Episode 32 Homes Under the Hammer

-Hello and welcome to the show.

-Buying property can have its highs

and its lows, especially if you get caught in a dreaded property chain.

But you can eliminate the chain altogether

by buying your next home under the hammer.

Well, there are all sorts of properties

being sold at the auctions these days.

And buyers have a huge variety of plans and budgets available.

So, what's got our buyers inspired on today's programme?

'In Bentilee, Stoke, it's the savings that get me going.'

I can't believe it went for what it did, actually.

Neither could I and that's why I bought it.

'But in Surrey, it's the possible profits that leave me stunned.'

If you want to make some cash,

you need to pummel this property to the ground.

'While in Wales, have you ever heard of a rock'n'roll kitchen?

'You have now.'

It's a Billy Idol kitchen.

Nice day for a white wedding.

All these properties have been sold at auction,

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

when they went under the hammer.

All done, sir, it's yours.

I'm in Bentilee, Stoke-on-Trent.

When it was built in the 1950s,

it was one of the largest estates in Europe.

The estate is now a mix of rented and private homes

and over the last decade or so,

there have been various initiatives to improve rented stock

and build new homes, including retirement homes,

as well as redeveloping facilities like the country park.

Well, with all those positive community initiatives

in recent times, you can understand why the residential suburb

of Bentilee is a really popular place to live

and the housing here is pretty affordable.

For instance, this looks fantastic.

It is a three-bed, substantially-built semi-detached,

guide price was £60,000 plus, close to the local amenities,

great looking, what more could you want?

And the house comes with a rather neat and tidy front garden.

So what do you get for that relatively low guide price -

the place is in a right old state?

You might be surprised.

Through the front door

into this little area here, that is a kind of odd layout.

I've never seen this before, because that, believe it or not,

is the way to the stairs up to the bedrooms,

but it maximises the space in the lounge and it's a good size.

We've obviously got central heating, double glazing.

That's going to save you a bit on the renovation.

Through into the kitchen -

now, it's not modern, and, yeah, you know,

it needs a bit of money spending on it,

but you've got a good size space here, lots of extra space

out that way with a downstairs loo and little sort of utility area.

It's an ex-local authority house, therefore it's solidly built

and the rooms are a really good size.

There's a lot of space to play with and I like that.

OK, so it needs redecorating,

but this house looks like it's been well looked after.

It just needs a fresh, modern make-over to give it the best

potential value in the present market.

So, upstairs, and three bedrooms, two good-sized doubles

and a sort of slightly smaller single.

The only issue, you've got a good-sized bathroom,

but that then leads on to the third bedroom, so that's really not ideal.

So a strange kind of layout,

which definitely could do with a bit of playing around with,

but one thing you cannot complain about is the amount of space

you've got here and with a bit of clever renovation,

a bit of playing around with the layout,

you'd end up with such a lovely, lovely family home.

A bedroom that can only be accessed from the one bathroom in the house

is not a good idea, but, other than that,

it's a very promising property and we're not finished yet.

I always get quite excited

when I come to the rear of the auction properties I look at,

cos you never know quite what you're going to find.

Will it be ramshackle, will it be a jungle, will it be garden,

will it be a mess?

In this case, what a pleasant surprise,

a really nice landscaped garden.

Now, it might not be to everyone's cup of tea

in terms of all these flagstones,

but certainly if you were looking at renting this place out,

it's ideal, cos it's low maintenance and actually,

somebody has obviously spent a lot of time and effort.

I'll tell you this, it's a really nice little space.

Plus the added bonus of a semi-detached garden shed

and all for a guide price

of £60,000.

We asked along a local property expert to see what

they thought of the house.

First impressions of the property is it's a good sized family home.

Downstairs has got plenty of rooms.

It's got an extra utility

and a rear porch which will be fantastic for a growing family.

The only downside to the property is it hasn't got any off-road parking.

But it all comes down to location and what prices can be

achieved here, so what potential does this property have?

When the property's been renovated,

we'd recommend an asking price of £85,000.

If you got it for anything like that £60,000 guide price

and did the work within a sensible budget,

there could be a good chunk of profit in this house.

What about as a rental investment?

I'd imagine we'd ask a rental price of £495 per calendar month.

Well, it just goes to show, doesn't it, that even in 2014,

if you search them out, there are still property bargains to be had?

It's a lovely house for not very much money and for that

£60,000 plus guide price, got to be a popular lot at the auction.

Let's see who bought it.

Lot number 56. 45 bid.

Thank you. At £45,000, can we see 46 now?

46, 47,

48, 49, 50, 51, 52,

£52,000. 53 anywhere else? 52... 53.

54? 54. 55?

At... 55, 56. No?

At £55,000, then.

Standing there at £55,000, for the first time,

£55,000 for the second time, third and final time at 55,000.

You've bought it, sir. Well done.

'And the lucky man to get this property for what

'I reckon is a bargain at 55,000 is mortgage adviser Irvine.

'This is his first property purchase at auction, but between him

'and his wife, they now own seven investment properties.

'Today, he's here with his friend Julie who will be helping

'with this property refurbishment.'

-Irvine, Julie, good to meet you both.

-Yes, good to see you, Martin.

-Nice to meet you too, Martin.

-Congratulations.

-Yeah, thank you.

-I can't believe it went for what it did, actually.

