Episode 46 Homes Under the Hammer

Hello, and welcome to the show.

Now, the thing about property developing

is that there's projects out there to suit everyone.

Yes, they don't need to be too complicated or even expensive,

unless that's what you want.

No, and the likelihood is you'll be able to find

exactly what you're looking for at the auctions.

Well, there's usually a wide range of properties available at an auction.

Yes, and a wide range of buyers looking for a bargain.

Let's see where the bids landed on today's programme.

First up in London's Harlesden, a hammer rule is broken.

-Did you get a damp survey done?

-I didn't, no.

Oops!

In Stanley, in County Durham, how does your garden grow?

Stretching all the way back... to a great house. Ha, bonus!

And in Ramsgate, Kent, let's call plan B a backup.

So, guys, worst, worst case scenario...

What are you going to do with that plot?

Flatten it, turf it, and have a lovely summer garden.

All of these properties have been sold at auction,

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

when they went under the hammer.

Your lot, sir.

We're in Harlesden NW10.

It's got good transport links to central London

and has Willesden Green on its doorstep.

It really is well situated, yet it offers property prices

that are less eye-watering than its more affluent neighbours.

This seems like a nice quiet street, and it is literally a short walk

from the train station which also makes it very convenient.

Well, I'm here today to see a two-bedroom flat.

It had a guide price of £210,000,

and it's in this lovely Victorian property.

Now, I've got my fingers crossed

there is some character features left inside.

I shall investigate.

'While the outside is definitely a little unusual in shape,

'our flat is on the first floor and comes with a reasonably healthy

'99 year lease and a grand rent of £250 per annum.'

Entering into this flat feels cold, smells damp, and feels moist.

So, straightaway, not ideal, but it feels spacious.

You've got this lovely ceiling height.

You've got a bathroom and a loo here.

Now, straightaway, I'd be putting a wall there

and opening this up into one big luxury, nice bathroom.

It would make such a difference.

At the moment, you've got a pokey toilet and a pokey bathroom,

but look at this - there is character.

I do love one of these round walls.

Get rid of this woodchip and you've got character.

This is a nice, big Victorian building.

We've got a bedroom, a bedroom,

a kitchen which we'll come back to a little while.

But look at this - for a rather spectacular lounge.

Now, OK, there's obviously damp problems down here.

People have had the floorboards up.

You'd need to investigate further, but you've got fabulous windows,

fabulous space, but, come.

A bit of a no-no. Look out the window.

There's a train line.

Now that could be potentially a little bit noisy.

I'm not sure how many times a day trains actually do pass there,

but that is not really ideal.

A bit of a shame.

I suppose in London you're never really far away from a train track,

so you might just get used to it.

If not, you may need to look at replacing these sash windows

with double-glazed units.

# Get on the right track, baby

# Get on the right track, baby. #

'Getting the rest of the flat back on track might be harder.

'With not just the damp, the electrics, and general disorder

'to contend with, there's also its somewhat strange shape.'

You've probably noticed the rooms in the flat are a little bit skew-whiff,

and you can see why when I show you this plan.

Now, as it's set on a curve in the road, it slants round,

and this wall continues at an angle

creating an almost sort of triangular shape.

Look, you can see along here.

But it does make the flat feel bigger

and a big quirky, which I like.

But some people might be put off by this.

It could be tricky fitting your furniture in against

some of those slanted walls, but overall,

I think it's a flat full of character.

# Bend me, shape me any way you want me

# Long as you love me it's all right. #

So bearing all that in mind, let's have another look at the kitchen.

If you kept the layout like this, you'd need to think about

customising the units to fit, and that could be expensive.

You could knock through the kitchen wall

and make it an open plan kitchen/lounge/diner.

Now, that would certainly get rid of some of the odd angles.

But what the local estate agent's angle on this one?

I think a property in this condition

would need approximately £20-25,000 in refurbishment.

I'd look to do a kitchen and dining room, and possibly a new bathroom.

There is a possibility of loft extension in this property.

You would look to remove part of the wardrobe in the hallway

in order to get the stairway for the loft.

Hm, some good ideas from the agent there.

Of course, with anything structural like the loft,

you'll need to check out who owns the freehold.

This flat was guided at £210,000 plus,

and a loft conversion could cost between £30-40,000.

So, would it be worth doing?

If this property was renovated as a two-bedroom flat,

I would look to market the property at £310,000

with a view to getting offers in excess of £300,000.

If this property is extended to the loft, I would look to market

the property at £350,000 in order to achieve offers in excess of £340,000.

And with rental returns around

£1,300 per calendar month as a two bed,

or £1,500 per calendar month as a three bed,

this flat could turn into a good investment.

Well, it might not be a standard shape,

and that train line is definitely not ideal,

but I really like this flat.

It's a great size and there's potential to improve it further.

And, it's in an area that is on the up.

So let's see who agreed when we went to auction.

Lot 83 is a first floor two-bedroom flat in need of modernisation.

I'm looking for, let's say something with a two in front to start.

200 upwards. 200, thank you. 200 I've got.

201 anywhere? 201.

202. 203. 204.

205. 206. 207. 208.

209. 210. 211.

And so there was quite a battle for the property

and we rejoin the bidding with the flat now at £245,000.

245 back in again. 246.

Good bid. 250.

251.

No? With you, bid's £250,000 against you on my left. Anyone else?

If not, 250 for the first... 250 for the second...

250 for the third and final time... All done? Sold, 250.

