Episode 63 Homes Under the Hammer

Hello and welcome to the programme.

Today the weather has been a bit changeable.

We've had sunshine and some cloud.

Well, ups and downs. A bit like the property market,

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

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

are always telling you here on Homes Under the Hammer.

Well, spotting a bargain is what everyone wants to do,

but if two of you spot the bargain

and you're bidding against each other, well, it drives up the price.

The only way round that is to come up with a budget and to stick to it.

I wonder if today's bidders did just that.

Let's take a look at what they bought.

In Stoke-on-Trent, I thought I'd seen it all

when it came to terraced properties,

but I wasn't expecting that.

Whereas, in Kent, my property instincts tell me

that all isn't quite right.

I've just got a feeling that it's out here

that it goes horribly wrong.

And, in south Wales, I've got some searching of my own to do.

Stairs down and stairs up.

Got to be explored.

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.

You've bought it, sir. Well done.

Terraced properties.

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

Two bedrooms, three bedrooms, good, solid family homes

and the bedrock of the British property stock.

Often built as housing for factory workers,

they provided high-volume housing using a repeated joined-up style

that allowed for less build and design costs

which meant affordable housing and Stoke-on-Trent,

which employed thousands of workers for its pottery manufacturing,

was no exception.

So, terrace property, terrace property, terrace property,

gap, terrace property,

not a terrace property.

That's interesting because you'd expect that to continue,

but no.

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

and a terrace property of standard proportions it is not,

hinted at by the guide price. £115,000 plus.

Let's take a look.

I wasn't expecting that.

Wow!

Look at the size of this room.

Even a baby grand piano is lost in this space.

It's enormous.

Nice floor. Looks to be in reasonable condition.

This is incredible.

I thought that was big, look at this.

Is this a house or is this some kind of a... I don't know.

A banqueting suite or...

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

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

And it just goes on and on and on.

Through here, lots of little rooms going off.

There's a room down there.

This massive great leisure centre complex,

conference centre.

The building does seem to be in pretty good condition and...

Oh, wow. So it continues. Look at this kitchen.

It's almost like I've been shrunk, like I'm in Alice in Wonderland

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

It almost belies belief...

..but it's true. Wow!

At a guess, and an educated one given my experience of them,

I think this one big building must have been three terraces originally.

While downstairs is all about big open spaces,

the opposite is true of upstairs with a warren of small rooms.

For the life of me I can't figure out

what this building was previously used for.

I mean, it's obviously been extensively refurbished

and it is extensive in total.

I mean, we've got more and more rooms. One there,

there's another one over this way,

you've got this big room here which is almost a walk-through

which isn't ideal. So, I mean, would these let as individual rooms?

I mean, I don't know.

I'm really at a loss because you come in here and there's more rooms.

There's one over there, there's one here,

there's a separate little kitchen area there,

steps down to the kitchen area again. I'm not sure.

It's very easy to get disorientated as you wander round.

I think I'm above that big room downstairs at the moment,

but, as I said, to get your head around it you'd need to have

an architect come up with an interior plan of this as it is

before you even started to think about what you can do with it.

This is another of the bedrooms. Absolutely massive.

Wow!

You need to sit down in a darkened room

with a wet towel around your head to figure this one out.

Yes, it's all rather confusing.

It seems my much-loved terrace has been converted into one property

with, wait for it, seven bedrooms, five living rooms,

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

but what to do with it all?

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

First impressions of this property. It is exceptionally large

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

I think, to maximise the return for this property,

the buyer would need to look into, possibly, conversion into flats

or, possibly, bedsits or individual letting rooms

which, of course, would all be subject

to the relevant planning permission.

I think the agent is spot on.

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

that flat idea could be very attractive.

So, what kind of money could they make?

I would anticipate one-bedroom flats in this area

would be in the region of £50,000.

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

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

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

Minus the auction price paid and the conversion costs,

there's still room for a healthy profit here,

but would rental in some form or other

be an option worth considering?

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

you would possibly be looking at

around £250 per calendar month per room.