Neither could I and that's why I bought it.

Yeah, was it not on your radar until that point...

It was on about my D or E list and the price just...

Well, they said they had to get rid of it.

I'd looked at the packs and I'd put a few mortgages on houses around here,

so I knew these were well built, so I thought, "Let's go for it."

So somebody else had had a survey done on them.

Oh, yeah, I've seen several surveys from around here.

They're all built pretty much the same,

so I didn't really actually need to see them.

'It's handy that Irvine's job as a mortgage broker has already

'made him well versed in these properties,

'though, of course, individual houses can have their own issues,

'so we'd still recommend always taking a look first.

'Looks like he's been lucky with this one, though.'

So, Julie, what's your involvement in all this?

Well, basically, Irvine... I'm sort of the other end of the line

when he needs to do things. Like,

"Julie, how do you do wood flooring?

"Julie, how do you do plumbing? How do you do this? How'd you do that?"

-And I'm like...

-Oh, right.

Basically, what he's asked me to do is come in and have a look at it,

so really my involvement is to get the guys in

and change over the kitchen, the bathroom suite

and do a little bit of an alternate route for the bathroom upstairs.

Yeah, so I think it should be pretty straightforward.

So, is this something you do?

I've never really taken on anything quite so big as doing a kitchen,

a bathroom and this, that and the other

on my own house,

however, I have sold lots of kitchens over the years

to house builders, you know, to Joe Public and so on

and I've even fitted one or two as well.

Right. Wow. So what prompted you to bring Julie in?

My total lack of experience, really.

She's your International Rescue

-and she's coming in with Thunderbird 1 and 2 and 3...

-And 4.

THUNDERBIRDS THEME PLAYS

'I'm sure Irvine won't need the help of the Tracy family

'as these two have a great working relationship.

'He deals with the money, she deals with the DIY.'

So what's the plan, then?

The plan is that Julie will tell you all about the plan.

Thanks, Irvine.

Well, we thought maybe a little paint

on these walls would go down...

I'm only kidding. No, in actual fact, we need, er, gas...

electrician sorting out, make sure everything is OK and then,

you know, sort of work our way back, sort of thing, you know.

'What's the plan to rescue the bathroom situation?'

As you walk into the bathroom,

you've got the bathroom sort of opens off,

and off the bathroom,

you've got a doorway that goes into a bedroom,

so it's almost like an en-suite, but it's the main bathroom,

so it seems a bit silly to leave it like that.

We'd be better, I think...

Irvine would be better to get the stud wall in there

and get a door off to the bathroom

and keep the door to the other bedroom

and then we might be able

to even perhaps get a shower in there behind,

-if we've got enough money to do that.

-Right.

'Irvine has given Julie a budget of only £10,000,

'so things might be a bit tight, but what about the timescale?'

-ASAP.

-Yeah.

-As soon as possible, really.

-However, I'd say over the next four to six weeks, really.

-OK.

-Yeah.

Well, congratulations, both of you.

-Look forward to seeing how it all turns out.

-Thank you.

-We'll be back.

-Thank you very much.

-Thanks a lot, Martin. Cheers.

Well, you could spend a long time searching for a property

that's as good as this and it seems like Irvine just stumbled on it.

Well, good luck to him

and I'm sure with Julie's help he'll do just fine sorting it out.

You can find out how it turns out later in the show.

So, are we going to stumble across a property just as good

here in Surrey? Well, I'm in East Horsley.

It's handily placed for Leatherhead and Guildford. A popular

and affluent village, it's famous for its flint buildings

designed by Lord Lovelace in the 19th century.

The area around here is known as stockbroker belt

because it's popular with London City types who want

a semi-rural location, but still need an easy commute into London.

Now, for commuters, the house I'm here to see will be ideal

as it's only a few hundred yards from the local train station.

East Horsley village significantly expanded in the 1930s

with a lot of the housing stock, the main shopping areas

and the station all being built around this period.

But the property I'm here to see today hasn't quite stood

the test of time.

So, this is the property,

a two-bedroom detached cottage on a 0.39-acre site.

Now, the guide price, £500,000 plus.

Now, that seems like a lot of money for a two-bed cottage,

but this is an affluent and expensive area

and the value here is in the plot, not the property.

Look, it is ripe for redevelopment.

Now, it already looks like a building site.

You've got metal fencing here and the neighbouring house, well,

it's already been knocked down, but, before we dismiss this cottage

completely as a demolition job, let's take a look around inside.

At the moment, the cottage looks like it's marooned in the middle

of a muddy wasteland and the easiest way in is round the back.

Well, not quite what I was expecting inside,

but you can see some of the work has started.

Look at all this wiring hanging out

and somebody's already started to do the plastering on the walls,

but by looking at the damp, look, I think

this property has been derelict for quite a while.

Now, I know there's no kitchen down here

and the bathroom has not been plumbed in,

so I would say it's unmortgageable as it stands at the moment,

but on a positive note, look, you've got pretty windows,

a little doorway, and a porch through here.

You've got a good space, it's got character, you know,

it does have the makings of a nice little house.

Off this reception room is another living area,

again, it's just a shell and then upstairs, there are two bedrooms.

As with the rest of the house, work has been started here,

but nothing is finished.

You've just got bare walls, bare floors and a few bare wires.

OK, the cottage is cute.

