0:00:02 > 0:00:03Hello, and welcome to the show.
0:00:03 > 0:00:05Property developing can be very rewarding.
0:00:05 > 0:00:07Both for the satisfaction of doing up the property
0:00:07 > 0:00:11- and, of course, for investment purposes.- But it's not always straightforward,
0:00:11 > 0:00:14so it's best to expect the unexpected.
0:00:14 > 0:00:19And one way to gauge your local market is to get down to your local property auction.
0:00:45 > 0:00:48The world of property is a fast moving environment
0:00:48 > 0:00:51and as Martin and I know, you've got to know what you're doing.
0:00:51 > 0:00:53Yes, so let's see what today's buyers bought.
0:00:55 > 0:01:00We start in London today, where a developer hopes he's got the perfect plot for making a profit.
0:01:00 > 0:01:04Property values in this area might possibly go up as much as 40%.
0:01:05 > 0:01:08From the capital city to the beautiful beaches of Devon.
0:01:08 > 0:01:13But what do you really wish for in a flat at the seaside?
0:01:13 > 0:01:15A view of the sea.
0:01:15 > 0:01:20But the views inside this property in County Down aren't quite so picturesque.
0:01:24 > 0:01:25Ah.
0:01:27 > 0:01:30All these properties have been sold at auction -
0:01:30 > 0:01:35we'll find out who bought them and what they paid for them when they went under the hammer.
0:01:39 > 0:01:43This is Abbey Wood in south-east London, close to the Kent border.
0:01:43 > 0:01:45Near to the banks of the River Thames,
0:01:45 > 0:01:48the area was once mainly farmland and fields.
0:01:48 > 0:01:52Although now you're much more likely to come across commuters than cows,
0:01:52 > 0:01:55with decent train links that are due to get even better
0:01:55 > 0:01:58with the arrival of Crossrail in 2018,
0:01:58 > 0:02:03predicting journey times from Abbey Wood to Bond Street of just 25 minutes.
0:02:03 > 0:02:07# Take the "A" Train Take the "A" Train... #
0:02:07 > 0:02:10Everyone wants to live close to the train station
0:02:10 > 0:02:13to whittle down that daily commute.
0:02:13 > 0:02:16So, around an eight-minute stroll is ideal.
0:02:16 > 0:02:19An actual house to live in? Well, that would also be good,
0:02:19 > 0:02:24because the lot I'm here to see is this...a plot of land.
0:02:24 > 0:02:27Now, luckily it had planning permission for two homes
0:02:27 > 0:02:31and a guide price of £110,000.
0:02:32 > 0:02:35The land at one stage used to be a large garden
0:02:35 > 0:02:38and has more recently been used as parking.
0:02:38 > 0:02:40It's a lovely quiet road in a residential area,
0:02:40 > 0:02:44so I'm not surprised planning was passed for two detached houses.
0:02:44 > 0:02:48I can't wait to take a look at these drawings for the site.
0:02:49 > 0:02:53# So take a look at me now
0:02:54 > 0:02:57# There's just an empty space... #
0:02:57 > 0:03:02Well, they're very interesting. The designs are for two three-bedroomed houses.
0:03:02 > 0:03:06They're very square and boxy from the outside, but quite minimalist
0:03:06 > 0:03:11and a nice change from your standard red brick, pitched roof affair.
0:03:11 > 0:03:13Now, you've got your front door to the side here,
0:03:13 > 0:03:15which frees up the rest of the space for living.
0:03:15 > 0:03:18Into the hall, you've got storage and a shower room,
0:03:18 > 0:03:21then a kitchen and dining area.
0:03:21 > 0:03:25Then, what I absolutely love is this partitioned shelving area
0:03:25 > 0:03:29which separates the space, but just maintains the flow downstairs.
0:03:29 > 0:03:33You've got a living room at the back out onto a patio, which is fab. I love it.
0:03:33 > 0:03:36Upstairs, we've got a double bedroom, twin and single,
0:03:36 > 0:03:39which still looks generous, and then you've got a family bathroom.
0:03:39 > 0:03:45It's a shame there's no en suite, but it's probably more important to have these built-in cupboards.
0:03:45 > 0:03:49Overall, it's practical, modern and really rather nice plans.
0:03:49 > 0:03:53I feel like someone's taken care with the design here
0:03:53 > 0:03:57and really thought about how a modern family would actually like to live.
0:03:57 > 0:04:00And two houses on this site doesn't feel like overkill.
0:04:00 > 0:04:04It's an odd shape, slightly tapering off at one end,
0:04:04 > 0:04:07but I think it's easily big enough for these two properties.
0:04:07 > 0:04:10But there's more to these plans than meets the eye.
0:04:10 > 0:04:15Ho-ho, yes. These are designs with a conscience.
0:04:15 > 0:04:17Now, you've got a solar thermal panel on each roof,
0:04:17 > 0:04:20which is used to warm your water.
0:04:20 > 0:04:22Then, there's the sedum roof,
0:04:22 > 0:04:25which is basically a living, green, flowering roof.
0:04:25 > 0:04:28Which is great for insulation, noise reduction
0:04:28 > 0:04:32and it stops water cascading down after heavy rain.
0:04:32 > 0:04:35But what I love most are the PV panels,
0:04:35 > 0:04:40which are essentially solar panels, but if you generate more electricity than you can use,
0:04:40 > 0:04:44you can sell it back to the grid and make money.
0:04:44 > 0:04:48Ecofriendly and profitable, which is fantastic.
0:04:48 > 0:04:53# It's not easy being green... #
0:04:53 > 0:04:58It's great to see that new builds are embracing the green way of living,
0:04:58 > 0:05:00but is there any cash to be made?
0:05:04 > 0:05:08We asked along a local estate agent to see what he thought.
0:05:08 > 0:05:11I think the plan's good. Downstairs we've got open-plan living space,
0:05:11 > 0:05:14which is ever more popular in recent years.
0:05:14 > 0:05:17We've got a downstairs shower room, which is very important.
0:05:17 > 0:05:20People don't want guests going up to the top floor to the bedrooms.
0:05:20 > 0:05:23Upstairs there's three good-sized bedrooms and a family bathroom.
0:05:23 > 0:05:26Storage, as well, has been accommodated in them.
0:05:26 > 0:05:29But is a new build development right for the Abbey Wood area?
0:05:29 > 0:05:33New builds do sell very quickly - there's high interest in them.
0:05:33 > 0:05:36We've just sold one two roads down from here,
0:05:36 > 0:05:38which went within a matter of weeks.
0:05:38 > 0:05:42OK, let's talk money. The site alone was guided at £110,000
0:05:42 > 0:05:47and build costs are likely to be around £200,000 for the two houses.
0:05:47 > 0:05:52So, that's at least a £310,000 investment.
0:05:52 > 0:05:55So, what kind of profit would we be looking at here?
0:05:55 > 0:06:00Once built, I think these properties are going to achieve between £315,000 up to £325,000.
0:06:00 > 0:06:04Oh, so that could be a great two-for-one offer,
0:06:04 > 0:06:06with one house covering costs
0:06:06 > 0:06:11while the other could potentially be a straight profit of over 300 grand.
0:06:14 > 0:06:20I like these designs and the site seems really rather nice and straightforward.
0:06:20 > 0:06:22Famous last words.
0:06:22 > 0:06:25But still, bought at the right price there is certainly profit in it -
0:06:25 > 0:06:28let's see what the price was at the auction.
0:06:30 > 0:06:35Right, lot 14 is a well located site,
0:06:35 > 0:06:37approximately about 5,000 square feet.
0:06:37 > 0:06:41You've got planning for two three-bedroomed dwellings.
0:06:41 > 0:06:44Who'd like to kick off on this? I don't know, £70,000?
0:06:44 > 0:06:48£70,000 on my right. 75 anywhere?
0:06:48 > 0:06:5275 with you. 80? 80.
0:06:52 > 0:06:5585? 90.
0:06:57 > 0:07:01Maybe not surprisingly, there was a lot of interest in the building plot
0:07:01 > 0:07:06and we rejoin the bidding at 190,000.
0:07:06 > 0:07:08190.
0:07:08 > 0:07:11195. 200.
0:07:11 > 0:07:13205?
0:07:13 > 0:07:15201?
0:07:15 > 0:07:18Might just do it, yeah? 201. 202.
0:07:18 > 0:07:21203 elsewhere?
0:07:21 > 0:07:24202, first time.
0:07:24 > 0:07:26Second time.
0:07:26 > 0:07:29Third and last time - have we all done?
0:07:29 > 0:07:31Sold, 202.
0:07:31 > 0:07:36Well, that £110,000 guide price went completely out of the window
0:07:36 > 0:07:40and the successful bidder at 202,000 was Pram.
0:07:40 > 0:07:44Now, Pram has been an IT consultant for 25 years
0:07:44 > 0:07:48and this is his first foray into the world of property developing.
0:07:48 > 0:07:49And what a start.
