Episode 2 Homes Under the Hammer


Episode 2

Similar Content

Browse content similar to Episode 2. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

Hello, and welcome to the programme.

0:00:020:00:03

Now, Martin, today the weather has been a bit changeable.

0:00:030:00:06

-We've had sunshine and some cloud...

-Yeah, ups and downs,

0:00:060:00:08

a bit like the property market.

0:00:080:00:10

But, you know what? It's all about buying at the right price

0:00:100:00:13

and at the right time, and that's what me and Lucy

0:00:130:00:15

are always telling you, here on Homes Under The Hammer.

0:00:150:00:17

MUSIC: Solid Rock by Dire Straits

0:00:430:00:48

Terraced properties.

0:00:480:00:49

Over the years, I have visited literally hundreds for the show -

0:00:490:00:54

two bedrooms, three bedrooms, good, solid family homes -

0:00:540:00:59

and the bedrock of the British property stock.

0:00:590:01:04

# Solid rock, rock, solid rock... #

0:01:040:01:08

Often built as housing for factory workers, they provided

0:01:080:01:12

high-volume housing, using a repeated joined-up style that

0:01:120:01:16

allowed for less build and design costs,

0:01:160:01:18

which meant affordable housing.

0:01:180:01:20

And Stoke-on-Trent, which employed thousands of workers

0:01:200:01:23

for its pottery manufacturing, was no exception.

0:01:230:01:27

MUSIC CONTINUES

0:01:270:01:31

So, terraced property, terraced property,

0:01:320:01:35

terraced property, gap, terraced property...

0:01:350:01:42

Not terraced property.

0:01:420:01:43

Er, that's kind of interesting

0:01:430:01:46

because you'd expect that to continue, but no.

0:01:460:01:48

This big, cream building is the property that was up for auction

0:01:480:01:54

and a terraced property of standard proportions it is not,

0:01:540:01:59

hinted at by the guide price, £115,000 plus. Let's take a look.

0:01:590:02:04

I wasn't expecting that. Wow! Look at the size of this room!

0:02:090:02:15

Even that baby grand piano is lost in this space!

0:02:150:02:21

It's enormous.

0:02:210:02:22

Nice floor, looks to be in reasonable condition.

0:02:220:02:26

HE LAUGHS

0:02:260:02:27

This is incredible! I thought that was big, look at this!

0:02:270:02:31

Is this a house, or is this some kind of a...?

0:02:310:02:34

I don't know, a banqueting suite or... I mean...

0:02:340:02:39

I'm sorry, I'm not being very descriptive of what I'm seeing.

0:02:390:02:42

You can just see, can't you? What an amazing space!

0:02:420:02:44

And it just goes on and on and on.

0:02:440:02:46

Through here, lots of little rooms going off,

0:02:460:02:49

there's a room down there.

0:02:490:02:50

This massive great...

0:02:500:02:54

leisure centre complex, conference centre!

0:02:540:02:57

The building does seem to be in pretty good condition.

0:02:570:03:02

And... Oh, wow. So it continues.

0:03:020:03:06

Look at this kitchen.

0:03:060:03:07

It's almost like I've been shrunk,

0:03:070:03:10

like I'm in Alice in Wonderland or something,

0:03:100:03:13

and I'm very small and the house is disproportionately big.

0:03:130:03:16

It's almost belies belief.

0:03:160:03:20

But it's true. Wow!

0:03:210:03:24

# Confusion

0:03:240:03:26

# You know it's driving me wild

0:03:260:03:28

# Confusion

0:03:280:03:30

# It comes as no big surprise

0:03:300:03:32

# You've lost your love and you just can't carry on

0:03:330:03:35

# Can't carry on

0:03:350:03:37

# You feel there's no-one there for you to lean on

0:03:370:03:42

# To lean on... #

0:03:420:03:45

Yes, it's all rather confusing.

0:03:450:03:47

It seems my much-loved terrace has been converted into

0:03:470:03:51

one property with, wait for it... seven bedrooms, five living rooms,

0:03:510:03:56

two kitchens, two bathrooms and just loads of general rooms.

0:03:560:04:01

But what to do with it all?

0:04:010:04:03

# Confusion

0:04:050:04:08

# Confusion... #

0:04:100:04:11

Time, I think, to get some advice on a local property expert.

0:04:150:04:20

First impressions of this property, it is exceptionally large

0:04:200:04:24

and it's really too large to be used as really one dwelling.

0:04:240:04:27

I think to maximise the return for this property,

0:04:270:04:30

the buyer would need to look into possibly conversion into flats

0:04:300:04:35

or possibly bedsits or individual letting rooms, which of course

0:04:350:04:40

would all be subject to the relevant planning permission.

0:04:400:04:43

I think the agent is spot on.

0:04:430:04:45

Two big as one house, but at that guide price of 115,000,

0:04:450:04:49

that flat idea could be very attractive.

0:04:490:04:52

So what kind of money could they make?

0:04:520:04:54

I would anticipate one-bedroom flats

0:04:540:04:57

in this area would be in the region of £50,000.

0:04:570:05:01

Possibly two beds, you could be closer to the £60,000 more.

0:05:010:05:05

OK, assuming you could get a maximum of six one-bed flats,

0:05:050:05:09

that would mean a total sale price of £300,000,

0:05:090:05:13

minus the auction price paid and the conversion costs,

0:05:130:05:17

there's still room for a healthy profit here.

0:05:170:05:19

But would rental in some form or other

0:05:190:05:22

be an option worth considering?

0:05:220:05:24

I think if you were going to rent it as individual rooms,

0:05:240:05:27

you'd possibly be looking around £250 per calendar month, per room.

0:05:270:05:31

I would anticipate rental income for one-bedroom flats

0:05:310:05:35

to be in the region of £350 per calendar month

0:05:350:05:38

and two bedrooms possibly between 400-425 per calendar month.

0:05:380:05:43

Well, it's an intriguing property for sure that could be

0:05:470:05:51

a potentially lucrative venture for someone,

0:05:510:05:55

but that someone's going to need a lot of money

0:05:550:05:57

and quite a bit of imagination to take this on.

0:05:570:06:00

Let's find out who bought it when it went under the hammer.

0:06:000:06:03

Lot 91 is a substantial corner terrace building,

0:06:060:06:09

large accommodation, lots of rooms. Shall we say 115 then?