I really like it, even if it does need a lot of work

and you could do it up,

extend it and have a lovely, rather large garden, but if you buy this

as an investment, well, that's just not the way to maximise profit.

If you want to make some cash, you need to pummel this property

to the ground and build, not one, but several properties in its place.

Now, there's no planning permission as yet to do that,

but because there's a house already here, getting permission to build

something else, well, it shouldn't be an issue.

The question is, what will the local council let you build here

and how many properties will they let you squeeze in here?

You've got to think about all of that before even

bidding for this at auction.

To get the lowdown on the market here,

we asked a local property expert

what he thought would happen

to this cottage and the plot with its guide price of 500,000.

I think ultimately the cottage is going to be knocked down

and the site will be developed for new housing.

What that housing will be will obviously depend on planning consent,

erm, I suspect and I hope that it will be perhaps mews-type townhouses

which I think would go very well in the village.

If you were to build a four-bedroom townhouse,

say, for argument's sake, around 2,000 square feet,

that should realise something in the region of £850,000-£900,000.

And if you didn't gain planning permission

and just renovated what's here.

I can see it realising something in the region of £700,000-£750,000.

OK, and what about the option of renting?

This cottage, I suspect, would realise something between

£1,200 and £1,500 per calendar month.

If new properties were built,

and, again, of the similar size that we were talking about earlier,

they should realise something in the region of £3,000 per calendar month.

Done up and extended,

this house could really make a lovely home,

but with property prices at a premium round here,

I would opt to knock this down and apply for planning permission

to build, but what will the new owner decide to do?

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

450 to the phone, 465, 480 on the phone,

500 in the room,

515, 530, 530...

As I thought, this was a very popular lot.

We rejoin the bidding and £640,000.

640, 645, 650, 655,

660,

665, 670,

675, 680,

680, 685?

680, first time, second time, third and last time.

If you're all done, sold 680. Well done. Sorry to...

'Fighting off the competition with a successful bid of 680,000,

'Dennis and his business partner Brian were certainly never

'going to give up on this opportunity.

'I met up with one half of the duo back at the property to see

'what they had in store for their latest purchase.'

Brian, congratulations, you must be so pleased.

Yes, we are, we've done really well. Yeah, very, very pleased.

So tell me about auction day. Did you expect to get this?

Erm, we were going to try very, very hard.

We went for a cup of tea before the auction,

so we just had a quick chat and we set a limit at 650,000.

We said we're not going to pay any more than that,

that's going to be our top.

Anyway, in the end, we paid 680,000.

-Dennis couldn't stop putting his hand up.

-And how did you feel about that?

Good, we probably would have paid more, actually.

-We really wanted the site.

-So when you said 650, you were both lying?

We were. 100%. Yeah. We would have carried on.

So what's yours and Dennis's background?

Dennis is more into the automotive paint product, really, selling paint,

whereas I've been in the building... carpenter by trade,

so just come through really. That's how it works.

'Dennis and Brian have been successfully running

'their own property development company for the last four years

'with Brian taking care of project management

'and Dennis looking after the finances.'

So, with this plot, it doesn't come with planning permission,

you've got a little cottage sitting there, which is all very nice

and pretty, but what are you going to do?

We're going to try and work with the local authority on planning.

Hopefully, we will achieve four townhouses on three storeys

and possibly a unit into the rear, which will be good.

-That will be a bonus for us.

-So is that coming down?

It will come down eventually, yes.

We're also in some negotiations with surrounding bits of land,

so it might grow into something about eight units at the end.

So, so far you've spent £680,000.

How much do you think you're going to need to build?

If we achieve the five units,

we'd be looking at sort of about 1.2 million build costs,

-something around that sort of money, really.

-Wow.

How long do you think that's going to take you

-for the four units initially?

-For four units, it will probably take us

about 14 months from start to finish, really.

So, as far as Brian's concerned,

it could be the end of the road for the little cottage.

But then, its fate really lies in the hands of the local planners.

So do you think you'll be up against it with the planners?

Do you think this will be quite a straightforward build?

It's never, ever straightforward with planning.

It's an absolute can of worms, really.

You've just got to try and bring everybody into it, get the planners

on side to start with, and just see what they would accept, really.

But it's got to be achieved through planning,

otherwise we're sitting on a little tiny house with a great big garden.

# No guarantee, hey! #

'So, it all hangs on getting the planning permission they need,

'but helping Brian and Dennis along the way

'will be their architect Marek.'

Well, how exciting! What is your vision for this site?

Right, well, we have a set of plans here,

which we've sort of put together. We're hoping to keep

-the townhouses the same height as that block there.

-So you get a nice

-sort of swoop round?

-Yeah.

So we're going to work hard to try and make it fit in there.

And what is the sort of look of the property?

We will incorporate some of the clay features and

some of the brickwork details that we've got on the existing building.

Now, obviously, this is the most important aspect,

-the fact that you get the four townhouses.

-Yes.

But then, you have got quite a large site with a big,

big plot of land at the back there, which is ideal for a house.

How many problems will you have to overcome with this,

because where's the access going to be?

-Will you have to come along here?

-Yes, we'll have, right at the front,

with a gated entrance and into a nice little courtyard of its own.

Well, it's been fantastic meeting you.

-I can't wait to see the outcome and hear the story behind it all.

-OK.