0:07:49 > 0:07:51# Start. #
0:07:51 > 0:07:54I met him back at the site with his architect, Paul,
0:07:54 > 0:07:56who will be overseeing the build with him.
0:07:56 > 0:08:01- So, congratulations, guys. Pram, you were successful on auction day. Well done.- Thank you.
0:08:01 > 0:08:05- You've got the site. Now, I know it comes with planning permission... - That's right.
0:08:05 > 0:08:09..with plans already drawn up of two really nice looking houses.
0:08:09 > 0:08:11- Are you going with those? - Yes, we are.
0:08:11 > 0:08:15We've decided that we're actually going to construct the houses,
0:08:15 > 0:08:18go for a really nice design
0:08:18 > 0:08:24and, hopefully, within the next six to seven months, the houses will be built.
0:08:24 > 0:08:27So, Paul, what part are you going to play within this development?
0:08:27 > 0:08:30I have an architectural background, but I'm working for the contractor.
0:08:30 > 0:08:34And I've taken the brief from Pram to improve various aspects of the design,
0:08:34 > 0:08:37which is fundamentally sound already.
0:08:37 > 0:08:39But we're going to improve on things like the green roof,
0:08:39 > 0:08:43the photovoltaic cells and make the building even more energy-efficient.
0:08:43 > 0:08:47You see, I absolutely love the plans. Looking at them they seem very practical.
0:08:47 > 0:08:49I love the space, I love the flow of the property.
0:08:49 > 0:08:52How are you going to tweak them and how you going to make them better?
0:08:52 > 0:08:58Good space standards, you're right. But there's aspects of connectivity with the garden.
0:08:58 > 0:09:00So, Pram's asked, could I improve that?
0:09:00 > 0:09:04And we've decided there's going to be a folding opening screen at one end,
0:09:04 > 0:09:06instead of a window and a couple of French doors.
0:09:06 > 0:09:10So, there'll be really good connectivity into the garden. Lots of light flooding into the property.
0:09:10 > 0:09:15Into the ground floor, in particular. And good access into the garden so you can enjoy the patio.
0:09:15 > 0:09:18We're just going to tweak it to add that little bit extra kerb appeal
0:09:18 > 0:09:21- to give Pram a better margin on the profit.- That's right, yes.
0:09:21 > 0:09:24So, one of the ideas is to actually...
0:09:24 > 0:09:26We've got two double bedrooms and a single one.
0:09:26 > 0:09:29So, we actually want to try and increase the floor space slightly
0:09:29 > 0:09:30on the top floor,
0:09:30 > 0:09:33so that we can make it three doubles, instead of a single.
0:09:33 > 0:09:36So, how much are they going to cost to build?
0:09:36 > 0:09:39The build costs are going to be approximately £105,000 per house.
0:09:39 > 0:09:42- So, that's 210,000 for both. - That's right.
0:09:42 > 0:09:45And on top of that we've allowed a 10% contingency.
0:09:45 > 0:09:50I mean, you never know - by the end of the build, property values may be rising still.
0:09:50 > 0:09:54Well, with the Crossrail coming here - and this is the end of the line for the Crossrail -
0:09:54 > 0:09:59it's been predicted that property values in this area might possibly go up as much as 40%.
0:10:02 > 0:10:0740% more? Crikey. This site just doesn't stop giving.
0:10:07 > 0:10:09It really looks like a sure-fire winner.
0:10:09 > 0:10:13But where property is concerned - and particularly new builds -
0:10:13 > 0:10:17well, you never really know until it's built and then sold.
0:10:21 > 0:10:24So, Pram, are you going to be on site every day driving this project?
0:10:24 > 0:10:29Um, I won't be here every day. Paul will be taking quite a lot of the responsibility
0:10:29 > 0:10:32with the building contractor, as well.
0:10:32 > 0:10:35But I will be receiving weekly reports via e-mail
0:10:35 > 0:10:39and photographs and I possibly will be coming down at least once a week
0:10:39 > 0:10:41to have a look at the progress.
0:10:41 > 0:10:44So, Paul, it's all up to you. It rests on your shoulders.
0:10:44 > 0:10:47- Well, let's see in seven months. - Whoa. So, how do you feel about that?
0:10:47 > 0:10:49I mean, how well do you know the contractor?
0:10:49 > 0:10:53I'm invigorated. I've known the contractor for five years now -
0:10:53 > 0:10:56we've been friends and now I'm actually working with him.
0:10:56 > 0:11:00Really looking forward to the project. We've got a great relationship.
0:11:00 > 0:11:02As far as I'm concerned, we are a great team.
0:11:02 > 0:11:05I love your positivity, but I love the design, as well.
0:11:05 > 0:11:07I can't wait to see what they look like.
0:11:07 > 0:11:11Guys, good luck with this project. It's going to be really exciting for us to see the outcome of them.
0:11:11 > 0:11:14- Congratulations.- Thank you, Lucy. - Thank you.
0:11:15 > 0:11:18Well, Pram has a fabulous site here
0:11:18 > 0:11:22and perhaps an even better investment than he first thought.
0:11:22 > 0:11:28And the houses themselves? Well, I think they might be really rather interesting.
0:11:28 > 0:11:30You can find out if they are later in the show.
0:11:34 > 0:11:40I'm in the charming East Devon coastal town of Budleigh Salterton.
0:11:40 > 0:11:45Only 12 miles from Exeter and yet a world away from...
0:11:45 > 0:11:50Well, anything vaguely stressful, really. I could spend hours here.
0:11:50 > 0:11:55Luckily, this is the place that the auction property is situated.
0:11:55 > 0:11:57Let's go and take a look.
0:11:57 > 0:11:59And what a place it is!
0:11:59 > 0:12:04Budleigh Salterton is one of the most desirable coastal towns.
0:12:04 > 0:12:08It's situated on the western end of what is known as the Jurassic Coast,
0:12:08 > 0:12:12England's first natural World Heritage site,
0:12:12 > 0:12:15sitting alongside the likes of the Grand Canyon
0:12:15 > 0:12:17and the Great Barrier Reef with good reason.
0:12:17 > 0:12:20It is spectacular.
0:12:20 > 0:12:26# Come with me
0:12:26 > 0:12:30# To the sea... #
0:12:30 > 0:12:33Well, just a short walk from the seafront
0:12:33 > 0:12:37and 100 yards from the town centre is the property I'm here to see.
0:12:37 > 0:12:41It's a two-bedroom flat in this purpose-built block.
0:12:41 > 0:12:44Guide price was £155,000.
0:12:44 > 0:12:48Described in the auction catalogue as being spacious, so that's a really good start.
0:12:48 > 0:12:51Let's hope it lives up to expectations.
0:12:51 > 0:12:54From the outside, the building looks in good nick
0:12:54 > 0:12:57and I love the look of that balcony.
0:12:57 > 0:13:00A well-kept communal stairway is a plus.
0:13:00 > 0:13:03Ooh! Well, it's certainly a really nice start.
0:13:03 > 0:13:06Lots of space in this large hallway.
0:13:06 > 0:13:09Lots of light coming in from the kitchen there, through this glass wall.
0:13:09 > 0:13:11Although...
0:13:11 > 0:13:14I'm not a fan of glass being used like this.
0:13:14 > 0:13:17It's too easy to break and it makes it a real safety hazard.
0:13:17 > 0:13:21So, either replace that with safety glass or get rid of it altogether.
0:13:21 > 0:13:25Kitchen itself, again really light and airy. There some lovely views out the windows
0:13:25 > 0:13:28across to the hills over there.
0:13:28 > 0:13:32And it doesn't look like it's bang up to date, but it's a pretty decent condition.
0:13:32 > 0:13:36Lots of storage, which you don't always get in flats, so that's nice.
0:13:36 > 0:13:39Two bedrooms - they seem to be a really nice size.
0:13:39 > 0:13:43And a real additional bonus, a loo and a separate shower room with its own loo.
0:13:43 > 0:13:47So, that's fantastic. And then through into, er...
0:13:47 > 0:13:49Well, I suppose your main living area.
0:13:49 > 0:13:53And, again, what a great feeling this place has.
0:13:53 > 0:13:57It's only a two-bedroom flat, but it immediately feels so, so nice.
0:13:57 > 0:14:01Ah. At last, a negative. Not that I'm searching for negatives,
0:14:01 > 0:14:03but it's nice to show a bit of balance.
0:14:03 > 0:14:06Storage heaters or electric heaters.
0:14:06 > 0:14:09And that clearly means there isn't central heating.
0:14:09 > 0:14:11That's probably something you want to put right.
0:14:11 > 0:14:15And it's just a case of, "where is the gas?" if that's what you want to go with to connect into it.
0:14:15 > 0:14:20But all in all... lots of ticks on this one.
0:14:20 > 0:14:23# Everything is awesome
0:14:23 > 0:14:26# When we're living our dream. #
0:14:27 > 0:14:30This place has everything you could want.
0:14:30 > 0:14:33You know I'm a fan of a separate WC and bathroom.
