0:00:02 > 0:00:03Hello, and welcome to the programme.
0:00:03 > 0:00:06Now, Martin, today the weather has been a bit changeable.
0:00:06 > 0:00:08- We've had sunshine and some cloud... - Yeah, ups and downs,
0:00:08 > 0:00:10a bit like the property market.
0:00:10 > 0:00:13But, you know what? It's all about buying at the right price
0:00:13 > 0:00:15and at the right time, and that's what me and Lucy
0:00:15 > 0:00:17are always telling you, here on Homes Under The Hammer.
0:00:43 > 0:00:48MUSIC: Solid Rock by Dire Straits
0:00:48 > 0:00:49Terraced properties.
0:00:49 > 0:00:54Over the years, I have visited literally hundreds for the show -
0:00:54 > 0:00:59two bedrooms, three bedrooms, good, solid family homes -
0:00:59 > 0:01:04and the bedrock of the British property stock.
0:01:04 > 0:01:08# Solid rock, rock, solid rock... #
0:01:08 > 0:01:12Often built as housing for factory workers, they provided
0:01:12 > 0:01:16high-volume housing, using a repeated joined-up style that
0:01:16 > 0:01:18allowed for less build and design costs,
0:01:18 > 0:01:20which meant affordable housing.
0:01:20 > 0:01:23And Stoke-on-Trent, which employed thousands of workers
0:01:23 > 0:01:27for its pottery manufacturing, was no exception.
0:01:27 > 0:01:31MUSIC CONTINUES
0:01:32 > 0:01:35So, terraced property, terraced property,
0:01:35 > 0:01:42terraced property, gap, terraced property...
0:01:42 > 0:01:43Not terraced property.
0:01:43 > 0:01:46Er, that's kind of interesting
0:01:46 > 0:01:48because you'd expect that to continue, but no.
0:01:48 > 0:01:54This big, cream building is the property that was up for auction
0:01:54 > 0:01:59and a terraced property of standard proportions it is not,
0:01:59 > 0:02:04hinted at by the guide price, £115,000 plus. Let's take a look.
0:02:09 > 0:02:15I wasn't expecting that. Wow! Look at the size of this room!
0:02:15 > 0:02:21Even that baby grand piano is lost in this space!
0:02:21 > 0:02:22It's enormous.
0:02:22 > 0:02:26Nice floor, looks to be in reasonable condition.
0:02:26 > 0:02:27HE LAUGHS
0:02:27 > 0:02:31This is incredible! I thought that was big, look at this!
0:02:31 > 0:02:34Is this a house, or is this some kind of a...?
0:02:34 > 0:02:39I don't know, a banqueting suite or... I mean...
0:02:39 > 0:02:42I'm sorry, I'm not being very descriptive of what I'm seeing.
0:02:42 > 0:02:44You can just see, can't you? What an amazing space!
0:02:44 > 0:02:46And it just goes on and on and on.
0:02:46 > 0:02:49Through here, lots of little rooms going off,
0:02:49 > 0:02:50there's a room down there.
0:02:50 > 0:02:54This massive great...
0:02:54 > 0:02:57leisure centre complex, conference centre!
0:02:57 > 0:03:02The building does seem to be in pretty good condition.
0:03:02 > 0:03:06And... Oh, wow. So it continues.
0:03:06 > 0:03:07Look at this kitchen.
0:03:07 > 0:03:10It's almost like I've been shrunk,
0:03:10 > 0:03:13like I'm in Alice in Wonderland or something,
0:03:13 > 0:03:16and I'm very small and the house is disproportionately big.
0:03:16 > 0:03:20It's almost belies belief.
0:03:21 > 0:03:24But it's true. Wow!
0:03:24 > 0:03:26# Confusion
0:03:26 > 0:03:28# You know it's driving me wild
0:03:28 > 0:03:30# Confusion
0:03:30 > 0:03:32# It comes as no big surprise
0:03:33 > 0:03:35# You've lost your love and you just can't carry on
0:03:35 > 0:03:37# Can't carry on
0:03:37 > 0:03:42# You feel there's no-one there for you to lean on
0:03:42 > 0:03:45# To lean on... #
0:03:45 > 0:03:47Yes, it's all rather confusing.
0:03:47 > 0:03:51It seems my much-loved terrace has been converted into
0:03:51 > 0:03:56one property with, wait for it... seven bedrooms, five living rooms,
0:03:56 > 0:04:01two kitchens, two bathrooms and just loads of general rooms.
0:04:01 > 0:04:03But what to do with it all?
0:04:05 > 0:04:08# Confusion
0:04:10 > 0:04:11# Confusion... #
0:04:15 > 0:04:20Time, I think, to get some advice on a local property expert.
0:04:20 > 0:04:24First impressions of this property, it is exceptionally large
0:04:24 > 0:04:27and it's really too large to be used as really one dwelling.
0:04:27 > 0:04:30I think to maximise the return for this property,
0:04:30 > 0:04:35the buyer would need to look into possibly conversion into flats
0:04:35 > 0:04:40or possibly bedsits or individual letting rooms, which of course
0:04:40 > 0:04:43would all be subject to the relevant planning permission.
0:04:43 > 0:04:45I think the agent is spot on.
0:04:45 > 0:04:49Two big as one house, but at that guide price of 115,000,
0:04:49 > 0:04:52that flat idea could be very attractive.
0:04:52 > 0:04:54So what kind of money could they make?
0:04:54 > 0:04:57I would anticipate one-bedroom flats
0:04:57 > 0:05:01in this area would be in the region of £50,000.
0:05:01 > 0:05:05Possibly two beds, you could be closer to the £60,000 more.
0:05:05 > 0:05:09OK, assuming you could get a maximum of six one-bed flats,
0:05:09 > 0:05:13that would mean a total sale price of £300,000,
0:05:13 > 0:05:17minus the auction price paid and the conversion costs,
0:05:17 > 0:05:19there's still room for a healthy profit here.
0:05:19 > 0:05:22But would rental in some form or other
0:05:22 > 0:05:24be an option worth considering?
0:05:24 > 0:05:27I think if you were going to rent it as individual rooms,
0:05:27 > 0:05:31you'd possibly be looking around £250 per calendar month, per room.
0:05:31 > 0:05:35I would anticipate rental income for one-bedroom flats
0:05:35 > 0:05:38to be in the region of £350 per calendar month
0:05:38 > 0:05:43and two bedrooms possibly between 400-425 per calendar month.
0:05:47 > 0:05:51Well, it's an intriguing property for sure that could be
0:05:51 > 0:05:55a potentially lucrative venture for someone,
0:05:55 > 0:05:57but that someone's going to need a lot of money
0:05:57 > 0:06:00and quite a bit of imagination to take this on.
0:06:00 > 0:06:03Let's find out who bought it when it went under the hammer.
0:06:06 > 0:06:09Lot 91 is a substantial corner terrace building,
0:06:09 > 0:06:13large accommodation, lots of rooms. Shall we say 115 then?