-Lovely to meet you.

-And you.

-Thank you very much indeed.

Well, as they say, money makes money and

Brian and business partner Dennis are planning to spend big bucks here

in order to, hopefully, make some big profits.

But it's a massive investment.

680 grand for the cottage and plot

and over a million quid in estimated build costs

and it's going to take them well over a year of their lives.

But it all hangs on them

getting planning permission to build enough properties to make a profit.

So, will it work out for Brian and Dennis?

You can find out later on in the programme.

Coming up, in Wales,

a bit of a laugh at the start of this renovation.

He put his hand up, I burst out laughing, as it goes.

But at the end of this one in Surrey,

will the profits leave Brian and Dennis laughing too?

It's a lot more than we thought when we first started building.

Back to Bentley in Stoke, where we met mortgage broker Irvine

and his DIY enthusiast friend Julie.

In his first foray into auction buying,

Irvine bought this three-bed semi for an amazing 55,000.

He hadn't viewed the property before buying,

but that doesn't mean Irvine wasn't prepared.

I've put a few mortgages on houses around here,

so I knew these were well built, so I thought, "Let's go for it."

So somebody else has had a survey done on them?

Oh, yeah, I've seen several surveys from round here,

and they're all built pretty much the same.

-So, Julie, what's your involvement in all this?

-Really, my involvement

is to get the guys in and change over the kitchen, the bathroom suite

and do a little bit of an alternate route for the bathroom upstairs,

yeah, so I think it should be pretty straightforward.

Straightforward? Hmm, how often have we heard that?

There was a lot of work to be done.

A strange layout downstairs at the front door

and the problem of one of the bedrooms only being

accessible through the bathroom needed to be sorted out.

Julie was given £10,000 to play with and as for timescales?

-ASAP.

-Yeah.

-As soon as possible, really.

-However...

-But?

-I say over the next four to six weeks, really.

-OK.

-Yeah.

MUSIC: "I Can't Go For That" by Hall and Oates

I'm impressed by Julie's optimism.

So, six weeks, £10,000

and a property waiting to be transformed. How did it go?

Well, we're back ten weeks later to find out. Over to you, Julie.

-# Call me, call on me!

-Baby, baby!

# Do, do, do it! Baby, please! #

Wow! This looks like a completely different house!

But it's been more than just a cosmetic make-over.

We also needed to have the electrics checked.

Once the checks had been done,

we realised that the whole house wanted rewiring

and so, we've done all of that, stripped it all back,

plastered every single room,

new kitchen, new bathroom, new carpets throughout,

and we have actually knocked a few walls through,

as you'll probably be able to tell when you walk in.

I really don't think Julie could have done a better job here.

She's made alterations exactly where they needed to be made,

especially with the upstairs layout.

Previously, the only way of entering the bedroom

was through the bathroom and so, what we've done is

we've put an entrance to the bathroom and an entrance for the bedroom.

We halved the size of the bathroom, cos it was a significant size.

We've made enough room for a shower at some stage,

should that be required.

This issue could have been easily ignored,

so it's to their credit that it's been addressed.

Not only that, but they have also improved

the downstairs layout no end, by creating a new hallway

that leads from the front door directly to the kitchen.

However, such improvements cost money.

How did it affect that £10,000 budget Irvine gave Julie to spend?

The budget's come in at about 16,800,

but, given the quality of the work, um,

and the total metamorphosis of the property, I'm quite happy with that

and, hopefully, we'll kind of recoup that on the resale value.

Well, considering the complete rewire, and some pretty

substantially layout changes, that doesn't seem too bad at all.

And, after all, Irvine did get the house for 55,000,

which was £5,000 less than the guide price.

Given Julie has sold kitchens in the past,

she's pretty pleased with this one, as you'd expect.

As you can see, we've had a brand-new kitchen in here.

We've taken the old kitchen out - it was a little bit dated -

and replaced it with this high-gloss on-wall carcass,

with new oven, hob and hood and, er, new splash backs.

I'm really, really pleased with it. It looks fantastic.

A tremendous effort by Julie, with Irvine's support, of course.

# Lean on me... #

The goal initially was to complete everything within six weeks.

I always felt that was optimistic,

but who doesn't love a bit of optimism?

We thought it was going to take about four to six weeks.

Um, however, because of everything that needed to be done,

like the extra plastering and the rewiring and so on,

that extended it quite a lot, because every single room had to be

sorted out, so, yeah, it's actually now taken just under three months.

Underestimating schedules is very common with renovations,

but completing them to such a high standard is not.

With the hard work done,

what are Irvine's thoughts about the future for this property?

At the time, I was more inclined towards renting,

because I've got some other rented properties. I think I'm just waiting

to see basically what kind of value the estate agents put on it,

and if I can get it shut for, perhaps 89,000, something like 90,000,

um, I'd be more than happy to sell it.

The total spend on the property is £71,800.

So, let's find out if he's going to make the profit he hoped for

or is he going to rent this lovely house?

Two local estate agents came along

to help Irvine make up his mind.

But first, what do they think of Julie's efforts?

Coming in the second time, it's like walking into a new build.

It's been completely refurbished from top to bottom.

It's got a fantastic kitchen, fantastic bathroom,

new boiler, new electrics. It's just ready to move into.

The new bathroom and new kitchen are always big points with buyers.

