

But I'm hoping Scoop has done a bit of digging

when it comes to the real legal complications with the flat.

What do you know about the contents of the legal pack?

I'm familiar that you can't... I wouldn't be able to rent

the building out. So that's obviously fine, I don't want to.

-But you were aware of that before you bought it.

-Yes.

I often see that people don't read the legal pack, and yes, I did.

I'm really glad Scoop did his homework here.

He's clearly been listening when Lucy and I go on

about reading the legal pack.

But this is an example of how vital it is.

An investor who hadn't done their homework here

could have got themselves into a real nightmare.

Instead, Scoop got himself a great new home.

And he has a budget of £5,000 to spend on it.

The first thing to tackle is the plumbing.

At the moment, he doesn't have a working bathroom or kitchen,

as the plumbing is there, but doesn't appear to be connected.

However, this flat does have a bonus in terms of its outside space.

So there's planning permission to put a door out onto a balcony.

Is that something you're going to do?

-Yes, I'd like to use the balcony.

-So what about outside space?

I've got parking and I've only recently found out about the garden.

-What, after you bought it?

-Yes.

-Oh, right, bonus.

-Yes, very happy.

-Listen, congratulations. Good luck with it.

-Thank you.

Will look forward to seeing how you get on.

Well, it seems that Scoop, the digger operator, has dug himself up

a bit of a bargain with this place.

And given that he plans to live here himself,

some of the legal issues aren't too much of a problem.

It will only be an issue if he comes to sell or rent the place out.

But for now, well, he seems very happy, and quite right too.

Find out how he gets on sorting it out later in the show.

Well, it's been a while since we last saw those properties.

-Have the new owners been busy bees, Lucy?

-Or have they stopped dead.

Let's go back and find out.

We now head back to Kent and the village of Teynham,

near Sittingbourne, where we first saw this former hairdressers

that was tidy, clean and ready to go again.

And being on a busy road, this place represented

a great business opportunity that could be a cut above the rest.

Married couple Sunil and Geeta also thought so

and went ahead and bought it at auction for £35,000.

Sunil has been on the show before

when he bought and renovated this house in Stoke back in 2005.

Since then, he's expanded his portfolio

with several other residential properties.

Now, he and Geeta are looking at the potential of commercial units.

The big question is, what are you two going to do with this?

Firstly, our plan is to rent out the shop.

And then make planning application for a flat upstairs.

If we can get an apartment upstairs, one bedroom,

that would bring us an income upstairs as well as downstairs.

-Fantastic. So you get two bites of the cherry.

-Absolutely.

Really clever idea.

That is, of course, if they can get planning permission.

They aim to spend £60,000

and hopefully to do the project in four to six months.

But when we returned eight months later, there was no new flat.

However, the former hairdressers had undergone a restyle.

It does still look like a place you'd go if you want to look

well groomed, but they won't accept just any old dogsbody here.

Well, actually, they will!

# Who let the dogs out?

# Who let the dogs out?

# Who let the dogs out? #

Yes, Sunil and Geeta have let the shop out to a pet grooming business.

There's some canine caring going on.

This new business is run by Katie and Kelly who have set up shop

to cater to the pooch who likes to look good. Why?

Because they're worth it!

I think they've done a fantastic job.

It doesn't look like the same place now as it was when we bought it.

And they've just transformed it and turned it into a really nice,

cosy little parlour.

And it just feels like it's got a lot of warmth

and it's just a friendly place to come if you're a little doggie.

Hey, don't forget the cat customers, Geeta, you'll hurt their FELINES.

But seriously, with this little business now set up,

what happened to the plans for the flat above?

The main reason we decided not to carry on with our initial plans

was the cost of putting a flat up on top, plus the foundations, and

the ability for access on the back is what we were originally planning.

And when you put all that together, and the tenant situation

when they came along, it was just easier to say, actually,

other projects have come along and let's concentrate on those.

Let this one carry on and allow them to have their dream as well.

The tenants coming along and changing the plans

could look like a case of the tail wagging the dog.

But a flat upstairs is still a possible future project

for Sunil and Geeta.

And the location for this pet-pampering business is ideal,

as Katie explains.