0:14:33 > 0:14:38Bedrooms are a great size, too. Particularly if you remove the built in wardrobes.
0:14:38 > 0:14:41And, as if that wasn't enough, a door from the lounge
0:14:41 > 0:14:46gives you a south-facing balcony, so you can soak up the rays.
0:14:46 > 0:14:48This place seems perfect.
0:14:50 > 0:14:54Well, what do you really wish for in a flat at the seaside?
0:14:55 > 0:15:00A view of the sea. And from this window, you get it.
0:15:00 > 0:15:03Now, that's nice, beautiful.
0:15:03 > 0:15:07It also makes this flat even more desirable.
0:15:07 > 0:15:11# You're just too good to be true
0:15:11 > 0:15:15# Can't take my eyes off you. #
0:15:15 > 0:15:17I can't get over these stunning views,
0:15:17 > 0:15:20especially on such a lovely sunny day.
0:15:20 > 0:15:23And outside has another pleasant surprise.
0:15:26 > 0:15:30Well, parking outside the front of the flat is a little bit snug.
0:15:30 > 0:15:35But, joy of joys, no problem at all because the flat comes with yet another bonus...
0:15:35 > 0:15:37its own garage.
0:15:37 > 0:15:42So, a balcony, garage and sea views - this place seems ideal.
0:15:42 > 0:15:45And guided at £155,000 plus,
0:15:45 > 0:15:47it could also be a bargain for the area,
0:15:47 > 0:15:50as a local property expert can explain.
0:15:52 > 0:15:55Property prices in Budleigh Salterton can be very high.
0:15:55 > 0:15:58Certainly, there are properties on the market in and around the area
0:15:58 > 0:16:01for £2 million, and a little bit less.
0:16:01 > 0:16:04But, also, there are properties available for purchase
0:16:04 > 0:16:06at more modest prices.
0:16:06 > 0:16:10This particular flat is pretty well kept, decorative-wise.
0:16:10 > 0:16:13The kitchen and bathroom suites are a little tired now,
0:16:13 > 0:16:15so they could do with a little bit of TLC.
0:16:15 > 0:16:19But not an awful lot of effort would put this flat into top-notch condition.
0:16:20 > 0:16:26Now, this flat is freehold. And as it sits in a block that is mostly leasehold properties,
0:16:26 > 0:16:28this can be a big advantage.
0:16:28 > 0:16:30Freehold means you don't have to pay ground rent,
0:16:30 > 0:16:33you're free to renovate the property without restriction
0:16:33 > 0:16:39and any changes to the block itself would have to be approved by the owner of this flat.
0:16:39 > 0:16:42Freehold flats are great if your neighbours are leasehold.
0:16:42 > 0:16:46It means there aren't any nasty surprises hidden away.
0:16:47 > 0:16:51Having a share of the freehold interest is actually quite important to some people.
0:16:51 > 0:16:56Because, with respect, some members of the public don't quite understand leasehold.
0:16:56 > 0:17:00So, having the freehold of their flat in a building where there's only four freehold,
0:17:00 > 0:17:04it means they've got total control and they feel more comfortable with that situation.
0:17:04 > 0:17:07Well, I'm wondering, with its size and location,
0:17:07 > 0:17:11if this might make a good holiday let for seaside visitors.
0:17:11 > 0:17:14Not THOSE kind of seaside visitors.
0:17:14 > 0:17:19This particular property - you're not allowed to do holiday lets here, for obvious reasons.
0:17:19 > 0:17:23If you lived in the building, would you want new neighbours every week or every fortnight?
0:17:23 > 0:17:26Although, differentiating from a holiday home,
0:17:26 > 0:17:29it would make a perfect holiday home for the owner.
0:17:29 > 0:17:34Oh, well. You don't ask, you don't get. So, what about values?
0:17:34 > 0:17:39Once this property has been refurbished, we would expect the value to be circa £210,000.
0:17:39 > 0:17:44Once renovated, we would expect this property, if it were exposed to the rental market,
0:17:44 > 0:17:48to derive a yield of about £750 a month.
0:17:50 > 0:17:54Well, a home by the sea is a lot of people's dream.
0:17:54 > 0:17:58And in terms of property prices, houses situated by the coast
0:17:58 > 0:18:01can often be a really good investment.
0:18:01 > 0:18:04So, absolutely loads going for this particular flat.
0:18:04 > 0:18:07Let's see who bought it when it went under the hammer.
0:18:07 > 0:18:11Vacant, spacious, two-bedroom flat for updating,
0:18:11 > 0:18:15in a cul-de-sac location close to the town centre and seafront.
0:18:15 > 0:18:19It's £155,000.
0:18:19 > 0:18:23Anybody like to have a crack at this at £155,000?
0:18:24 > 0:18:29155, ladies and gentlemen? Come down from 175.
0:18:29 > 0:18:32Anybody like to have a bid at 155?
0:18:32 > 0:18:34Or a bid of your call? 155?
0:18:36 > 0:18:40Don't be shy, now's your chance. 155, back corner. Good man, well bid.
0:18:40 > 0:18:44155, with £20,000 under the original guide at 155.
0:18:44 > 0:18:47Any advance on 155?
0:18:49 > 0:18:53£155,000 standing. Looking for 160, if I can.
0:18:55 > 0:18:59A lot of debate going on over here. Do you like this one?
0:18:59 > 0:19:03No, thank you. That's very polite. Thank you.
0:19:03 > 0:19:08£155,000, one bid. Looking for 160.
0:19:08 > 0:19:10Well, we'll call it for first time, you know the routine now.
0:19:10 > 0:19:13Second time at 155, standing in the blue shirt.
0:19:13 > 0:19:16Third and last time.
0:19:16 > 0:19:18Nice little opportunity. Standing in the blue shirt,
0:19:18 > 0:19:23for the last time at £155,000 in the room.
0:19:23 > 0:19:27Done. Yours, sir. Thank you. One bid, one sale.
0:19:27 > 0:19:31# I am the one and only... #
0:19:31 > 0:19:36Craig was the one and only bidder at £155,000.
0:19:36 > 0:19:40I caught up with the one-bid wonder to find out his plans.
0:19:40 > 0:19:44- Craig, good to meet you. - Good to meet you.- Congratulations.
0:19:44 > 0:19:46- Thank you very much.- Tell me why you wanted to buy this place.
0:19:46 > 0:19:49Well, there were three reasons, really.
0:19:49 > 0:19:53One was the location, two was the price,
0:19:53 > 0:19:57- and three was that there didn't seem to be that much work to be done on the property.- No.
0:19:57 > 0:20:02So, I thought ideal first property to, sort of, do a bit of renovation on.
0:20:02 > 0:20:04Right, so this is your first venture into this kind of thing.
0:20:04 > 0:20:08- It's my first adventure, yeah. - Right, so why now?
0:20:08 > 0:20:13Well, my profession is a teacher. I was teaching for many years.
0:20:13 > 0:20:16- What level? What age? - Primary age children.
0:20:16 > 0:20:20But in the last six to seven years, I've been working with special needs children,
0:20:20 > 0:20:24- with children who have been excluded from school for behaviour reasons... - Oh, wow.
0:20:24 > 0:20:27..displaying challenging behaviour.
0:20:27 > 0:20:31So, I thought it's about time I took a bit of a break from that line of work.
0:20:31 > 0:20:34It must be quite challenging in itself. Rewarding, I'm sure.
0:20:34 > 0:20:38Rewarding and challenging. So, I thought I need a new challenge.
0:20:38 > 0:20:41- So, I thought property development. - And why here?
0:20:41 > 0:20:43It's a lovely coastal town. SEAGULLS CRY
0:20:43 > 0:20:46Seaside, obviously we've even got seagulls.
0:20:46 > 0:20:48THEY LAUGH
0:20:48 > 0:20:52- Yeah, I thought ideal place and lovely.- Are you local?
0:20:52 > 0:20:56- Exeter, not too far away.- It's a lovely flat. What did you like about it?
0:20:56 > 0:20:59I like the fact that... Well, like you said earlier,
0:20:59 > 0:21:02the location. Beautiful location.
0:21:02 > 0:21:07And looking around it, there was nothing that frightened me about it
0:21:07 > 0:21:11as regards to the work - it was all doable.
0:21:11 > 0:21:15And I thought, "I can do this, I can do this."
0:21:15 > 0:21:19I've done work on my own properties at home
0:21:19 > 0:21:22- and so I thought it was a change in career.- Yeah.
0:21:22 > 0:21:25- This is a good start. - A good start indeed.
0:21:25 > 0:21:28A flat bought bang on the guide price and in a prime location.
0:21:28 > 0:21:32You couldn't have asked for more. So, what does he plan to do?
0:21:33 > 0:21:36The main thing is, I want to get central heating in.
0:21:36 > 0:21:39At the moment it's electric storage heaters.
0:21:39 > 0:21:43There's gas in the building, but there's not gas in this property.
0:21:43 > 0:21:47So, that's the first thing I need to do is get gas connected to the property.