Um, so they've both been changed

and just the overall feel and the decor of the property.

I think making the hall straight through is a great idea,

especially if you're coming in and have your shopping bags, instead of

traipsing through the lounge, you're straight into the kitchen area.

So, lots of positives, but how does that translate in monetary terms?

From the point of view of a resale on the property,

I think an appropriate asking price at this time would be £79,950.

I think the owner, with what they've done to the property and so on,

I would probably recommend an asking price of £85,000.

The figure of obviously 85 is obviously a lot better than 79,950.

Um, I've seen them on for 85, um, around here and

so I was hoping for more like about 89,950, given it was a full refurb.

A bit disappointed with those resale figures there.

But that top estimate would still

give a potential pre-tax profit of over £13,000. Not bad at all.

Will the rental figures be better news?

I would suggest a figure of £425 per calendar month.

Rental, I would recommend a rental price of £450 per calendar month.

Given that, I think I'll probably end up renting.

Easy decision for Irvine, then, and, in my opinion, the correct one.

£450 a month will give him an annual 7% return on his investment.

Now that's what I call a solid outcome.

# And now it's solid

# Solid as a rock! #

With the job completed, what words of wisdom

can our property duo share with new developers?

I think that, um, if anything,

you can't go into it too sort of, er, blase.

You've got to make sure that you've got the right team,

like I said before, around you and make sure that you're not

going to go over the top on the spend as well.

I've realised that there is a ceiling on these properties and,

if you do produce something high spec,

um, that people are not necessarily willing to pay for the extra,

um, expenditure on the specifications.

Two great pieces of advice

from a team that clearly work well together.

So, will this pair be joining forces again?

That's dependent upon Irvine's answer.

Oh, absolutely! SHE LAUGHS

Absolutely, I've already checked... I'd like to check out

-Julie's availability for the next three or four months.

-Good lad.

-Good lad indeed!

-# That's what friends are for... #

We're heading now to the little village of Abercwmboi,

which sits in the Cynon Valley in the south of Wales.

It offers many local amenities in the village and nearby.

'It's just a couple of miles from the bigger town of Aberdare.'

Well, situated on one of the main roads through the valley is

the property I'm here to see, so, straightaway,

not ideal to be on this main road.

Um, however, I like the exterior.

It's nice stonework. That's attractive.

As is the guide price.

£23,000 plus.

Two bedroom, mid-terrace. Let's have a look.

-So, fairly low expectations.

-HE LAUGHS

Are they going to be met? Or will I be surprised?

Well, um, entrance there, stairs up to your bedrooms.

I like the fact you've got this door here, which you can close off,

keeps out a little bit of the noise and also the cold and then,

into your front living room. You've got a gas fire, double glazing.

Well, you are going to need that for sure, for more than noise again.

Um, but it's not a bad-sized space. In fact, straightaway,

quite an open feel, um, through this door into the kitchen. Look at this!

Perfectly serviceable. I mean, you know,

not the most modern units, all that stuff,

but with a bit of sprucing up, I think this could be pretty good.

Great views out the back there.

And just from the front, what could be quite a claustrophobic little

terraced house has turned into a really, really serviceable space.

# Say, hey, good looking

# What you got cooking? #

A good-looking property and not a bad guide price.

So much for my low expectations.

However, this kitchen also has a unique selling point.

Now, one of the things I love when I'm wondering around houses

is discovering those little design touches which just make you think...

Wow! Where did that come from?

And in this kitchen, there is an absolute doozy. Look at this.

Fantastic! On the work surface, studs!

Now, I know it's probably for putting pans on.

But don't you think it turns this kitchen into a...

punk or heavy rock kitchen?

Oh, I know! It's a Billy Idol kitchen!

Nice day for a white wedding.

# It's a nice day to...

# Start again! #

So, upstairs, and really good news.

Bathroom and toilet here, where, ideally, it should be.

Now, often with these kind of properties,

the loo is extended on from the kitchen. That's not ideal.

This is great. Um, two bedrooms. The first one there.

Er, well, er, it's a bit small and wow!

What about that colour?

Great if you like frogs!

Ooh! Ha-ha! Ideally, I think something a little bit more neutral.

But then, through into the front bedroom, er, which is

not only a better colour, but also a slightly bigger size, um,

so that's good news.

It could actually be even bigger. If it wasn't for this!

How about that for a central heating system/water heater?

Wow!

-ENGINE REVS LOUDLY

-Ooh! Noise from the road!

Um, yeah, get rid of that, I think.

-HE EXHALES:

-Combination boiler in the kitchen is definitely required!

The property is a nice size and has a layout with a lot going for it,

but there are a couple of things that raise concerns.

# It's not easy

# Being green... #

No, not just the green!

These cracks in here could well be superficial,

but would definitely be worth looking into further.

And back in the main bedroom, there's quite a bit of damp

around the window, which is also pretty worrying.

Better check out what the back has to offer.

Well, at the back of the property, not only have you got lovely views,

you've also got a bit of water, and that's not the only surprise.

'Not a bad spot for some wedding photos, might I suggest.

'But more excitingly, look what I found.'

Down these steps that also lead to the garden

and you come across a kind of basement room.

Now, apart from this door, there's no windows.

But a very useful either storage area or perhaps little office.

An additional bonus I wasn't expecting.

