Episode 64 Homes Under the Hammer

Martin and I are both mad about property.

It doesn't matter how much you know,

there is always something new to learn.

Yes, every property is different.

And of course, let's not forget the people who buy them.

They're all different, too.

Lucy, me, you...

Well, thousands of properties are sold under the hammer every year.

So, there's something to suit all tastes and budgets.

So, let's see what's on offer at the auctions on today's show.

First up, in Burton-on-Trent,

one buyer chooses a property complete with tenant.

Looks like we've really got a friendly pet tortoise.

While here in Deal, Kent, the choice is a bit more industrial.

So, what are we looking at? A building plot, of course.

But, in Maryport, in Cumbria, the question is...

-Tell me why you wanted to buy this property?

-God knows!

That's a good start!

All these properties are being sold at auction.

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

when they went under the hammer.

The town of Burton-upon-Trent in Staffordshire

is probably best-known for its brewing heritage.

In its heyday, there were around 12 breweries here

producing, between them, over a quarter

of the total amount of beer brewed in Britain.

# And I want to thank you

# For giving me the best day of my life... #

I'm sure, in the past,

a fair few residents of the UK were thanking Burton.

But, alas, we're not here to stop at the town's Brewing Experience Museum.

So, it's time to drink up and see what property Burton has to offer.

Last orders, please.

Well, a couple of miles from the centre of Burton,

in the popular suburb of Winshill, is the property I'm here to see.

£56,000 plus was the guide price for a classic two-bedroomed mid-terrace.

On a fairly busy road. That's not ideal.

And how about that for a front step?

Wow!

So, I guess the obvious question is,

will the house be a step up the property ladder?

Well, maybe.

In through the door, up the step and into your living room. Nice size.

Nice, high ceilings.

Obviously, though, without any porch or anything like that,

you are going to get a lot of noise from that road.

So, maybe triple glazing at the front there.

But it doesn't smell damp.

It doesn't seem to be in too bad condition.

Door there, down to the cellar.

And that's a nice, additional bonus.

And then through into your rear living room area.

The floor seems pretty solid, so that's good news.

Slight disappointment, the kitchen.

Originally, it would have been here.

Somebody's built some kind of extension, at some point.

It's in the back there.

So, as starting points go? Not bad.

# Step it up, step it up, it's all right... #

Apart from that enormous front step, there's nothing too problematic here.

You could even make a feature of that period kitchen furniture,

if you were feeling brave.

For me, a good modernisation is all it would take to sort this out.

Well, upstairs, there is a fairly classic layout.

A little landing at the top of the stairs.

And then one bedroom one way and one bedroom the other.

Both half-decent sized, which is good.

But there's one thing we haven't found yet.

And that's the bathroom.

And I'm afraid, the bad news is that it's accessed through this bedroom.

If you're looking for the property to appeal

to as many people as possible,

I'm afraid a bathroom that only has access through a bedroom is a no-no,

especially if you're looking to rent the property.

In this case, though, creating a corridor

between the landing and the bathroom is an easy fix.

Just remember to account for the cost in your budget.

Well, at the back of the property, this little yard area.

Quite a nice... You've got an outdoor loo. And then the garden.

However, all is not what it seems.

Because you think, wow, what an amazing garden!

However, it's shared with the next-door neighbour.

Basically, it's split down the middle here, on this path.

So, I guess you're going to have to get on well with your neighbours

and hope, like it is in this instance,

that whoever is your neighbour, looks after their side.

And in this case, it's absolutely beautiful. But it's a nice space.

And an added bonus,

it looks like we've even got a friendly pet tortoise.

# Any time you choose Kick off your shoes

# Rest your weary eyes and catch up with the news

# A favourite book will be the perfect company, so relax... #

Will everyone appreciate it as much as this local resident?

It's a little rude to give someone's age away,

but this chap is 52 years old.

So, that makes me an old-age mentioner!

Sorry. Anyway, a local auctioneer hared along to tell us more.

My first impressions of the property are,

I think it's a good, honest, solid property.

And it offers an excellent opportunity for somebody

to put their own mark on it and, certainly, to add value.

A solid house in a good area, then.

This two-bedroomed terraced house has a guide price of £56,000 plus.

What does he think it will be worth, once renovated?

I would say, once renovated,

this property would achieve somewhere in the region of £85,000.

And if I were looking to offer this property to the rental market,

then I would imagine a fair rent would be

somewhere in the region of £475 per calendar month.

Well, a really nice house in a popular area.

Yes, a bit of noise from the road out the front.

But, apart from that, a great one to go for.

Let's see if you agree when it went under the hammer.

A two-bedroomed terraced house, good potential to it.

How much shall I say for it today, ladies and gentlemen? 54? Thank you.

£54,000, I have, on the right-hand side.

55. 55.

56. 57.

58.

59.

60,000.

61.

62?

61,000, in front of me.

I'll take 500, if it'll help you.

It's in the market. It's going to get sold.

61,500 somewhere else?

At £61,000, then. It's going to go for the first time, at 61.

For the second time, at 61. Third opportunity.

Anybody? Any higher bid?

Sold at 61,000.

The successful bid of £61,000

came from local pair, Sue and her partner Andy.

Sue already has a property portfolio.

So, no doubt, she found this terrace

after scouring through auction catalogue after auction catalogue.

Well, not exactly.