I would anticipate rental income for one-bedroom flats to be

in the region of £350 per calendar month

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

Well, it's an intriguing property, for sure,

that could be a potentially lucrative venture for someone,

but that someone is going to need a lot of money

and quite a bit of imagination to take this on.

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

Lot 91 is a substantial corner terrace building,

large accommodation, lots of rooms, shall we say 115, then? Lot 91.

115, back left. At £115,000.

120, I'm going to say now. £120,000.

125. £125,000.

130. 130,000.

135. £135,000.

140. No, then 135,000, by the door.

136 anywhere else?

136, seated.

137. 138. 139.

140. 141. 142.

Shaking his head. 142, seated.

143 anywhere else?

If not, I'm selling it at 142,000 to the gentleman seated.

For the first time.

At £142,000, for the second time.

Third and final time at £142,000.

You've bought it, sir. Well done.

And so the hammer fell at 142,000

and the successful bid was made by Neil,

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

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

but on a much smaller development project.

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

-Nice to see you.

MARTIN LAUGHS

-Welcome to the Palace Ballroom!

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

So, welcome back to the show. How did the last project go?

Before we get onto this one.

Went really well, nice, straightforward project,

simple terraced house.

I say it's simple - he does the work, I don't.

So it's easy for me.

But, yeah, went well, tenants moved in the day after you moved out

-and they're still there.

-Result.

So...what about this place, then?

-Yeah, it's big, isn't it?

-Why did you want to buy it?

Simply the sheer size of the property

made it an attractive option.

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

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

-Ten flats?

Eight to ten, yeah.

-Individual, self-contained flats?

-Yes.

Upstairs is virtually divided into flats,

it's just sorting out the downstairs.

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

they would either sell the entire redevelopment to an investor,

or sell some of the flats individually

and keep some to rent out.

But whatever route they choose,

it's all dependent on planning permission being granted.

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

They gave us an indication of what they would want,

in theory it would work, so we've obviously got to put

the formal application in and just check

that there's no hidden problems.

-But in theory it works?

-Yeah, yeah.

-What about parking?

Because it's on bus roads into the centre,

they were quite comfortable with that. There's no...

City centre development or town centre development, so it

doesn't come under those constraints of each flat having a parking space.

So how would the ten flats work layout-wise?

Well, there's two staircases into the building,

three front doors, potentially the front door -

which is right in the centre - will serve two flats on the ground floor.

We've then got the two staircases,

which hopefully will serve four flats -

two downstairs, two upstairs.

And the other back door will probably serve three upstairs,

-two downstairs.

-Right.

This area here will be split into two flats,

there's another flat at the front there, another at the corner,

and we should be able to squeeze another one in next door.

What kind of costs do you think would be involved

in creating ten flats?

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

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

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

But with the local property expert valuing one-bed flats

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

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

David is hoping, planning permission notwithstanding,

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

Remind me how it's divvied out between you two, what do you do?

You're the building side of things, aren't you?

I get involved with what happens on-site, yes.

And you swan around in the office?

-Pretty much, turn up every three weeks...

-Play golf.

-No, I play the golf.

-Much better than me!

My job, I'm an independent financial advisor,

so during my day job I'll help people look after their money,

and in the evenings I sort out the properties,

do the research on the internet, talk to the agents, do that side

and leave the practical stuff to David.

Right, obviously the relationship's working well.

Yeah, it's been working for two-and-a-half years now,

we haven't fallen out.

Congratulations, really excited to see how it all turns out.

-Thank you very much.

-Good to see you again.

-Cheers.

Well, it seems the history of this place is largely irrelevant.

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

and if they get that planning permission for ten flats,

lots of money to be made.

Will they...or won't they? You can find out later in the show.

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

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

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

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

the capital, making properties very much in demand.

Also in demand is Whitstable's most famous seafood,

which it's been exporting since Roman times.

# You're not the only oyster in the stew

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

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

so you can hide from the tourists, but a blast of the sea air?

Well, it's literally a stone's throw away, which is perfect.

And the outlook is pretty good too.

You've got this extremely pleasant green right here,

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

your view is fantastic.