0:06:090:06:13

Lots 91, 115. Back left, at £115,000.

0:06:130:06:19

120 going to say now. £120,000.

0:06:190:06:22

125? £125,000.

0:06:220:06:26

130? 130,000. 135? £135,000.

0:06:260:06:32

140? No?

0:06:320:06:34

Then 135,000, by the door. 136 anywhere else?

0:06:340:06:38

136, seated.

0:06:380:06:40

137, 138, 139,

0:06:400:06:44

140, 141, 142,

0:06:440:06:48

shaking his head 142, seated.

0:06:480:06:51

143 anywhere else? If not, I'm selling it at £142,000

0:06:510:06:56

to the gentleman seated for the first time,

0:06:560:06:59

at £142,000 for the second time...

0:06:590:07:03

Third and final time at £142,000...

0:07:030:07:07

-HAMMER BANGS

-You bought it, sir, well done.

0:07:070:07:10

And so the hammer fell at 142,000

0:07:100:07:13

and the successful bid was made by Neil,

0:07:130:07:15

who bought it as a joint purchase with his business partner David.

0:07:150:07:19

Eagle-eyed viewers will have spotted that I've met them before,

0:07:220:07:25

but on a much smaller development project.

0:07:250:07:29

# I'll see you again

0:07:290:07:32

# Oh-whoa, oh-whoa-oh

0:07:320:07:34

# This is not where it ends... #

0:07:340:07:36

Neil, David, good to see you both...again!

0:07:360:07:39

-Welcome to the palace ballroom!

-Yeah, feels that way, doesn't it?

0:07:410:07:44

Yes! Why did you want to buy it?

0:07:440:07:46

Simply the sheer size of the property

0:07:460:07:48

made it an attractive option.

0:07:480:07:50

OK, so what are you going to do with it, then?

0:07:500:07:52

-Well, the intention is to put it into about ten flats.

-Ten flats?

0:07:520:07:56

See if we can get 8-10 flats, yeah.

0:07:560:07:58

-What, individual, self-contained flats?

-Yes.

0:07:580:08:00

Upstairs is virtually divided into flats,

0:08:000:08:03

it's just sorting out the downstairs.

0:08:030:08:05

If David and Neil's plan to convert this building into flats goes ahead,

0:08:050:08:09

they would either sell the entire redevelopment to an investor or

0:08:090:08:13

sell some of the flats individually and keep some to rent out.

0:08:130:08:18

But, whatever route they choose,

0:08:190:08:21

it's all dependent on planning permission being granted.

0:08:210:08:25

We spoke to the planning department before we bought the building,

0:08:250:08:28

they gave us an indication of what they would want.

0:08:280:08:31

In theory, it works, so we've obviously got to put the formal

0:08:320:08:36

application in and just check that there's no hidden problems.

0:08:360:08:39

-But in theory it works?

-Yeah, yeah.

0:08:390:08:42

What kind of cost do you think there would be involved

0:08:420:08:44

in creating ten flats?

0:08:440:08:46

I think we're looking at roughly around 200,000.

0:08:460:08:50

£200,000 spent along with their £142,000 purchase price

0:08:500:08:55

will commit them to a spend of £342,000.

0:08:550:09:00

But with the local property expert valuing one-bed flats

0:09:000:09:03

around £50,000, ten of those could bring in a cool

0:09:030:09:07

half a million quid and that would see a rather nice profit.

0:09:070:09:11

And David is hoping planning permission not withstanding,

0:09:110:09:14

his team of builders could turn this around in just four months.

0:09:140:09:19

I mean, congratulations and really excited to see how it all turns out.

0:09:190:09:24

-Thank you very much.

-Good to see you again.

-Cheers.

0:09:240:09:26

Neil and Dave seem to have found themselves a real gold mine here

0:09:270:09:32

and if they get that planning permission for ten flats,

0:09:320:09:35

lots of money to be made.

0:09:350:09:37

Will they? Or won't they?

0:09:380:09:40

You can find out, later in the show.

0:09:400:09:43

Never mind potential gold mines in Stoke, I've gone to a location

0:09:460:09:51

where I'm hoping I might find a real gem.

0:09:510:09:54

I'm in Whitstable, on the beautiful Kent coast.

0:09:540:09:57

It's a much sought-after area with good transport links

0:09:570:10:00

to the capital, making properties very much in demand.

0:10:000:10:04

Also in demand is Whitstable's most famous seafood,

0:10:040:10:08

which it's been exporting since Roman times.

0:10:080:10:12

# You're not the only oyster in the sea

0:10:120:10:15

# Not the only tea leaf in the tea... #

0:10:160:10:20

Five minutes is all it takes to walk from the beach to the property.

0:10:210:10:26

So you can hide from the tourists,

0:10:260:10:28

but a blast of the sea air, well, it's literally a stone's throw away,

0:10:280:10:32

which is perfect. And the outlook is pretty good, too.

0:10:320:10:35

You've got this extremely pleasant green, right here,

0:10:350:10:39

and while it might not be sea views from the windows,

0:10:390:10:41

your view is fantastic.

0:10:410:10:42

Now, the house itself is this.

0:10:420:10:44

It's a two-bedroom terrace. It had a guide price of 110-115,000.

0:10:440:10:50

I am going to check it out.

0:10:500:10:51

When you walk in, the first thing that you realise

0:10:540:10:57

is it's incredibly small. It's got a cottage-like feeling to it.

0:10:570:11:01

But what I love is the fact that there is a

0:11:010:11:03

certain amount of charm and character,

0:11:030:11:05

a really nice sitting room through there, you've got picture rails,

0:11:050:11:09

really wide floorboards. I mean, look at these lovely doors

0:11:090:11:13

with the handles.

0:11:130:11:14

Another reception room through here... Oh, VERY small kitchen.

0:11:140:11:19

Look how disappointing this is.

0:11:190:11:21

So, it's dinky, it's delightful...

0:11:210:11:24

I've just got a feeling that it's out here that it goes horribly wrong!

0:11:240:11:28

Yes, gets interesting, doesn't it?

0:11:310:11:34

Bit of a lean-to situation, and, as I thought, that's the bathroom.

0:11:340:11:39

I mean, really, are you going to have a bath in there?