And so for £250,000, the successful bidder

for the two-bed first floor Harlesden flat is Robbie.

Robbie owns several rental investments in different

parts of London and currently lives in one of the properties

which he's yet to refurbish.

I joined him back at the flat to find out

more about his plans for his latest purchase.

-Robbie, congratulations.

-Thank you very much.

Are you delighted with yourself for purchasing this flat at auction?

I am delighted. I'm very happy. It's a lovely place, yeah.

-Big, spacious...

-So, have you bought this for you or an investment?

I bought this for myself.

I have a couple of other rental properties that are potentially

to live in, but I had this in mind for myself

cos I know this area reasonably well.

So what's your background? Have you always been a developer?

-No, it's something I... I've been an IT professional for 15 years.

-Wow!

That's my college qualifications, my uni qualifications.

I took redundancy, went travelling for four years, came back

and I had been lucky enough to get into property very early

when I moved to London originally, so I was able to then sell

a couple of bigger properties that I had and was able to invest

those in two or three smaller places that I've got at the moment.

Robbie moved from his home in Northern Ireland to London in 1987,

and quickly started property developing as a sideline -

a pretty wise move considering the increase in London property prices.

-What do you intend doing with it?

-I want to put really nice floors in.

I want to do something with the kitchen and the lounge area.

Like what?

Well, not take maybe the whole wall down,

but I'm thinking very much of opening the wall that

that's going into the reception at the moment,

but at splash back level so you've got worked-ups going up towards

the window, and you'll have a sofa area in front of that

and a nice big archway to go into the kitchen area.

-Something along those lines.

-Pretty spectacular.

-You're looking sort of top end. It's going to be showy.

-Very much.

Well, especially if it's something that I'm going to be

living in myself, I want to...

If you go to the bother of doing something for yourself,

you may as well do it to a nice specification.

Make it somewhere nice to live, yeah.

So with this property in particular, it smells of damp,

you can see the damp, you can see a lot of the walls are wet...

-Did you get a damp survey done?

-I didn't, no.

-Oops!

You have a feel for a place and damp from...

We're saying there's a lot of window problems

There's lots of areas and the window sills, you know,

you got sort of a west-facing very open area,

clearly a bit of damp coming in there. Easily fixed, I hope.

And the roof, which I haven't actually had surveyed yet either.

Sort of my builders are going to go in there and see whether or not

there's anything substantial that needs to be done there.

One way to resolve that - you could just extend up into the roof

and smash it all out and include another bedroom and bathroom.

Have you thought about that?

I have thought about that and I'm very keen to do it if I can do it.

-Oh, that's really good news.

-Absolutely.

That will add a lot of value to this property.

Very much so, and it's a huge space up there.

So let's move on to the finances.

What cash have you got to splash on this place?

I've budgeted about 70,000 for it.

OK, so does that £70,000 include the loft?

No, I wish it did. I wish it did.

Normally, you know, builders will talk in terms of 40...40-ish,

45,000 for a decent loft conversion,

so I imagine we'd be kind of talking about adding that much to the budget

for the build.

It's great that Robbie wants to make this an amazing flat

but I have to confess, I'm a bit worried

if Robbie goes the whole hog,

he could be in for a total spend in the region of 365,000,

and the agent reckoned a three-bedroomed flat here

would only make £340,000.

Argh, um! That's less 20 grand.

So, is this something that Robbie has considered?

Are you worried that you might be spending more

than the flat will be worth at the end of the day?

No, I'm not,

because I do genuinely believe that a flat of this size,

in this area, done nicely, you know, sort of will be worth

every penny of the purchase price plus the development costs.

I also have, in my case,

the extra relaxation of the fact that it will be my place at the end,

somewhere for me to live in, potentially, as opposed to something

that I absolutely have to make an instant profit on.

-So what's your timescale to do the work?

-I'm hoping for...

..six months.

If there's a loft involved -

and I really hope that there will be a loft involved -

then it might even be slightly longer timescale on that

because of planning permission and, you know,

maybe architect's drawings, etc.

I can't wait to see what it's like when you've done it up. Well done.

-Congratulations. Thank you.

-Thanks very much.

Well, it sounds as if Robbie has got big plans

to create a fantastic home here,

but I do think he needs to keep an eye on the budget

as he could spend more than the flat will be worth at the end of it all.

Will we return to see that loft conversion?

Join me later in the programme and we can find out how he gets on.

Stanley in County Durham is a former colliery town

with road links to Durham and Newcastle,

which is about 25 minutes away.

It does have a small town centre, new leisure facilities

and some lovely countryside.

I'm here to look at a lot which, once upon a time,

was part of the local authority housing stock

and, as you know, this is the kind of housing that always gives me

a good "feline"...

HE SIGHS

Two-bedroom semidetached at a guide price of £45,000.

Garden need a bit of tidying up but, apart from that,

looks all right.

# Stanley, here I am

# Here I am. #

Well, fairly classic layout.

Stairs up to your bedrooms there

and then through into your living room.

Um...wow.

You're certainly hit by the wallpaper

the moment you walk in here.

Hmm, brown, eurgh... No, got to go.

As has the floor.

I mean, it's serviceable, I suppose, but it's just...

It's that... It just gives, again, the wrong impression.

Nice flooring here will definitely make

all the difference. Even strip back the floorboards.

But it's not a bad-sized room.

And, as I always say, when it comes to ex-local authority houses,

real solid walls, none of your stud partitions here.