0:06:13 > 0:06:19Lots 91, 115. Back left, at £115,000.
0:06:19 > 0:06:22120 going to say now. £120,000.
0:06:22 > 0:06:26125? £125,000.
0:06:26 > 0:06:32130? 130,000. 135? £135,000.
0:06:32 > 0:06:34140? No?
0:06:34 > 0:06:38Then 135,000, by the door. 136 anywhere else?
0:06:38 > 0:06:40136, seated.
0:06:40 > 0:06:44137, 138, 139,
0:06:44 > 0:06:48140, 141, 142,
0:06:48 > 0:06:51shaking his head 142, seated.
0:06:51 > 0:06:56143 anywhere else? If not, I'm selling it at £142,000
0:06:56 > 0:06:59to the gentleman seated for the first time,
0:06:59 > 0:07:03at £142,000 for the second time...
0:07:03 > 0:07:07Third and final time at £142,000...
0:07:07 > 0:07:10- HAMMER BANGS - You bought it, sir, well done.
0:07:10 > 0:07:13And so the hammer fell at 142,000
0:07:13 > 0:07:15and the successful bid was made by Neil,
0:07:15 > 0:07:19who bought it as a joint purchase with his business partner David.
0:07:22 > 0:07:25Eagle-eyed viewers will have spotted that I've met them before,
0:07:25 > 0:07:29but on a much smaller development project.
0:07:29 > 0:07:32# I'll see you again
0:07:32 > 0:07:34# Oh-whoa, oh-whoa-oh
0:07:34 > 0:07:36# This is not where it ends... #
0:07:36 > 0:07:39Neil, David, good to see you both...again!
0:07:41 > 0:07:44- Welcome to the palace ballroom! - Yeah, feels that way, doesn't it?
0:07:44 > 0:07:46Yes! Why did you want to buy it?
0:07:46 > 0:07:48Simply the sheer size of the property
0:07:48 > 0:07:50made it an attractive option.
0:07:50 > 0:07:52OK, so what are you going to do with it, then?
0:07:52 > 0:07:56- Well, the intention is to put it into about ten flats.- Ten flats?
0:07:56 > 0:07:58See if we can get 8-10 flats, yeah.
0:07:58 > 0:08:00- What, individual, self-contained flats?- Yes.
0:08:00 > 0:08:03Upstairs is virtually divided into flats,
0:08:03 > 0:08:05it's just sorting out the downstairs.
0:08:05 > 0:08:09If David and Neil's plan to convert this building into flats goes ahead,
0:08:09 > 0:08:13they would either sell the entire redevelopment to an investor or
0:08:13 > 0:08:18sell some of the flats individually and keep some to rent out.
0:08:19 > 0:08:21But, whatever route they choose,
0:08:21 > 0:08:25it's all dependent on planning permission being granted.
0:08:25 > 0:08:28We spoke to the planning department before we bought the building,
0:08:28 > 0:08:31they gave us an indication of what they would want.
0:08:32 > 0:08:36In theory, it works, so we've obviously got to put the formal
0:08:36 > 0:08:39application in and just check that there's no hidden problems.
0:08:39 > 0:08:42- But in theory it works?- Yeah, yeah.
0:08:42 > 0:08:44What kind of cost do you think there would be involved
0:08:44 > 0:08:46in creating ten flats?
0:08:46 > 0:08:50I think we're looking at roughly around 200,000.
0:08:50 > 0:08:55£200,000 spent along with their £142,000 purchase price
0:08:55 > 0:09:00will commit them to a spend of £342,000.
0:09:00 > 0:09:03But with the local property expert valuing one-bed flats
0:09:03 > 0:09:07around £50,000, ten of those could bring in a cool
0:09:07 > 0:09:11half a million quid and that would see a rather nice profit.
0:09:11 > 0:09:14And David is hoping planning permission not withstanding,
0:09:14 > 0:09:19his team of builders could turn this around in just four months.
0:09:19 > 0:09:24I mean, congratulations and really excited to see how it all turns out.
0:09:24 > 0:09:26- Thank you very much.- Good to see you again.- Cheers.
0:09:27 > 0:09:32Neil and Dave seem to have found themselves a real gold mine here
0:09:32 > 0:09:35and if they get that planning permission for ten flats,
0:09:35 > 0:09:37lots of money to be made.
0:09:38 > 0:09:40Will they? Or won't they?
0:09:40 > 0:09:43You can find out, later in the show.
0:09:46 > 0:09:51Never mind potential gold mines in Stoke, I've gone to a location
0:09:51 > 0:09:54where I'm hoping I might find a real gem.
0:09:54 > 0:09:57I'm in Whitstable, on the beautiful Kent coast.
0:09:57 > 0:10:00It's a much sought-after area with good transport links
0:10:00 > 0:10:04to the capital, making properties very much in demand.
0:10:04 > 0:10:08Also in demand is Whitstable's most famous seafood,
0:10:08 > 0:10:12which it's been exporting since Roman times.
0:10:12 > 0:10:15# You're not the only oyster in the sea
0:10:16 > 0:10:20# Not the only tea leaf in the tea... #
0:10:21 > 0:10:26Five minutes is all it takes to walk from the beach to the property.
0:10:26 > 0:10:28So you can hide from the tourists,
0:10:28 > 0:10:32but a blast of the sea air, well, it's literally a stone's throw away,
0:10:32 > 0:10:35which is perfect. And the outlook is pretty good, too.
0:10:35 > 0:10:39You've got this extremely pleasant green, right here,
0:10:39 > 0:10:41and while it might not be sea views from the windows,
0:10:41 > 0:10:42your view is fantastic.
0:10:42 > 0:10:44Now, the house itself is this.
0:10:44 > 0:10:50It's a two-bedroom terrace. It had a guide price of 110-115,000.
0:10:50 > 0:10:51I am going to check it out.
0:10:54 > 0:10:57When you walk in, the first thing that you realise
0:10:57 > 0:11:01is it's incredibly small. It's got a cottage-like feeling to it.
0:11:01 > 0:11:03But what I love is the fact that there is a
0:11:03 > 0:11:05certain amount of charm and character,
0:11:05 > 0:11:09a really nice sitting room through there, you've got picture rails,
0:11:09 > 0:11:13really wide floorboards. I mean, look at these lovely doors
0:11:13 > 0:11:14with the handles.
0:11:14 > 0:11:19Another reception room through here... Oh, VERY small kitchen.
0:11:19 > 0:11:21Look how disappointing this is.
0:11:21 > 0:11:24So, it's dinky, it's delightful...
0:11:24 > 0:11:28I've just got a feeling that it's out here that it goes horribly wrong!
0:11:31 > 0:11:34Yes, gets interesting, doesn't it?
0:11:34 > 0:11:39Bit of a lean-to situation, and, as I thought, that's the bathroom.
0:11:39 > 0:11:42I mean, really, are you going to have a bath in there?
0:11:42 > 0:11:44I don't think so.