The stairs to the garden are quite steep and not that pretty

and, sad to say, neither is the garden,

but it is a fair size, I think, possibly, underneath all that.

There's also access to the rear,

so potential off-road parking is available.

The bonuses keep adding up here and, at that guide price of 23,000,

this lot is a property that keeps on giving.

What does a local estate agent think of it?

The property needs updating

and needs a new kitchen, bathroom, redecoration throughout.

And the property is located on a main road,

so, unfortunately, parking is limited.

But who would be attracted to a property like this

once the work is done?

After renovation has taken place,

the property would be suited to a first-time buyer with a small deposit

or an investor who would look at buying the property for buy-to-let.

After the work has been carried out,

I would expect that the property would achieve between 35 and 40,000.

If you keep costs down, and buy for anything near

that guide price of £23,000, there could be a tidy profit.

But the rental market round here is strong and worth considering.

I would expect the property

would achieve between £320 and £340 per calendar month.

So, what do you think?

Surprisingly nice house for the money, for sure.

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

Traditional mid-terrace house, UPVC double glazed, gas central heated.

Guided at £23,000.

Where do you start me? Start me at around 20, will you?

£20,000, let's get it started.

Thank you, 20, I've got you there, at 20,000. At 20,000. One can I see?

I've got 20 there. One I'm looking for.

21, thank you. 22 now.

22, back to you? 22. 23. 24.

25. 26. 26. 27.

28. 28? 28? No.

At £27,000. I'll take a half number, if you want.

Or it's going to be sold at £27,000, for the first time.

At 27,000, second time.

Third... 27½.

28. Bad luck! 28?

28? Are you sure? Well, that could have been his one and only bid.

At 27½, then, I've got, by the pillar.

For the first time.

27½, then, for the second time.

Third and last time, £27,500...

GAVEL BANGS Well done, sir, yours.

'Jumping right in with that audacious bid of 27,500

'has paid off for business partners

'and first-time property developers Raul and Luke.

'Raul, who is a criminal lawyer, and Luke,

'who runs a double glazing company, both live locally

'and they've decided to take on property developing together.'

# Jump right in

# Let the music pull you in Jump right in... #

-Luke, Raul, lovely to meet you both.

-Nice to meet you.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy the house.

Um, basically, we went to the auction to buy a house further up the road,

um, and we were in the auction, this came at the right price

and he put his hand up, I burst out laughing, as it goes.

I can remember walking into the auctioneers, to do the paperwork,

and Raul said, "Where is the house?" So we burst out laughing

and then we came in here and had a little look in the night.

As it happens, it's a nice little property.

Talk me through the auction process. What was going on in your brain?

Nothing. When this property came at a certain price,

it got stuck on that

and the auctioneer said if anybody would want to put a 500 up.

So I thought, maybe let's try this.

It's not a very high price for a property.

Something we could work on with. In the area that we know.

Now, as you know, it's a Hammer golden rule that you should

view the property before you stick your hand up at the auction.

Lucy tells you, I tell you and still some people don't do it!

Tut! Tut!

However, these two had good local knowledge

so it was a calculated risk.

But I'm curious as to what brought Raul,

a criminal lawyer, and Luke together on this project.

Luke's father works for me.

Luke has helped us in the business a bit, doing bits and pieces.

When I saw him, he's always keen, he's come up with ideas

and all sorts of things of developing property.

I had a discussion with him and I said,

"Why don't we go for this auction?"

-Have you got any building experience?

-I have.

I buy and sell houses. I've got two not far from here.

But I'm a window fitter. I own a double-glazing business.

I'm always in builders, doing work for them

and I've always took an interest in property.

-So you have done the whole...

-Yeah.

Tell me what you're going to do to sort it out.

The first thing, we're going to strip all the paint back, get

the messy stuff out of the way first like the garden and things like that.

And then just start from scratch and decorate it.

Obviously, carpets are done last thing.

-We'll just take our time and see how it goes.

-Right.

With a view to doing it up for the rental market, is that the idea?

If it doesn't sell then yes, we'll rent.

But the idea is to put it back on the market for resale.

The profit depends on how much you're going to spend

doing it up. What is the budget for that?

-Luke says four to six, I say three to five!

-We'll see how it goes!

First argument on the cards!

It should really sell.

You've got the train station down there, you've got the centre up there

so it is not in a bad location.

You've got a nice view behind as well.

The view is amazing. There's a little lake behind.

You can go swimming or fishing, whatever you fancy!

Well, before Luke gets his swimming trunks on,

he'll be rolling up his sleeves and doing the majority of the work

himself, whilst Raul will take more of a back seat day-to-day.

-But how long do they envisage it taking them?

-Four to six weeks.

-Four to six weeks.

-At least you agree on that.

-But if...

Like if you were in here constantly, I think

it's only like two to three weeks' work anyway, maximum.

We're not going to be here all the time. It's just one of them things.

We've got other stuff to do.

-If you take some time off, we can do it in a week!

-Congratulations.

-Good luck with it. We look forward to seeing how you get on.

-Cheers.

Well, it may have been a bit of a random purchase by Raul and Luke

but they certainly have a good plan for this nice little property.

But plans can go wrong

and they still have to agree a budget between them.

How will they get on? You can find out later in the programme.

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

Have they been racing through the work?

Or has the whole project ground to a complete halt?