So, through into the kitchen

and it's - surprise, surprise - a really nice size.

Easily enough space, probably over there,

for a sort of table and chairs or at least breakfast bar idea.

It's not in the best of conditions.

These units, although, probably pretty serviceable,

and if you were renting this place out,

you might leave them.

But, I think, for a small investment,

you could definitely sparkle this place up.

So, in terms of that little utility area there - beyond me.

It is what it is

and I like it.

Bold wallpaper and underwhelming flooring aside,

I think this has a lot going for it.

And you could add value by replacing the kitchen.

I reckon, given the semi's condition and position,

it would be an ideal first-time buyer property.

Hopefully, the foliage is confined to the downstairs.

So, up here and...

Well, the bathroom. It's exactly where you want it to be -

top of the stairs, so to speak.

It's been knocked through into one. I imagine, in early days

this would have been a separate bathroom and loo.

That's good.

It would definitely benefit from some tender loving care, though.

Probably replace the suite with a white one,

really modernise it and you'd definitely get your money back

in terms of what value you would add to the house.

But two bedrooms. OK, it'll...

Well, I guess it would be a three-bedroomed house

but I like the fact you've got two really good-sized beds.

There's one at the back there, one at the front here.

Yeah, it's just a really good family home.

Again, there are some decoration issues.

The carpeting needs replacing and,

yes, there are flowery things going on up here too.

But the one place I would have liked to have seen some

is in the front garden,

but there is a notable absence of any colour.

Curb appeal totally missing here, I'm afraid.

What about round the back?

Whoa, one of the bonuses of ex-local authority houses

is that they often have really good-sized gardens,

and that's certainly the case here.

Now, it is a little bit overgrown but what it is

is a really nice size, stretching all the way back to a greenhouse.

Ah, bonus!

Now, I love a garden and a greenhouse but,

as there is a dandelion or two,

there is a bit of weeding to be done.

This garden would not necessarily be a bonus if you were a landlord.

Maintaining gardens can be a thorny issue with tenants.

However, it's a good garden for a family,

but then there's only two bedrooms.

What does a local estate agent think of this lot?

First impressions of this property are it's a fairly standard layout.

It's what you would expect of a property of this type.

Immediately, you notice the size of the garden.

It's a really good size garden.

Plenty of potential for somebody to do more with that.

In the current market, there's a slightly limited appeal

for two-bedroom properties. We're tending to find,

particularly as first-time buyers are older now,

they may be at a different stage of life

and go straight for a three-bedroom or maybe four-bedroom property.

They may already have children,

or they may be thinking of starting a family fairly soon.

Of course, a two-bedroom property is limited in that respect.

Now that is an interesting point to consider.

Demographics have a profound impact on the housing market.

Nonetheless, this house does have an attractive guide price of £45,000.

What does the agent think it could be worth?

I think if the property were done up to a good standard

and put on the open market for resale,

you'd be looking to achieve something hopefully

in the region of £70,000-£75,000.

There's a fairly good demand for rental properties in the area.

I would expect to achieve something in the region of £400 per calendar month.

So, who was up for a good, solid little house

in need of a bit of modernisation at a really good guide price?

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

Semidetached house, vacant.

As you see it in your catalogues. What shall we say for it?

Do you want to bid me 50 for this?

Cheap for the money. 50, somebody?

Yes, thank you. 50 I'm bid. 51.

51. 52. 53. 54.

55.

At 55.5 in a new place. 56.

56.5.

56.5 in a new place.

57. 57 here?

57. 57.5.

57.5. 58.

58. 58.5.

Sure? On my right then at £58,000 I'm bid.

Yours at 58 once.

58 twice.

Third and final time.

-BANGS GAVEL

-Sells to you at £58,000.

The successful bidder was Noman,

who is a property developer and a legal student living in London.

So, what has brought him

to Stanley to buy this good little house for £58,000?

-Noman, nice to meet you.

-Nice to meet you too.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

-I bought... Before this, I bought another two properties.

-Oh!

One in Lowton, one in Kettering.

Three, four days before the auction,

I called them to view some property in Liverpool, Manchester.

They said all of them finished actually.

There are no more viewing.

And suddenly, I called regarding this property and they said, "Yes.

"There is viewing tomorrow morning, 9 o'clock."

In terms of the country then,

it seems like you're...well, happy to go anywhere.

You've got properties in Kettering

-and...where was this other one you said?

-Lowton.

-Lowton.

-Yeah.

-You were looking at properties in Liverpool and Manchester?

-That's right.

-You've ended up with somewhere in the Northeast.

What is this? Like, close your eyes, stick a pin in the map

and - pow - buy a property there?

I do some research as well before buying the property.

I see the sold price on the website and, you know,

when I come here, I call the estate agent as well.

I mean, what I can achieve before I sell the property

or what's the standard.

If I do some upgrading on the property, so then, you know...

decide to buy it.

Noman also works in electricity and gas sales,

so he travels around the country.

This is on top of studying for his law degree

as well as having a wife and baby daughter.

He's a busy man.

And, on top of all that, he'll do the work here.

So, what's the plan?

I'm going to keep it as it is in this room.

-What, including the wallpaper?

-No.

I'm going to paint or put in new wallpaper.

The floor, it will be the same as it is.

It looks quite good but I'm going to put some bit in the corner.

Upstairs I'm going to change the carpet. Bought the carpets.

I'm planning to change all the toilet but I'm painting throughout

and changing the carpets.