0:11:390:11:42

I don't think so.

0:11:420:11:44

And typically, as you would expect in a property like this,

0:11:440:11:49

the outside loo. Just close that door.

0:11:490:11:52

It's not really working.

0:11:520:11:53

But, once you're outside,

0:11:530:11:55

you can see it's such a pretty little garden.

0:11:550:11:58

I mean, this really is fantastic.

0:11:580:12:00

You've got loads of space there, so I'm thinking,

0:12:000:12:03

judging by what they've done next door, because, there you go,

0:12:030:12:06

the neighbour's wall comes right the way out to here,

0:12:060:12:10

you could have a nice, big extension.

0:12:100:12:13

You could go right the way up, get an extra bedroom,

0:12:130:12:15

a bathroom upstairs. That really, really would

0:12:150:12:18

make this little property so much more worthwhile.

0:12:180:12:22

But what you've got to really think about is do the figures stack up?

0:12:220:12:26

An extension like this could create approximately

0:12:270:12:30

half as much floor space as the original house.

0:12:300:12:33

Apart from the cash, you wouldn't be sacrificing much.

0:12:330:12:36

There would still be loads of garden,

0:12:360:12:38

you wouldn't have to cut quite as much grass

0:12:380:12:41

and a first floor bathroom would really add value.

0:12:410:12:44

So let's see what the top floor has in store as it stands.

0:12:440:12:48

Well, in the catalogue, it says there are two bedrooms up here...

0:12:510:12:54

Yes, one...two? More like a half-size!

0:12:540:12:59

I mean, this is incredibly small.

0:12:590:13:02

Can you even fit a single bed along?

0:13:020:13:05

Although you do have a lovely little view of the green through that window,

0:13:050:13:09

but that's if you can clamber over your bed

0:13:090:13:11

and move the bits and pieces in-between.

0:13:110:13:13

I'm being positive.

0:13:130:13:15

Look, I'm not saying this couldn't be a nice space,

0:13:160:13:19

or a kind of nice not-much-space.

0:13:190:13:21

Bedroom number two, next door, is a much better size, but not so big

0:13:210:13:26

that you could steal a bit of space from here to give to next door.

0:13:260:13:30

You could look to open up the eaves in here

0:13:300:13:32

and maybe think of installing a dormer at the back

0:13:320:13:34

if you didn't want to do the full extension, that is.

0:13:340:13:38

This house is challenging.

0:13:380:13:40

The kitchen's tiny, but not as small as that bedroom.

0:13:400:13:43

And the bathroom and toilet are basically out in the lean-to conservatory.

0:13:430:13:48

But it's also cute and quirky,

0:13:480:13:50

but will cuteness cut it at a guide price of 110-115,000?

0:13:500:13:56

We asked along the local estate agent for her opinion.

0:13:560:13:59

First impressions of the property are it's a lovely place

0:14:030:14:05

in a brilliant location.

0:14:050:14:07

Definitely a project.

0:14:070:14:09

But keeping the original features would definitely kind of give it

0:14:090:14:13

the appeal, should the buyer want to sell it on.

0:14:130:14:15

I don't think it'd be worth extending the property

0:14:150:14:18

because I don't think you'd gain that much money on top of it,

0:14:180:14:21

but again, maybe putting in roof lights to make it seem more

0:14:210:14:25

light and airy, just giving the appearance of more space.

0:14:250:14:28

The agent doesn't think an extension would be worthwhile,

0:14:280:14:32

so what could this cottage be worth without one?

0:14:320:14:35

If the property was done up to a very, very good standard,

0:14:350:14:38

you'd be looking at possibly around about the £225,000 mark.

0:14:380:14:42

A property like this could achieve

0:14:420:14:45

£750-£800 per calendar month for rent.

0:14:450:14:49

I think Whitstable is wonderful, full of charm and character,

0:14:490:14:53

with a lovely coastline.

0:14:530:14:54

It really is a perfect place to while away a weekend

0:14:540:14:57

and to own property here would be something special.

0:14:570:15:00

Let's see who thought the same about this house at the auction.

0:15:000:15:04

Lot 150.

0:15:040:15:06

We've got a guide of 110-115 and what may I say?

0:15:060:15:11

Start me at 110?

0:15:110:15:12

110. And 112? 112.

0:15:130:15:16

115? 115. 117?

0:15:160:15:19

117 in a fresh place.

0:15:190:15:20

Cracking start, with bids coming in from all over the room.

0:15:200:15:24

Hardly surprising, as the average price for a two-bedroom property

0:15:240:15:28

in Whitstable is £190,000.

0:15:280:15:31

We rejoin the bidding at £145,000.

0:15:310:15:34

145. And 147?

0:15:340:15:37

146, if it helps.

0:15:370:15:39

That's a definite no, isn't it?

0:15:400:15:42

£145,000, lady's bid on my right-hand side.

0:15:420:15:46

At £145,000 I have.

0:15:460:15:49

146, can I tempt you again?

0:15:490:15:52

146. And 147?

0:15:520:15:55

That's a definite no, as well.

0:15:550:15:57

At 146,000, then, for the first time,

0:15:570:16:00

146,000 for the second time,

0:16:000:16:04

146,000, third and final time, £146,000, all done?

0:16:040:16:10

Sold at 146,000.

0:16:100:16:12

Well done and your bidder's number?

0:16:120:16:14

See, that extra 1,000 made all the difference.

0:16:140:16:17

Indeed, it did make all the difference.

0:16:170:16:19

That extra grand has made Zira a very happy woman.

0:16:190:16:23

She's a stylist and vintage shop owner, originally from Brazil,

0:16:230:16:27

who's lived in the UK for 19 years.

0:16:270:16:30

She and dog Indie already know these doggy walks well as they live

0:16:300:16:34

very nearby in a little cottage.

0:16:340:16:36

I caught up with her at her newly acquired vintage home-to-be.

0:16:360:16:40

Zira, it's lovely meeting you today.

0:16:400:16:42

Are you happy with your purchase and why did you want to move here?

0:16:420:16:45

I needed to downsize a bit

0:16:450:16:47

and release some cash from my property and so this being perfect.

0:16:470:16:52

-So, you're downsizing from that house to buy this house?

-Exactly.

0:16:520:16:55

So, how did that work out financially?