0:11:44 > 0:11:49And typically, as you would expect in a property like this,
0:11:49 > 0:11:52the outside loo. Just close that door.
0:11:52 > 0:11:53It's not really working.
0:11:53 > 0:11:55But, once you're outside,
0:11:55 > 0:11:58you can see it's such a pretty little garden.
0:11:58 > 0:12:00I mean, this really is fantastic.
0:12:00 > 0:12:03You've got loads of space there, so I'm thinking,
0:12:03 > 0:12:06judging by what they've done next door, because, there you go,
0:12:06 > 0:12:10the neighbour's wall comes right the way out to here,
0:12:10 > 0:12:13you could have a nice, big extension.
0:12:13 > 0:12:15You could go right the way up, get an extra bedroom,
0:12:15 > 0:12:18a bathroom upstairs. That really, really would
0:12:18 > 0:12:22make this little property so much more worthwhile.
0:12:22 > 0:12:26But what you've got to really think about is do the figures stack up?
0:12:27 > 0:12:30An extension like this could create approximately
0:12:30 > 0:12:33half as much floor space as the original house.
0:12:33 > 0:12:36Apart from the cash, you wouldn't be sacrificing much.
0:12:36 > 0:12:38There would still be loads of garden,
0:12:38 > 0:12:41you wouldn't have to cut quite as much grass
0:12:41 > 0:12:44and a first floor bathroom would really add value.
0:12:44 > 0:12:48So let's see what the top floor has in store as it stands.
0:12:51 > 0:12:54Well, in the catalogue, it says there are two bedrooms up here...
0:12:54 > 0:12:59Yes, one...two? More like a half-size!
0:12:59 > 0:13:02I mean, this is incredibly small.
0:13:02 > 0:13:05Can you even fit a single bed along?
0:13:05 > 0:13:09Although you do have a lovely little view of the green through that window,
0:13:09 > 0:13:11but that's if you can clamber over your bed
0:13:11 > 0:13:13and move the bits and pieces in-between.
0:13:13 > 0:13:15I'm being positive.
0:13:16 > 0:13:19Look, I'm not saying this couldn't be a nice space,
0:13:19 > 0:13:21or a kind of nice not-much-space.
0:13:21 > 0:13:26Bedroom number two, next door, is a much better size, but not so big
0:13:26 > 0:13:30that you could steal a bit of space from here to give to next door.
0:13:30 > 0:13:32You could look to open up the eaves in here
0:13:32 > 0:13:34and maybe think of installing a dormer at the back
0:13:34 > 0:13:38if you didn't want to do the full extension, that is.
0:13:38 > 0:13:40This house is challenging.
0:13:40 > 0:13:43The kitchen's tiny, but not as small as that bedroom.
0:13:43 > 0:13:48And the bathroom and toilet are basically out in the lean-to conservatory.
0:13:48 > 0:13:50But it's also cute and quirky,
0:13:50 > 0:13:56but will cuteness cut it at a guide price of 110-115,000?
0:13:56 > 0:13:59We asked along the local estate agent for her opinion.
0:14:03 > 0:14:05First impressions of the property are it's a lovely place
0:14:05 > 0:14:07in a brilliant location.
0:14:07 > 0:14:09Definitely a project.
0:14:09 > 0:14:13But keeping the original features would definitely kind of give it
0:14:13 > 0:14:15the appeal, should the buyer want to sell it on.
0:14:15 > 0:14:18I don't think it'd be worth extending the property
0:14:18 > 0:14:21because I don't think you'd gain that much money on top of it,
0:14:21 > 0:14:25but again, maybe putting in roof lights to make it seem more
0:14:25 > 0:14:28light and airy, just giving the appearance of more space.
0:14:28 > 0:14:32The agent doesn't think an extension would be worthwhile,
0:14:32 > 0:14:35so what could this cottage be worth without one?
0:14:35 > 0:14:38If the property was done up to a very, very good standard,
0:14:38 > 0:14:42you'd be looking at possibly around about the £225,000 mark.
0:14:42 > 0:14:45A property like this could achieve
0:14:45 > 0:14:49£750-£800 per calendar month for rent.
0:14:49 > 0:14:53I think Whitstable is wonderful, full of charm and character,
0:14:53 > 0:14:54with a lovely coastline.
0:14:54 > 0:14:57It really is a perfect place to while away a weekend
0:14:57 > 0:15:00and to own property here would be something special.
0:15:00 > 0:15:04Let's see who thought the same about this house at the auction.
0:15:04 > 0:15:06Lot 150.
0:15:06 > 0:15:11We've got a guide of 110-115 and what may I say?
0:15:11 > 0:15:12Start me at 110?
0:15:13 > 0:15:16110. And 112? 112.
0:15:16 > 0:15:19115? 115. 117?
0:15:19 > 0:15:20117 in a fresh place.
0:15:20 > 0:15:24Cracking start, with bids coming in from all over the room.
0:15:24 > 0:15:28Hardly surprising, as the average price for a two-bedroom property
0:15:28 > 0:15:31in Whitstable is £190,000.
0:15:31 > 0:15:34We rejoin the bidding at £145,000.
0:15:34 > 0:15:37145. And 147?
0:15:37 > 0:15:39146, if it helps.
0:15:40 > 0:15:42That's a definite no, isn't it?
0:15:42 > 0:15:46£145,000, lady's bid on my right-hand side.
0:15:46 > 0:15:49At £145,000 I have.
0:15:49 > 0:15:52146, can I tempt you again?
0:15:52 > 0:15:55146. And 147?
0:15:55 > 0:15:57That's a definite no, as well.
0:15:57 > 0:16:00At 146,000, then, for the first time,
0:16:00 > 0:16:04146,000 for the second time,
0:16:04 > 0:16:10146,000, third and final time, £146,000, all done?
0:16:10 > 0:16:12Sold at 146,000.
0:16:12 > 0:16:14Well done and your bidder's number?
0:16:14 > 0:16:17See, that extra 1,000 made all the difference.
0:16:17 > 0:16:19Indeed, it did make all the difference.
0:16:19 > 0:16:23That extra grand has made Zira a very happy woman.
0:16:23 > 0:16:27She's a stylist and vintage shop owner, originally from Brazil,
0:16:27 > 0:16:30who's lived in the UK for 19 years.
0:16:30 > 0:16:34She and dog Indie already know these doggy walks well as they live
0:16:34 > 0:16:36very nearby in a little cottage.
0:16:36 > 0:16:40I caught up with her at her newly acquired vintage home-to-be.
0:16:40 > 0:16:42Zira, it's lovely meeting you today.
0:16:42 > 0:16:45Are you happy with your purchase and why did you want to move here?
0:16:45 > 0:16:47I needed to downsize a bit
0:16:47 > 0:16:52and release some cash from my property and so this being perfect.
0:16:52 > 0:16:55- So, you're downsizing from that house to buy this house?- Exactly.
0:16:55 > 0:16:57So, how did that work out financially?