Clearing the garden - front and back.

-OK.

-That's what I'm going to do.

Noman is rightly cautious about any refurbishment costs.

He did pay £13,000 over the guide price.

Still, he plans to weigh up professional advice

before deciding what to do next.

So is the idea then to rent it out?

I have...two plans.

Definitely I'm going to put it back to the market for sale.

That's actually... It all depends on the circumstances, really.

How much money I can gain after doing the works.

I'll get some opinion, then, you know,

I'll go ahead with the work actually.

Put it back to the market or,

if I can see that I can't achieve anything of what I expect,

-then might be on rent.

-OK.

Noman will have to take on board the slow market in this area.

His previous property experience was in London which,

as we all know, is its own phenomena.

He made £60,000 in eight months there.

What's the timescale for what you're planning?

Maybe a week.

-MARTIN LAUGHS It's not much work anyway, so...

-No.

..that's what I'm thinking to finish the work.

How much are you spending on it, do you think, budget-wise?

No more than 3,000, that's max. Between 2 and 3.

What do you think you might be able to sell it for?

Um, there is conflicting information actually.

I called the local estate agent before I buy the property.

-They said 75 or 70...

-Mm-hm.

..but I got a second opinion.

They are saying I can't achieve more than 60 or 65. That's what they said.

When did you get the second opinion? After you bought it?

Yeah, after I bought it, cos I have to buy it, so...

So I would say I'm expecting at least 75 or 70.

Even if I don't achieve anything... This is the very beginning.

I want to be in the market for about 10-12 years, so I don't mind.

Even losing a couple of grand, it's just experience.

I can see that Noman is trying to curtail the spend

and trying to protect his potential profit,

but he might do better doing a bit more work

to get this property up to scratch

and looking into it as a long-term investment.

But then, Noman does have a lot on his plate, like his studies.

-I just finished my second year exam.

-Well done.

-I've got another year to do.

-Oh, right.

-And then I would like to become a solicitor actually.

-Oh, great.

-So, still a long way to go.

-Well, listen, congratulations.

-Thank you very much.

-Good luck with it.

-Thank you.

-And nice to meet you.

-Nice to meet you too.

Well, it's certainly a minimalistic renovation that Noman has

in mind for this place.

But maybe that's not such a bad idea given that its value

might not be as high as he had originally hoped.

How will he get on?

You can find out later in the show.

Still to come, there'll be plenty of work ahead

for whoever buys a plot in Ramsgate, Kent,

that can only be seen via a step ladder.

But in Stanley, County Durham,

it looks like Noman was true to his word.

I've spent 250 including everything.

First up, though, is Harlesden in northwest London,

where this first floor, two-bedroomed, split-level flat

is very close to good transport links.

Actually, I thought it was too close to the railway line.

But that didn't put off Robbie,

a retired systems analyst who paid 250,000 for it,

intending to do a full refurbishment and move in himself.

It smells of damp, you can see the damp,

you can see a lot of the walls are wet.

Did you get a damp survey done?

I didn't, no.

-HE LAUGHS

-Oops.

You have a feel for a place.

And...damp from the...

You were saying there's a lot of window problems.

There's lots of areas in the windowsills.

You know, you've got a kind of west-facing, very open area,

clearly a bit of damp coming in there.

Easily fixed, I hope.

And the roof, which I haven't actually had surveyed yet either...

One way to resolve that, you could just extend up into the roof,

and smash it all out, and include another bedroom or bathroom.

Have you thought about that?

I have thought about that,

and I'm very keen to do it if I can do it.

Robbie had grand plans

for transforming the quirky-shaped rooms into a more attractive space.

And not take maybe the whole wall down

but I'm thinking very much of opening the wall

that's going into the reception at the moment

but at splashback levels.

So you've got worktops going up towards the window,

and you'll have a sofa area in front of that,

and a nice big archway to go into the kitchen area,

-along those lines.

-Pretty spectacular.

-You're looking sort of top end. It's going to be showy.

-Very much.

Not including the loft conversion,

Robbie had a timescale of six months.

So, six months later, we're back

to find out how showy he's made it.

Everything certainly looks much fresher

with a coat of paint and new carpeting.

But there's no loft conversion.

The plan to knock the kitchen into the lounge hasn't materialised.

And there appears to be just minor changes to the bathroom.

So, what happened?

When I bought, initially,

I had a grand plan to do a big refurbishment downstairs,

knock through this kind of kitchen area, make a bigger bathroom,

you know, do a complete refurbishment on the walls and on the floors.

But, before starting major work,

Robbie decided to purchase a share of the property's freehold

but he's had difficulty, so he's taking legal steps.

So I thought I would do just a very small refurbishment

to allow me to move into the place

and live here while we go through the longer legal process

to buy the freehold, and do the whole job at one time.

Changes in legislation mean

if qualifying leaseholds in the property

want to buy a share of the freehold, the freeholder is compelled -

by law - to sell it to them.

So, along with the downstairs tenant,

Robbie is doing just that.

Once completed, not only will they be able to get on

with all the structural work,

but he'll have raised the value of his property too.

But this temporary setback hasn't halted all works.

I did some floor repairs, some window repairs,

obviously painted and decorated,

and replastered some of the worse area of the walls.

Sand the kitchen, really very little other than putting in white goods,

the bathroom - some tap changes, mixer changes

and some new light fittings.

Other than that, carpeting, soft furnishings.

That's really all that's been done at this point.