The house itself is a two-bedroom terrace.

It had a guide price of £110-115,000.

I'm going to check it out.

The properties surrounding the green are mainly semidetached

or terraced, with an average price of around about £148,000,making

the area one of the cheapest places to live in Whitstable,

providing you can find one that suits you.

# You're the only one for me. #

When you walk in, the first thing

you realise is it's incredibly small.

It's got a cottage-like feeling to it, but what I love is

the fact that there is a certain amount of charm and character.

Really nice sitting room through there, picture rails,

really wide floorboards...

I mean, look at these lovely doors with the handles,

another reception room through here.

Ooh, very small kitchen, look how disappointing this is.

But you know what I'm going to say, because I always say it

on this programme - you could take this wall out!

You've got to take this wall out,

because then you'll have a really fabulous kitchen,

lovely dining table, you could even close this doorway up here,

use this bit of space...

Look, you've got so much character, these little cupboards here,

really nice, think I would keep that.

So it's dinky, it's delightful...I've just got

a feeling that it's out here that it goes horribly wrong.

Yes, gets interesting, doesn't it?

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

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

I don't think so.

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

the outside loo... I'll just close that door.

..it's not really working.

But once you're outside, you can see,

it's such a pretty little garden.

This really is fantastic, you've got loads of space there,

so I'm thinking, judging by what they've done next door -

because there you go, the neighbour's wall comes right

the way out to here - you could have a nice big extension.

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

a bathroom upstairs, that really, really would

make this little property so much more worthwhile.

But what you've got to really think about it is,

do the figures stack up?

An extension like this could create approximately half as much

floor space as the original house.

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

There would still be loads of garden,

you wouldn't have to cut quite as much grass,

and the first floor bathroom would really add value.

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

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

Yes, one...two? More like a half size. This is incredibly small.

Can you call this a bedroom? Would anyone want to sleep in here?

Can you even fit a single bed along?

You've got the eaves coming out this way,

you've got a sort of boxy thing stuck there,

you probably could try and get rid of it, but it's tiny.

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

but that's if you can clamber over your bed and all the bits

and pieces in between. I'm being positive.

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

or a kind of nice not-much-space.

Bedroom number two next door is a much better size,

but not so big that you could steal

a bit of extra space from here to give to next door.

You could look to open up the eaves in here

and maybe think of installing a dormer at the back

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

This house is challenging.

The kitchen's tiny - but not as small as that bedroom - and the

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

It's also cute and quirky,

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

We asked along a local estate agent for her opinion.

First impressions of the property are that it's

a lovely place in a brilliant location.

Definitely a project, but keeping the original features will

definitely give it the appeal should the buyer want to sell it on.

I don't think it would be worth extending the property,

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

But again, maybe putting in roof lights to make it seems more

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

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

so what could this cottage be worth without one?

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

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

A property like this could achieve £750-800 per calendar month for rent.

I think Whitstable is wonderful, full or charm

and character with a lovely coastline.

It really is a perfect place to while away a weekend.

And to own property here would be something special.

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

Lot 150, we've got a guide of 110-115, start me at 110.

110, and 112.

112, 115. 115, 117.

117 in a fresh place.

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

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

in Whitstable is £190,000.

We rejoin the bidding at 145,000.

154, and 147, 146 if it helps...

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

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

At £145,000 I have - 146, can I tempt you again?

146. And 147. That's a definite no as well.

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

146,000 for the second time...

£146,000, third and final time...

146,000, all done.

Sold at 146,000, well done, and your bidder's number.

See, that extra thousand made all the difference.

Indeed, it DID make all the difference.

That extra grand has made Zaira a very happy woman.

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

who's lived in the UK for 19 years.

She and dog Indy already know these doggy walks well,

as they live very nearby in a little cottage.

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

Zaira, it's lovely meeting you today.

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

I needed to downsize a bit

and release some cash for my property, so this is perfect.

So your current property is literally round the corner.

-It is, yes.

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

-Exactly.

-So how did that work out financially?

Because you've got to have the money ready when you buy at auction,

and I know you still currently own that house.