0:16:57 > 0:16:59Because you've got to have the money ready
0:16:59 > 0:17:02when you buy at auction and I know you still currently own that house.
0:17:02 > 0:17:05I know. Well, my house is... I actually have a very,
0:17:05 > 0:17:08very special best friend who lent me the money...
0:17:08 > 0:17:09SHE MOUTHS
0:17:09 > 0:17:12..to go into the auction and buy this house.
0:17:12 > 0:17:14- So you bought this house cash? - I bought this... Yes, with her cash.
0:17:14 > 0:17:16- With her cash?- Yes.
0:17:16 > 0:17:19There we go, a big box of chocolates and a bunch of flowers.
0:17:19 > 0:17:22Absolutely, absolutely. I owe her big time.
0:17:22 > 0:17:25# Thank you for being a friend. #
0:17:26 > 0:17:28Zira has a good friend, that's for sure.
0:17:28 > 0:17:30This has helped over the period
0:17:30 > 0:17:33when her own Victorian house is in the process of being sold
0:17:33 > 0:17:37and this house is going to be ideal for her and her son Max.
0:17:37 > 0:17:41Her aim was to downsize and this does appear to fit the bill.
0:17:42 > 0:17:45Well, first of all, the size I was looking for, two bedrooms,
0:17:45 > 0:17:48with a garden and, of course, with this price,
0:17:48 > 0:17:51all I could get was a flat on a high street.
0:17:51 > 0:17:55- And having the green right in front of the house.- You're right.
0:17:55 > 0:17:57I mean, for the price of a flat,
0:17:57 > 0:17:59you've got yourself a whole house here.
0:17:59 > 0:18:02The only thing is it's a little bit small.
0:18:02 > 0:18:04Where's your son going to sleep?
0:18:04 > 0:18:06Well...
0:18:06 > 0:18:12The small second bedroom, I think I can fit a bed in there.
0:18:12 > 0:18:14How does he feel about it?
0:18:14 > 0:18:17He's OK because I promised the front room,
0:18:17 > 0:18:20it's going to be a den, TV/games room.
0:18:20 > 0:18:23What are the immediate renovations you're going to be doing?
0:18:23 > 0:18:24The bathroom upstairs.
0:18:24 > 0:18:27So, there's 1.5 metres of the eaves,
0:18:27 > 0:18:29I think I can fit a bathroom there.
0:18:31 > 0:18:33Zira has had plans drawn up for this conversion
0:18:33 > 0:18:36and hopes she can install the bathroom,
0:18:36 > 0:18:41and do all the other refurbishment work on a budget of £25,000.
0:18:41 > 0:18:43# What do you do in the bath? #
0:18:45 > 0:18:48So, when do you hope to move in?
0:18:48 > 0:18:51- In about two weeks.- Really?! - Yes.- Wow.
0:18:51 > 0:18:53I don't want to spend the money on a rental
0:18:53 > 0:18:56when I need the money to put into the house.
0:18:56 > 0:19:01- Are you excited to renovate...?- I can't wait. I can't wait. I like...
0:19:01 > 0:19:03Part of me enjoy being in a building site.
0:19:03 > 0:19:06- I can't wait to see that bathroom upstairs.- Yes, so do I!
0:19:06 > 0:19:10- Happy cosy living. - Thank you very much. Thank you.
0:19:10 > 0:19:15Oh, Zira has a really good buy here in a fabulous location,
0:19:15 > 0:19:19but she's going to have to put all that creativity to work
0:19:19 > 0:19:22to make this cosy home practical.
0:19:22 > 0:19:23I'm sure she'll do it, though.
0:19:23 > 0:19:26You can find out if I'm right later on in the show.
0:19:28 > 0:19:33Coming up, in South Wales, this is a hard house to work out.
0:19:35 > 0:19:36HE EXHALES LOUDLY
0:19:38 > 0:19:40We return to Whitstable, on the Kent coast,
0:19:40 > 0:19:43to find out what's upsetting Zira's plans.
0:19:43 > 0:19:45Oh.
0:19:45 > 0:19:47No, don't like it.
0:19:51 > 0:19:54But first it's back to Stoke on Trent.
0:19:54 > 0:19:58And now, six months later, we're back to see how they got on.
0:19:59 > 0:20:04Well, externally, the property seems to have gained a few more doors -
0:20:04 > 0:20:08that's an encouraging sign. But, more importantly, what's inside?
0:20:10 > 0:20:14Ah! This rather smart one-bed flat with open-plan kitchen-diner...
0:20:16 > 0:20:17..shower room behind...
0:20:18 > 0:20:21..and a single bedroom at the rear.
0:20:24 > 0:20:26But what about the rest of the building?
0:20:29 > 0:20:32Ah. Not quite as finished.
0:20:35 > 0:20:38What will all these rooms be once completed?
0:20:40 > 0:20:43We've looked at producing eight flats now.
0:20:43 > 0:20:45Originally, we'd hoped to get nine or ten.
0:20:45 > 0:20:49Reduced slightly but it means each one's slightly larger than they had
0:20:49 > 0:20:52originally planned and we think that's going to make them more attractive.
0:20:52 > 0:20:56And the eight one-bed flats will be made up of four flats
0:20:56 > 0:20:59on the ground floor and four flats on the first floor.
0:21:01 > 0:21:04So, presently, what stage are the flats at?
0:21:05 > 0:21:07Basically, there's one flat which is completely finished.
0:21:07 > 0:21:11We've then got two flats which are ready for decoration,
0:21:11 > 0:21:15we've got one more flat which is ready for second fix joinery
0:21:15 > 0:21:18and then we've got three more flats which are ready
0:21:18 > 0:21:21for partition work going up, stud work going up -
0:21:21 > 0:21:24that's going to be completed in the next three or four weeks.
0:21:25 > 0:21:28David has had two teams working on the building -
0:21:28 > 0:21:31one on the first floor and one on the ground floor.
0:21:31 > 0:21:35And, then, a team was going round doing all the second fix work.
0:21:35 > 0:21:38So, have there been any major problems?
0:21:38 > 0:21:41The biggest job was we've had a new gable wall built at the far
0:21:41 > 0:21:44end of the building cos the old one was falling down.
0:21:44 > 0:21:47A new staircase had to go in and floors had to be aligned to that.
0:21:47 > 0:21:50There's just been a lot of the same sort of work, that's all.
0:21:50 > 0:21:53Well, it seems, gable end notwithstanding,
0:21:53 > 0:21:55this project is working out well for the duo.
0:21:55 > 0:22:00But have they now decided what to do with the flats once they're completed?
0:22:00 > 0:22:04We're now at the point where we're prepared to sell all eight flats.
0:22:04 > 0:22:05Very similar to where we were,
0:22:05 > 0:22:08we're quite happy to hang on to two or three of them, as well,
0:22:08 > 0:22:11cos they're going to provide a good steady rental income.
0:22:11 > 0:22:15At the moment, we have three flats under offer,
0:22:15 > 0:22:20so five are still available to either be retained by us or to be sold on.