It's only a trifle compared to his major plans,

but there's no denying that what Robbie has done so far

has made a once-dingy, old flat far more appealing.

Robbie has only spent nine grand of his development budget,

so will the value of the property now reach the dizzying heights

of the £300,000 valuation for a fully refurbished flat

that was suggested when we first came to visit?

Will buoyant London property prices outweigh the minimal renovation

and still produce a profit?

After all, Robbie has spent £259,000 on this property.

We asked two local agents along to get their opinions.

If I was to value this property for sales,

I would look to market the property at £379,950

to achieve offers in excess of £360,000.

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

I would market it at a price of £360,000.

If Robbie could sell for £360,000,

he'd make a potential profit of £101,000, minus fees and expenses.

Well, they're good, positive figures. That's...

I mean, it's a good indication that my gut feeling

as to the purchase price at the auction was a good value price.

Yes. £100,000 profit in six months

after a £9,000 renovation

is a pretty amazing result in anyone's book.

That's the London factor

and a rising market which isn't true in every area.

But how does that affect

the furthermore expensive refurbishment plans?

The agents seem to have suggested

that most of the realisation in the property value

has effectively already happened with a fairly small refurbishment,

and that the large refurb and loft conversion

you may not, actually, sort of get the money back that you put in.

But I'm still quite keen to do the long-term refurbishment

because I can see a beautiful space and a beautiful loft conversion.

And it's already a lovely flat.

Well, when it's your own home it's not all about increasing value,

it's also about being happy there.

Speaking of which, what's happening about the damp problem?

The exterior problem that's causing the damp

has not actually been resolved yet.

I've got a roofer coming this afternoon to do the gutter repair,

so, hopefully, after that the walls will dry out

and I won't any longer have a problem with that.

So with the damp problem and the legal issues

regarding the freehold,

it's been far from a straightforward journey.

So, has Robbie got any advice for future developers?

Don't do it. Don't do it.

HE LAUGHS It's a nightmare.

Well, hopefully, there'll be calmer waters in Ramsgate, Kent.

It's a nice, coastal town with a lovely marina

and it's connected to London by a high-speed rail link.

15 minutes' walk from the marina

and I'm here to see today's auction lot.

Now, the houses along here are quite nice.

The guide was set at just 8-10,000,

so my expectations are at an all-time low.

It's not this one...

No.

It's not this one round here, which is just an old derelict plot.

Typical. It's this one!

It's behind that wall and, sadly, I can't get into it today.

They always say it's advisable to buy the worst house on the street

but that is taking things a bit far.

It's not even a house anymore.

The footings are over there but it's classed as land.

Excitingly, the auction catalogue tells me it has potential.

I'm going to investigate.

Our view of the site is blocked by the high wall and the trees.

From across the road you can get a feel of its size

and its position between another vacant site

on the corner and St John's Ambulance station.

The lot is surrounded by houses, and shops, and small businesses,

so that opens up a variety of possible options.

There isn't any planning in place at the moment,

hence the reason for that low guide.

But, imagine if you achieve planning permission

to build a three-bedroom house over there.

It's in a residential area, the access is really good,

and it's a large enough site to accommodate a house.

But, as we know, achieving planning permission

is never ever a sure thing.

Buying land with hope value is always a gamble.

You could be left with an expensive parcel of land

if things don't go your way.

That's my concern.

By the way, in case you haven't heard the phrase

"hope value" before,

that little bit of jargon in this particular case

just means the bit of the market value that reflects the hope

that the property has the possibility of being developed

in some way that may just add value.

But, of course, it is just that - hope.

As we should all know by now,

nothing is certain in the world of planning regulation,

so getting carried away

by the very attractive guide price of 8-10,000

might prove to be a mistake.

So, picture the scene - the planning application has been granted,

you've built your dream house

and you look out of your window to admire the view.

Ooh, it's not great, is it?

This will, no doubt, have a negative impact on the value of the house.

I would make it my business to contact the council

and ask if there's any plans to develop this site.

You may find out they're thinking of building new houses here

or they've been given the go-ahead for a chicken factory!

Oh, no! That would be a nightmare.

One thing's for sure though,

you will need to do your homework before going to the auction.

Of course, if the buyer of the auction lot

actually wanted to build a chicken factory,

again, some homework and weighing up the risks would needed,

like, what are the council's plans for this area,

and what kind of developments are they keen to encourage?

Maybe explore if this other bit of land is for sale

and make the plot and the potential bigger.

It has to be said, plots of land with access

and services are generally very sought after,

especially with people who want to self build.

The self-build market accounts for about 7% of new houses in the UK.

So, what are the benefits?

You get a bespoke house,

it's roughly 30% cheaper than buying an existing property,

it's tax-free,

and if the plot costs less than £125,000,

well, you can escape stamp duty. Perfect.

Time to get some local gen

from an estate agent.

What does he think could be done with this plot

guided at 8-10,000?

It's a small plot.

It'll be quite difficult to develop

but it is big enough to put a single unit on there.

In an ideal world, you'd like to buy the extra land next to the site,

perhaps build a couple of units on there

because, without that, if you just built the site in isolation,

it's going to be sat next to a St John's Ambulance centre

plus a rundown, derelict plot next door,

so it's not going to be particularly attractive.

What kind of potential could this plot have?

Let's say you bought it for £15,000.

If you could achieve planning on this site

for perhaps a 900 sq ft, three-bedroom town house,

realistically, you're looking at a plot value of about £30,000.