0:16:550:16:57

Because you've got to have the money ready

0:16:570:16:59

when you buy at auction and I know you still currently own that house.

0:16:590:17:02

I know. Well, my house is... I actually have a very,

0:17:020:17:05

very special best friend who lent me the money...

0:17:050:17:08

SHE MOUTHS

0:17:080:17:09

..to go into the auction and buy this house.

0:17:090:17:12

-So you bought this house cash?

-I bought this... Yes, with her cash.

0:17:120:17:14

-With her cash?

-Yes.

0:17:140:17:16

There we go, a big box of chocolates and a bunch of flowers.

0:17:160:17:19

Absolutely, absolutely. I owe her big time.

0:17:190:17:22

# Thank you for being a friend. #

0:17:220:17:25

Zira has a good friend, that's for sure.

0:17:260:17:28

This has helped over the period

0:17:280:17:30

when her own Victorian house is in the process of being sold

0:17:300:17:33

and this house is going to be ideal for her and her son Max.

0:17:330:17:37

Her aim was to downsize and this does appear to fit the bill.

0:17:370:17:41

Well, first of all, the size I was looking for, two bedrooms,

0:17:420:17:45

with a garden and, of course, with this price,

0:17:450:17:48

all I could get was a flat on a high street.

0:17:480:17:51

-And having the green right in front of the house.

-You're right.

0:17:510:17:55

I mean, for the price of a flat,

0:17:550:17:57

you've got yourself a whole house here.

0:17:570:17:59

The only thing is it's a little bit small.

0:17:590:18:02

Where's your son going to sleep?

0:18:020:18:04

Well...

0:18:040:18:06

The small second bedroom, I think I can fit a bed in there.

0:18:060:18:12

How does he feel about it?

0:18:120:18:14

He's OK because I promised the front room,

0:18:140:18:17

it's going to be a den, TV/games room.

0:18:170:18:20

What are the immediate renovations you're going to be doing?

0:18:200:18:23

The bathroom upstairs.

0:18:230:18:24

So, there's 1.5 metres of the eaves,

0:18:240:18:27

I think I can fit a bathroom there.

0:18:270:18:29

Zira has had plans drawn up for this conversion

0:18:310:18:33

and hopes she can install the bathroom,

0:18:330:18:36

and do all the other refurbishment work on a budget of £25,000.

0:18:360:18:41

# What do you do in the bath? #

0:18:410:18:43

So, when do you hope to move in?

0:18:450:18:48

-In about two weeks.

-Really?!

-Yes.

-Wow.

0:18:480:18:51

I don't want to spend the money on a rental

0:18:510:18:53

when I need the money to put into the house.

0:18:530:18:56

-Are you excited to renovate...?

-I can't wait. I can't wait. I like...

0:18:560:19:01

Part of me enjoy being in a building site.

0:19:010:19:03

-I can't wait to see that bathroom upstairs.

-Yes, so do I!

0:19:030:19:06

-Happy cosy living.

-Thank you very much. Thank you.

0:19:060:19:10

Oh, Zira has a really good buy here in a fabulous location,

0:19:100:19:15

but she's going to have to put all that creativity to work

0:19:150:19:19

to make this cosy home practical.

0:19:190:19:22

I'm sure she'll do it, though.

0:19:220:19:23

You can find out if I'm right later on in the show.

0:19:230:19:26

Coming up, in South Wales, this is a hard house to work out.

0:19:280:19:33

HE EXHALES LOUDLY

0:19:350:19:36

We return to Whitstable, on the Kent coast,

0:19:380:19:40

to find out what's upsetting Zira's plans.

0:19:400:19:43

Oh.

0:19:430:19:45

No, don't like it.

0:19:450:19:47

But first it's back to Stoke on Trent.

0:19:510:19:54

And now, six months later, we're back to see how they got on.

0:19:540:19:58

Well, externally, the property seems to have gained a few more doors -

0:19:590:20:04

that's an encouraging sign. But, more importantly, what's inside?

0:20:040:20:08

Ah! This rather smart one-bed flat with open-plan kitchen-diner...

0:20:100:20:14

..shower room behind...

0:20:160:20:17

..and a single bedroom at the rear.

0:20:180:20:21

But what about the rest of the building?

0:20:240:20:26

Ah. Not quite as finished.

0:20:290:20:32

What will all these rooms be once completed?

0:20:350:20:38

We've looked at producing eight flats now.

0:20:400:20:43

Originally, we'd hoped to get nine or ten.

0:20:430:20:45

Reduced slightly but it means each one's slightly larger than they had

0:20:450:20:49

originally planned and we think that's going to make them more attractive.

0:20:490:20:52

And the eight one-bed flats will be made up of four flats

0:20:520:20:56

on the ground floor and four flats on the first floor.

0:20:560:20:59

So, presently, what stage are the flats at?

0:21:010:21:04

Basically, there's one flat which is completely finished.

0:21:050:21:07

We've then got two flats which are ready for decoration,

0:21:070:21:11

we've got one more flat which is ready for second fix joinery

0:21:110:21:15

and then we've got three more flats which are ready

0:21:150:21:18

for partition work going up, stud work going up -

0:21:180:21:21

that's going to be completed in the next three or four weeks.

0:21:210:21:24

David has had two teams working on the building -

0:21:250:21:28

one on the first floor and one on the ground floor.

0:21:280:21:31

And, then, a team was going round doing all the second fix work.

0:21:310:21:35

So, have there been any major problems?

0:21:350:21:38

The biggest job was we've had a new gable wall built at the far

0:21:380:21:41

end of the building cos the old one was falling down.

0:21:410:21:44

A new staircase had to go in and floors had to be aligned to that.

0:21:440:21:47

There's just been a lot of the same sort of work, that's all.

0:21:470:21:50

Well, it seems, gable end notwithstanding,

0:21:500:21:53

this project is working out well for the duo.

0:21:530:21:55

But have they now decided what to do with the flats once they're completed?

0:21:550:22:00

We're now at the point where we're prepared to sell all eight flats.

0:22:000:22:04

Very similar to where we were,

0:22:040:22:05

we're quite happy to hang on to two or three of them, as well,

0:22:050:22:08

cos they're going to provide a good steady rental income.

0:22:080:22:11

At the moment, we have three flats under offer,

0:22:110:22:15

so five are still available to either be retained by us or to be sold on.