0:21:47 > 0:21:53And then the electrics look a little bit dated, so they need to be updated.
0:21:53 > 0:21:57And generally, it's just decor. The kitchen is OK,
0:21:57 > 0:22:01but I think it could do with updating again.
0:22:01 > 0:22:05The two things you mentioned, the electrics and the gas, you have to get other people in to do.
0:22:05 > 0:22:08- Yeah, yeah.- What about the rest of it - could you fit a kitchen?
0:22:08 > 0:22:13I could fit the kitchen, yeah. I could fit the kitchen and do the decorating, tiling...
0:22:13 > 0:22:16Yeah. So, I will be fairly hands on.
0:22:16 > 0:22:20What's the plan for it, then? Is it to rent it out, or to sell it on?
0:22:20 > 0:22:23Hopefully to sell it on... as quick as possible, really.
0:22:23 > 0:22:28- And then move on to my next project. - How much budget have you got?
0:22:28 > 0:22:31- I've got up to £10,000.- OK.
0:22:31 > 0:22:34Which should be OK.
0:22:34 > 0:22:38I do have a contingency of a couple of thousand.
0:22:38 > 0:22:42Because the gas and the central heating is going to swallow up probably half of that, isn't it?
0:22:42 > 0:22:45- There's still a few unknowns there.- OK.
0:22:45 > 0:22:48So, hopefully, around about the £10,000.
0:22:48 > 0:22:52If I can do a lot of the work myself, that would keep costs down.
0:22:53 > 0:22:55Craig has a six-to-eight-week timescale,
0:22:55 > 0:22:58but I do think he's been pretty optimistic with the budget.
0:22:58 > 0:23:02There really isn't much room for any unforeseen costs that may occur.
0:23:05 > 0:23:08- How was the auction experience? - Lovely.
0:23:08 > 0:23:11- It was a really, really nice experience.- Yeah?
0:23:11 > 0:23:14I've never been to an auction before of any type
0:23:14 > 0:23:17and I couldn't believe it.
0:23:17 > 0:23:21The property came up, I had an idea of what I wanted to pay for it
0:23:21 > 0:23:24and it went for the guide price.
0:23:24 > 0:23:28Which was... You know, I was prepared to go higher than the guide price
0:23:28 > 0:23:31and I was the only person that bid for it.
0:23:31 > 0:23:35So, there was either something that I was missing...
0:23:35 > 0:23:39or I got a good property at a good price.
0:23:39 > 0:23:42- Well, I think it's the latter, isn't it, really?- I hope so.
0:23:42 > 0:23:46- Yeah, definitely. Well, congratulations.- Thank you very much indeed.- Good luck with it.- Cheers.
0:23:46 > 0:23:50- I look forward to seeing how you get on.- Thank you.
0:23:50 > 0:23:53Well, it's a new career for teacher Craig,
0:23:53 > 0:23:57but I think he's already learned some really important property lessons.
0:23:57 > 0:24:00Choosing a good location, somewhere that doesn't need too much work
0:24:00 > 0:24:03and buying things at the right price. He's done well.
0:24:03 > 0:24:06Will his £10,000 budget stretch?
0:24:06 > 0:24:10He hasn't had the quote from sorting the gas yet.
0:24:10 > 0:24:12You can find out later in the show.
0:24:13 > 0:24:19Coming up, in County Down, what looks like hard work could be deceptively simple.
0:24:19 > 0:24:22- I've come into places far, far worse.- Right.
0:24:22 > 0:24:24This here wouldn't annoy me.
0:24:25 > 0:24:29While, for Craig, something simple turns out to be very hard work.
0:24:29 > 0:24:33Getting the woodchip off the ceilings took me three weeks.
0:24:40 > 0:24:42And now it's back to Abbey Wood in south-east London
0:24:42 > 0:24:47where this plot of land came with planning permission for two three-bedroomed houses.
0:24:47 > 0:24:51It was snapped up by Pram, a full-time IT consultant,
0:24:51 > 0:24:54who forked out 202,000.
0:24:55 > 0:24:58Sold, 202.
0:24:58 > 0:25:00Pram had good reason to be delighted.
0:25:00 > 0:25:03With this area of London scheduled to become the final stop
0:25:03 > 0:25:06on the new Crossrail service from Heathrow Airport,
0:25:06 > 0:25:12an investment in property now could pay big dividends further down the line.
0:25:12 > 0:25:16It's been predicted that property values in this area might possibly go up as much as 40%.
0:25:19 > 0:25:21With existing plans already approved,
0:25:21 > 0:25:26was Pram or architect Paul tempted to change the original design?
0:25:27 > 0:25:31I've taken the brief from Pram to improve various aspects of the design,
0:25:31 > 0:25:35which is fundamentally sound already. But we are going to improve on things like the green roof,
0:25:35 > 0:25:39the photovoltaic cells and make the building even more energy-efficient.
0:25:42 > 0:25:46Pram set his architect and builders a time of six to seven months
0:25:46 > 0:25:50and allowed a budget of £210,000 for the build.
0:25:51 > 0:25:55We returned 18 months later to see what he had managed to create
0:25:55 > 0:25:58from his patch of scrubland at Abbey Wood.
0:26:03 > 0:26:08Well, we were expecting square and boxy on the outside and that's what we've got.
0:26:08 > 0:26:12Pram and his architect Paul decided to go their own separate ways
0:26:12 > 0:26:14and so there were some changes to the initial plans.
0:26:14 > 0:26:19I loved Pram's eco-ambitions and he did install the PV panels.
0:26:19 > 0:26:22But, for the roof, he opted for a lightweight aluminium
0:26:22 > 0:26:25rather then the sedum he'd planned to use.
0:26:25 > 0:26:32We decided to have an aluminium roof because, as opposed to a green roof, the maintenance was a lot easier
0:26:32 > 0:26:37and overall we thought that the life span of an aluminium roof would be much longer.
0:26:37 > 0:26:42There's still landscaping work ongoing, but inside it's a different story altogether.
0:26:49 > 0:26:53Both houses have identical layouts and fixtures and fittings.
0:26:53 > 0:26:57Pram decided against having the shelving partition between the kitchen and living room,
0:26:57 > 0:27:01preferring to keep it as one enormous space, which I agree with.
0:27:01 > 0:27:03Pretty impressive.
0:27:04 > 0:27:11This is plot B and what we've decided to do was go for a black-and-white themed kitchen.
0:27:11 > 0:27:16High-gloss kitchen units, integrated dishwasher and oven and appliances.
0:27:16 > 0:27:21And at the same time we decided to go with porcelain white tiles,
0:27:21 > 0:27:25so it's nice and airy and nice and bright with the reflective lights and LED lighting.
0:27:25 > 0:27:30And I'm really pleased with the way it's turned out and the kitchen looks really fabulous.
0:27:32 > 0:27:34Well, I can't argue with that, Pram.
0:27:34 > 0:27:38Completing the downstairs accommodation is a nicely finished wet room.
0:27:43 > 0:27:48Upstairs, the approved plan allowed for two double and one single bedroom.
0:27:48 > 0:27:53But thanks to a clever redesign, the single bedroom has increased in size to a double.
0:27:55 > 0:27:58What we've done is created an overhang on the first floor,
0:27:58 > 0:28:01so the single bedroom has now become a double bedroom
0:28:01 > 0:28:04and the bathroom has been pushed back further towards the back of the house.
0:28:13 > 0:28:17We've gone for mainly a modern-style look.
0:28:17 > 0:28:21Modern fittings and a lot of windows for a lot of daylight
0:28:21 > 0:28:25and we've kept the overall appearance quite neutral.
0:28:25 > 0:28:30Well, I'm glad to see Pram has been using his skills as an IT consultant.
0:28:30 > 0:28:33Well, he must be familiar with installing WINDOWS.
0:28:37 > 0:28:39Apart from some minor snags and landscaping,
0:28:39 > 0:28:42the houses are finished and ready to sell.
0:28:42 > 0:28:46Were there are any problems that Pram and his team faced along the way?
0:28:47 > 0:28:51One of the challenges we had was, after the soil tests we had to do piling.
0:28:51 > 0:28:54That involves basically doing some boring in certain points
0:28:54 > 0:28:57down to a depth of about eight to ten metres.
0:28:57 > 0:28:59And at that time the weather was quite bad.
0:28:59 > 0:29:02It basically delayed us by about a few months.
0:29:02 > 0:29:06And one of the other challenges was there was a shortage of bricks.
0:29:06 > 0:29:11So, it took us approximately six to eight weeks to procure bricks
0:29:11 > 0:29:13for both houses at one time.
0:29:16 > 0:29:21As well as adding time to the project, those setbacks also cost money,
0:29:21 > 0:29:26with the soil tests and piling alone adding an extra £30,000.
0:29:26 > 0:29:31Another added expense was running services to the new houses.
0:29:31 > 0:29:36We've gone over budget by about £70,000.
0:29:36 > 0:29:40So, in total the spend has come up to about £280,000 for both the houses.