That all-important planning permission

could potentially double the value overnight.

So, how much could a new house be worth?

If you built a decent, three-bedroom town house on the site,

it's going to have a small garden, it's not going to be a big plot,

but really that end unit's going to be worth

somewhere in the order of £180,000.

So, plenty of potential profit,

even allowing for the build costs of a new property.

This is a risky purchase.

Great if the planning goes your way, not so great if it doesn't.

Somebody thought it was a gamble worth taking though.

Let's find out who that was as we go to auction.

Land with potential, close to the town centre.

Cheap little lot here.

Where are you going to start? 10,000 for it.

£10,000, can I say?

10,000, can I say?

Give me 8. Get me on the way.

£8,000 bid I've got.

10 I'm looking for.

10,000 on the phone.

10,000 on the phone. 11,000 if you like.

It's in the room to be sold. Get one. One more.

No? You know you'd make her really happy.

11,000 at the back.

At £11,000 at the back. £12,000.

11.5 if you like.

12,000 in the door.

12.5 if you wish now. 12.5.

And 13. 13.5.

13.5. 14.

At 14. 14.5.

I've got it 14.5. Now 15.

Are we all done at 14.5? 15 anywhere else?

It's that number there for the first time.

14.5 for the second time.

Third and final time at 14,500.

-BANGS GAVEL

-Your bit of land, sir.

Grabbing that bit of land for £14,500 was Andy, here on the left,

and his friend and business partner Ben.

Andy is an accountant based in London

and Ben is a construction site manager,

who is a local lad, accountant and a site manager.

Ha, sounds like a dream team when it comes to property development.

I met up with them to find out why they were willing to risk

buying this plot of land.

Guys, congratulations.

Happy with the price you paid on auction day?

Um, yeah, I'd say so. Fairly happy with it.

It didn't go over budget, so... Yeah, happy.

Andy, what was your top limit?

£500 more - £15,000.

-Really?

-So it was right on the edge, yeah.

So do you feel you've got yourselves a bargain here?

-Potentially, yeah.

-Yeah, well, hopefully.

Everything seems to be indicating that,

so, yeah, I'm happy with it all so far.

So why does it appeal to you?

Cos it's big enough to put one house on,

so with the price we paid for it,

we're not going to lose money on what we've bought,

and potentially we're looking to buy the two plots at the front of it as well.

We've made an offer on the corner one, so we're waiting to have acceptance.

If we do get all three,

then there's scope to do something much bigger on it.

So the land next to their purchase is actually two plots and not one.

Andy and Ben are aiming high here.

Getting the other parcels of land could mean they have this wrapped up

with potentially higher returns

but, without the permissions, an even higher risk.

# Livin' on the edge... #

-Do you think you will get planning permission for that?

-Yeah, without a doubt.

If you look round the surrounding area, it's rundown,

and there's a need for housing in Thanet at the moment.

That's a disused space,

so I don't see there being any issues with it.

If we get it outlined, agreed in principle for that as well,

it'll help us with the other two if we do get that.

Hang on, they haven't even bought the land yet.

These guys are in a hurry and the risks keep piling up.

So, Ben, have you even walked around on the plot?

No, I've had a look over the wall off a ladder, that's about it,

and seen it on an ordnance survey map so I could see the size of it

but that's as far as it's gone, to be honest.

I don't think you can get into the plot at the moment.

They're confident for sure and, given their professions,

why shouldn't they be?

How are you going to make it work as a team?

I mean, who's going to be on this, over this,

talking to the builders, the planners?

-Who's doing that side of it?

-I'll run the job.

Well, I'll project manage and run the job from down here

while Andy's in London,

and he'll deal with anything that's financial,

like any payments, material purchase, everything like that.

So we're kind of getting him into construction-minded thinking

rather than just figures.

-SHE LAUGHS

-Right, OK, do you hear that?

-I need that.

-It's come from the horse's mouth.

-Yep.

He's already training me already.

They make it sound so easy

but there are a lot of issues to tackle.

They definitely aim to build one town house on the site they bought

and have it completed in six months.

They hope to buy the rest of the land here for around 50,000.

It's a case of literally watch this space, or rather, these spaces.

My worry is, Andy, that you'll build a beautiful town house

and it'll be overlooking a very ugly, derelict plot of land.

What happens then?

Well, in Ramsgate at present, there's a big drive for regeneration,

so, as far as they're the concerns,

the council do actually want to see that space used,

developed and made to look, you know, fairly pretty, to be honest with you.

Either we have the opportunity to snap it up,

or someone else is going to come along and develop it themselves.

Do you think that you will buy the other plots of land?

No, I do believe so. I think...

We currently made an offer on the corner plot which, hopefully,

over the next couple of days, we'll find out whether it gets accepted.

If that's the case, that's great.

The other plot of land, it's a bit more tricky.

It's going to be a lot more politics behind it,

and I think, to be honest, that'll be something

we'll have to have to work with the council on but, if that's the case,

I think we're in a position of pretty much strength it.

Then we can then push it forward and pretty much purchase that.

What sort of budget have you got to build your town house?

I think we'll do it for under 75 grand.

Have you got any ideas of what it's going to look like and how much space it'll have?

Well, the space it's going to have is the space that the land offers,

it's as simple as that.

What it'll look like is just dependent on the council.

We're not building it for ourselves, so whatever they'll pass quickly,

-we'll build for it.

-How many houses in total would you like to build

on the plots if you get all three of them?