0:22:150:22:20

With three under offer, it certainly indicates that the decision

0:22:200:22:23

to convert the building into flats was the right one.

0:22:230:22:26

But they are creating two less flats than they hoped for,

0:22:260:22:29

so will the figures still add up?

0:22:290:22:31

The budget, originally, was 200,000.

0:22:320:22:36

We are currently on around about 180,000,

0:22:360:22:39

but that includes fees such as architects' fees.

0:22:390:22:42

We had to spend slightly more on the gable wall,

0:22:420:22:45

although we had allowed for that within the original budget.

0:22:450:22:48

So, currently, it looks like we're going to complete

0:22:480:22:52

the project on about £180,000.

0:22:520:22:54

Provided they stick to their £180,000 budget, then,

0:22:550:23:00

on top of their £142,000 purchase price,

0:23:000:23:03

their grand total to create eight flats will be £322,000.

0:23:030:23:08

What do two local property experts make of the development so far?

0:23:090:23:14

I would anticipate a rental value in the region of £400

0:23:150:23:18

per calendar month per flat.

0:23:180:23:20

As an average rental for the apartments, I'd expect them

0:23:200:23:23

to achieve in the region of £375 per calendar month.

0:23:230:23:26

Even the lower £375 per calendar month would potentially

0:23:270:23:31

bring in an annual rental yield of 11% for the whole building.

0:23:310:23:35

But what about resale values for the flats?

0:23:350:23:38

Will Neil and David see much return from what will be

0:23:380:23:41

a £322,000 investment?

0:23:410:23:43

I would anticipate a resale value for the flats

0:23:460:23:49

individually at around £50,000.

0:23:490:23:52

As an average guide price, for each independent flat,

0:23:520:23:55

I would suggest that they would sell

0:23:550:23:57

at around £50,000 as an average price.

0:23:570:23:59

It's in line with what we'd expected.

0:23:590:24:01

An average figure is fine.

0:24:010:24:03

In reality, we'd expect the larger top-floor flats will probably

0:24:030:24:08

sell for a little bit more

0:24:080:24:09

and the two smaller flats will probably sell for a little bit less.

0:24:090:24:12

An average price of 50,000 would see a total return

0:24:140:24:17

of £400,000 for the eight flats,

0:24:170:24:20

which would, potentially, see a pre-tax profit of £78,000.

0:24:200:24:24

That's not bad.

0:24:240:24:26

So, with this looking like a successful venture,

0:24:260:24:29

are they planning more development projects together?

0:24:290:24:32

Yes, gradually, over the last two or three years, we've done

0:24:340:24:38

slightly larger projects each time, so we're comfortable with this.

0:24:380:24:41

It seems to have worked well, so, yes, we are looking

0:24:410:24:44

for other similar-sized projects now.

0:24:440:24:46

If you've never been here before then, the first time you visit

0:24:500:24:55

the valleys of south Wales, you might be in for a bit of a surprise.

0:24:550:24:59

They really are spectacular.

0:25:000:25:02

This area has been moulded over millions of years by volcanoes,

0:25:040:25:09

rivers, glaciers and even tropical climates,

0:25:090:25:13

all of which have created the natural beauty

0:25:130:25:15

of these deep channels running through the mountains.

0:25:150:25:18

The coal that was also created led to the build-up of villages,

0:25:180:25:22

which have nestled themselves in the stunning backdrop.

0:25:220:25:25

# Into the valley... #

0:25:260:25:30

The town of Penrhiwceiber is no exception,

0:25:300:25:33

but I can't spend all day admiring the view.

0:25:330:25:35

I had better get on with the property I'm here to see.

0:25:350:25:38

So, what was up for grabs at the auction?

0:25:390:25:42

Well, a two-bedroomed mid-terrace at a guide price of £23,000 plus.

0:25:420:25:49

It's one of these very attractive properties. What's it like inside?

0:25:490:25:52

Only one way to find out.

0:25:520:25:54

So, what have we got? Whew!

0:25:560:25:58

Woodchip wallpaper for a start.

0:25:590:26:01

Can't resist it.

0:26:030:26:04

Bit of stripping while I'm here, so to speak.

0:26:070:26:09

Entrance hall there, though,

0:26:090:26:10

through into what is your fairly standard layout, isn't it?

0:26:100:26:14

A front sitting room, nice big window, so lots of light.

0:26:140:26:19

Stairs down and stairs up.

0:26:190:26:22

Got to be explored.

0:26:230:26:25

First stop on the tour,

0:26:320:26:34

the bathroom on the same floor as the living room.

0:26:340:26:37

Now, ordinarily, I would be saying, "Ground-floor bathroom?!

0:26:370:26:40

"Let's try and move it upstairs."

0:26:400:26:42

But, with the house split over three floors, it's best left where it is.

0:26:420:26:46

But, on the bright side,

0:26:460:26:48

you're only ever one flight of stairs from the loo.

0:26:480:26:50

Well, typical of many properties around here, the kitchen

0:26:550:26:59

is actually situated down here on the lower floor.

0:26:590:27:03

It's not a bad-sized space.

0:27:030:27:05

I mean, it's a kitchen sort of dining room, so that's good.

0:27:050:27:08

Couple of things which I see straight away, though,

0:27:080:27:11

which do cause a bit of concern. Number one, very old radiator

0:27:110:27:15

and my guess is, maybe, central heating system needs updating.

0:27:150:27:18

Number two, really bad case of damp.

0:27:180:27:22

Hm, that's the neighbouring property - intriguing.

0:27:220:27:25

Where's that coming from? Whatever, it needs to be sorted.

0:27:250:27:28

Other than that, and the woodchip wallpaper,

0:27:290:27:32

the property is in generally good condition.

0:27:320:27:35

It's the paperwork that may cause a bit of a headache.

0:27:350:27:38

The property had, until last year, a 99-year lease.

0:27:400:27:45

That has now expired.

0:27:450:27:47

Hm? Interesting scenario. What does that mean?

0:27:470:27:50

Well, it's good, on the one hand, that it will probably end up

0:27:500:27:54

reverting to being a freehold property.

0:27:540:27:56

It's bad, on the other,

0:27:560:27:58

because you're going to have to put a lot of time and

0:27:580:28:00

effort, or at least your solicitor is, into sorting out those issues,

0:28:000:28:05

which, of course, means money.