0:29:42 > 0:29:47Add to that 280,000 the 202,000 he paid for the land and his
0:29:47 > 0:29:53total spend comes to 482,000. Well, that's a big investment.
0:29:57 > 0:30:00There's only one way to find out if it could pay off.
0:30:00 > 0:30:03That's right, it's estate agent time.
0:30:03 > 0:30:06I think the properties are quite unique for the area.
0:30:06 > 0:30:09There aren't many new-build houses.
0:30:09 > 0:30:11They're extremely light and airy,
0:30:11 > 0:30:14and with off-street parking, which is quite important around here
0:30:14 > 0:30:16with the parking restrictions
0:30:16 > 0:30:18for a couple of hours during the day.
0:30:18 > 0:30:20The houses have a very nice finish to them.
0:30:20 > 0:30:22I like the open-plan living space
0:30:22 > 0:30:24that you've got downstairs.
0:30:24 > 0:30:26The owner's factored into the ground floor with a wet room
0:30:26 > 0:30:30and a bathroom upstairs with three double bedrooms. Very good accommodation size.
0:30:30 > 0:30:35Now, the houses themselves are mirror images of each other
0:30:35 > 0:30:38but the plot of land on the right has a slightly larger garden
0:30:38 > 0:30:42and parking area. It's not a lot but this is London, after all.
0:30:42 > 0:30:45And any land is at a premium.
0:30:45 > 0:30:48So, let's get those all-important valuations.
0:30:49 > 0:30:52If the properties were to come onto the market,
0:30:52 > 0:30:56I would value the property on the left
0:30:56 > 0:30:58at between £360,000 and £370,000
0:30:58 > 0:31:03and the property on the right, between £370,000 and £380,000.
0:31:03 > 0:31:09The house on the left-hand side, I would place in the region of £370,000 to £380,000.
0:31:09 > 0:31:11The house on the right-hand side, I would place
0:31:11 > 0:31:14a value in the region of £380,000 to £390,000.
0:31:18 > 0:31:19At those valuations,
0:31:19 > 0:31:22Pram could be looking at a total price
0:31:22 > 0:31:26of between 730,000 and 770,000,
0:31:26 > 0:31:31giving him a whopping potential profit of 288,000.
0:31:31 > 0:31:33That's before fees and tax.
0:31:34 > 0:31:37Well, the properties are on the market for £400,000 each
0:31:37 > 0:31:42and we have just recently accepted offers on both properties
0:31:42 > 0:31:45and the valuations that the agents have given are in line
0:31:45 > 0:31:47with the offers we have received.
0:31:47 > 0:31:51So the £288,000 question is,
0:31:51 > 0:31:55will Pram be going back to IT consulting?
0:31:55 > 0:31:57I actually quite enjoy both, you know,
0:31:57 > 0:32:01obviously I've been doing IT for a long time but I would say
0:32:01 > 0:32:06that, in the long run, I would prefer to do property development.
0:32:06 > 0:32:09It's nice to see what you started out with and what you've achieved
0:32:09 > 0:32:12and the end result is always good.
0:32:17 > 0:32:2020 miles south of Belfast, it's Downpatrick,
0:32:20 > 0:32:23one of Northern Ireland's most ancient towns.
0:32:25 > 0:32:30Legend has it that the remains of St Patrick himself lie within
0:32:30 > 0:32:34this grave at Down Cathedral, making it a site of pilgrimage for many.
0:32:36 > 0:32:4015 minutes' walk from Downpatrick centre is the property
0:32:40 > 0:32:43I'm here to see. And it is this.
0:32:43 > 0:32:47A three bed end-of-terrace, had a guide price of £30,000.
0:32:47 > 0:32:51Big question is, is it a saint or a sinner?
0:32:51 > 0:32:56MUSIC: Saints And Sinners by Johnny And The Self Abusers
0:33:02 > 0:33:04Ah.
0:33:04 > 0:33:07Well, I think it's definitely coming into the sinners camp, for sure.
0:33:07 > 0:33:10Let's look at what we've actually got rather than the state it's in.
0:33:10 > 0:33:12That's a classic error.
0:33:12 > 0:33:15Front room there, it's a good size. Nice sized hallway,
0:33:15 > 0:33:18stairs up to the bedrooms there. It's obviously
0:33:18 > 0:33:20had a few problems in its recent life
0:33:20 > 0:33:23because there's quite a lot of damage inside and,
0:33:23 > 0:33:26obviously, there's some major...
0:33:26 > 0:33:30Sorry, cover your ears... Just do it, trust me.
0:33:30 > 0:33:32GLASS CRUNCHES
0:33:34 > 0:33:37Ooh, few bits of glass on the floor there.
0:33:37 > 0:33:41Yeah, so the kitchen needs a bit of work. But I like the size,
0:33:41 > 0:33:43I like the design.
0:33:43 > 0:33:47I just need to really polish my rose-tinted spectacles.
0:33:48 > 0:33:52So, first impressions not so good.
0:33:52 > 0:33:57# Walking on, walking on broken glass. #
0:33:57 > 0:34:00If this was a first date I'd be checking my watch,
0:34:00 > 0:34:03scanning for the nearest exit and rehearsing my,
0:34:03 > 0:34:06"Er, there's a bit of an emergency at home" excuse.
0:34:06 > 0:34:10But let's see if this home emergency has spread upstairs.
0:34:10 > 0:34:13# Walking on, walking on broken glass. #
0:34:13 > 0:34:18Well, upstairs... And, surprisingly, it's sparklingly clean.
0:34:18 > 0:34:20Er, no.
0:34:20 > 0:34:23However, let's look again at what we've actually
0:34:23 > 0:34:25got in terms of the fabric of the building.
0:34:25 > 0:34:29Three half-decent-sized bedrooms.
0:34:29 > 0:34:31Two at the front there and one at the back.
0:34:31 > 0:34:35And, you might not have expected this, but look at that!
0:34:35 > 0:34:38A really decent toilet.
0:34:38 > 0:34:42So now it's a case of just figuring out what is actually stuff
0:34:42 > 0:34:46that we can just dump in a skip and get rid of and sort the place out,
0:34:46 > 0:34:49What is actually structural - I don't know if there's much of that -
0:34:49 > 0:34:52what's cosmetic, there's probably quite a lot of that.
0:34:52 > 0:34:57But do that, and what you've got here is a great house.
0:34:58 > 0:35:00So things are looking up.
0:35:00 > 0:35:03The fabric of the house seems to be in good order,
0:35:03 > 0:35:07it just needs a really good clear out.
0:35:07 > 0:35:12# Can't judge a book by looking at the cover. #
0:35:12 > 0:35:14So, what do you think?
0:35:14 > 0:35:18Well, I am now going to attempt what's called a paradigm shift.
0:35:18 > 0:35:22That is where you change somebody's opinion or viewpoint
0:35:22 > 0:35:24based on new information.
0:35:24 > 0:35:28That new information is that there is a massive demand for
0:35:28 > 0:35:31rental property around these parts and there's a shortage of houses.
0:35:31 > 0:35:35A house like this could easily rent out for around
0:35:35 > 0:35:40£450 a calendar month. That's £5,400 a year.
0:35:40 > 0:35:43If you get this property for anything like that
0:35:43 > 0:35:47£30,000 guide prize, that's an 18% yield.
0:35:50 > 0:35:52Viewpoint changed, perhaps?
0:35:56 > 0:35:59Potentially very impressive rental figures.
0:35:59 > 0:36:00But for a sales valuation,
0:36:00 > 0:36:04we've invited a local estate agent along to give us his opinion.
0:36:07 > 0:36:09First impressions of the house,
0:36:09 > 0:36:11it's a specious set-end terrace property
0:36:11 > 0:36:14in need of total refurbishment.
0:36:14 > 0:36:16It requires a new kitchen
0:36:16 > 0:36:18but there's no signs of damp and, to be honest,
0:36:18 > 0:36:22just cosmetic work, really, is required to the property.
0:36:22 > 0:36:26I believe that the property would be worth around £65,000
0:36:26 > 0:36:27once the work is done.
0:36:30 > 0:36:35OK, when you consider that £30,000 guide price and the potential
0:36:35 > 0:36:39rental yield, these numbers are beginning to look very attractive.
0:36:43 > 0:36:47Well, you could easily set one foot inside this property
0:36:47 > 0:36:51and say to yourself, "No way, Jose."
0:36:51 > 0:36:54However, I think if you did that you'd be missing a trick.
0:36:54 > 0:36:58Because, actually, intrinsically, it's a really good little house.
0:36:58 > 0:37:02For that guide price, definitely worth looking at.
0:37:02 > 0:37:05Let's see who agreed when it went under the hammer.
0:37:05 > 0:37:08It's a three-bed end terrace, guide price is £30,000.
0:37:08 > 0:37:10Someone like to get us away at £30,000?
0:37:10 > 0:37:13We have 30,000 bid here, at 30,000.
0:37:13 > 0:37:15Any advance on the £30,000 we have?