Well, my house, I actually have a very, very special best friend

who lent me the money to go into the auction and buy this house.

-You bought this house cash?

-Yes, with her cash.

-With her cash?

-Yes!

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

Yes, absolutely, I owe her big time.

# Thank you for being a friend... #

Zaira has a good friend for sure.

This has helped her over the period

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

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

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

First of all, the size I was looking for, with the two bedrooms

and the garden. Of course, with this price,

all I could get was a flat on the high street, and having the green

right in front of the house, and the beach is still only minutes away.

You're right, for the price of a flat you've got yourself

a whole house here. The only thing is, it's a little bit small.

Where's your son going to sleep?

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

-You're going to have fold him up a little, make him cross his legs.

-No!

Actually, the eaves, you can go under, if you see the wall,

-and then you'll be able to fit a bed.

-How does he feel about it?

He's OK, because I promised the front room, it's going to be a den,

TV/games room, and I just purchased a summer house for the garden.

Ah! Perfect.

So there's other spaces he can use, and he's a 12-year-old boy,

all he does in his bedroom is sleep.

So what are the immediate renovations you're going

-to be doing?

-The bathroom upstairs.

So there's a metre-and-a-half of the eaves, by three metres,

and I think I can fit a bathroom there.

-And is your son also going to use that bathroom?

-Yes.

So he'll have to come into your room?

No, because you can fit a door on the tiny little landing, there's a space.

'Ah, yes, don't know how I missed that,

'just off to the left here, giving access to those eaves.

'Zaira has had plans drawn up for this conversion and hopes she can

'install the bathroom

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

# What do you do in the bath? #

-So when do you hope to move in?

-In about two weeks.

-Really?

-Yes.

-Wow.

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

when I need it to put into the house.

-Are you quite excited to renovate and do it over again?

-I can't wait.

Part me of enjoys being on the building side.

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

-Yes, that's also why!

-Happy cosy living.

-Thank you very much, thank you.

Ooh, Zaira has a really good buy here in a fabulous location, but

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

this cosy home practical. I'm sure she'll do it, though.

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

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

HE EXHALES

We return to Whitstable on the Kent coast to find out what's

upsetting Zaira's plans...

Oh... Yeah, don't like it.

But first, it's back to Stoke-on-Trent,

which - like many cities and towns -

has a proliferation of terraced houses.

But the house we saw was no ordinary two-up two-down.

It was more a ten-up six-down mega terrace, with at least

three properties knocked into

one large sprawling property over two floors,

consisting of at least seven bedrooms, five living rooms,

two kitchens, two bathrooms,

with a downstairs area of ballroom proportions.

But impressive as the space was, as far as practicality goes,

it wasn't really the right layout for the local area.

Property developers Neil and David

bought it for £142,000 with a definite plan in mind.

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

Well, the intention is to see if we can get about eight to ten flats.

-Individual, self-contained flats?

-Yes.

And it was going to be down to builder David to

project manage this large conversion,

while Neil made sure the £200,000 budget

they had earmarked for the work was adhered to.

And once planning permission had been granted,

they hoped they could complete the work in four months.

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

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

That's an encouraging sign, but more importantly, what's inside?

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

shower room behind...

and a single bedroom at the rear.

But what about the rest of the building?

Ah - not quite as finished.

What will all these rooms be once completed?

We've looked at producing eight flats now.

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

but it means each one is slightly larger than originally planned,

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

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

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

And there'll be five entrances and two stairwells.

So, presently, what stage are the flats at?

Basically there's one flat that's completely finished.

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

one more which is ready for second fix joinery, then three more

which are ready for partition work and studwork going up.

That's going to be completed within the next three or four weeks.

David has had two teams working on the building.

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

Then a team was going round doing all the second fix work.

So, have there been any major problems?

The biggest job was having a new gable wall built at the

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

New staircase had to go in and floors had to be aligned

to that, but there hasn't been anything really,

just a lot of the same sort of work.

Well, it seems - gable end not withstanding -

this project is working out well for the duo.

But have they now decided what to do

with the flats once they're completed?