0:22:20 > 0:22:23With three under offer, it certainly indicates that the decision
0:22:23 > 0:22:26to convert the building into flats was the right one.
0:22:26 > 0:22:29But they are creating two less flats than they hoped for,
0:22:29 > 0:22:31so will the figures still add up?
0:22:32 > 0:22:36The budget, originally, was 200,000.
0:22:36 > 0:22:39We are currently on around about 180,000,
0:22:39 > 0:22:42but that includes fees such as architects' fees.
0:22:42 > 0:22:45We had to spend slightly more on the gable wall,
0:22:45 > 0:22:48although we had allowed for that within the original budget.
0:22:48 > 0:22:52So, currently, it looks like we're going to complete
0:22:52 > 0:22:54the project on about £180,000.
0:22:55 > 0:23:00Provided they stick to their £180,000 budget, then,
0:23:00 > 0:23:03on top of their £142,000 purchase price,
0:23:03 > 0:23:08their grand total to create eight flats will be £322,000.
0:23:09 > 0:23:14What do two local property experts make of the development so far?
0:23:15 > 0:23:18I would anticipate a rental value in the region of £400
0:23:18 > 0:23:20per calendar month per flat.
0:23:20 > 0:23:23As an average rental for the apartments, I'd expect them
0:23:23 > 0:23:26to achieve in the region of £375 per calendar month.
0:23:27 > 0:23:31Even the lower £375 per calendar month would potentially
0:23:31 > 0:23:35bring in an annual rental yield of 11% for the whole building.
0:23:35 > 0:23:38But what about resale values for the flats?
0:23:38 > 0:23:41Will Neil and David see much return from what will be
0:23:41 > 0:23:43a £322,000 investment?
0:23:46 > 0:23:49I would anticipate a resale value for the flats
0:23:49 > 0:23:52individually at around £50,000.
0:23:52 > 0:23:55As an average guide price, for each independent flat,
0:23:55 > 0:23:57I would suggest that they would sell
0:23:57 > 0:23:59at around £50,000 as an average price.
0:23:59 > 0:24:01It's in line with what we'd expected.
0:24:01 > 0:24:03An average figure is fine.
0:24:03 > 0:24:08In reality, we'd expect the larger top-floor flats will probably
0:24:08 > 0:24:09sell for a little bit more
0:24:09 > 0:24:12and the two smaller flats will probably sell for a little bit less.
0:24:14 > 0:24:17An average price of 50,000 would see a total return
0:24:17 > 0:24:20of £400,000 for the eight flats,
0:24:20 > 0:24:24which would, potentially, see a pre-tax profit of £78,000.
0:24:24 > 0:24:26That's not bad.
0:24:26 > 0:24:29So, with this looking like a successful venture,
0:24:29 > 0:24:32are they planning more development projects together?
0:24:34 > 0:24:38Yes, gradually, over the last two or three years, we've done
0:24:38 > 0:24:41slightly larger projects each time, so we're comfortable with this.
0:24:41 > 0:24:44It seems to have worked well, so, yes, we are looking
0:24:44 > 0:24:46for other similar-sized projects now.
0:24:50 > 0:24:55If you've never been here before then, the first time you visit
0:24:55 > 0:24:59the valleys of south Wales, you might be in for a bit of a surprise.
0:25:00 > 0:25:02They really are spectacular.
0:25:04 > 0:25:09This area has been moulded over millions of years by volcanoes,
0:25:09 > 0:25:13rivers, glaciers and even tropical climates,
0:25:13 > 0:25:15all of which have created the natural beauty
0:25:15 > 0:25:18of these deep channels running through the mountains.
0:25:18 > 0:25:22The coal that was also created led to the build-up of villages,
0:25:22 > 0:25:25which have nestled themselves in the stunning backdrop.
0:25:26 > 0:25:30# Into the valley... #
0:25:30 > 0:25:33The town of Penrhiwceiber is no exception,
0:25:33 > 0:25:35but I can't spend all day admiring the view.
0:25:35 > 0:25:38I had better get on with the property I'm here to see.
0:25:39 > 0:25:42So, what was up for grabs at the auction?
0:25:42 > 0:25:49Well, a two-bedroomed mid-terrace at a guide price of £23,000 plus.
0:25:49 > 0:25:52It's one of these very attractive properties. What's it like inside?
0:25:52 > 0:25:54Only one way to find out.
0:25:56 > 0:25:58So, what have we got? Whew!
0:25:59 > 0:26:01Woodchip wallpaper for a start.
0:26:03 > 0:26:04Can't resist it.
0:26:07 > 0:26:09Bit of stripping while I'm here, so to speak.
0:26:09 > 0:26:10Entrance hall there, though,
0:26:10 > 0:26:14through into what is your fairly standard layout, isn't it?
0:26:14 > 0:26:19A front sitting room, nice big window, so lots of light.
0:26:19 > 0:26:22Stairs down and stairs up.
0:26:23 > 0:26:25Got to be explored.
0:26:32 > 0:26:34First stop on the tour,
0:26:34 > 0:26:37the bathroom on the same floor as the living room.
0:26:37 > 0:26:40Now, ordinarily, I would be saying, "Ground-floor bathroom?!
0:26:40 > 0:26:42"Let's try and move it upstairs."
0:26:42 > 0:26:46But, with the house split over three floors, it's best left where it is.
0:26:46 > 0:26:48But, on the bright side,
0:26:48 > 0:26:50you're only ever one flight of stairs from the loo.
0:26:55 > 0:26:59Well, typical of many properties around here, the kitchen
0:26:59 > 0:27:03is actually situated down here on the lower floor.
0:27:03 > 0:27:05It's not a bad-sized space.
0:27:05 > 0:27:08I mean, it's a kitchen sort of dining room, so that's good.
0:27:08 > 0:27:11Couple of things which I see straight away, though,
0:27:11 > 0:27:15which do cause a bit of concern. Number one, very old radiator
0:27:15 > 0:27:18and my guess is, maybe, central heating system needs updating.
0:27:18 > 0:27:22Number two, really bad case of damp.
0:27:22 > 0:27:25Hm, that's the neighbouring property - intriguing.
0:27:25 > 0:27:28Where's that coming from? Whatever, it needs to be sorted.
0:27:29 > 0:27:32Other than that, and the woodchip wallpaper,
0:27:32 > 0:27:35the property is in generally good condition.
0:27:35 > 0:27:38It's the paperwork that may cause a bit of a headache.
0:27:40 > 0:27:45The property had, until last year, a 99-year lease.
0:27:45 > 0:27:47That has now expired.
0:27:47 > 0:27:50Hm? Interesting scenario. What does that mean?
0:27:50 > 0:27:54Well, it's good, on the one hand, that it will probably end up
0:27:54 > 0:27:56reverting to being a freehold property.
0:27:56 > 0:27:58It's bad, on the other,
0:27:58 > 0:28:00because you're going to have to put a lot of time and
0:28:00 > 0:28:05effort, or at least your solicitor is, into sorting out those issues,
0:28:05 > 0:28:08which, of course, means money.