0:37:15 > 0:37:1731 we have, at 31, we have.
0:37:17 > 0:37:2232, we have 32 at the wall here at 32,000. 33, seated at 33,000.
0:37:22 > 0:37:2533 again, 34. The wall, 34,000.
0:37:25 > 0:37:27This man here, 35,
0:37:27 > 0:37:28selling at 35,000.
0:37:28 > 0:37:29A ding-dong battle got
0:37:29 > 0:37:33under way for this property and we rejoin the auction with the bid
0:37:33 > 0:37:35standing at 45,000.
0:37:35 > 0:37:38At 45, 45, he's gone to 45.
0:37:38 > 0:37:43At 46, 46, 46, seated at 46,000. All sure? Last call.
0:37:43 > 0:37:4747, at 47 at the back of the room, at 47,000.
0:37:47 > 0:37:53At 47, 47,500, 47,500, 48. 48 at the back of the room, at 48,000.
0:37:53 > 0:37:5748,500, at 48,500, at 48,500, 49. At 49,000.
0:37:57 > 0:38:0149,000 we have, at 50,000. Seated at 50,000.
0:38:01 > 0:38:05Seated at £50,000, we have 50,000. Seated at £50,000.
0:38:05 > 0:38:08All sure? Last call at £50,000. Going once,
0:38:08 > 0:38:11seated at 50,000, going twice,
0:38:11 > 0:38:12sold 50,000.
0:38:12 > 0:38:14Number there, please.
0:38:14 > 0:38:17MUSIC: Big Brother by Stevie Wonder
0:38:17 > 0:38:20Paying £20,000 over the guide price was Michael.
0:38:20 > 0:38:23Who, together with brother Adrian, run a building contractors,
0:38:23 > 0:38:27an estate agency and also let out properties in the local area.
0:38:27 > 0:38:29Busy boys.
0:38:29 > 0:38:32I met up with the fabulous builder brothers back at the house.
0:38:34 > 0:38:36# Your name is big brother. #
0:38:36 > 0:38:39- Michael, Adrian, good to meet you both.- Good to meet you, Martin.
0:38:39 > 0:38:41- Nice to meet you, Martin. - Congratulations, I think
0:38:41 > 0:38:43you got yourself a bit of an investment here.
0:38:43 > 0:38:47- Yes, well, so we have, yes. Hopefully it goes well.- Hopefully it will.
0:38:47 > 0:38:50Tell me why you wanted to buy this house.
0:38:50 > 0:38:52Well, we were looking for houses
0:38:52 > 0:38:55and I had seen this was coming up auction.
0:38:56 > 0:38:59Went and viewed it, thought it was a good area,
0:38:59 > 0:39:03thought the house was in good shape, even though it may be wrecked inside,
0:39:03 > 0:39:06but I knew it was a good standard house, so that's why I went for it.
0:39:06 > 0:39:08So how do you divvy out the work?
0:39:08 > 0:39:10Mostly, Michael will do most of the estate agent work. Well,
0:39:10 > 0:39:13he does all the estate agent work and I got the short straw.
0:39:13 > 0:39:15HE LAUGHS
0:39:15 > 0:39:17I could have guessed that by the way you're dressed.
0:39:17 > 0:39:19You look like an estate agent
0:39:19 > 0:39:21and you definitely look like you're ready to do some work.
0:39:21 > 0:39:25Ready to do some work and I do all the rough work
0:39:25 > 0:39:27and all the building end of things.
0:39:27 > 0:39:30Right, and how do you make the decisions in terms of which
0:39:30 > 0:39:33properties you going to go for? Again, that's a joint decision, is it?
0:39:33 > 0:39:38No, generally I would try and find the properties, mainly online,
0:39:38 > 0:39:41go to the auctions, see what the area's like,
0:39:41 > 0:39:43potential of the property...
0:39:43 > 0:39:46Generally would probably make the decision.
0:39:46 > 0:39:51- And Adrian would then come and do the labour-intensive work.- Right.
0:39:51 > 0:39:52That's generally what happens.
0:39:52 > 0:39:54So you pick up the pieces of his decisions?
0:39:54 > 0:39:55I pick up what's left over, yeah.
0:39:55 > 0:39:57MARK LAUGHS
0:40:00 > 0:40:03There are plenty of pieces for Adrian to pick up in this house.
0:40:03 > 0:40:05But being experienced contractors,
0:40:05 > 0:40:07the brothers obviously aren't put off
0:40:07 > 0:40:09by the appearance of the property.
0:40:11 > 0:40:14When I was here viewing the property, there was a lot
0:40:14 > 0:40:16of people here and when you come in
0:40:16 > 0:40:18and you see such a mess that it's in, you think,
0:40:18 > 0:40:23"My God." They just couldn't see past a skip full of rubbish, you know?
0:40:23 > 0:40:28Plus the windows smashed and all that would generally put people off.
0:40:28 > 0:40:31We've come into places far, far worse and we've done them up,
0:40:31 > 0:40:37renovated them and put them back into the control of the tenants.
0:40:37 > 0:40:39This here wouldn't annoy me.
0:40:39 > 0:40:42And you paid a bit more than the guide price, obviously.
0:40:42 > 0:40:47Yeah, well, I knew 50 was my mark. I thought it would go to 50.
0:40:47 > 0:40:51I probably might have put another couple of bids on
0:40:51 > 0:40:55- but I knew 50 was the mark for it. - Sure.
0:40:55 > 0:40:58But even at that, you're getting over 10% as a yield, aren't you?
0:40:58 > 0:41:02Yeah, yeah, you would be, yeah. So, happy enough.
0:41:02 > 0:41:07So, Adrian, tell me what you need to do to get it into a habitable state.
0:41:07 > 0:41:11First thing I'll do is get it all cleared out
0:41:11 > 0:41:14and get a kitchen ordered, get the glass ordered.
0:41:14 > 0:41:17You won't replace the windows, then? You'll put new glass panels
0:41:17 > 0:41:20- in, will you?- Yeah, we'll put new double glazing units into it.
0:41:20 > 0:41:21Is that cheaper? A lot cheaper?
0:41:21 > 0:41:24There's really nothing wrong with the windows except the glass
0:41:24 > 0:41:26is broken in them.
0:41:26 > 0:41:29The windows are not damaged. The window frames themselves,
0:41:29 > 0:41:31just the glass.
0:41:31 > 0:41:33Central heating, there isn't any at the moment.
0:41:33 > 0:41:37- Well, there's radiators but there's no boiler.- Well, there's no...
0:41:37 > 0:41:39copper cylinder, it's gone.
0:41:39 > 0:41:42- But there is a boiler out the back in the boiler house.- Ah.
0:41:42 > 0:41:44I didn't find that, you see.
0:41:44 > 0:41:47I didn't find that the first day I was here either.
0:41:47 > 0:41:50- But I found it at a later visit.- Oh.
0:41:50 > 0:41:54- It's there, hidden round the back. - Right.
0:41:54 > 0:41:56But the copper cylinder, it's disappeared.
0:41:56 > 0:41:59- It was probably worth a few pounds, so it's gone.- Right.
0:41:59 > 0:42:01Bathroom's obviously quite spectacular.
0:42:01 > 0:42:06Yeah, that's the surprising thing about the house, the bathroom.
0:42:06 > 0:42:09Really, the only problem with the bathroom is that the shower
0:42:09 > 0:42:12door's been smashed. Apart from that, pretty nice bathroom.
0:42:12 > 0:42:16Yeah, so what's the budget for the work?
0:42:16 > 0:42:21Probably 7,000 to 10,000 at the maximum.
0:42:21 > 0:42:24- Is that costing in your time? - Well, that would include my time.
0:42:24 > 0:42:26Need to get stuck into it.
0:42:26 > 0:42:29Yeah, yeah, for sure. And what is the timescale, then?
0:42:29 > 0:42:33- Five, six weeks. - OK. And then on the rental market.
0:42:33 > 0:42:36I've already been approached by a couple of people just today here.
0:42:36 > 0:42:41- Really?- Yeah. To move in, so...- Wow.
0:42:41 > 0:42:45Well, didn't I tell you there was a shortage of houses in this area?
0:42:45 > 0:42:48It looks like these brothers have got this business sewn up.
0:42:48 > 0:42:52And how does it work, the two of you working together?
0:42:52 > 0:42:55We played football often enough together for a long time
0:42:55 > 0:42:59and we never fell out during that. It's just the next move on.
0:42:59 > 0:43:02When we were young we would have hung round together, so...
0:43:02 > 0:43:05- It's really nice, then, that you can both...- Natural move.
0:43:05 > 0:43:07Yeah, and you've both got complementary skills
0:43:07 > 0:43:12- and areas of the business you're happy to sort of focus on.- Yeah.
0:43:12 > 0:43:15- Yeah, that's great.- Well, listen, congratulations, good luck with it.
0:43:15 > 0:43:18- Thank you.- I look forward to seeing how you get on.