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

Very similar to where we were.

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

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

At the moment, we have three flats under offer,

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

With three under offer, it certainly indicates that the decision

to convert the building into flats was the right one.

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

so, will the figures still add up?

The budget originally was 200,000.

We're currently on around about 180,000,

but that includes fees such as architect's fees,

we had to spend slightly more on the gable wall -

although we had allowed for that within the original budget -

so currently it looks like we're going to complete

the project on about £180,000.

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

on top of their £142,000 purchase price,

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

So, what do two local property experts make of

the development so far?

This is my second visit to the property.

They are starting to take shape now and you can see the layout of

the flats, and I think it will turn out to be a very good development.

Judging by the flat that's finished,

the flats will be done to a good standard with good kitchens,

nice bathrooms, and it's in a good location.

At present, Neil and David see this as a mixed development of

resale and rental properties.

So, how would these one-bed flats fare on the local letting market?

I would anticipate a rental value in the region of

£400 per calendar month, per flat.

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

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

Even the lower £375 per calendar month would potentially

bring in an annual rental yield of around 115 for the whole building.

But what about resale values for the flats?

Will Neil and David see much return from what will be

a £322,000 investment?

I would anticipate a resale value for the flats

individually at around £50,000.

As an average guide price for each independent flat, I would

suggest that they would sell at around £50,000 as an average price.

It's in line with what we expected.

An average figure is fine, in reality,

we'd expect the larger top floor sets to sell for a little bit more,

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

An average price of 50,000 would see a

total return of £400,000 for the eight flats.

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

That's not bad.

So, with this looking like a successful venture,

are they planning more development projects together?

Yes, gradually. Over the last two or three years

we've done slightly larger projects each time,

so we're comfortable with this,

it seems to have worked well, so yes, we are

looking for other similar-sized projects.

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

the Valleys of South Wales, you might be in for a bit of a surprise.

They really are spectacular.

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

rivers, glaciers and even tropical climates.

All of which have created the natural beauty

of these deep channels running through the mountains.

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

which have nestled themselves in this stunning backdrop.

# Into the valley... #

The town of Penrhiwceiber is no exception,

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

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

So, what was up for grabs at the auction?

Well, a two-bedroom mid terrace had a guide price of £23,000 plus.

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

Only one way to find out!

So what have we got?

Whoo, woodchip wallpaper for a start.

Can't resist it. Hmm.

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

Entrance hall through there...

-LAUGHING:

-..into what is your fairly standard layout.

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

Stairs down and stairs up.

Got to be explored.

First stop on the tour -

the bathroom on the same floor as the living room.

Now ordinarily I would be saying,

"Ground-floor bathroom? Let's try and move it upstairs."

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

Look on the bright side - you're only ever

one flight of stairs from the loo.

Well, typical of many properties around here,

the kitchen is actually situated down here on the lower floor.

It's not a bad-sized space, it's a kitchen/dining room, so that's good.

Couple of things I see straightaway though which do

cause me a bit of concern.

Number one - very old radiator,

my guess is maybe central heating system needs updating.

Number two - really bad case of damp.

Hmm, that's the neighbouring property.

Intriguing, where's that coming from?

Whatever, it needs to be sorted.

Other than that and the woodchip wallpaper,

the property is in generally good condition.

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

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

That has now expired.

Hmm, interesting scenario, what does that mean?

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

reverting to being a freehold property, it's bad on the other

because you're going to actually have to put

a lot of time and effort - or at least your solicitor is -

into sorting out those issues.

Which, of course, means money.

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

at least you knew about it beforehand.

Obviously this isn't the case with every leasehold.

Normally, letting the lease run out isn't a good idea,

but in this case the small print suggests that it

works in favour of the property owners.

I like to think that when this was being set up,

the idea was that after 99 years these miners' cottages could revert

to freehold cottages that went back to the miners or the community.

So, at the back of the property...

Well, before I get to the garden, how about this?

This exterior may look like normal pebbledash, but if you hit it,

it sounds a bit hollow, and what I reckon this is is wall insulation.