-Andy, Sue, great to meet you both.

-Nice to meet you.

-Nice to meet you.

-Congratulations.

-Thank you very much.

-Yeah.

Tell me why you wanted to buy this place.

-I live just up the road and I do this, actually, for a living.

-Right.

It started as a hobby.

But I came to take my granddaughter to school

and I saw the sign outside, so I thought, "Oh, got to have a look."

And is it normally buy them and sell them on?

No, I buy everything and rent it.

But this is a new portfolio-type thing.

I'm buying this to renovate to a good standard and sell on.

Right. So why the change of strategy?

Sometimes, I find tenants hard work.

Right.

And... I've got some wonderful tenants.

But it is hard work.

So, I just want to buy something, concentrate on renovating it,

getting money back and do this and go again.

# That's what I go to school for... #

Well, if Sue makes a healthy profit,

she won't complain about the school run again.

It goes to show that experienced developers

are always looking for the next potential opportunity.

Sue has been doing this for 25 years,

along with a significant amount of charity work.

But she was originally a fashion model.

Erm, I think, when you walk into a property,

it either feels good or you think, no.

And that often happens to me.

And I walked in here and I thought, five minutes,

yes, I'm going for this.

What did you think of it, Andy?

Just like Sue says, it's got that good feel to it.

The decor is not good, but we do houses to a good standard.

-Tell me what you're going to do to it, then.

-From top to bottom.

It's going to have to have the roof checked.

We want lagging in the roof.

We always start at the top and work our way down.

Brand-new bathroom.

Bedrooms all sorted out.

-But we're putting a passageway in the second bedroom.

-Ah...

-Yes.

So, we're just going to put a stud wall, partition it off,

and the bedroom will still be sized for a double bed.

Out the back, you've got this quite interesting garden,

that's split down the middle with the neighbour.

It's lovely. These are the gardens round here.

-This is what they're like.

-It's charming.

And, obviously, the gentleman who owns next door

obviously does a fantastic job of sorting his side.

Yes. Yes. And he loves doing it.

So, when I bought at the auction,

I came and said that I was coming to renovate it

and thanked him for doing the garden.

And he's done it since, so...

Has he? Oh, excellent. That's fantastic.

-And he's got a 52-year-old tortoise.

-Thomas.

Thomas the tortoise.

-So, he'll be keeping an eye on things.

-Yes.

-Er, no doubt.

The house is an investment.

But Sue and Andy sound quite fond of it

and its helpful and charming neighbours.

If the lovely garden, a smashing neighbour

and reconfigured bathroom don't add value,

I think a guard tortoise just might.

So, what's the budget for all the work?

-I think about £10,000.

-Right.

It usually works out about that with these type of terraced houses.

I've got a good team that have worked with me a long time,

decorators, plumbers, electricians.

I don't touch things that are either going to blow me up or hurt!

Fair enough.

I'm glad to hear that Sue is clearly a switched-on developer.

You can't do better than have a reliable team you know and trust,

which means this should be pretty straightforward

in her two-month timescale.

How much do you think you might be able to sell it for?

I think, looking at the local area, about 89,950.

The one across the road's just sold for 92...

-Right.

-..I believe.

-Right.

-So, I think there's profit in it to do it properly and erm...

-So, you paid?

-61.

-61. Plus your ten. 71.

-Yes.

So, there may be 15-20 grand in it, if you can...

I hope so. I hope so.

It might be a hobby, but it's got to weigh up!

Sue is spot on. Don't forget your bottom line.

Don't forget how much hard work it's going to be.

And don't forget you will need professionals for certain jobs.

Phew! She's full of good advice. She'll do me out of a job.

I may as well get some more, while I'm here.

So, what do you think the most important lesson you've learned

in your 25 years of doing this is?

-Always read your legal pack.

-Yes.

-I've learned that from Homes Under The Hammer.

-Oh, good girl!

Yes. Absolutely.

Well, listen, congratulations. Good luck with it.

-Thank you very much.

-We look forward to seeing how you get on.

Well, this project should be water off a duck's back

for property old-timers Sue and Andy.

But there's only one person I'm interested to find out

what they think of the renovation and that's Tommy the tortoise.

You can find out how it all goes later in the show.

This is Deal, in Kent.

Once a busy shipping port, it's now a quiet seaside town,

with a glorious stretch of beach and some lovely views.

A mile from the beach is the lot I'm here to see.

And it's this - a former St John's Ambulance headquarters,

eight garages and a store.

Now, I'm aware the main building hasn't been used for several years

and, well, the whole site's seen better days.

So, what are we looking at?

A building plot, of course,

which had a guide price of 100,000 to 105,000.

Let's see what we've got.

Basically, we have an L-shaped site with two road frontages.

One on the main street and one on the side.

Fabulous.

There are eight lock-up garages,

which haven't done much locking up lately.

And a large storeroom, with no door.

And this tired, old hall, which used to be home to St John's Ambulance.

# Doctor, doctor

# Give me the news

# I got a bad case of loving you... #

It's dilapidated and weedy,

but that planning permission could resuscitate this site.

So, what have we got?

Well, the planning permission

is for a row of three three-bedroom terraces

and one detached two-bedroom house.

Now, the reason you have this slightly odd arrangement

is the shape of the plot, which is a dogleg.

So, the terraces go along that side

and the detached sneaks in along the back here.

