Episode 74 Homes Under the Hammer


Episode 74

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Transcript


LineFromTo

Hello, and welcome to the show.

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Property developing can be very rewarding.

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Both for the satisfaction of doing up the property

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-and, of course, for investment purposes.

-But it's not always straightforward,

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so it's best to expect the unexpected.

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And one way to gauge your local market is to get down to your local property auction.

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The world of property is a fast moving environment

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and as Martin and I know, you've got to know what you're doing.

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Yes, so let's see what today's buyers bought.

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We start in London today, where a developer hopes he's got the perfect plot for making a profit.

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Property values in this area might possibly go up as much as 40%.

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From the capital city to the beautiful beaches of Devon.

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But what do you really wish for in a flat at the seaside?

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A view of the sea.

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But the views inside this property in County Down aren't quite so picturesque.

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Ah.

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All these properties have been sold at auction -

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we'll find out who bought them and what they paid for them when they went under the hammer.

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This is Abbey Wood in south-east London, close to the Kent border.

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Near to the banks of the River Thames,

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the area was once mainly farmland and fields.

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Although now you're much more likely to come across commuters than cows,

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with decent train links that are due to get even better

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with the arrival of Crossrail in 2018,

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predicting journey times from Abbey Wood to Bond Street of just 25 minutes.

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# Take the "A" Train Take the "A" Train... #

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Everyone wants to live close to the train station

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to whittle down that daily commute.

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So, around an eight-minute stroll is ideal.

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An actual house to live in? Well, that would also be good,

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because the lot I'm here to see is this...a plot of land.

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Now, luckily it had planning permission for two homes

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and a guide price of £110,000.

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The land at one stage used to be a large garden

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and has more recently been used as parking.

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It's a lovely quiet road in a residential area,

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so I'm not surprised planning was passed for two detached houses.

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I can't wait to take a look at these drawings for the site.

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# So take a look at me now

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# There's just an empty space... #

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Well, they're very interesting. The designs are for two three-bedroomed houses.

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They're very square and boxy from the outside, but quite minimalist

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and a nice change from your standard red brick, pitched roof affair.

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Now, you've got your front door to the side here,

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which frees up the rest of the space for living.

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Into the hall, you've got storage and a shower room,

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then a kitchen and dining area.

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Then, what I absolutely love is this partitioned shelving area

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which separates the space, but just maintains the flow downstairs.

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You've got a living room at the back out onto a patio, which is fab. I love it.

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Upstairs, we've got a double bedroom, twin and single,

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which still looks generous, and then you've got a family bathroom.

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It's a shame there's no en suite, but it's probably more important to have these built-in cupboards.

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Overall, it's practical, modern and really rather nice plans.

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I feel like someone's taken care with the design here

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and really thought about how a modern family would actually like to live.

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And two houses on this site doesn't feel like overkill.

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It's an odd shape, slightly tapering off at one end,

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but I think it's easily big enough for these two properties.

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But there's more to these plans than meets the eye.

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Ho-ho, yes. These are designs with a conscience.

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Now, you've got a solar thermal panel on each roof,

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which is used to warm your water.

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Then, there's the sedum roof,

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which is basically a living, green, flowering roof.

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Which is great for insulation, noise reduction

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and it stops water cascading down after heavy rain.

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But what I love most are the PV panels,

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which are essentially solar panels, but if you generate more electricity than you can use,

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you can sell it back to the grid and make money.

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Ecofriendly and profitable, which is fantastic.

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# It's not easy being green... #

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It's great to see that new builds are embracing the green way of living,

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but is there any cash to be made?

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We asked along a local estate agent to see what he thought.

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I think the plan's good. Downstairs we've got open-plan living space,

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which is ever more popular in recent years.

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We've got a downstairs shower room, which is very important.

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People don't want guests going up to the top floor to the bedrooms.

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Upstairs there's three good-sized bedrooms and a family bathroom.

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Storage, as well, has been accommodated in them.

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But is a new build development right for the Abbey Wood area?

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New builds do sell very quickly - there's high interest in them.

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We've just sold one two roads down from here,

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which went within a matter of weeks.

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OK, let's talk money. The site alone was guided at £110,000

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and build costs are likely to be around £200,000 for the two houses.

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So, that's at least a £310,000 investment.

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So, what kind of profit would we be looking at here?

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Once built, I think these properties are going to achieve between £315,000 up to £325,000.

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Oh, so that could be a great two-for-one offer,

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with one house covering costs

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while the other could potentially be a straight profit of over 300 grand.

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I like these designs and the site seems really rather nice and straightforward.

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Famous last words.

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But still, bought at the right price there is certainly profit in it -

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let's see what the price was at the auction.

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Right, lot 14 is a well located site,

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approximately about 5,000 square feet.

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You've got planning for two three-bedroomed dwellings.

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Who'd like to kick off on this? I don't know, £70,000?

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£70,000 on my right. 75 anywhere?

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75 with you. 80? 80.

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85? 90.

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Maybe not surprisingly, there was a lot of interest in the building plot

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and we rejoin the bidding at 190,000.

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190.

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195. 200.

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205?

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201?

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Might just do it, yeah? 201. 202.

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203 elsewhere?

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202, first time.

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Second time.

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Third and last time - have we all done?

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Sold, 202.

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Well, that £110,000 guide price went completely out of the window

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and the successful bidder at 202,000 was Pram.

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Now, Pram has been an IT consultant for 25 years

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and this is his first foray into the world of property developing.

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And what a start.

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# Start. #

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I met him back at the site with his architect, Paul,

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who will be overseeing the build with him.

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-So, congratulations, guys. Pram, you were successful on auction day. Well done.

-Thank you.

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-You've got the site. Now, I know it comes with planning permission...

-That's right.