0:28:050:28:08

But, given that you'll always read the legal pack,

0:28:080:28:11

at least you knew about it beforehand.

0:28:110:28:13

So, at the back of the property, well,

0:28:180:28:21

before I get to the garden, how about this?

0:28:210:28:24

This exterior, it may look like just normal pebble dash,

0:28:240:28:26

but if you...hit it it sounds a bit hollow.

0:28:260:28:30

I reckon what this is is wall insulation.

0:28:300:28:33

There's a bit of a government directive to provide this

0:28:330:28:36

kind of thing cos it makes a house a lot more energy efficient.

0:28:360:28:40

It also creates quite a watertight exterior. So, that's good,

0:28:400:28:44

it's been done, another thing to tick off the renovation list.

0:28:440:28:48

But back to the garden and not a bad size.

0:28:480:28:51

But it feels a lot bigger cos look at that view! Fantastic.

0:28:510:28:55

And, apart from the great views, this is an ex-council property

0:28:580:29:02

that not only has wall insulation but also these water heating panels,

0:29:020:29:07

which are included in the price of the property,

0:29:070:29:09

making them a very desirable addition to the whole package.

0:29:090:29:12

Now, I've been putting this off, but I still need to see the bedrooms.

0:29:150:29:20

# But I would walk 500 miles

0:29:230:29:26

# And I would walk 500 more

0:29:260:29:30

# Just to be the man who walked 1,000 miles

0:29:300:29:35

# To fall down at your door

0:29:350:29:37

-# Dada-da-da-da

-Dada-da-da-da

0:29:370:29:39

-# Dada-da-da-da

-Dada-da-da-da... #

0:29:390:29:42

HE EXHALES LOUDLY

0:29:430:29:44

Well, I don't know about 500 miles, feels like 500 steps.

0:29:450:29:50

But when you get up here, what do you find?

0:29:500:29:52

Well, actually, two decent-sized bedrooms.

0:29:520:29:55

That one there, fantastic views over the hills.

0:29:550:29:57

The front one here, well, ha, look at it.

0:29:570:30:02

Much bigger than you expect

0:30:020:30:04

from the size of the property on the outside.

0:30:040:30:06

So...

0:30:060:30:07

it just tops off what is already

0:30:070:30:09

a pretty respectable little property.

0:30:090:30:11

While I get my breath back,

0:30:140:30:16

let's find out what potential

0:30:160:30:18

a local property expert sees in this three-storey,

0:30:180:30:21

two-bed terraced house.

0:30:210:30:22

The property is a split-level property,

0:30:240:30:27

so obviously two flights of stairs may limit the market slightly

0:30:270:30:31

with the younger families with young children

0:30:310:30:33

and also the problems with, perhaps,

0:30:330:30:36

anybody with mobility issues might limit that market a little bit.

0:30:360:30:38

But, generally, a good-sized property here,

0:30:380:30:41

so will open a few doors.

0:30:410:30:43

So what's the potential value once property is done up?

0:30:440:30:47

The potential resale value of this property

0:30:490:30:52

would be in the region of £50,000.

0:30:520:30:54

As a rental property, it could achieve £350 per calendar month.

0:30:540:30:59

So...a pretty nice little house

0:31:010:31:03

that just needs a bit of tender loving care and modernisation.

0:31:030:31:07

Who fancied it when it went under the hammer?

0:31:070:31:10

Lot number 14 is guided at 23,000,

0:31:110:31:13

start me, will you, at 20,000?

0:31:130:31:15

20 I've got, thank you. At 20. One - can I see?

0:31:150:31:18

21, 22, 23...

0:31:180:31:20

24, 25, 26, 27,

0:31:200:31:23

28, 29, 30.

0:31:230:31:25

31...31?

0:31:250:31:27

No. At 30,000, then, standing.

0:31:270:31:30

At 30, then, for the first time...

0:31:300:31:32

second time,

0:31:320:31:33

third and last time at 30...

0:31:330:31:35

31? 30 and a half, then, if you like.

0:31:350:31:37

30 and a half... 31? No.

0:31:370:31:39

That half was just enough to do it.

0:31:390:31:41

At 30 and a half, then.

0:31:410:31:43

Seated for the first time,

0:31:430:31:44

second time,

0:31:440:31:46

third and last time. 30,500.

0:31:460:31:47

Yours, madam. Your number, please?

0:31:490:31:51

That extra £500 was enough to seal the deal

0:31:510:31:54

at £30,500 for Cardiff couple Ray and Paul.

0:31:540:32:00

Having recently left the Army,

0:32:000:32:01

Paul has started up property maintenance business.

0:32:010:32:05

However, it wasn't just the price that had attracted them to the area.

0:32:050:32:08

# Zipping up my boots...

0:32:080:32:11

# Going back to my roots, yeah... #

0:32:130:32:16

Ray, Paul, good to meet you both.

0:32:160:32:17

-Hi.

-Congratulations.

0:32:170:32:20

So what was it about this particular place that appealed?

0:32:200:32:23

It's on a commuter route to Cardiff,

0:32:230:32:26

it's an area that's being regenerated

0:32:260:32:30

and within our price budget.

0:32:300:32:32

Also Paul has family connections to the area -

0:32:320:32:36

that his family grew up here.

0:32:360:32:37

His grandfather was born just a few streets away.

0:32:370:32:40

Oh, wow.

0:32:400:32:41

So, yes, I suppose you've come back home, really.

0:32:410:32:45

Paul has come back to his roots for the couple's first project.

0:32:480:32:52

And apart from being familiar territory,

0:32:520:32:54

this is an ideal starter project.

0:32:540:32:56

So tell me what you're going to do to sort this place out.

0:32:570:33:01

New kitchen and a new bathroom put in.

0:33:010:33:06

The rest of it is just some redecoration,

0:33:060:33:08

new woodwork and just freshen it up, really.

0:33:080:33:11

-Central heating? Improvements?

-Yep.

0:33:110:33:13

We've still got the back boiler here,

0:33:130:33:15

so we intend to put in a new combi boiler in.

0:33:150:33:17

-Right.

-So that should take the majority of our budget.

0:33:170:33:19

Who's going to do the work?