Now, the designs themselves are actually very nice.

I love the layout downstairs.

You've got a nice, big lounge,

then a kitchen at the back with a dining area.

And I really like that.

You've got a cupboard here, a cupboard there.

Nice and practical, actually.

Then, upstairs, three good-sized bedrooms, a family bathroom

and an en suite

and a walk-in wardrobe storage area.

Love it!

Whoever designed these, really thought about how families live.

I'm impressed.

# Congratulations

# I'm impressed

# All you had to do was beat the best... #

The busy road to one side of the site could put potential buyers off,

as could the small gardens in the plans.

However, with the planning permission in place,

I can't see anyone wanting to return the hall to its former glory.

Whatever happens, it's likely to become residential.

However, as with any development, it's all about the maths.

Is there good potential profit if these plans were to be carried out?

We've asked a local estate agent along,

to give us his opinions on the plans.

I think the plans that are approved are good for this site.

They're good, interesting houses

and will be appropriate for the location.

The only other use this site

is some other form of residential, maybe flats.

That would be best in this market.

If you want to let, I think I'd put flats.

If you want to sell, I think I would build houses.

Now, that's intriguing.

However, attempting to change the planning permission would cost time and money.

So, how do the options compare financially?

For the houses that are proposed here currently,

they are going to have a value of about 185,000 to £190,000.

And the detached one would be about the same

because it's slightly smaller, but is detached.

Based on those top valuations,

four houses here could have a total value of £760,000.

Wow!

If you got the site for anything like the guide price of 100 to 105

and allow, say, 300,000 for build costs,

that would be a total spend of around £400,000.

That means there is a potential profit of 360 grand in this project.

Definitely worth doing.

But what about the option for flats that the agent mentioned?

If they were flats, they would be less.

A one-bedroom flat would be about 100 to 110.

And a two-bedroom flat would be about £110,000 to £120,000.

And what would a flat here rent for?

If flats were built here,

they would let for £450 per calendar month for a one-bed

and £500 to £550 per calendar month for a two-bed.

This is a nice plot in a decent enough residential area

with money to be made, if bought for the right price.

Let's see what that was at the auction.

It's the former St John's premises and garages

and it's got the planning for the redevelopment

for the terrace of three and the detached house.

So, I'm going to say £100,000 for it.

£100,000. Where's my builders?

£100,000 can I say?

Give me 90, then. Start me at £90,000.

90, I'm bid. 95 bid, I have.

£100,000, I'm bid.

105, now, if you like. At £100,000.

105, right at the back, I've got.

108.

110, standing at the back.

110, can I see?

110.

And 12.

And 14.

And 14.

114.

And 16.

With some cagey bidding going on, we leave it there

and return at £142,000.

142. And four. And six.

146. And eight. And 50.

50. And two. And four.

And six. And eight.

158?

At £156,000, I've got.

158, anywhere else?

If not, at £156,000, for the first time.

156, for the second time.

Third and final time, at £156,000.

Well done, madam, you've stuck with it and you got it.

Sticking with the bidding was Tracey and her builder Paul.

That successful bid of £156,000

smashed the guide price by over 50 grand.

Tracey has been on the show before with her business partner Martin.

Their property business currently has 21 properties,

which they rent out.

However, not only is Martin her business partner,

he's also her boss.

He's a criminal lawyer and Tracey has worked with him

for over 20 years in her nine-to-five job.

# Working nine to five

# What a way to make a living

# Well, we're getting by, it's all taking and no giving... #

Tracey, we meet again. I think it was 2008 the last time we met.

-That's right, in Dover.

-So have you been property developing ever since?

Back in that time, we'd done a bit of renovation work.

But, since then, we've been doing new-build properties.

Building flats around Dover.

So, what was it that took your eye about this particular site?

Well, we had looked at it in the past,

when it came up for auction once before.

But, at that time,

we were in the middle of doing a 12-flat development in Dover,

so it wasn't quite the right time to buy.

And when we saw it come back again this time,

we just couldn't miss the opportunity.

The thing that took my eye about this plot

is the planning that comes with it.

You've got a really nice house at the back.

A nice, big detached house.

And three nice houses that sit in the front.

Is that something, or was that something,

that particularly appealed to you with this?

We like the idea that it's got planning on it.

But it wouldn't appeal to us to have that particular planning on it,

because we tend to specialise in building flats,

because we don't sell our properties on,

we deal with the rental market.

And we find the rental return on flats

is much better than it is on houses.

-So, you're not going to go with the plans that come with this site?

-No.

We've already spoken to an architect

and he's drafted plans with the potential of nine flats on the site.

Wow! That's incredible.

I'm stunned, actually, that you're not going to go with the plans that were here.

Because I actually thought, looking at them, they were quite good.

-And they'd really been thought about.

-Well, they had.

And if you are selling the properties,

then that would probably be the way forward.

But, if you want a good rental return on what you're building on the site,

then, to build two-bedroom flats in Deal,

it's a very sought-after rental area here.

Tracey certainly knows her stuff.

But you'd think working full-time

with business partner Martin in criminal law

and taking on a project this size,

she'd have enough on her plate without creating new plans.

So, have you spoken to the planners?

Have they, like, given you any indication

whether or not they'll pass something like this?

The architects had an initial chat with the person from the council

and it's looking very hopeful that they will agree the new plans.