0:28:08 > 0:28:11But, given that you'll always read the legal pack,
0:28:11 > 0:28:13at least you knew about it beforehand.
0:28:18 > 0:28:21So, at the back of the property, well,
0:28:21 > 0:28:24before I get to the garden, how about this?
0:28:24 > 0:28:26This exterior, it may look like just normal pebble dash,
0:28:26 > 0:28:30but if you...hit it it sounds a bit hollow.
0:28:30 > 0:28:33I reckon what this is is wall insulation.
0:28:33 > 0:28:36There's a bit of a government directive to provide this
0:28:36 > 0:28:40kind of thing cos it makes a house a lot more energy efficient.
0:28:40 > 0:28:44It also creates quite a watertight exterior. So, that's good,
0:28:44 > 0:28:48it's been done, another thing to tick off the renovation list.
0:28:48 > 0:28:51But back to the garden and not a bad size.
0:28:51 > 0:28:55But it feels a lot bigger cos look at that view! Fantastic.
0:28:58 > 0:29:02And, apart from the great views, this is an ex-council property
0:29:02 > 0:29:07that not only has wall insulation but also these water heating panels,
0:29:07 > 0:29:09which are included in the price of the property,
0:29:09 > 0:29:12making them a very desirable addition to the whole package.
0:29:15 > 0:29:20Now, I've been putting this off, but I still need to see the bedrooms.
0:29:23 > 0:29:26# But I would walk 500 miles
0:29:26 > 0:29:30# And I would walk 500 more
0:29:30 > 0:29:35# Just to be the man who walked 1,000 miles
0:29:35 > 0:29:37# To fall down at your door
0:29:37 > 0:29:39- # Dada-da-da-da - Dada-da-da-da
0:29:39 > 0:29:42- # Dada-da-da-da - Dada-da-da-da... #
0:29:43 > 0:29:44HE EXHALES LOUDLY
0:29:45 > 0:29:50Well, I don't know about 500 miles, feels like 500 steps.
0:29:50 > 0:29:52But when you get up here, what do you find?
0:29:52 > 0:29:55Well, actually, two decent-sized bedrooms.
0:29:55 > 0:29:57That one there, fantastic views over the hills.
0:29:57 > 0:30:02The front one here, well, ha, look at it.
0:30:02 > 0:30:04Much bigger than you expect
0:30:04 > 0:30:06from the size of the property on the outside.
0:30:06 > 0:30:07So...
0:30:07 > 0:30:09it just tops off what is already
0:30:09 > 0:30:11a pretty respectable little property.
0:30:14 > 0:30:16While I get my breath back,
0:30:16 > 0:30:18let's find out what potential
0:30:18 > 0:30:21a local property expert sees in this three-storey,
0:30:21 > 0:30:22two-bed terraced house.
0:30:24 > 0:30:27The property is a split-level property,
0:30:27 > 0:30:31so obviously two flights of stairs may limit the market slightly
0:30:31 > 0:30:33with the younger families with young children
0:30:33 > 0:30:36and also the problems with, perhaps,
0:30:36 > 0:30:38anybody with mobility issues might limit that market a little bit.
0:30:38 > 0:30:41But, generally, a good-sized property here,
0:30:41 > 0:30:43so will open a few doors.
0:30:44 > 0:30:47So what's the potential value once property is done up?
0:30:49 > 0:30:52The potential resale value of this property
0:30:52 > 0:30:54would be in the region of £50,000.
0:30:54 > 0:30:59As a rental property, it could achieve £350 per calendar month.
0:31:01 > 0:31:03So...a pretty nice little house
0:31:03 > 0:31:07that just needs a bit of tender loving care and modernisation.
0:31:07 > 0:31:10Who fancied it when it went under the hammer?
0:31:11 > 0:31:13Lot number 14 is guided at 23,000,
0:31:13 > 0:31:15start me, will you, at 20,000?
0:31:15 > 0:31:1820 I've got, thank you. At 20. One - can I see?
0:31:18 > 0:31:2021, 22, 23...
0:31:20 > 0:31:2324, 25, 26, 27,
0:31:23 > 0:31:2528, 29, 30.
0:31:25 > 0:31:2731...31?
0:31:27 > 0:31:30No. At 30,000, then, standing.
0:31:30 > 0:31:32At 30, then, for the first time...
0:31:32 > 0:31:33second time,
0:31:33 > 0:31:35third and last time at 30...
0:31:35 > 0:31:3731? 30 and a half, then, if you like.
0:31:37 > 0:31:3930 and a half... 31? No.
0:31:39 > 0:31:41That half was just enough to do it.
0:31:41 > 0:31:43At 30 and a half, then.
0:31:43 > 0:31:44Seated for the first time,
0:31:44 > 0:31:46second time,
0:31:46 > 0:31:47third and last time. 30,500.
0:31:49 > 0:31:51Yours, madam. Your number, please?
0:31:51 > 0:31:54That extra £500 was enough to seal the deal
0:31:54 > 0:32:00at £30,500 for Cardiff couple Ray and Paul.
0:32:00 > 0:32:01Having recently left the Army,
0:32:01 > 0:32:05Paul has started up property maintenance business.
0:32:05 > 0:32:08However, it wasn't just the price that had attracted them to the area.
0:32:08 > 0:32:11# Zipping up my boots...
0:32:13 > 0:32:16# Going back to my roots, yeah... #
0:32:16 > 0:32:17Ray, Paul, good to meet you both.
0:32:17 > 0:32:20- Hi.- Congratulations.
0:32:20 > 0:32:23So what was it about this particular place that appealed?
0:32:23 > 0:32:26It's on a commuter route to Cardiff,
0:32:26 > 0:32:30it's an area that's being regenerated
0:32:30 > 0:32:32and within our price budget.
0:32:32 > 0:32:36Also Paul has family connections to the area -
0:32:36 > 0:32:37that his family grew up here.
0:32:37 > 0:32:40His grandfather was born just a few streets away.
0:32:40 > 0:32:41Oh, wow.
0:32:41 > 0:32:45So, yes, I suppose you've come back home, really.
0:32:48 > 0:32:52Paul has come back to his roots for the couple's first project.
0:32:52 > 0:32:54And apart from being familiar territory,
0:32:54 > 0:32:56this is an ideal starter project.
0:32:57 > 0:33:01So tell me what you're going to do to sort this place out.
0:33:01 > 0:33:06New kitchen and a new bathroom put in.
0:33:06 > 0:33:08The rest of it is just some redecoration,
0:33:08 > 0:33:11new woodwork and just freshen it up, really.
0:33:11 > 0:33:13- Central heating? Improvements? - Yep.
0:33:13 > 0:33:15We've still got the back boiler here,
0:33:15 > 0:33:17so we intend to put in a new combi boiler in.
0:33:17 > 0:33:19- Right.- So that should take the majority of our budget.