0:33:190:33:21

-That'll be me.

-Will it?

0:33:210:33:23

HE CHUCKLES

0:33:230:33:24

So what is the budget?

0:33:240:33:25

Budgeting for about £5,000,

0:33:250:33:28

but we are hoping to apply for a home improvements loan,

0:33:280:33:33

which is being funded by the Welsh Assembly,

0:33:330:33:36

so they're trying to help people to regenerate the area, as well,

0:33:360:33:39

-and get the empty homes back into use.

-Brilliant.

0:33:390:33:42

-Sounds like a good thing.

-Yes.

0:33:420:33:43

-And that's a cheaper rate loan or at least a loan.

-Interest free.

0:33:430:33:47

So what about timescale?

0:33:470:33:49

-We're hoping three-to-four months.

-Yes.

0:33:490:33:52

-It's all going to be on your back?

-Oh, yes.

-Can you do it in that time?

0:33:520:33:56

-Well...

-I don't see why I can't.

0:33:560:33:58

With a bit of help. We've got fantastic parents

0:33:580:34:01

and hopefully they can help with some childcare,

0:34:010:34:03

which will help me to come up and give him a hand, really.

0:34:030:34:07

Well, listen, congratulations. Good luck with it.

0:34:070:34:09

-Thank you very much.

-Cheers.

-Look forward to seeing how you get on.

0:34:090:34:14

So... Ray and Paul choosing a place with family ties

0:34:140:34:17

for their first property investment venture.

0:34:170:34:20

How will they get along with that budget and that timescale?

0:34:200:34:25

You can find out later in the show.

0:34:250:34:27

Tucked away on the Kent coastline

0:34:320:34:34

is the pretty fishing town of Whitstable

0:34:340:34:37

and it's here that we cast our property nets

0:34:370:34:39

and came up with a two-bed new-style cottage

0:34:390:34:42

overlooking a pleasant green.

0:34:420:34:45

It was brought for £146,000 by Brazilian-born Zira

0:34:450:34:49

as a new home for her and her 12-year-old son Max...

0:34:490:34:52

Not forgetting the dog, Indie, of course.

0:34:520:34:55

She was keen not to incur additional rental costs

0:34:570:35:00

and thought moving into her new home was the most cost-effective option.

0:35:000:35:05

But renovation while living in a house is never easy.

0:35:050:35:08

And now, 15 months after our last visit,

0:35:080:35:11

we're back to check on progress.

0:35:110:35:13

Ah, a summerhouse has appeared in a rejuvenated garden space

0:35:150:35:19

that should give them a bit more room!

0:35:190:35:21

But what about inside?

0:35:210:35:23

Oh, well, they've clearly moved in!

0:35:280:35:30

And in the front room, the chimney breast has been removed

0:35:300:35:33

to give a few more precious inches.

0:35:330:35:36

But it was upstairs where the main work was initially planned.

0:35:360:35:40

So what's it looking like?

0:35:400:35:41

Will the master bedroom...?

0:35:440:35:47

Well, it's got a bed in it.

0:35:470:35:49

And the really small bedroom that was for 12-year-old Max...?

0:35:490:35:53

Oh, well. That's looking a whole lot better.

0:35:530:35:56

Zira has made some progress up here,

0:35:570:36:00

but the main task was to make room for a bathroom under the eaves.

0:36:000:36:04

So what happened to that?

0:36:040:36:06

I had to put an application through the council

0:36:070:36:09

and about nine months after I bought the house...

0:36:090:36:13

Eight weeks later the council refused,

0:36:130:36:15

so you have to reapply with very little change

0:36:150:36:19

and then it takes another eight weeks for them to approve,

0:36:190:36:22

so that just happened a few weeks ago.

0:36:220:36:25

Well, finally then, Zira has got the green light

0:36:250:36:28

to go ahead with an upstairs bathroom.

0:36:280:36:30

But what's it been like living in a house that you're still working on?

0:36:300:36:35

I think the major problem is the bathroom's not very nice,

0:36:350:36:39

so we had to spend a lot of time at friends' houses.

0:36:390:36:43

We go for visits and stay for a shower!

0:36:430:36:45

SHE CHUCKLES

0:36:450:36:47

And the kitchen, as well. We can't really bake anything.

0:36:470:36:50

It's to be a dish with... A two-plate dish!

0:36:500:36:52

Well, I don't envy Zira

0:36:540:36:55

that she's still got most of the major work ahead of her!

0:36:550:36:59

I'm going to knock down the small kitchen with the dining room

0:36:590:37:02

and make it into a bigger kitchen-diner room.

0:37:020:37:06

I can probably stay with friends for a few days

0:37:060:37:09

and so in one go, otherwise it's very hard for us to cope.

0:37:090:37:13

She's also hoping that once the bathroom and kitchen are finished

0:37:130:37:16

to put a conservatory on the back of the house,

0:37:160:37:18

replacing that rather sorry lean-to.

0:37:180:37:21

But all her plans are dependent on money

0:37:210:37:24

and the key to her finances was selling her old house in Whitstable.

0:37:240:37:27

I put my house on the market immediately,

0:37:290:37:31

sold in about a few weeks and then

0:37:310:37:36

took about a month and a half

0:37:360:37:38

to put...the money to go through,

0:37:380:37:41

so that's when I paid my friend.

0:37:410:37:43

So with one debt repaid,

0:37:450:37:46

how much is she looking to spend on the cottage to get it how she wants?

0:37:460:37:50

My original budget was 25,000.

0:37:510:37:53

I think... Of course, I haven't finished the house yet,

0:37:530:37:56

so hopefully I will stick to it,

0:37:560:38:00

give or take a few thousand.

0:38:000:38:01

A £25,000 budget, on top of her £146,000 purchase price,

0:38:030:38:08

will take Zira's spend to 171,000.

0:38:080:38:12

So, will all the dust and disruption be worth it in the end?

0:38:120:38:16

What do two local estate agents think?

0:38:160:38:18

At the moment, it doesn't really provide

0:38:180:38:22

what people will want from a modern house

0:38:220:38:24

and the bathroom's very small.

0:38:240:38:26

The kitchen's very small.

0:38:260:38:28

But, certainly, there are things you could do to overcome that.

0:38:280:38:30

Garden's very nice.