Well, how much will it cost to build

what you're looking to do on this site?

Generally speaking, we estimate about 70,000 per unit.

-OK.

-So, we've got two separate units, phase one and phase two.

Phase one, of the five units, you'd be looking at about 350,000.

And the second of the four units, that's about 280,000.

Wow!

Now, this might feel like a lot of numbers,

but stay with me all the way to the bottom line.

Nine rental properties

could mean a rental yield of nearly 9%.

Tracey certainly has a business head on her,

but this project isn't without

its little sentimental sting in the tail.

Well, I grew up in the north end of Deal.

So, I was fairly familiar with this end of Deal

and it was only after I'd bought this place at the auction

and I was telling my family about it

that I found out that my parents had their wedding reception here

back in 1968.

That is amazing to think that, once upon a time,

they sat in here having a wedding reception

and now you're going to knock it down!

How do they feel about that?

I did ask if they wanted to come

and have one final look down, for memory, old time's sake,

but they said it was pretty grotty back in 1968

and it wouldn't have improved since then.

And now here you are, you're about to improve it completely.

I think the best thing we can do with this is knock it down.

How long do think it's going to be before this development is finished?

I would think it would be about 20 weeks until we got the plans through

and we're in a position to proceed.

And then, phase one, I would think is about six months, 26 weeks.

And similar or less for phase two.

-Well, good luck.

-Thank you.

It's going to be really exciting

coming back and seeing this not being here

and a lovely block of flats in its place.

Good luck with the project.

-And, hopefully, it won't be so long the next time I see you.

-No.

Thanks very much. Thank you.

So, another block of flats for Tracey.

Seems to be a winning formula.

It's such a shame these nice houses won't see the light of day,

but I do hope they get the planning permission they want.

There's certainly money in it.

You can find out what happens later in the show.

Still to come...

In Maryport, Cumbria, I think I've spotted the problem.

Urgh!

Oh, that's not good.

And over in Deal, Kent, best-laid plans have stalled in the erm...

..planning office.

Back now to the town of Burton-upon-Trent in Staffordshire,

where I earlier looked around this two-bedroom mid-terrace property

that had a guide price of £56,000.

A solid, traditional property in need of updating.

And it had one inconvenient element.

And that's the bathroom.

And I'm afraid, the bad news is that it's accessed through this bedroom.

So, not ideal, at all.

Yes, it certainly was a problem that needed fixing

and the person who was feeling flush enough to do it on auction day

was Sue and her partner Andy.

Sold at 61,000.

Experienced property developer Sue took the property on a gut feeling

and she and Andy had figured out the solution

for the bathroom problem straight away.

-We're putting a passageway in the second bedroom.

-Ah...

-Yes.

So, we're just going to put a stud wall, partition it off

and the bedroom will still be sized for a double bed.

A big bonus of the property was the beautiful back garden,

which had been lovingly maintained by the neighbour

and his 50-year-old tortoise, Thomas.

So, with a £10,000 budget

and a timescale of two months

to get the property ready for the sales market,

Sue and Andy were raring to get going.

Five months later, we returned to see just how things had come along.

The downstairs has been transformed, from dull and dated,

to modern and aspirational.

The feature fireplaces in the two reception rooms

give a great focal point.

And the brand-new kitchen is unrecognisable from before.

Wow, this is a fantastic job and a really professional finish.

I can't wait to see what's been done upstairs.

A lovely new bathroom suite

sits at the end of a newly-constructed landing

made with space taken from the second bedroom,

as Sue explains...

This is the stud wall I built. I actually did build the wall.

Some of the lads gave me a hand with the plasterboard,

because that's very heavy.

But I did all the framework.

I think it's made it ideal.

You couldn't walk through a bedroom to get into a bathroom.

The bedroom's still a really good size

and it's just made the whole upstairs flow through.

I love it. I really am pleased with this.

I think Sue has every right to be pleased.

She and her regular team have done a cracking job.

This is a much more practical layout that suits modern living,

as does the bright and tasteful decor.

I like the greys.

Still fairly neutral.

But getting away from magnolia makes a change.

But, how has it been for Sue and Andy?

Oh, and, of course, pet dog Alfie.

Well, we started at the top of the house.

Bathroom totally stripped, a new suite put in.

Then, the front bedroom.

The whole house was rewired.

Then we came down and, again, all rewired.

Plaster off the walls.

Went into the kitchen, removed the kitchen.

Redid the plastering there.

And very nice job.

Good kitchen fitters, so...

I'm pleased with the whole thing.

It all came together.

It certainly has.

Not only have they done the interior

but they've also tidied up the back,

including their neighbour Des's side,

who has very kindly continued to look after the garden,

along with the now hibernating Thomas the tortoise.

It hasn't all gone to plan, though. As Sue and Andy explain...

The biggest problem, the electrics.

I had a quote of £650.

But when the electrician started, he'd only been here ten minutes

and phoned me up saying, "Sue, you'll have to come back down."

All the electrics were the original electrics in the property when it was built, we think.

So, the whole place had to be stripped.

So, then it meant all the plaster.

And we didn't cut corners.

It's been done to a high standard,

plus we've got the internet cables all through.

Every room has got a TV plug, TV aerial

and erm...all the DVD, anything you want

regarding electrics is all behind the fireplace.

Wow! That's impressive. OK, I like a gadget or two.