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

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

It also creates quite a watertight exterior,

so that's good, it's been done.

Another thing to tick off the renovation list.

But, back to that garden, and not a bad size,

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

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

that not only has wall insulation,

but also these water-heating panels,

which are included in the price of the property, making them

a very desirable addition to the whole package.

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

# I would walk 500 miles

# And I would walk 500 more

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

# To fall down at your door

-# Da-da-da-da!

-Da-da-da-da!

-# Da-da-da-da!

-Da-da-da-da! #

HE EXHALES DEEPLY

Well, I don't know about 500 miles, but it feels like 500 steps!

But when you get up here, what'd you find?

Actually, two decent-sized bedrooms.

That one there, fantastic views over the hills,

and the front one here, well...

HE CHUCKLES

Look at it.

Much bigger than you expect from the size of the property on the outside.

So it just tops off what is already

a pretty respectable little property.

While I get my breath back,

let's find out what potential a local property expert

sees in this three-storey, two-bed terraced house.

The property is a split-level property,

so obviously two flights of stairs may limit the market slightly

with the younger families with young children, and also the problems

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

But generally, a good-sized property will open a few doors.

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

The potential resale value of this property would be

in the region of £50,000.

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

So, a pretty nice little house that just needs a bit of

tender loving care and modernisation.

Who fancied it when it went under the hammer?

Lot number 14 is guided at 23,000. Start me, will you, 20,000?

20 I've got, thank you. One can I see? 21, 22, 23, 24...

25? 26, 27, 28, 29, 30.

31? 31? No. At 30,000 then, standing...

At 30 then for the first time...

second time...third and last time at 30...

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

That half was just enough to do it.

At 30-and-a-half then, seated, for the first time...

second time...third and last time, 30,500...

Yours, madam, your number, please.

That extra £500 was enough to seal

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

Having recently left the army,

Paul has started up a property maintenance business.

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

# Zipping up my boots

# Going back to my roots... #

Ray, Paul, good to meet you both.

-Hi.

-All right?

-Congratulations.

So what was it about this particular place that appealed?

It's on a commuter route to Cardiff,

it's an area that's being regenerated, within our

price budget, and also Paul has family connections to the area.

His family grew up here,

-his grandfather was born just a few streets away.

-Oh, wow.

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

-Yeah.

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

and apart from being familiar territory,

this is an ideal starter project.

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

New kitchen, new bathroom put in, the rest of it is just redecoration,

new woodwork and just sprucing it up, really.

-Central heating improvements?

-Yep, we've still got the back boiler here,

so we intend to put a new combi boiler in.

-Right.

-So that should take the majority of our budgets.

And who's going to do the work?

-It'll have to be me.

-MARTIN LAUGHS

What will you be able to put your hand to?

To be honest, most things.

The only thing we wouldn't really be able to do would be the electrics

if any need doing, and obviously the boiler.

So what is the budget?

Budgeting for about £5,000,

but we are hoping to apply for a home improvement loan, which is

being funded by the Welsh Assembly, so they're trying to help people

regenerate the area as well and get the empty homes back into use.

Brilliant, sounds like a good thing.

-A cheaper rate loan or at least a loan.

-Interest-free loan, yeah.

So what timescale?

-We're hoping three to four months.

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

-Oh, yes.

-Can you do it in that time?

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

With a bit of help, we've got fantastic parents

and hopefully they can help with some childcare, which will help me

to come up and give him a hand.

-Listen, congratulations, good luck with it.

-Thank you very much.

Look forward to seeing how you get on.

So, Ray and Paul choosing a place with family ties

for their first property investment venture.

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

You can find out later in the show.

We've seen how one of our buyers tackled their project -

what about the other two? Did everything go according to plan?

HE WHINES NONCOMMITTALLY

-Martin, have some faith!

-Oh, all right, let's find out.

Tucked away on the Kent coastline is the pretty fishing town

of Whitstable, and it's here that we cast our property nets

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

a pleasant green.

It was just five minutes' walk from the sea,

so the all-important location was good, but the property?

Well, how would I describe it? Small...compact...bijou.