0:33:19 > 0:33:21Who's going to do the work?
0:33:21 > 0:33:23- That'll be me.- Will it?
0:33:23 > 0:33:24HE CHUCKLES
0:33:24 > 0:33:25So what is the budget?
0:33:25 > 0:33:28Budgeting for about £5,000,
0:33:28 > 0:33:33but we are hoping to apply for a home improvements loan,
0:33:33 > 0:33:36which is being funded by the Welsh Assembly,
0:33:36 > 0:33:39so they're trying to help people to regenerate the area, as well,
0:33:39 > 0:33:42- and get the empty homes back into use.- Brilliant.
0:33:42 > 0:33:43- Sounds like a good thing.- Yes.
0:33:43 > 0:33:47- And that's a cheaper rate loan or at least a loan.- Interest free.
0:33:47 > 0:33:49So what about timescale?
0:33:49 > 0:33:52- We're hoping three-to-four months. - Yes.
0:33:52 > 0:33:56- It's all going to be on your back? - Oh, yes.- Can you do it in that time?
0:33:56 > 0:33:58- Well...- I don't see why I can't.
0:33:58 > 0:34:01With a bit of help. We've got fantastic parents
0:34:01 > 0:34:03and hopefully they can help with some childcare,
0:34:03 > 0:34:07which will help me to come up and give him a hand, really.
0:34:07 > 0:34:09Well, listen, congratulations. Good luck with it.
0:34:09 > 0:34:14- Thank you very much.- Cheers.- Look forward to seeing how you get on.
0:34:14 > 0:34:17So... Ray and Paul choosing a place with family ties
0:34:17 > 0:34:20for their first property investment venture.
0:34:20 > 0:34:25How will they get along with that budget and that timescale?
0:34:25 > 0:34:27You can find out later in the show.
0:34:32 > 0:34:34Tucked away on the Kent coastline
0:34:34 > 0:34:37is the pretty fishing town of Whitstable
0:34:37 > 0:34:39and it's here that we cast our property nets
0:34:39 > 0:34:42and came up with a two-bed new-style cottage
0:34:42 > 0:34:45overlooking a pleasant green.
0:34:45 > 0:34:49It was brought for £146,000 by Brazilian-born Zira
0:34:49 > 0:34:52as a new home for her and her 12-year-old son Max...
0:34:52 > 0:34:55Not forgetting the dog, Indie, of course.
0:34:57 > 0:35:00She was keen not to incur additional rental costs
0:35:00 > 0:35:05and thought moving into her new home was the most cost-effective option.
0:35:05 > 0:35:08But renovation while living in a house is never easy.
0:35:08 > 0:35:11And now, 15 months after our last visit,
0:35:11 > 0:35:13we're back to check on progress.
0:35:15 > 0:35:19Ah, a summerhouse has appeared in a rejuvenated garden space
0:35:19 > 0:35:21that should give them a bit more room!
0:35:21 > 0:35:23But what about inside?
0:35:28 > 0:35:30Oh, well, they've clearly moved in!
0:35:30 > 0:35:33And in the front room, the chimney breast has been removed
0:35:33 > 0:35:36to give a few more precious inches.
0:35:36 > 0:35:40But it was upstairs where the main work was initially planned.
0:35:40 > 0:35:41So what's it looking like?
0:35:44 > 0:35:47Will the master bedroom...?
0:35:47 > 0:35:49Well, it's got a bed in it.
0:35:49 > 0:35:53And the really small bedroom that was for 12-year-old Max...?
0:35:53 > 0:35:56Oh, well. That's looking a whole lot better.
0:35:57 > 0:36:00Zira has made some progress up here,
0:36:00 > 0:36:04but the main task was to make room for a bathroom under the eaves.
0:36:04 > 0:36:06So what happened to that?
0:36:07 > 0:36:09I had to put an application through the council
0:36:09 > 0:36:13and about nine months after I bought the house...
0:36:13 > 0:36:15Eight weeks later the council refused,
0:36:15 > 0:36:19so you have to reapply with very little change
0:36:19 > 0:36:22and then it takes another eight weeks for them to approve,
0:36:22 > 0:36:25so that just happened a few weeks ago.
0:36:25 > 0:36:28Well, finally then, Zira has got the green light
0:36:28 > 0:36:30to go ahead with an upstairs bathroom.
0:36:30 > 0:36:35But what's it been like living in a house that you're still working on?
0:36:35 > 0:36:39I think the major problem is the bathroom's not very nice,
0:36:39 > 0:36:43so we had to spend a lot of time at friends' houses.
0:36:43 > 0:36:45We go for visits and stay for a shower!
0:36:45 > 0:36:47SHE CHUCKLES
0:36:47 > 0:36:50And the kitchen, as well. We can't really bake anything.
0:36:50 > 0:36:52It's to be a dish with... A two-plate dish!
0:36:54 > 0:36:55Well, I don't envy Zira
0:36:55 > 0:36:59that she's still got most of the major work ahead of her!
0:36:59 > 0:37:02I'm going to knock down the small kitchen with the dining room
0:37:02 > 0:37:06and make it into a bigger kitchen-diner room.
0:37:06 > 0:37:09I can probably stay with friends for a few days
0:37:09 > 0:37:13and so in one go, otherwise it's very hard for us to cope.
0:37:13 > 0:37:16She's also hoping that once the bathroom and kitchen are finished
0:37:16 > 0:37:18to put a conservatory on the back of the house,
0:37:18 > 0:37:21replacing that rather sorry lean-to.
0:37:21 > 0:37:24But all her plans are dependent on money
0:37:24 > 0:37:27and the key to her finances was selling her old house in Whitstable.
0:37:29 > 0:37:31I put my house on the market immediately,
0:37:31 > 0:37:36sold in about a few weeks and then
0:37:36 > 0:37:38took about a month and a half
0:37:38 > 0:37:41to put...the money to go through,
0:37:41 > 0:37:43so that's when I paid my friend.
0:37:45 > 0:37:46So with one debt repaid,
0:37:46 > 0:37:50how much is she looking to spend on the cottage to get it how she wants?
0:37:51 > 0:37:53My original budget was 25,000.
0:37:53 > 0:37:56I think... Of course, I haven't finished the house yet,
0:37:56 > 0:38:00so hopefully I will stick to it,
0:38:00 > 0:38:01give or take a few thousand.
0:38:03 > 0:38:08A £25,000 budget, on top of her £146,000 purchase price,
0:38:08 > 0:38:12will take Zira's spend to 171,000.
0:38:12 > 0:38:16So, will all the dust and disruption be worth it in the end?
0:38:16 > 0:38:18What do two local estate agents think?
0:38:18 > 0:38:22At the moment, it doesn't really provide
0:38:22 > 0:38:24what people will want from a modern house
0:38:24 > 0:38:26and the bathroom's very small.
0:38:26 > 0:38:28The kitchen's very small.
0:38:28 > 0:38:30But, certainly, there are things you could do to overcome that.