But Sue has certainly brought this property right up-to-date.

Unfortunately, though,

the electrics weren't the only thing that caught her unawares.

The fireplaces. I took the fireplaces out.

Took the one in the middle room out first.

Then, started on the front one and I heard a horrible crashing noise

and the rest of the fireplace in the back room fell down.

But it did reveal the original fireplace, the hole.

So, we were able to make that a feature,

where we did put all the electrics and then put...

You can actually have a wood-burning stove or anything in there

if you wanted to go back.

The flu is still there but blocked off.

So, it's made it very nice.

Very nice feature in the room.

Acting as project manager,

Sue has done a great job of turning problems into positives

and she's only gone over her £10,000 budget by £600,

thanks, mainly, to Andy sourcing the best deals on the internet.

What's more, their timeframe of two months has been stuck to,

albeit somewhat delayed by holidays

and problems with other properties they own.

So, with a total outlay here of just under £72,000

and Sue and Andy keen to sell,

it will be interesting to see what two local experts

think of the property, starting with the agent who saw it originally.

This is the second time I've been to the property.

And I think the work has been carried out to a great standard.

And is certainly above the average, really, for a property of this type.

Very impressed with the layout of the property.

Especially upstairs on the landing.

I think, originally,

these had a walk straight through from a bedroom.

It makes such a difference.

And it will certainly increase value with the property.

Great news.

But, with a total outlay here of just under £72,000,

what kind of figures are we talking?

If this property were placed on the market for sale,

I would expect it to achieve £85,000.

I think, if the client decided to market this property for sale,

I would expect them to achieve at least £89,000.

Well, erm...

..I think they're fair.

But, to this standard, it wants to be at the top end, the 89.

I valued it at 89,950.

And I've actually sold the property for 89,000.

Crikey! You kept that quiet, Sue.

Selling it for £89,000 has left Sue

with a pre-tax profit of just over 17,000,

making this project a big success.

And she isn't resting on her laurels one little bit.

I keep saying I'm not going to buy any more, but it's like a drug.

You do. You can't help yourself.

Today, I'm in Maryport,

the southern-most coastal town on the Solway Firth in Cumbria.

Now, for many years, this place was called Ellenfoot,

until a developer in Georgian times, by the name of Humphrey Senhouse,

decided to redevelop it and name it in honour of his wife.

Gladys.

I'm kidding.

Mary.

# And the wind, it cries Mary... #

It's hard to believe now,

but Maryport in Cumbria was once an industrial hubbub.

Coal from local mines was used in local smelting works.

With the arrival of the railway,

Maryport was one of the most important coal ports in England.

Fishing then became the main industry,

as coal and mining declined.

Today, a series of major regeneration projects

are improving the prospects for the town.

Well, a few minutes' walk from the town centre and the harbour

is the property I'm here to see.

Three-bedroomed terrace.

Guide price of £35,000-plus.

So, not a lot of money.

Does it have an interior that reflects that price?

Well, nice, high ceilings as you walk through the door.

Bit of an odd layout.

Just one, big room down here

which, obviously, makes this your living room

and a sort of kitchen area.

Well, at least it doesn't feel, sort of, claustrophobic.

But here's a feature you don't see very often.

Ta-da! There's the fireplace.

And here's an alternative fireplace.

Or is it a TV?

Maybe.

Oh...

HOMES UNDER THE HAMMER THEME TUNE

Brilliant show.

Anyway, work to be done. But I do quite like the layout here.

And, yeah, onwards and upwards.

Urgh!

That's not good.

Neither is this.

Sort of on this little landing halfway up the stairs,

you've got this door,

which leads out into this, well, covered passageway,

which leads to another front door.

This house is a listed building, so you have to think about that

when it comes to deciding what you want to do with it.

It's described in the catalogue as a three-storey house.

But with this half-landing and this extra door that leads to it,

it certainly is quirky.

This other front door is tucked off to the right of the property.

Confusing for the postman, I would have thought.

Anyway, onwards and upwards.

Let's hope it's not quite as complicated up here.

Erm, what have we got? Bathroom there.

With that hole in the floor.

So, you'd definitely want to sort that out.

Stairs up to the second floor, where the second bedroom is.

And then, through into your first bedroom here.

And, you know, what's the opposite of open plan?

Because, downstairs is open plan.

And up here is absolutely the opposite.

It's very cramped. It's all corridors and stairs and it doesn't work.

And glancing around, there's not an easy solution.

So, some work to be done inside here.

Going from the first floor with its bathroom and front bedroom,

ever upwards to the second floor, you find two further bedrooms,

each of reasonable size.

But there's no denying,

anyone challenged by stairs needn't bother bidding on this property.

We asked a local property expert

for their opinion on this perplexing property.

The main downside to the property

is that it doesn't have any outside space. Not even a small yard.

Also, the positive of it being over three floors,

could be a negative to some people.

People do like the bathroom to be on the same floor as the bedroom.

The bathroom arrangement is far from ideal.

But tricky to see where you could fit one in to make life easier.

What could this house rent for if done up to a good standard?

We could achieve somewhere in the region of £350 per calendar month.

Given a guide price of 35,000,

after refurbishment,

what sort of sale price would you advise on the open market?

If the property was renovated,

depending on the standard of the finish,

it could achieve anywhere between £75,000 and £80,000.

Well, a nice enough property, but a lot of work to be done on this one.