You get the picture - it wasn't the biggest of places,

and the layout wasn't fantastic either,

with a downstairs bathroom that was off the kitchen,

in a lean-to, of all places.

Come in, have a look at that.

Really, are you going to have a bath in there?

I don't think so.

But actually, despite all its faults,

it had a certain charm and character.

It was bought for £146,000 by Brazil-born Zaira as

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

Not forgetting the dog Indy, of course.

The only problem with this property is, it's very small.

-Where's your son intending to sleep?

-Well...

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

The eaves, you can go actually go under, if you see the wall,

-and be able to fit a bed.

-So what are

the immediate renovations you're going to be doing?

The bathroom upstairs.

So there's a metre-and-a-half of the eaves by three metres,

and I think I can fit a bathroom there.

-So when do you hope to move in?

-In about two weeks.

-Really?

-Yes.

So Zaira had come up with some clever ideas

to maximise the cottage,

but the change of layout would need planning approval,

and Zaira had borrowed the money to purchase the cottage from

a friend, while her old property was in the process of being sold.

She was keen not to incur additional rental costs, and thought

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

But renovation while living in a house is never easy, and now,

15 months after our last visit, we're back to check on progress.

Ah! A summer house has appeared,

in a rejuvenated garden space that should give them a bit more room.

But what about inside?

Well, they've clearly moved in, and in the front home the

chimney breast has been removed to give a few more precious inches.

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

so what's it looking like?

Well, the master bedroom... Uh, well, it's got a bed in it!

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

Oh, well, that's looking a whole lot better, and a little bigger.

This room was a challenge, it was very tiny,

and to begin with we couldn't even fit a single bed in here,

so the way around it was to get the eaves pushed back,

and now we can fit a nice size single bed in there,

and then this side, again,

had a wall here which was empty over the stairs, pushed it back,

and it's going to be fitted with shelving, clothes,

storage and books for my son.

Zaira has made some progress up here, but the main task was to

make room for a bathroom under the eaves, so what happened to that?

We had to put an application through the council,

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

eight weeks later the council refused,

saying you have to reapply with very little change,

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

So that just happened a few weeks ago.

Well, finally then Zaira has got the green light to go ahead with

an upstairs bathroom,

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

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

so we had to spend a lot of time at a friend's house.

We'd go for a visit and stay for a shower!

And the kitchen as well,

we can't really bake anything, it has to be a dish with two...

two-plate dish!

Well, I don't envy Zaira,

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

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

and make it into a bigger kitchen/diner.

We haven't done that yet, it's a lot of mess,

and because I live in the property, we're kind of waiting for it

all to be the same week where the bathroom and kitchen get done.

I can probably stay with friends for a few days, all in one go,

otherwise it's very hard for us to cope.

She's also hoping once the bathroom

and kitchen are finished to put a conservatory on the back

of the house, replacing that rather sorry lean-to.

But all her plans are dependent on money,

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

I put my house on the market immediately,

sold in a few weeks, and then took about a month-and-a-half

for the money to go through, and so that's when I paid my friend.

So with one debt repaid, how much is she looking to

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

My original budget was 25,000.

I think - of course I haven't finished the house yet,

so hopefully, I will stick to it, give or take a few thousand!

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

will take Zaira's spend to £171,000.

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

What do two local estate agents think?

At the moment it doesn't really provide what people would

want from a modern house.

The bathroom's very small, the kitchen's very small.

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

Garden's very nice, position's good, looking across the green,

and the cottage style is very popular in Whitstable,

so it has got potential there.

Obviously the cottage is far from finished, and in particular, there

is the upstairs bathroom to install and improvements to the kitchen.

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

her £25,000 worth of work?

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

If it was renovated, and allowing for the slight alteration

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

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

minus the usual taxes and expenses.

But what does Zaira think about the valuation figures?

Oh... No, don't like it.

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

Yes, well, it's difficult really to judge the true value of the cottage

at this stage, and anyway, Zaira isn't looking to sell any time soon.

But despite the upheaval,

would she be tempted to tackle any more property projects?