Ideally, I think we'd like to go for four.

I think that's the kind of maximum that we're looking.

Worst-case scenario - you don't get permission,

you don't build anything, what are you going to do with that plot?

Flatten it, turf it and have a lovely summer garden.

-THEY LAUGH

-Have a nice picnic?

-Yeah.

Good luck. I can't wait to see what happens and what the outcome is.

-Thank you very much. Cheers.

-Thank you.

-Thank you very much.

Andy and Ben certainly have their work cut out with this,

their first project.

Will they achieve the planning?

Will they purchase the derelict plot of land next door?

And will we come back to one house, or three, or four houses?

Will they be left with an expensive parcel of land

that they can't do anything with?

So many variables.

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

So there you have it, Martin. One property done and dusted.

Let's see what happened to the others.

Yes, it's a while since we visited.

Let's go back.

First up, it's Stanley in County Durham.

Earlier we met Noman, a property developer, legal student

and electrical and gas salesman.

He bought this tired semi for £13,000 over the guide price.

However, he didn't intend spending very much more on it.

He was already juggling several careers,

lots of properties, as well as studying

but, even then, it seemed distance was no object for Noman.

In terms of the country then,

it seems like you're happy to go anywhere.

You've got properties in Kettering

-and...where was this other one you said?

-Lowton.

-Lowton.

You were looking at properties in Liverpool and Manchester,

and you've ended up with somewhere in the Northeast.

Two months later we're back to find out

if Noman changed his mind about doing the bare minimum.

And, from the outside, that looks like a no.

The only difference in the garden

is that the weeds might be a bit shorter,

so no points for added curb appeal.

Perhaps inside will be better.

Well, there hasn't been much in the way of changes

that I can see.

Noman has been focusing on two other properties that he owns.

So, how much time has he spent on this property?

It didn't take me that long

and I finished it literally even not one day.

# What a difference a day made

# 24 little hours... #

You heard him right - one day.

And, from what I can see,

it's not a day that's made much of a difference.

Could that be

Homes Under The Hammer's shortest refurbishment?

Quite possibly.

Noman did a little research once he'd brought the property

and he came to the conclusion that,

having spent so much over the guide price,

he could lose money if he spent too much,

so he's kept with the plan to do the bare minimum.

Instead of lifting up those carpets upstairs,

Noman chose to clean them,

and he decided to do some work in the bathroom.

This is the place where I've done most work actually.

I painted the ceiling, and I've put new flooring

and put some silicone where necessary.

So, Noman has added this new seal and new flooring.

One day, minimal refurb.

How much did it cost?

Even though I decided to upgrade the property,

I had in my mind that I would spend about £1,000,

but I didn't want to spend that much really.

I've spent, I think, 250 including everything.

That's £250.

The shortest refurbishment,

and certainly one of the cheapest I've seen.

And yes, Noman did have some work done on the garden,

the only thing that he didn't do himself.

The greenhouse has gone and the back lawn has been cut

but already needs another trim.

Noman is hoping to sell this property on

but I'm certainly concerned he's not done enough

to make this house more appealing.

Two estate agents have come along to give us their thoughts.

This is my first time in the property.

After I've had a look around, I think, you know,

it's a basic refurbishment

and I don't think he's done too much to it,

just perhaps a bit of painting on the walls, and that's about it.

If it was myself, I would have maybe done a bit more of a refurbishment

to the property, painted it throughout,

maybe looked at putting in some new flooring,

and I think I would have tidied up the garden as well.

I think the standard of the work that's been carried out

on this property is, um...

It could have been done to a better standard.

Noman held back from doing any significant work

in order to protect his investment of £58,250.

What could this house achieve on the open market?

In its current condition,

I'd be looking to place this property on the market at around £60,000.

I think if the owner was to place the property on the current market,

I think he could achieve offers in the region of 60-65,000.

Yeah, 60-65 that's not bad actually.

I mean, at least I'm not going to lose any money,

so I'll be happy if I'll

be able to achieve even the lower one as well.

But if I were to achieve the higher one, that's pretty much good.

That highest valuation of 65,000 would give him a profit of £6,750

without factoring in taxes, fees or expenses.

What about rental?

Would that be a better option?

The rental value of this property would be £400 per calendar month.

I think if the owner was to put this property on the rental market,

I think he could achieve possibly 400-£450 per calendar month.

If I was the owner of this property,

I would have spent a bit more money on the property

bringing it up to a higher standard.

I would have put it on the rental market for at least 6-12 months

until the market picks up.

# A change will do you good... #

The consensus is that changes were needed here

to make this house more marketable.

The agents who first came to see it thought it could have resold

for £70-£75,000 if renovated.

Anyway, maybe the change that is needed now is a change in the plan.

Rental instead of selling on?

Those figures would give him a really healthy 9% yield.

Is he tempted?

Hmm, yeah, if I'd put it on the rental market,

it might be all right because after paying mortgage

and all other expenses, I think that should be OK.

But, you know, I don't have any plan to put it on the rental market.

# I'm learning how to fall

# (Learning how to fall)

# Learning how to take a hit

# (Learning how to fall.) #

Noman will have to think about agent's fees

and other expenses, as well as taxes.

If he only got the lower valuation, a loss could be on the cards.

He did only spend a day on this project but his time is scarce.

He's a busy man with studies, a sales job

and his property interests.

How does he feel about this one now?

I mean, I learned a lot from this property actually, from this project.