0:43:19 > 0:43:22Well, it seems that brothers
0:43:22 > 0:43:25Michael and Adrian have certainly got the winning formula
0:43:25 > 0:43:29and all the expertise it needs to take on this project.
0:43:29 > 0:43:32Lots to do but how will it turn out when they're finished?
0:43:32 > 0:43:35You can find out later in the show.
0:43:38 > 0:43:41Well, we've already seen how one property did,
0:43:41 > 0:43:42but what about the other two?
0:43:42 > 0:43:45Will we see big changes and potential profits?
0:43:45 > 0:43:46Let's find out.
0:43:48 > 0:43:52We're back in the quaint seaside town of Budleigh Salterton
0:43:52 > 0:43:53in East Devon.
0:43:53 > 0:43:56With seagulls and sunshine and sand
0:43:56 > 0:44:02and this two-bed purpose-built flat with a guide price of £155,000.
0:44:02 > 0:44:05It was bright and spacious and, although it didn't have central
0:44:05 > 0:44:08heating, when it offers views like this,
0:44:08 > 0:44:10I think we can forgive it.
0:44:11 > 0:44:15What a great feeling this place has. It's only a two-bedroom flat
0:44:15 > 0:44:18but it immediately feels so, so nice.
0:44:18 > 0:44:21MUSIC: Perfect by Fairground Attraction
0:44:26 > 0:44:29And buyer Craig must have thought it was perfect too, especially
0:44:29 > 0:44:36when he was the sole bidder paying the exact guide price of £155,000.
0:44:36 > 0:44:39Craig was taking a career break from teaching children with
0:44:39 > 0:44:44special needs and thought this was an ideal first property to develop.
0:44:44 > 0:44:47I like the fact that looking around it, there was
0:44:47 > 0:44:51nothing that sort of frightened me about it - it was all doable.
0:44:51 > 0:44:56And I thought, you know, "I can do this, I can do this."
0:44:56 > 0:45:02# I wanna do great things I don't wanna compromise. #
0:45:03 > 0:45:06That's the spirit but will spirit be enough?
0:45:06 > 0:45:10Craig had a budget of £10,000 but wanted to install new gas
0:45:10 > 0:45:15central heating which could take up almost half that money alone.
0:45:15 > 0:45:16Would he be able to stay within budget
0:45:16 > 0:45:20and finish within his six-to-eight-week timescale?
0:45:22 > 0:45:24Well, three months have passed
0:45:24 > 0:45:26and we've returned to see how Craig got on.
0:45:35 > 0:45:39The flat looks great - but, then, the flat looked quite good before.
0:45:39 > 0:45:42So, how much work did Craig have to do?
0:45:44 > 0:45:49I put gas into the property and put in central heating.
0:45:49 > 0:45:52Prior to that it was the electric storage heater.
0:45:53 > 0:45:56I've had to rewire the whole property,
0:45:56 > 0:45:59which was an unexpected expense
0:45:59 > 0:46:03cos I wasn't expecting it to be needing a total rewire.
0:46:04 > 0:46:08I've put a new kitchen in completely.
0:46:08 > 0:46:10The old one was ripped out and I've had it redesigned.
0:46:10 > 0:46:14And now this is a kitchen-dining room.
0:46:14 > 0:46:18One or two of the walls needed replastering
0:46:18 > 0:46:21and redecorated, and new flooring throughout.
0:46:21 > 0:46:23So, in the end, quite a bit of work needed.
0:46:23 > 0:46:26In all seriousness, though this flat didn't look too bad
0:46:26 > 0:46:30when we first visited, Craig's work sorting out the central heating
0:46:30 > 0:46:34and electrics makes the flat so much more practical.
0:46:34 > 0:46:37He even got rid of that unsafe frosted glass
0:46:37 > 0:46:39and his cosmetic changes in the kitchen,
0:46:39 > 0:46:44and throughout the rest of the flat, bring the style bang up to date.
0:46:44 > 0:46:48Craig got professionals in to install his gas central heating,
0:46:48 > 0:46:51rewire his electrics and fit his kitchen.
0:46:51 > 0:46:56But he wasn't afraid to get stuck in himself. How did he find it all?
0:46:59 > 0:47:04I'd always done a little bit of DIY but with a project like this,
0:47:04 > 0:47:07obviously, you needed skilled tradesmen to come in
0:47:07 > 0:47:11and I think you learn by watching the tradespeople.
0:47:11 > 0:47:15So, if I did this again, obviously I picked up a few skills from them
0:47:15 > 0:47:18but, yeah, it has been a learning curve as well.
0:47:18 > 0:47:20But a very good learning curve.
0:47:20 > 0:47:22The most onerous job, I would say,
0:47:22 > 0:47:26was getting the woodchip off the ceilings off all the rooms.
0:47:26 > 0:47:30Believe it or not, it took me three weeks to do that job.
0:47:30 > 0:47:34# And I hate everything about you
0:47:34 > 0:47:39# Everything about you. #
0:47:39 > 0:47:42Three weeks up a ladder scraping woodchip is not the most
0:47:42 > 0:47:44glamorous of development jobs.
0:47:44 > 0:47:47Good thing he had these views to keep his spirits up.
0:47:50 > 0:47:53Craig's original timescale was six to eight weeks -
0:47:53 > 0:47:55it's actually taken him three months.
0:47:55 > 0:47:59But it wasn't the timescale I was worried about, it was his budget.
0:47:59 > 0:48:01So how did he get on?
0:48:03 > 0:48:07I think I said my original budget was between 8,000 and 10,000.
0:48:09 > 0:48:15I think I've actually spent just a little under 12,000.
0:48:15 > 0:48:19The overspend went on the electrics
0:48:19 > 0:48:24and the central heating was a little more than we thought.
0:48:24 > 0:48:28I've also gone for a slightly higher spec on the kitchen.
0:48:28 > 0:48:32But I'm pleased, I'm pleased with what I spent.
0:48:33 > 0:48:39And that is why it was very wise for Craig to have his contingency fund.
0:48:39 > 0:48:42Even in this flat where everything looked pretty sound,
0:48:42 > 0:48:44there were a few hidden problems.
0:48:44 > 0:48:47However, I certainly think it was worth spending the extra
0:48:47 > 0:48:51to get that central heating in. And the kitchen looked great.
0:48:51 > 0:48:55But will he be able to recoup those £12,000 development costs
0:48:55 > 0:49:00on top of his £155,000 purchase price?
0:49:00 > 0:49:02We've asked along two local estate agents
0:49:02 > 0:49:03to get their opinion.
0:49:03 > 0:49:07He's added some really nice contemporary touches,
0:49:07 > 0:49:10i.e. the kitchen particularly, but I do like the doors
0:49:10 > 0:49:14which are a major uplift and really do work well in the property.
0:49:14 > 0:49:16Nice light carpets
0:49:16 > 0:49:19because, being south facing, you get plenty of sunlight.
0:49:19 > 0:49:22Because of the colour schemes on the walls, that reflects the sunlight
0:49:22 > 0:49:26and gives the whole flat a nice warm sense about it.
0:49:26 > 0:49:28There aren't any obvious negatives, really.
0:49:29 > 0:49:31Other than the fact that the flat market
0:49:31 > 0:49:33is not particularly strong.
0:49:33 > 0:49:37It hasn't been good for two or three years,
0:49:37 > 0:49:39and it's quite well supplied with properties.
0:49:39 > 0:49:42Craig's done a great job sprucing the place up
0:49:42 > 0:49:46but it sounds like he's fighting against quite a weak market.
0:49:46 > 0:49:49Both estate agents recommend a rental valuation of £800
0:49:49 > 0:49:55per calendar month but Craig wants to sell, so what could he expect?
0:49:55 > 0:50:02My recommendation would be an asking price of circa £190,000 to £195,000.
0:50:02 > 0:50:06So currently I wouldn't expect it to sell for more than £200,000.
0:50:06 > 0:50:09If they delay a sale until the spring,
0:50:09 > 0:50:13the market could be tested at perhaps £225,000.
0:50:13 > 0:50:16But I think that would have to be kept under close review
0:50:16 > 0:50:19dependent on the viewing levels generally.
0:50:19 > 0:50:25If I need to wait till spring to sort of get that sort of figure of 225,
0:50:25 > 0:50:27really it might be worth me
0:50:27 > 0:50:30hanging onto it for a couple of... Three months
0:50:30 > 0:50:31and then try the market then.
0:50:31 > 0:50:35- So, that sounds OK.- It wouldn't half.
0:50:35 > 0:50:38With his total spend of £167,000,
0:50:38 > 0:50:42that top valuation of 225,000 would give Craig
0:50:42 > 0:50:47a profit of £58,000 minus the usual taxes and expenses.
0:50:47 > 0:50:50And despite those expenses increasing the longer
0:50:50 > 0:50:54he holds on to it, Craig should still be in for a healthy profit.
0:50:54 > 0:50:55So, knowing that,
0:50:55 > 0:51:00how does Craig feel about his first property development?
0:51:00 > 0:51:03It's turned out far better than I thought.