If I was by myself I would do it again sooner, but I have to

wait for my son to go off to university, then I can do it again.

Next up, we wave goodbye to Whitstable and whizz to Wales.

Nestled in the Valleys 20 miles north of Cardiff

is the town of Penrhiwceiber.

It was here that we came across a two-bed mid terrace house

with hidden depths.

On the face of it, this was a conventional two-storey house,

but get inside and things weren't quite what they appeared.

Stairs down and stairs up.

Got to be explored.

With the kitchen on the ground floor and the living room

and bathroom at street level, and two bedrooms upstairs,

you need to be a bit buff and have a lot of puff to make the most of it.

HE EXHALES DEEPLY

'Oof, I really do need to get back into training.'

With stunning views to the rear, good-sized garden

and actually plenty of space, this house had a lot going for it.

And it was bought at auction for £30,500 by Paul and Ray,

as the couple's first development project.

So what was it about this particular place that appealed?

It's on a commuter route to Cardiff, so close for people back

and forth to work, and also Paul has family connections to the area.

His family grew up here,

his grandfather was born just a few streets away.

-Oh, wow.

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

-Yeah.

And the couple had a relatively small budget of £5-7,500,

and a timescale of three to four months,

with ex-army man Paul doing the majority of the refurbishment.

And now, seven months later, we're back to see

if it's fit for inspection.

OK, so eyes front, all looking good there.

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

Well, that's a big improvement.

The kitchen, we took the old, dated units out

and put more modern units in, new flooring in,

replaced the back door, which was damaged, and painted it.

And moving up the house to the ground floor...

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

carpeted throughout with some new radiators as well.

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

So what about that final storey?

Going up to the top floor, it's completely re-painted.

I'll have to re-plaster one of the walls.

There's new radiators put in there and it's been painted

and decorated, plus we've put new doors all round.

So the place has been finished fantastically from top

to bottom, or is that bottom to top?

I'm not sure, but clearly, there has been a lot of work.

Paul's done the vast majority of work himself.

Obviously we needed to get a plumber in to do the pipework for the

new radiators and then we had somebody in

to fit the carpets for us.

I've had some friends and family help.

Nearly all of this has been myself.

There are some minor leak and damp issues that Paul

and Ray need to resolve, but in essence, the house is ready to go.

What about that paperwork?

And I don't mean the woodchip they had to tackle.

When we first bought the house there was a 99-year lease which had

just literally expired on the property.

That automatically reverted to a freehold, all to do with control

of the mining works below ground, but since that's now exhausted,

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

Well, that's great, and just by getting the freehold

they should have added value to the house.

But with Paul busy on other projects,

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

So, how's their budget looking?

Initially, we budgeted £5-7,500.

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

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

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

A £3,000 spend is impressive,

and added to their £30,500 purchase price,

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

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

So, is that the right decision? What do two local estate agents think?

This is my second visit to the property, it appears to have

had a fairly successful redevelopment over the past months

since the first visit, it's in a much better shape.

It's a good standard of finish to the property,

nice plastered walls and clean lines throughout.

Well, they do seem to have paced this house right,

but how is it working from an investment point of view?

Having so far spent £33,500, what might it resell for?

If it was to be put to the sales market, to be competitive with

other houses in the area, I would advise an asking price of £45,000.

We'd put this on the open market for £37,500.

And look to achieve £45,000.

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

A valuation of £45,000 would give a potential pre-tax profit

of £11,500, but the resale market is slow in the local area.

So, Ray and Paul have decided the letting market is more

suited for the house.

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

If the property was placed on the rental books then we'd

probably look in the region of £335 per calendar month.

335 is probably a little low,

but we're quite confident we could get 375.

Even that lower £335 figure would produce a healthy rental yield

in the region of 12%. Not bad as a starting point.

For our first investment property, I'd say it's been an eye-opener

and a good learning curve.

Yeah, we'd have no hesitations to do it again,

it's worked out really well so far.

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

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

here on Homes Under the Hammer.

-Look forward to seeing you then.

-Goodbye.

-Goodbye.