So, not a weekend refurbishment.

Let's see who decided to take on the challenge

when it went under the hammer.

Three-storey four-bedroom terraced house

situated in a popular area of the town.

The property is a listed building.

35? 30?

I need a bid.

I can't sell it without one.

At 30,000.

30, I'm in.

At 30,000.

Despite a packed auction house,

it looked like the guide price was unobtainable.

But then the bids started to move a little.

At £30,000, then.

31. 32.

33. 34.

35. No?

With you, at 34.

Half. 35.

35. Yeah, I've got half here.

At 35, with you.

Half? No.

Back with you, at 35.

At £35,000 on my left seated.

First time.

Second time.

Third time at £35,000, then.

Well done, sir.

The successful bid of £35,000 was made by Dave.

I met up with him and his business partner Kevin,

leading the way here,

back at the property.

-Dave, Kevin, good to meet you both. Congratulations.

-Thank you.

-Tell me why you wanted to buy this property.

-God knows!

That's a good start. Yeah.

Well, we're new into the renovation part of our careers now.

We've done the house builds. We've done all that to do with that.

We now want to go forward and buy properties to do up and to rent.

Right, OK. And what's the relationship between you two?

He says he's my second son, but I don't believe that.

But, in those days, you couldn't get test, could you?

-No, Kev is the builder of the business.

-Right.

And that's the connection.

That's why we want to go forward and do other things.

So does, in effect, Kevin work for you?

Kevin actually works for my drainage business, yes.

-And you're the boss of the drainage business?

-I am.

-So, in effect, he works for you.

-We work together.

-Right, OK.

-I prefer that.

-Yeah, you do, OK. That works.

So, Kevin, then, this is a joint-venture?

Yes. It's what we want to get into. It's a pension, isn't it?

So, what do you stand to gain from it all?

The next one will be in Kevin's name.

Ah...!

So, why now? What's prompted you to do this just now?

It's a good time for us. Business is good.

And we now want to reinvest that business into another business.

OK. Fantastic.

So, why this particular house, then?

There's a funny story to that. Shall I tell it or shall you?

-Oh, you can tell him. Go on.

-Right.

We arrived at our first auction a month ago, just gone.

And the house we wanted was number five on the list.

And the money that it went for was absolutely above our budget.

Right.

We have a certain budget and the next one along was this one,

which was within our budget.

That story is not that funny.

Well, it's funny for us,

because the one we wanted we didn't get a look in on.

That's the funny bit. And we didn't want to come away empty-handed.

Sorry, Dave, you know how it is when you have to explain the joke!

-Right, so had you seen it beforehand?

-No.

-No.

Oh...!

-Had you read the legal pack?

-No.

Oh...!

So you hadn't seen it, hadn't read the legal pack.

-That's, kind of, a little bit on the...

-Back to front?

-Well, kind of. Bit dangerous.

-Absolutely. But confidence, you see?

Foolhardy, a bit, sort of?

-Nothing to worry about, is there?

-Well, possibly.

-You don't know until you've read the legal pack.

-Yeah.

-No, it's all been dealt with.

-Oh, now, after you've bought it.

Oh, yes. Well, I'm finalising now, so there's nothing scary amongst it.

Could have been, though.

Well, confidence.

Next time, we will read the legal pack.

But this was our first and we're not upset about the purchase at all.

How was the auction for you?

That was great. We loved it.

We were taken aback with how many people were there.

Absolutely packed out.

-And it was good.

-Brilliant.

So, what are the plans for it, then?

-What are you going to do to it?

-Top to bottom.

-Take all the chimney breasts out, top to bottom.

-Oh, are you?

-Yeah.

Take everything apart.

And the walls, we'll re-skim where necessary.

New floorboards.

New heating system.

Rewire.

It's a, kind of, interesting layout, as well, isn't it?

Sort of higgledy-piggledy, all over the place.

What are you going to do to sort of change that?

Well, the worst part for us, we think, is the kitchen area here

because, you know,

with the stairs coming up from behind that wall there,

it's going to take a little bit of erm...

..imagination.

And there's no back yard to this property here.

But the passage is there, which is a back yard.

So, we can do things with that to make light work of the kitchen.

-Right.

-Put white goods in there, that sort of thing.

-Right.

So, is the idea, then, to do it up and sell it on or to rent it out?

-Rent out.

-Rent out.

-Right.

So, building a little portfolio between you.

How's the work divvied up? What are you going to do, Kevin?

-What's your job?

-We all just play about together.

-Right.

-We all just chip in.

-So keep everything in-house.

-Yeah. What's your specialities?

-I'm a bricklayer by trade.

-Right.

-I'll cover the plastering and everything.

-Right.

So, what's the budget?

We have a budget of up to 12 grand.

With the purchase price on top of that,

we think we can turn this round into a nice return,

-market appraisal-wise.

-Right.

What sort of rents do you think you might get?

In the area, they're going for roughly £450 to £500.

-Yeah, in this area.

-Right.

It does worry me that Dave and Kevin

have gone into this without having a chance to weigh it all up.

Their estimate of the rental is much higher than the agents

who came to see it.

Well, it remains to be seen who was right.

They've set themselves a 12-week timescale

and Dave's wife, Linda, will be looking after the finances

so, hopefully, she'll make those figures add up.

And are you happy with what you've paid for this one?