0:38:30 > 0:38:32Garden's very nice.
0:38:32 > 0:38:35Position's good, looking across the green,
0:38:35 > 0:38:38and the cottage-style is very popular in Whitstable,
0:38:38 > 0:38:39so it has got potential there.
0:38:40 > 0:38:42Obviously, the cottage is far from finished
0:38:42 > 0:38:45and, in particular, there is the upstairs bathroom to install
0:38:45 > 0:38:48and improvements to the kitchen.
0:38:48 > 0:38:51But what might the value of the house be once she's done
0:38:51 > 0:38:54her £25,000 worth of work?
0:38:54 > 0:38:59I think the property could achieve somewhere in the region of £225,000.
0:38:59 > 0:39:03If it was renovated, allowing for the slight alteration upstairs
0:39:03 > 0:39:08with the bathroom, then I suggest a figure of £220-£225,000.
0:39:08 > 0:39:13So, potentially a pre-tax profit of between 49 and 54,000,
0:39:13 > 0:39:16minus the usual taxes and expenses.
0:39:16 > 0:39:19But what does Zira think about the valuation figures?
0:39:20 > 0:39:22Oh.
0:39:22 > 0:39:23No, I don't like it.
0:39:23 > 0:39:27I would think, if it was completely done, I probably would get more.
0:39:27 > 0:39:29Yes, well, it's difficult, really,
0:39:29 > 0:39:32to judge the true value of the cottage at this stage
0:39:32 > 0:39:35and, anyway, Zira isn't looking to sell any time soon.
0:39:35 > 0:39:37But, despite the upheaval,
0:39:37 > 0:39:42would she be tempted to tackle any more property projects?
0:39:42 > 0:39:45If I was by myself, I would do it again sooner,
0:39:45 > 0:39:47but I have to wait for my son to go off to university,
0:39:47 > 0:39:49then I can do it again!
0:39:53 > 0:39:56Next up, we wave goodbye to Whitstable
0:39:56 > 0:39:58and whizz to Wales.
0:39:58 > 0:40:00Nestled in the valleys 20 miles north of Cardiff
0:40:00 > 0:40:02is the town of Penrhiwceiber
0:40:02 > 0:40:04and it was here that we came across
0:40:04 > 0:40:08a two-bed, mid-terraced house with hidden depths.
0:40:08 > 0:40:10And, now, seven months later,
0:40:10 > 0:40:12we're back to see if it's fit for inspection.
0:40:15 > 0:40:19OK, so, eyes front, all looking good there.
0:40:19 > 0:40:23But let's go inside and work from the lower ground up, I think.
0:40:28 > 0:40:31In the kitchen, we took the old dated units out.
0:40:31 > 0:40:35We've put more modern units in,
0:40:35 > 0:40:37put new flooring in and painted it.
0:40:39 > 0:40:42And moving up the house to the ground floor?
0:40:44 > 0:40:48In the living room, we took the wallpaper off and redecorated,
0:40:48 > 0:40:51carpeted throughout with some new radiators as well.
0:40:55 > 0:40:59And the bathroom on this floor has also been completely refurbished.
0:40:59 > 0:41:03So, what about that final storey?
0:41:03 > 0:41:06Going up to the top floor, it's completely repainted and,
0:41:06 > 0:41:10plus, we've put new doors all around.
0:41:10 > 0:41:12So, the place has been finished fantastically
0:41:12 > 0:41:16from top to bottom, or it is that bottom to top? I'm not sure.
0:41:16 > 0:41:19But, clearly there has been a lot of work.
0:41:19 > 0:41:21There was a 99-year lease,
0:41:21 > 0:41:24which had just literally expired on the property.
0:41:24 > 0:41:27That automatically reverted to a freehold,
0:41:27 > 0:41:31all to do with just control of the mining works below ground,
0:41:31 > 0:41:33but since that's now exhausted and no longer works,
0:41:33 > 0:41:37they were happy to release it, so it's now fully freehold.
0:41:38 > 0:41:39Well, that's great.
0:41:39 > 0:41:41And just by getting the freehold,
0:41:41 > 0:41:43they should have added value to the house.
0:41:43 > 0:41:45But, with Paul busy on other projects,
0:41:45 > 0:41:49their hoped-for three-to-four-month timescale went out the window.
0:41:49 > 0:41:51So, how's their budget looking?
0:41:53 > 0:41:58Initially, we budgeted £5-7,500.
0:41:58 > 0:42:01Due to the fact that Paul has done almost everything himself,
0:42:01 > 0:42:04we've managed to save on a lot of costs and we've actually come
0:42:04 > 0:42:09in at about £3,000 without totting up everything on a calculator.
0:42:09 > 0:42:11A £3,000 spend is impressive
0:42:11 > 0:42:14and added to their £30,500 purchase price,
0:42:14 > 0:42:20their first development project so far has cost them £33,500.
0:42:20 > 0:42:24And they've also decided to rent out the house, rather than sell it on.
0:42:24 > 0:42:26So, is that the right decision?
0:42:26 > 0:42:29What do two local estate agents think?
0:42:29 > 0:42:31If it was to be put to the sales market,
0:42:31 > 0:42:33to be competitive with other houses in the area,
0:42:33 > 0:42:36I would advise an asking price of £45,000.
0:42:36 > 0:42:41We'd put this property on the open market for £47,500
0:42:41 > 0:42:44and we look to achieve £45,000.
0:42:44 > 0:42:47Yeah, that's pretty much about the 45,000 mark for the area.
0:42:49 > 0:42:52A valuation of £45,000
0:42:52 > 0:42:57would give a potential pre-tax profit of £11,500.
0:42:57 > 0:43:01But the resale market is slow in the local area,
0:43:01 > 0:43:05so Ray and Paul have now decided the letting market
0:43:05 > 0:43:07is more suited for the house.
0:43:07 > 0:43:12I would advise a rental in the region of £350-£375 per calendar month.
0:43:12 > 0:43:15If the property was placed on the rental books,
0:43:15 > 0:43:19then we'd probably look in the region of £335 per calendar month.
0:43:19 > 0:43:23335 is probably a little bit low,
0:43:23 > 0:43:26but we're quite confident that we could get 375.
0:43:26 > 0:43:30Even that lower £335 per calendar month rental figure
0:43:30 > 0:43:34would produce a healthy rental yield in the region of 12%.
0:43:34 > 0:43:37Not bad as a starting point.
0:43:38 > 0:43:42For our first investment property,
0:43:42 > 0:43:46I'd say it's been an eye-opener and a good learning curve.
0:43:46 > 0:43:48Yeah. We'd have no hesitations to do it again.
0:43:48 > 0:43:51It's worked out really well so far.
0:43:53 > 0:43:55So, from Martin and me, that's it.
0:43:55 > 0:43:58Yes, but join us next time for more stories from the auctions,
0:43:58 > 0:43:59here on Homes Under The Hammer.
0:43:59 > 0:44:02- Look forward to seeing you then. - Goodbye.- Goodbye.