We just thought it was a great proposition

in that it's on the main road, it's on the high street,

and we just thought there'd be a lot of passing trade

we could get from being here.

And for business partner Kelly, this pet project is a dream come true.

It's just something I've always wanted to do.

I've always loved animals, I've always had dogs

and it's a bit of a dream come true, really.

Going from working in London,

working locally with animals is what I've always wanted to do.

# I love my dog as much as I love you... #

It also helps that they have a good relationship with Sunil and Geeta.

Sunil's been a great landlord.

Everything we've needed, he's been there and he's done it very promptly.

So we couldn't ask for anybody better, could we?

No, they're really good landlords.

Business is about building relationships

and good relationships.

And I think that's what helps a business become sustainable

and last a long time.

It's the people that make it,

and if we can help any landlords or tenants,

then we're more than happy to do that.

While Katie and Kelly finance the fitting of the grooming parlour,

Sunil and Geeta had the old toilet retiled, adding a new boiler

and installing a small kitchenette.

That set them back £3,000.

And with the purchase price of £35,000,

the total outlay here is £38,000.

So while this is a small addition to their portfolio,

it's part of what Sunil sees as an important aspect of the business.

It's lovely to be working together with your wife

and building a future in what we do.

And she's been very inspirational in driving and asking questions,

"What's this? How are we going to do this?"

And often, in business you need someone to bounce ideas off,

and she's always been there.

But did they choose the right business opportunity here?

Time to find out the thoughts of two local estate agents,

starting with the agent who saw this property earlier.

It's turned into a very smart little premises,

offering a nice-sized unit

for this specialty business.

And with such a busy thoroughfare outside, it gives the business

the opportunity to access passing trade.

What's been done is the right thing.

It's been positioned in its marketplace correctly.

It's very open, it's good for the customers

because they can obviously see the staff working in here.

So it probably gives them more confidence

in terms of the way it's set.

Sunil and Geeta spent £38,000 on the commercial unit,

so what sort of returns do the agents think they could be getting?

It's a great business opportunity

because you'd likely achieve a rent of around £500 per calendar month.

On that basis, I'd have expected the freehold value to be

somewhere between £50,000 and £55,000.

In terms of a local business, the resale value, in my opinion,

would be around £50,000.

Without a sitting tenant,

the property would be worth around £45,000.

So what did Geeta and Sunil make of the agents' opinions?

I think the valuations are fairly spot-on,

because we are achieving a rental of £485 per month.

And... Which is around £5,800 a year.

So on the property purchase price, we are very happy with that.

As far as the flat upstairs is concerned,

both agents felt this might be an over-investment in the property.

Combine this with the fact that there are difficulties

working out access, there will be a...PAWS on this plan.

And for now, Sunil and Geeta are happy with the rental income,

and maybe somewhere in the future, to get their own pets pampered.

Absolutely.

If we had pets, a dog or a cat, we would definitely bring it here.

-All we've got is a tortoise, haven't we?

-We've got a tortoise.

But there's no tortoise parlours here.

Well, moving rapidly on, we're now back in the Shropshire market town

of Wem, where earlier, in this listed period building,

we saw this three-bed duplex apartment

that was awash with lots of light and space

and most important of all real charm and character.

Huge windows,

and a sweeping staircase made this an attractive lot at auction.

What wasn't quite so attractive were the legal complications

around the leasehold, meaning this property had restrictions.

It couldn't be rented out

and therefore was really only suitable for owner-occupation.

That's where Scoop came in,

getting the apartment at auction for £66,000.

So, tell me why you wanted to buy this place.

I thought it would be a very good investment.

And since buying it, I think I'll move in here myself.

-It's going to be your home?

-Yes.

What did you think when you first saw it?

I was just impressed with the size of the place.

Scoop's moniker derives from his job,

which is every boy's dream job, he drives a digger.

His plan was to create a home for himself in six months.

A budget of £5,000 seemed a reasonable sum,

given that the property was in fairly reasonable decorative order.

And seven months later, we returned to Wem.

Straightaway, the entrance hall is as impressive as ever,

with new carpeting leading up the grand staircase.

Scoop hasn't quite finished renovating the property,

but the main room has some personal touches added.