0:51:03 > 0:51:07I've had such a positive experience doing this one so, you know,
0:51:07 > 0:51:12I can't wait, really, to go ahead and get another property.
0:51:15 > 0:51:19Time now to return to Downpatrick in Northern Ireland.
0:51:19 > 0:51:23This three-bed end terraced house had a guide price of just £30,000.
0:51:23 > 0:51:26It was going to take some renovating, though.
0:51:26 > 0:51:28The place was a mess.
0:51:29 > 0:51:33# Big mess, big mess He was a
0:51:33 > 0:51:35# He was really mixed up. #
0:51:35 > 0:51:39But here on Hammer we try to see past the superficial.
0:51:39 > 0:51:41It had good-sized rooms
0:51:41 > 0:51:46and was in an area with a very high demand for rented property.
0:51:46 > 0:51:51So, now it's a case of just figuring out what is actually structural -
0:51:51 > 0:51:54I don't know if there's much of that - what's cosmetic.
0:51:54 > 0:51:57There's probably quite a lot of that.
0:51:57 > 0:52:00But what we've got here is a great house.
0:52:00 > 0:52:03Brothers Michael and Adrian clearly agreed.
0:52:03 > 0:52:07They were successful at auction with their bid of 50,000.
0:52:07 > 0:52:10The brothers run building contractors and estate agents
0:52:10 > 0:52:14and are a well-oiled machine when it comes to renovation.
0:52:14 > 0:52:17Generally I would try and find the properties
0:52:17 > 0:52:23- and Adrian would then come and do the labour-intensive work.- Right.
0:52:23 > 0:52:26- That's generally what happens.- So you pick up the pieces of his decisions?
0:52:26 > 0:52:28I pick up what's left over, yeah.
0:52:28 > 0:52:29MARK LAUGHS
0:52:29 > 0:52:32# It takes two, baby
0:52:32 > 0:52:34# It takes two, baby
0:52:34 > 0:52:37# To make a dream come true. #
0:52:37 > 0:52:39With a budget of £7,000 to £10,000
0:52:39 > 0:52:41and a time scale of five to six weeks,
0:52:41 > 0:52:44could the two of them transform this terrible terrace
0:52:44 > 0:52:47into a dream come true?
0:52:47 > 0:52:49# Just take two. #
0:52:51 > 0:52:55Just under four months later, we're back to find out.
0:52:55 > 0:52:59Outside certainly looks good. Let's see what they've done to the inside.
0:53:00 > 0:53:03- # Sunshine on a rainy day - Sunshine
0:53:03 > 0:53:10# Makes my soul, makes my soul, drip, drip, drip away. #
0:53:10 > 0:53:14Wow, the kitchen is spacious and bright with new appliances
0:53:14 > 0:53:16and room enough for a dining table.
0:53:16 > 0:53:17And in the living room,
0:53:17 > 0:53:22they've even managed to keep some of the house's original features.
0:53:22 > 0:53:26Upstairs, the bedrooms have been redecorated in neutral tones,
0:53:26 > 0:53:30while the bathroom has had a new shower and taps fitted
0:53:30 > 0:53:32and a general clean and tidy up.
0:53:32 > 0:53:35This could now be a lovely family home.
0:53:35 > 0:53:38There was nothing structurally wrong with the house.
0:53:38 > 0:53:42The biggest challenge was probably with cleaning it out at the start.
0:53:42 > 0:53:46Two skips had to come out of the place.
0:53:46 > 0:53:48Just cleaning it up, general cleaning it up.
0:53:48 > 0:53:51When we had everything cleaned up we were fine.
0:53:51 > 0:53:56# I can move, move, move any mountain. #
0:53:56 > 0:53:59I think Adrian's underplaying just how big a job clearing
0:53:59 > 0:54:02this place out would have been.
0:54:02 > 0:54:05Still, taking on the lower skilled labour-intensive jobs
0:54:05 > 0:54:08yourself is exactly the way to keep costs down.
0:54:08 > 0:54:09Of course it helps
0:54:09 > 0:54:13if, like Adrian, you have your own team of builders you can call upon.
0:54:13 > 0:54:18But that wasn't the only way the brothers found to keep costs down.
0:54:21 > 0:54:24So, when we arrived the windows were all smashed
0:54:24 > 0:54:29but they were boarded up and we just took out the boards, put new glass
0:54:29 > 0:54:34in and managed to save the windows, which saved a fair bit of money.
0:54:36 > 0:54:39Michael, who's in charge of the administrative side
0:54:39 > 0:54:42of the project, estimated that by only replacing the glass
0:54:42 > 0:54:45they saved up to £550 per window.
0:54:45 > 0:54:49Money they needed as, when we last looked at the property,
0:54:49 > 0:54:51the central heating needed a major upgrade.
0:54:51 > 0:54:54And someone had stolen the copper cylinder.
0:54:56 > 0:55:00What we more or less had to do with the heating was to replace
0:55:00 > 0:55:03all the copper pipes in the dwelling.
0:55:03 > 0:55:08So we have replaced all them with PVC plastic,
0:55:08 > 0:55:11so there's going to be... Nobody's going to be near them again.
0:55:11 > 0:55:15So did they manage to keep within their budget?
0:55:15 > 0:55:21We spent roughly £7,200 to get it to this current standard.
0:55:21 > 0:55:24We had hoped to have the project finished in about six weeks but
0:55:24 > 0:55:27it's taken a bit longer because we had other projects going on.
0:55:27 > 0:55:29But, overall, we're pleased.
0:55:30 > 0:55:33In fact, it took the brothers 16 weeks in total
0:55:33 > 0:55:35to complete the renovation.
0:55:35 > 0:55:40However they did only spend £7,200 on it, along with
0:55:40 > 0:55:43the £50,000 they paid at auction.
0:55:43 > 0:55:46We've asked along two local estate agents to see
0:55:46 > 0:55:50if Michael's good eye and Adrian's hard work have created a winner.
0:55:51 > 0:55:55From the last time I was here, there's been quite a change.
0:55:55 > 0:55:58In fact, it's hard to believe, actually, it's the same house.
0:55:58 > 0:56:00The vendor has done a very,
0:56:00 > 0:56:02very nice job of refurbishing the property.
0:56:02 > 0:56:04Particularly downstairs in the kitchen.
0:56:04 > 0:56:08Main selling points - it's a very spacious terrace property.
0:56:08 > 0:56:10Every room is a very good size,
0:56:10 > 0:56:13particularly the kitchen's got a lovely open-plan feel to it.
0:56:13 > 0:56:16And you got a separate lounge and three good-sized bedrooms
0:56:16 > 0:56:18so it makes it a family home.
0:56:18 > 0:56:23There's a good demand for both buying and rental of this style of property.
0:56:23 > 0:56:27This property would appeal to investors or, most likely,
0:56:27 > 0:56:29a first-time buyer or a young professional couple.
0:56:30 > 0:56:35Michael and Adrian have turned this mess of a house into a desirable
0:56:35 > 0:56:39family home and in an area with goods demand for property like this.
0:56:39 > 0:56:44Can they make a profit on their total spend of 57,200?
0:56:44 > 0:56:47Let's get those all-important figures.
0:56:47 > 0:56:50In the current sales market I would expect this property
0:56:50 > 0:56:53to achieve between 65,000 and £70,000.
0:56:53 > 0:56:58In the resale market I'd expect this property to achieve around £65,000.
0:56:58 > 0:57:01Were they to achieve the higher value,
0:57:01 > 0:57:06this would give the brothers a pre-tax profit of £12,800.
0:57:06 > 0:57:09But it was always their plan to let the property out,
0:57:09 > 0:57:12so what could they achieve on the rental market?
0:57:12 > 0:57:14In the current rental market,
0:57:14 > 0:57:18I'd expect to achieve £450 per calendar month.
0:57:18 > 0:57:20In the rental market I believe this property could achieve
0:57:20 > 0:57:22£450 per calendar month.
0:57:24 > 0:57:27Yeah, well, I'm happy with both valuations.
0:57:27 > 0:57:30Obviously, we've made a bit on the property
0:57:30 > 0:57:34and the rental value would be where we would think it would be.
0:57:34 > 0:57:35So it gives us a good return.
0:57:37 > 0:57:41That rental value would give the brothers a yield of over 9%.
0:57:41 > 0:57:43It looks like their teamwork has paid off.
0:57:43 > 0:57:45So, do they have any tips for us?
0:57:47 > 0:57:51To any would-be developers my advice would be, don't take on
0:57:51 > 0:57:55too much financial stress on the property
0:57:55 > 0:57:57and make sure you see a way out financially.
0:57:57 > 0:58:00Yeah, and get a good tradesman.
0:58:00 > 0:58:01Especially me.
0:58:05 > 0:58:08Well, that's all we have time for today.
0:58:08 > 0:58:10But we'll have plenty more stories for you next time
0:58:10 > 0:58:12here on Homes Under The Hammer.
0:58:12 > 0:58:13- See you then.- Goodbye.- Goodbye.