-Yeah. Very much so, yeah.

-Within the budget and all?

Although I bought it blind.

Yeah, I know.

Tut-tut.

OK, well, listen, congratulations.

-Thank you.

-Good luck.

-Yeah, thank you.

-And look forward to seeing how you get on.

-Nice one.

-Thank you.

-Nice to meet you.

So, a new joint venture for David and Kevin.

But they broke all the rules buying this,

their first auction property,

not reading the legal pack, tut-tut-tut.

Not visiting the property beforehand... More tuts.

BREATHES IN AND OUT DEEPLY

Hopefully...

..the renovation will go a bit more, how shall we say, to plan.

Yes.

You can find out how they get on later in the show.

Well, we've already found out how one of our buyers got on.

What about the other two?

Did they have the cash and the energy to complete everything they needed?

Yes, how did those crucial valuations get on?

Did the estate agents give them news they wanted to hear?

Let's find out.

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

where part-time property developer Tracey

and her business partner Martin

paid 156,000 for this L-shaped plot of land,

which came with planning permission for four houses.

Since Tracey and Martin only build and rent out flats,

the existing plans became the first casualties

of this former St John's Ambulance headquarters development.

We've already spoken to an architect

and he's drafted plans with the potential of nine flats on the site.

Tracey and Martin know the local rental market well,

owning and renting 21 properties in this part of Kent.

And they calculated that building flats on this site,

rather than houses,

could generate a rental income of nearly £6,000 per month.

If you want a good rental return on what you're building on the site,

then to build two-bedroom flats in Deal,

it's a very sought-after rental area here.

The existing plans for this former ambulance HQ

were in need of urgent reconstructive surgery.

Cue the flashing lights. Sirens on.

It's time for a mad dash to the planning department.

SCREECHING TYRES

Hang on. Hang on. We all know planning doesn't work that way.

SEDATE MUSIC

Now, that's more like it.

Tracey and Martin first submitted their plans in November 2013.

And one year later, well, it's not been such a mad dash after all.

We met up with them back at the site

to find out how far their plans had progressed.

Well, the original purchase was in the summer of last year,

with completion a month later, July.

After that, we instructed an architect

and he had meetings with the local planning authority.

We moved on from there with him preparing plans

and submitting them in December.

We understood that process was going to be about six weeks.

So, we hoped to have planning by the end of January of 2014.

That didn't happen and the date was extended and extended.

And then the local planning authority

said they wanted a viability survey carried out,

which was at our expense.

And that led to discussions then about a payment

which eventually emerged and agreed as a figure of £20,000.

So, that was agreed in May.

So, we thought we'd have the planning very shortly after that.

But it wasn't, in fact, until October 2014

that planning was finally granted to us.

Tracey and Martin had originally planned for nine flats on the site.

But this was increased by one at the suggestion of their architect.

Back at the office,

Tracey took us through the new plans in more detail.

# Everybody's got to have plans

# She said Everybody's got to have plans... #

So, looking at the plans now,

we've got the driveway through the front of the property,

under the archway, to the rear of the property.

On the ground floor, we've got three two-bedroom flats.

When we move up to the first floor,

we've got three two-bedroom flats and a one-bedroomed flat.

And moving to the second floor, which is effectively the loft area,

there's a large three-bedroom flat

with one very large bedroom with an en suite

and two separate double bedrooms with a shared bathroom.

All of the property has got lounge-diners as an open space.

And separately,

there's a stand-alone two-floor two-bedroom unit,

which has got separate parking.

It all looks pretty impressive.

But their timescale for completion has, obviously, taken a hit.

Has this delay had an impact on their budget of 630,000?

The delay in the planning coming through hasn't been negative to us,

other than the fact that the site has now stood empty for a year,

while as we would have hoped to have a return on the money

that we'd invested into it.

Fortunately, in the last year, we've been in a rising market,

so the properties will be worth more when they're actually built.

Tracey and Martin know this business

and, more importantly, this area like the back of their hands.

Seems like a good point to bring in some impartial opinion

from two local estate agents.

I think the new plans and planning consent

are very appropriate for the site.

It's a good use of the space and will be in demand in this area.

I think the flats themselves in this location

will provide something quite unique.

I think there isn't many

apartments and flats in this spot.

But I do think there is a need for it,

especially, sort of, first-time buyers

and people that are downsizing.

Well, let's get some values.

Firstly, what price could these flats achieve

on the current property market?

Sales values here are going to be between 100,000 and 135,000

in the range of one bedrooms through to three bedrooms,

with probably the two-beds coming in at about £120,000.

I would suggest that the one-beds would be marketed around 100,000.

The two-beds at around the sort of 120,000, 125,000 price banding.

And then the three, around the sort of 135,00, 140,000 level,

depending on spec and how it's finished.

Taking those top-end prices,

the grand total comes to £1.24 million,

minus the purchase price of 156,000,

with an estimated spend of £700,000, including the extra flat.

That would leave Tracey and Martin

with a healthy profit of 384,000 before taxes and fees.

Fantastic. Better than I thought.

Those are slightly higher figures than we're working to.

But as fantastic as those figures are,

these two Kent developers aren't changing their game plan.

We find that the financial advantage is in keeping the flats

over a period of time.

We are looking to build and keep flats over 10, 20 years.

Time to return to the town of Ellenfoot in Cumbria.