Let's go back and find out.

Time to catch up with an exciting development

in East Horsley, Surrey, where a dilapidated cottage

on a third of an acre plot had cost Brian and Dennis 680,000...

..a whopping £180,000 more than the guide price.

What was the attraction?

So, with this plot, it doesn't come with planning permission,

you've got a little cottage sitting there, which is all very nice

and pretty, but what are you going to do?

We're going to try and work the local authority on planning.

Hopefully, we will achieve four townhouses on three storeys.

And possibly a unit into the rear, which would be good.

-That would be a bonus for us.

-Is that coming down?

It will come down eventually, yes.

A lot was hanging on the planning permission

so at the sharp end was architect Marek.

What is your vision for this site?

We're hoping to keep the townhouses the same height as that block there.

So you get a nice swoop round.

And you have got quite a large site with a big

plot of land at the back there, which is ideal for a house.

These were ambitious plans, but they had an even bigger vision,

to buy an adjacent piece of land and build as many as eight units.

But would they get planning permission in this

picturesque and affluent village?

Two years later, we're back.

It's a very large building site.

And while nothing is complete, you can

see it beginning to take shape.

I'm sure you're expecting some soft closing kitchen doors rather

than cement mixers but it turns out that old bugbear planning,

well, it took a year.

Quite a difficult process.

Had to go back in two or three times and use planning consultants.

We had a couple of objections from the local parish council,

which we overcame with a couple of meetings with them.

Not only did Dennis and Brian have to reassure

the local parish council,

they also had to deal with the rail company,

who owned a covenant on some parts of the land,

meaning these also had to be bought by Dennis and Brian.

Still, once planning permission was eventually granted,

it was full steam ahead.

Although when an opportunity arose to buy neighbouring land,

the business partners didn't hesitate, as Dennis explains.

Well, as you know, we bought the site at the auction.

And then we managed to acquire the site next door,

which already had planning for three small houses.

So time to count on those fingers.

Now that's two sets of semi-detached houses on the site

of the old cottage,

a detached five-bed house on the triangular patch of land

at the rear and a terrace of three houses, using the new bit of land.

Eight houses in total. All good.

But since they are far from finished, well, what's the story?

The site at the moment, we've got

the timber frames on several of the units erected now.

Three are in the dry with the roofs on.

Windows should be on the first three within the next couple of weeks.

The four on the front of the site should be

probably in the dry within the next three weeks as well.

Then we're going to start the foundations on the detached unit

at the back within the next two weeks.

Ready really for plastering.

We're first fixed on the first three now, which is cabling and plumbing.

And it doesn't end there.

We've got a gentleman next door and he wants to sell us his house.

Obviously, for more than it's worth because

we're going for planning permission for a bungalow in the back garden.

Well, don't stop counting on those fingers - they've not finished yet.

So, as well as a five-bed detached house yet to be built,

plus three terraced houses on newly purchased land

and the four three-bed semi-detached houses at the front of the plot,

Brian and Dennis may also build a bungalow.

All this extra work and land must have made quite

a dent in their original budget of 1.2 million.

We think the total overall build costs will be about 1.8 million.

That should see us out and everything finished.

But that doesn't include the new bungalow,

if we get planning for that one.

Brian and Dennis hope that all the work will be completed in

six to eight months, making this a three-year project and,

while their total outlay of 3.1 million sounds a lot, they are eager

to sell and already have a long waiting list of prospective buyers.

And the possible profit they could make, well, it's mind-boggling.

We've asked two local property experts to don their hard hats

and take a look.

I think it's worked out as a great development.

When they originally bought the old cottage,

it was quite limited as to what they could do but the acquisition

of the extra land at the back has really transformed the site.

The houses that they are building are much needed in the village

because they are smaller units and there is a great demand for them.

The demand for these houses is going to be right across the spectra,

from people downsizing to young families.

Because of the location here, just 100 yards from the station,

they're going to appeal to a wide raft of people,

including people that may even be buying for investment.

All sounding very positive.

So what could Brian and Dennis expect for the planned properties?

For the terrace of three houses, we've got and end-of-terrace

two-bedroom house, which we think will be in the region of £625,000.

The centre terrace probably £600,000.

And the end-of-terrace at the other end is a three-bedroom house,

which we think is going to be about 675,000.

There are two pairs of semi-detached houses.

They're slightly larger, over three storey.

We would expect to achieve,

in today's market, something in the region of £675,000.

We also have one detached house.

We expect that to be in the region of £1.2 million.

With both agents valuing the properties in the same

ballpark area, even excluding the possible bungalow,

these are some serious numbers...

..with a total of the lot coming in at around 5.8 million.

Wow!

With a total spend of 3.1 million, that would give Brian and Dennis

a profit of an utterly amazing 2.7 million, minus taxes and expenses.

Have you run out of fingers to count on yet? I have.

It's pretty much what we thought in the market today.

It's a lot more than we thought when we first started building them.

We're pleased that that's the sort of valuation that they've given us.

Yeah, I think it's a good valuation.

In the market today we expected house prices to start creeping up again

so it's a good price for the houses and a good location,

good price for them.

We'll definitely be back to see this project when it's complete.

It's not difficult to see what this experienced team

enjoy about this type of project.

We like building new houses because we're creating something.

It's somebody's dream.