And that kitchen?

Well, as those units were in good order,

Scoop had no need to change them.

It's now fitted out with a cooker and fridge-freezer.

But it's the beautiful Regency staircase which catches the eye.

And it's the ceiling that really finishes it off.

I've had a scaffold in and I put a new ceiling in

and I've decided to put some modern downlighters in.

The cornicing, I painted the flowers to make a feature of them.

I've had it all plastered and painted the stairs,

because unfortunately they were concrete,

so I was unable to sand them.

And I've put new carpets in and put brass stair rods in on the treads.

Up here on the top floor, Scoop has made some real changes.

The end room on the left has now become a family-sized shower room,

while next door, the master bedroom is at present a tool storeroom

which still needs to be finished off.

The original ensuite is as before.

Across the landing, the small end bedroom is also ready.

Originally, the apartment wasn't in too bad a state,

but Scoop wanted to make sure that everything would meet his standards.

It's been seven months. I've had the place replastered, rewired.

I've got water connected to the property now, fixed the drains

and built a new bathroom and a balcony.

Yep, that's right, a balcony.

Because in the last room on the tour,

Scoop has added these French doors

that lead out onto the huge roof terrace,

laid end to end with decking,

with railings still to be fitted.

Being a listed building, permission was required

and granted for the new French doors.

It's easy to imagine Scoop relaxing up here and taking in the views.

Though it sounds like he's already familiar with the shared garden.

I've enjoyed having a garden and having barbecues and friends round.

It hasn't helped my progress.

With the apartment in good condition,

there were no real issues to contend with,

although over the warm summer months, the freshly laid plaster

did dry out and crack, which meant reskimming it several times over.

One other challenge Scoop faced was selecting the right materials.

It was difficult trying to find French doors that fit

and trying to choose what bathroom suite and tiles to have.

There's too much choice out there.

There is a lot of character in here.

From the beautiful, high sash windows to the splendid cornicing.

Scoop is well on the way to having a beautiful home.

Calling in tradesmen for the plastering,

plumbing and electrical work, Scoop was on site most days

and got on with 90% of the renovation work himself.

He's planning to move in once everything is complete.

I've got the radiators to go back on the wall, fix the railings

on the balcony, and these floors to have a final sand and an oiling.

But with that new shower room, the impressive roof terrace

and the entire apartment replastered and rewired,

did Scoop have to splash more cash than he intended?

No, my original budget was £5,000 and I've spent £6,100.

It means that added to his purchase price of £66,000,

Scoop's total outlay here is £72,100.

Time to find out what two local property experts think

of Scoop's renovation work.

And we start off with the estate agent

who first saw the property earlier.

With the renovation so far, I'm impressed.

It's been cleaned up, freshened up,

decorated nicely and it's almost ready to be lived in.

I think it's lovely.

He's done a very good job of it, very nice, light and spacious.

I like the high ceilings, the period features which have been retained.

I really like the fact that the traditional features have been left.

And I also really like the balcony.

Scoop is planning to move in and make this his home.

As he has spent £72,100 on the apartment,

what sort of resale figure could he get

if he changed his mind and decided to sell?

If the property was mortgageable, open to mortgage buyers,

first-time buyers perhaps, I'd have it on the market at £135,000.

In this current sales market, I would recommend an asking price

of around £160,000 in order to achieve £150,000.

Well, that could be a possible profit of £78,000.

Although the current restrictions meaning anyone buying the flat

couldn't rent it out could affect the sale price.

But what does Scoop think of the valuation?

Oh, that would be very nice.

But I'm not looking to sell, so...

But it's nice to know.

And if a resolution could be found to those rental restrictions,

then the agents reckon the duplex could fetch

between £595 and £650 per calendar month,

which would give Scoop a very healthy rental yield

of between 10% and 11%.

Meanwhile, he's got himself a lovely home.

But will he be back on the property trail soon?

Yes, I would do an auction route again.

It's been very enjoyable,

but I would also recommend always buy a property next to a hardware shop.

Join us next time for more auction action.

Yes, will it go well or badly?

Will you be jealous or relieved you didn't bother?

-You can find out on the Homes Under The Hammer.

-Goodbye.

-Goodbye.