# That's not my name

# That's not my name

# That's not my name

# That's not my name... #

OK. OK.

The name it's been known by since Georgian times, Maryport in Cumbria.

We were here to see a three-bed three-floored terraced house

with a guide price of £35,000 plus.

And, well, a few problems to go with it.

Urgh!

That's not good.

It also had a slightly unusual layout,

with an open-plan kitchen and living area on the ground floor.

A little landing on the way up the stairs.

A bedroom and bathroom on the first floor.

And the final two bedrooms on the top.

It was bought for the guide price of £35,000 by Dave.

He was going to develop it with business partner Kevin

and, although a good price,

he seemed aware of the difficulties with that layout.

It's a kind of interesting layout as well, isn't it?

It's sort of higgledy-piggledy all over the place.

What are you going to do to sort of change that?

Well, the worst part for us, we think, is the kitchen area here.

Because, you know, with the stairs coming up from behind that wall there,

it's going to take a little bit of, erm...

..imagination.

# Imagination

# Could make a man of you

# Imagination... #

Oh, well, Dave and Kevin must have good imaginations,

as they bought this without even viewing it.

Oh, dear...

Still, they had a budget of £12,000 and a timescale of 12 weeks.

Could the boys dream up a profitable property

or is that the stuff of fantasy?

-The windows are quite good.

-Yep.

Four months later, we've returned to find out.

That bathroom's been totally redeveloped and it's looking great.

And while there's still work to be done on the rest of the house,

the walls and ceilings have all been re-plastered

so that it's just about ready to decorate.

They've even found a use for the mezzanine passageway,

putting in a WC to make a ground-floor toilet.

As Kevin was on another job,

we caught up with Dave and his wife, Linda,

to hear all about it.

It's been four months almost to the day since we started the project.

We've got about another four weeks to ago.

The top two rooms are both bedrooms.

They just needed squaring up and stripping back and rebuilding, basically.

Floorboards were replaced where necessary.

The middle floor, the bathroom,

that was a total, total disaster, that.

All the floors came out of there.

Joists were replaced where necessary.

And the whole place has been rewired, replumbed.

And then we're on the sitting room, which is the last room to do.

So, that'll be happening in the next few weeks.

We'll be into that and squaring that away.

So, with a combined sitting room and kitchen the last on their list,

they're getting there.

Hang on, though, if the kitchen isn't finished yet,

where are we interviewing them?

Let's let Dave explain.

Within a few days, we decided to take away

the chimney in the sitting room

to give a bit more width to the room.

And we dropped the chimney onto the floor upstairs,

cleared all the rubble away

and then we found a hole in the floor where the hearth was.

And my grandson was here that day and we put a ladder down

and dropped him into the hole

and he shone his torch around off his phone.

And it became quite clear that we have to use this room.

So, where's the kitchen?

Yep, it's in the cellar they didn't even know existed.

And moving it down there really seems to have solved a problem.

The original room, a lounge and a kitchen,

we were struggling to get it to look anything.

So, to find a cellar, it was brilliant.

I came down when they'd made access into it.

It was very dark. I had a torch.

It was an earth floor and I thought,

hmm, it's got to be very light in here.

So, the vision was to have a light floor, light walls.

And I wanted a white kitchen, but it was too white.

So, we put the floor down

and then carried on with the rest of the kitchen equipment.

Erm...

And, really, I'm so pleased with it.

It does look great. And, OK, it does mean another set of stairs.

But, on the other hand, it means more room for the living area.

But, discovering and renovating a secret new room

would have had an effect on the budget.

So, how have they got on?

The original budget, we estimated at between 12,000 and 15,000.

That's now gone to 20,000.

If we come in with 20,000 spent, then we're doing OK.

Dave bought the house for its guide price of 35,000

and, although his budget has gone up to 20,000,

the property now has an additional room.

Will that extra spend have been worth it?

We've asked along two local property experts to

get their opinion.

Yeah, I think it's very quirky.

It has the benefits from a bathroom

and also a downstairs toilet as well.

But the emergence of the cellar

has really kind of opened the property up

to a much larger property.

I think it's vastly benefited the property.

What I can see is of a good standard.

If it's completed to that fully, you know,

I think it's going to create a great home.

They certainly seem enthused about Dave's new layout.

His total spend is now £55,000.

So, how much could he expect were he to sell the property?

We would estimate we could market the property for around £82,000.

Done up to a good standard, I feel, in the current market,

this property would achieve a sale value

in the region of about £85,000.

That would be a profit of up to £30,000,

minus the usual taxes and expenses.

Not bad for five months' work.

And were the property to be rented...?

We would expect that we could achieve

around £400 per calendar month.

In the region of £400-£425 per calendar month.

-Oh, that's good.

-That's all right.

-Yeah. Yeah.

I thought about 360, 380. So, that's not bad.

Yeah, that's all right.

This would give Dave a yield of just over 9%.

Not bad, considering they're keeping the property as an investment

and renting it out.

So, what's next?

-Look for another one.

-No, not quite yet.

I have to have two months off now.

And then I'm allowed to start looking for another one.

But, the next one,

he will definitely look at before he buys it.

I don't want the shock again that I had when I came in here.

Yeah, but what a result.

Well, that's all we've got time for

but join us next time for more of the ups and downs...

-Hopefully, not too many downs.

-Well, yes!

..of property developing here on Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.