Though I'm running some other project

and I sold already two properties,

and I got some profit from that but, from my experience,

from very short research from this property,

I think I'm going to lose money from here,

so in future, it will really, really help me to go ahead with my business

and I can apply this experience for my future investment.

It's time to go back to Ramsgate in Kent,

where business partners Andy and Ben

had bought this plot of land for £14,500.

Overgrown and blocked off behind a high wall,

it wasn't much to look at from the outside

and neither were the adjacent sites.

However, accountant Andy and builder Ben had a plan.

It's big enough to put one house on, so with the price we paid for it,

we're not going to lose money on what we've bought.

But this ambitious duo weren't content

with planning to build one house.

Oh, no, the guys also had their eye on next door.

We're looking to buy the two plots at the front of it as well.

We've made an offer on the corner one, so we're waiting for acceptance on that.

If we do get all three, there's scope to do something much bigger.

Ideally, I think we'd like to go for four.

I think that's the kind of maximum that we're looking.

Do you think you'll get planning permission for it?

Oh, yeah, without a doubt.

If you look round the surrounding area, it's run down,

and there's a need for housing in Thanet at the moment.

That's a disused space,

so I don't see there being any issues with it.

Now, I've heard of counting chickens before they've hatched

but these guys were counting them before the eggs had even been laid.

They were hopeful that a deal for the other two pockets of land

could be struck quickly.

Assuming no problems arose with planning,

they were confident that the development could be complete

within six months.

# Don't count your chickens before they hatch... #

A tad optimistic.

Well, as it turned out, extremely optimistic.

Fast forward not one, not two,

not three, but almost 4 years.

There are now two very smart town houses sitting side by side.

On the original plot bought at auction

sits this lovely two-storey house.

And on the plot bought later on,

there's a fantastic three-storey town house.

The other plot remains undeveloped.

Basically, the back lot of the two-storey unit we bought at auction

and then after we came down and looked at the site

There were two other plots at the front of the site,

so we pursued both of them, bought the one that we're in now,

which was a plot big enough for one three-storey unit,

for real estate,

pursued the other one and obviously wasn't so lucky with that one,

so kind of...just kind of started the build with the two.

Not only did the land purchase cause delays

but the planning consent also proved to be a long, drawn-out process.

It was a bit more problematic than we first anticipated

because we're in a conservation area.

The big, three-storey house

at the front's fronting the high street approach,

so conservation had quite a lot to do with it.

We had to resubmit the plans quite a few times.

Um, and eventually, it panned out economically, so we started.

Oh, dear, this just reinforces that you can't assume anything

when it comes to planning.

Just because an area looks neglected doesn't mean planners

will let you do what you like.

And in fact, maybe a good question to have asked was

why have the plots remained undeveloped for so long?

Delays aside, the actual building process has taken only five months

and the results are impressive.

Let's take a closer look inside.

The layouts in both houses are simple and functional.

The living room and kitchen are on the ground floor,

with the addition of a small loo positioned under the stairs,

always handy to have.

The kitchens have French doors that open out onto the garden space.

In the two-storey house,

the first floor contains two double bedrooms and a family bathroom.

The three-storey house can afford a large first-floor bedroom

and a bigger bathroom, plus a roomy storage area on the landing.

A further two bedrooms are on the second floor,

with a wet room in-between.

Both houses are fitted out with high-spec kitchens,

wood-effect flooring,

and workshops complement the white units and tiling.

Equally well furnished are the bathrooms.

But it's not all conformity.

There's an interesting contrast of glazing units -

white in the three-storey house

and these rather natty black framed windows in the two-storey.

Now that the job is complete,

how does Ben feel about the development?

I think they look really nice from the outside,

and they fit well and flow well.

The inside is really nice as well.

We've had a lot of support from the locals

and residents living round here

saying how lovely the scheme looks and how pleased they are that we've done it.

The original budget was all dependent

on what land they managed to get.

Andy and Ben bought the plot at auction for £14,500,

and then bought another plot,

bringing the land buying total to £50,000.

They've built two lovely houses with a combined build cost

coming in at £170,000.

All in they spent 220,000.

However, they say time is money.

And this project has been three years and nine months in the making.

Has it all been worth it?

We asked two local property experts to come along

and appraise the value of these two houses.

I really like the standard of the finish on both the properties.

It's a very high-spec for this particular area.

It's a finish you would expect to see

maybe on a higher-end property.

The properties will appeal to people like first-time buyers

who want to live here,

or they'd be ideal for the rental market.

They'd rent out very well.

Unanimous approval there.

The estate agents were also of one mind when it came to valuation.

They felt the two-bedroom house would be worth around 150,000

and the three-bedroom could achieve £165,000.

Ha. But Ben, well, he's one step ahead.

I think they're in the process of being sold

for around about 300,000 combined value but Andy's got the figures -

I don't have them with me today - and knows more about that.

So, if that sale goes through, there's an £80,000 profit

from this two-house project minus the usual fees and taxes.

Does Ben have any final advice to share from this experience?

Yeah, investigate the local planning law and conservation,

and things like that.

It was quite a hindrance obviously not being able to do them

straightaway when we bought them. We thought it would be...

Always knew there would be a 12-week planning lead on it,

but two or three years is a lot longer than 12 weeks.

Well, we've seen lots of hard work and determination

in today's properties.

Yes, but for some buyers,

the hard work is only just beginning.

Join us next time for more properties from the auctions here

-on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.