0:38:300:38:32

Position's good, looking across the green,

0:38:320:38:35

and the cottage-style is very popular in Whitstable,

0:38:350:38:38

so it has got potential there.

0:38:380:38:39

Obviously, the cottage is far from finished

0:38:400:38:42

and, in particular, there is the upstairs bathroom to install

0:38:420:38:45

and improvements to the kitchen.

0:38:450:38:48

But what might the value of the house be once she's done

0:38:480:38:51

her £25,000 worth of work?

0:38:510:38:54

I think the property could achieve somewhere in the region of £225,000.

0:38:540:38:59

If it was renovated, allowing for the slight alteration upstairs

0:38:590:39:03

with the bathroom, then I suggest a figure of £220-£225,000.

0:39:030:39:08

So, potentially a pre-tax profit of between 49 and 54,000,

0:39:080:39:13

minus the usual taxes and expenses.

0:39:130:39:16

But what does Zira think about the valuation figures?

0:39:160:39:19

Oh.

0:39:200:39:22

No, I don't like it.

0:39:220:39:23

I would think, if it was completely done, I probably would get more.

0:39:230:39:27

Yes, well, it's difficult, really,

0:39:270:39:29

to judge the true value of the cottage at this stage

0:39:290:39:32

and, anyway, Zira isn't looking to sell any time soon.

0:39:320:39:35

But, despite the upheaval,

0:39:350:39:37

would she be tempted to tackle any more property projects?

0:39:370:39:42

If I was by myself, I would do it again sooner,

0:39:420:39:45

but I have to wait for my son to go off to university,

0:39:450:39:47

then I can do it again!

0:39:470:39:49

Next up, we wave goodbye to Whitstable

0:39:530:39:56

and whizz to Wales.

0:39:560:39:58

Nestled in the valleys 20 miles north of Cardiff

0:39:580:40:00

is the town of Penrhiwceiber

0:40:000:40:02

and it was here that we came across

0:40:020:40:04

a two-bed, mid-terraced house with hidden depths.

0:40:040:40:08

And, now, seven months later,

0:40:080:40:10

we're back to see if it's fit for inspection.

0:40:100:40:12

OK, so, eyes front, all looking good there.

0:40:150:40:19

But let's go inside and work from the lower ground up, I think.

0:40:190:40:23

In the kitchen, we took the old dated units out.

0:40:280:40:31

We've put more modern units in,

0:40:310:40:35

put new flooring in and painted it.

0:40:350:40:37

And moving up the house to the ground floor?

0:40:390:40:42

In the living room, we took the wallpaper off and redecorated,

0:40:440:40:48

carpeted throughout with some new radiators as well.

0:40:480:40:51

And the bathroom on this floor has also been completely refurbished.

0:40:550:40:59

So, what about that final storey?

0:40:590:41:03

Going up to the top floor, it's completely repainted and,

0:41:030:41:06

plus, we've put new doors all around.

0:41:060:41:10

So, the place has been finished fantastically

0:41:100:41:12

from top to bottom, or it is that bottom to top? I'm not sure.

0:41:120:41:16

But, clearly there has been a lot of work.

0:41:160:41:19

There was a 99-year lease,

0:41:190:41:21

which had just literally expired on the property.

0:41:210:41:24

That automatically reverted to a freehold,

0:41:240:41:27

all to do with just control of the mining works below ground,

0:41:270:41:31

but since that's now exhausted and no longer works,

0:41:310:41:33

they were happy to release it, so it's now fully freehold.

0:41:330:41:37

Well, that's great.

0:41:380:41:39

And just by getting the freehold,

0:41:390:41:41

they should have added value to the house.

0:41:410:41:43

But, with Paul busy on other projects,

0:41:430:41:45

their hoped-for three-to-four-month timescale went out the window.

0:41:450:41:49

So, how's their budget looking?

0:41:490:41:51

Initially, we budgeted £5-7,500.

0:41:530:41:58

Due to the fact that Paul has done almost everything himself,

0:41:580:42:01

we've managed to save on a lot of costs and we've actually come

0:42:010:42:04

in at about £3,000 without totting up everything on a calculator.

0:42:040:42:09

A £3,000 spend is impressive

0:42:090:42:11

and added to their £30,500 purchase price,

0:42:110:42:14

their first development project so far has cost them £33,500.

0:42:140:42:20

And they've also decided to rent out the house, rather than sell it on.

0:42:200:42:24

So, is that the right decision?

0:42:240:42:26

What do two local estate agents think?

0:42:260:42:29

If it was to be put to the sales market,

0:42:290:42:31

to be competitive with other houses in the area,

0:42:310:42:33

I would advise an asking price of £45,000.

0:42:330:42:36

We'd put this property on the open market for £47,500

0:42:360:42:41

and we look to achieve £45,000.

0:42:410:42:44

Yeah, that's pretty much about the 45,000 mark for the area.

0:42:440:42:47

A valuation of £45,000

0:42:490:42:52

would give a potential pre-tax profit of £11,500.

0:42:520:42:57

But the resale market is slow in the local area,

0:42:570:43:01

so Ray and Paul have now decided the letting market

0:43:010:43:05

is more suited for the house.

0:43:050:43:07

I would advise a rental in the region of £350-£375 per calendar month.

0:43:070:43:12

If the property was placed on the rental books,

0:43:120:43:15

then we'd probably look in the region of £335 per calendar month.

0:43:150:43:19

335 is probably a little bit low,

0:43:190:43:23

but we're quite confident that we could get 375.

0:43:230:43:26

Even that lower £335 per calendar month rental figure

0:43:260:43:30

would produce a healthy rental yield in the region of 12%.

0:43:300:43:34

Not bad as a starting point.

0:43:340:43:37

For our first investment property,

0:43:380:43:42

I'd say it's been an eye-opener and a good learning curve.

0:43:420:43:46

Yeah. We'd have no hesitations to do it again.

0:43:460:43:48

It's worked out really well so far.

0:43:480:43:51

So, from Martin and me, that's it.

0:43:530:43:55

Yes, but join us next time for more stories from the auctions,

0:43:550:43:58

here on Homes Under The Hammer.

0:43:580:43:59

-Look forward to seeing you then.

-Goodbye.

-Goodbye.

0:43:590:44:02

Download Subtitles

SRT

ASS