It's one of the biggest purchases you make in your life.

If people walk in and they look at it

and see the finish that we leave and go "Wow" then we've succeeded.

If we make a profit on the way, so much the better.

Yes, not every property development will make millions.

But they are about making the home of someone's dreams.

So, did Raul and Luke manage to do that here in Abercwmboi in Wales?

They bought this two bed mid-terrace for 27,500 and were hoping for

a quick turnaround and fast sale,

although they had a couple of things to iron out first.

Obviously, profit depends on how much you're going to spend

doing it up.

What's the budget for that?

Luke says four to six I say three to five!

And they've broken one of Hammer's golden rules -

viewing a property before you buy it.

Talk me through the auction process. What was going on in your brain?

Nothing.

When this property came at a certain price, it got stuck on that

and the auctioneer said if anybody would want to put a 500 up.

So I thought, maybe let's try this.

It's not a very high price for a property.

Something we could work on with.

In the area that we know.

Despite breaking the rules,

Raul and Luke had been lucky in finding a property

with plenty of hidden potential, despite signs of damp in some areas.

Just under five weeks later, we've returned to see how they've got on.

A simple renovation has meant keeping costs down

and maximising the potential for profit in an area where

properties have a definite ceiling price.

In the master bedroom, any signs of damp have been dealt with

and the neutral colour scheme that runs throughout both bedrooms

and the new bathroom will appeal to buyers and investors.

Outside, the garden is unfinished but it's looking a lot better

and its potential is obvious to see.

The interesting basement room is still undergoing work

so we couldn't have a look but the whole house is looking smarter,

brighter and far more inviting whilst also fitting nicely

into the area.

However, when it came to doing the work, there was

a significant change of plan.

My role was to fund the project.

We'd initially thought that Luke would be doing

the work in the house and we were going to split the profits

but Luke picked up another job so Luke hasn't worked on this

but that's not to suggest that our relationship finishes here.

We are looking at something else where hopefully,

the both of us can go in together and do that property up.

When we went to the auction, I thought

I'd do a lot of the work but because I'm so busy with my business

and my work,

I've just given advice.

I've left it to the main man to take control.

Raul, a complete refurbishment novice, has in fact project managed

the whole thing, getting in qualified tradespeople

to do the jobs.

So these walls of the room we are in had at least three

coatings of wallpaper on them.

It took us a long while to get rid of them.

Some of the wall had to be replastered, painted.

We had new carpets in this room.

Upstairs, we did tiles in the bathroom.

We changed the vinyl on the bathroom floor.

We had to plaster the front room upstairs in the main bedroom.

Got new carpets there as well. All painted. New doors in the house.

In the kitchen we had a new cooker, new vinyl, painted the kitchen.

Garden, we got rid of all the bushes in the garden.

The garden was too overgrown.

We had chippings on the garden. Membrane on the garden.

The extended bit of the garden has been cleared as well.

Possibly a car could be parked there.

I have pretty much come here every day to check

how the work is going,

providing materials, advising on them,

the sort of colour choice we wanted.

My daughter has come and helped me as well.

She selected the bathroom floor for us. That's pretty much it.

Oof! Quite a list. But Raul has kept a tight grip on that budget.

Initially, he and Luke differed on what would need to be spent,

with Raul thinking 3,000 to 5,000 and Luke 4,000 to 6,000.

Raul has kept a very tight grip on the budget, spending only 2,500.

But it's not quite finished yet so how has the timescale worked out?

We were hoping to finish the project within four to six weeks

and we've managed to do that.

We did start a bit late

but it took only about four weeks to finish the project.

Raul has taken some local advice and hopes to sell.

And with a modest final outlay of just £30,000,

the potential for profit is looking good.

But will two local property experts agree?

This is my first visit to the property.

I can see that some works have been done.

I can see the bathroom, the carpeting,

the painting has been done.

It hasn't had a new kitchen but obviously it just needed

a bit of a lick and a paint,

and it looks fine as it is for either resale or for renting.

There is a demand for investment properties.

We have a lot of investors on the books looking for rental

properties and also the first-time buyer market has increased

over the last six months.

That's reassuring news. So let's consider rental potential first.

If the owner were to rent the property,

we would expect to achieve between £350 and £375 per calendar month.

I would be looking at renting at between £375

and £400 per calendar month.

So, taking an average of £375 per calendar month would mean

a potential yield of a whopping 15%.

But Raul is set on selling for the time being.

If the owner were to put the property on the market as it stands,

we would market the property

at £45,000 and expect to achieve between £40,000 and £42,000.

If I was going to market this property,

I would be looking at putting it onto the market for about £47,000

and achieving somewhere in the region of £44,000 maybe £45,000.

LUKE: Property's only going to go up and up and up, I hope.

So, yeah, I'm happy.

These are the sort of figures I was expecting. I can live with that.

Glad to hear it.

With a top estimate of £45,000 that would mean a pre-tax profit

of £15,000.

Not too shabby, I'd say.

So, will they be heading back to the auctions?

Definitely looking to do another project

and trying to do it fairly quickly.

We'll be at the auctions next time they're on.

Well, the world of property is never static or boring.

You really do need to know what you're doing

so hopefully we can help with that.

Join us next time for more cautionary tales

and success stories on Homes Under The Hammer.

-We'll see

-you then. Goodbye!

-Bye!