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..with plans already drawn up of two really nice looking houses.

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-Are you going with those?

-Yes, we are.

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We've decided that we're actually going to construct the houses,

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go for a really nice design

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and, hopefully, within the next six to seven months, the houses will be built.

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So, Paul, what part are you going to play within this development?

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I have an architectural background, but I'm working for the contractor.

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And I've taken the brief from Pram to improve various aspects of the design,

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which is fundamentally sound already.

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But we're going to improve on things like the green roof,

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the photovoltaic cells and make the building even more energy-efficient.

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You see, I absolutely love the plans. Looking at them they seem very practical.

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I love the space, I love the flow of the property.

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How are you going to tweak them and how you going to make them better?

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Good space standards, you're right. But there's aspects of connectivity with the garden.

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So, Pram's asked, could I improve that?

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And we've decided there's going to be a folding opening screen at one end,

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instead of a window and a couple of French doors.

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So, there'll be really good connectivity into the garden. Lots of light flooding into the property.

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Into the ground floor, in particular. And good access into the garden so you can enjoy the patio.

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We're just going to tweak it to add that little bit extra kerb appeal

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-to give Pram a better margin on the profit.

-That's right, yes.

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So, one of the ideas is to actually...

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We've got two double bedrooms and a single one.

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So, we actually want to try and increase the floor space slightly

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on the top floor,

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so that we can make it three doubles, instead of a single.

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So, how much are they going to cost to build?

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The build costs are going to be approximately £105,000 per house.

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-So, that's 210,000 for both.

-That's right.

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And on top of that we've allowed a 10% contingency.

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I mean, you never know - by the end of the build, property values may be rising still.

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Well, with the Crossrail coming here - and this is the end of the line for the Crossrail -

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it's been predicted that property values in this area might possibly go up as much as 40%.

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40% more? Crikey. This site just doesn't stop giving.

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It really looks like a sure-fire winner.

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But where property is concerned - and particularly new builds -

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well, you never really know until it's built and then sold.

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So, Pram, are you going to be on site every day driving this project?

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Um, I won't be here every day. Paul will be taking quite a lot of the responsibility

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with the building contractor, as well.

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But I will be receiving weekly reports via e-mail

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and photographs and I possibly will be coming down at least once a week

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to have a look at the progress.

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So, Paul, it's all up to you. It rests on your shoulders.

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-Well, let's see in seven months.

-Whoa. So, how do you feel about that?

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I mean, how well do you know the contractor?

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I'm invigorated. I've known the contractor for five years now -

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we've been friends and now I'm actually working with him.

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Really looking forward to the project. We've got a great relationship.

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As far as I'm concerned, we are a great team.

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I love your positivity, but I love the design, as well.

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I can't wait to see what they look like.

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Guys, good luck with this project. It's going to be really exciting for us to see the outcome of them.

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-Congratulations.

-Thank you, Lucy.

-Thank you.

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Well, Pram has a fabulous site here

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and perhaps an even better investment than he first thought.

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And the houses themselves? Well, I think they might be really rather interesting.

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You can find out if they are later in the show.

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I'm in the charming East Devon coastal town of Budleigh Salterton.

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Only 12 miles from Exeter and yet a world away from...

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Well, anything vaguely stressful, really. I could spend hours here.

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Luckily, this is the place that the auction property is situated.

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Let's go and take a look.

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And what a place it is!

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Budleigh Salterton is one of the most desirable coastal towns.

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It's situated on the western end of what is known as the Jurassic Coast,

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England's first natural World Heritage site,

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sitting alongside the likes of the Grand Canyon

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and the Great Barrier Reef with good reason.

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It is spectacular.

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# Come with me

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# To the sea... #

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Well, just a short walk from the seafront

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and 100 yards from the town centre is the property I'm here to see.

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It's a two-bedroom flat in this purpose-built block.

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Guide price was £155,000.

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Described in the auction catalogue as being spacious, so that's a really good start.

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Let's hope it lives up to expectations.

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From the outside, the building looks in good nick

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and I love the look of that balcony.

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A well-kept communal stairway is a plus.

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Ooh! Well, it's certainly a really nice start.

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Lots of space in this large hallway.

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Lots of light coming in from the kitchen there, through this glass wall.

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Although...

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I'm not a fan of glass being used like this.

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It's too easy to break and it makes it a real safety hazard.

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So, either replace that with safety glass or get rid of it altogether.

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Kitchen itself, again really light and airy. There some lovely views out the windows

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across to the hills over there.

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And it doesn't look like it's bang up to date, but it's a pretty decent condition.

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Lots of storage, which you don't always get in flats, so that's nice.

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Two bedrooms - they seem to be a really nice size.

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And a real additional bonus, a loo and a separate shower room with its own loo.

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So, that's fantastic. And then through into, er...

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Well, I suppose your main living area.

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And, again, what a great feeling this place has.

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It's only a two-bedroom flat, but it immediately feels so, so nice.

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Ah. At last, a negative. Not that I'm searching for negatives,

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but it's nice to show a bit of balance.

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Storage heaters or electric heaters.

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And that clearly means there isn't central heating.

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That's probably something you want to put right.

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And it's just a case of, "where is the gas?" if that's what you want to go with to connect into it.

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But all in all... lots of ticks on this one.

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# Everything is awesome

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# When we're living our dream. #

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This place has everything you could want.

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You know I'm a fan of a separate WC and bathroom.

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Bedrooms are a great size, too. Particularly if you remove the built in wardrobes.

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And, as if that wasn't enough, a door from the lounge

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gives you a south-facing balcony, so you can soak up the rays.

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This place seems perfect.

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Well, what do you really wish for in a flat at the seaside?

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A view of the sea. And from this window, you get it.

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Now, that's nice, beautiful.

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It also makes this flat even more desirable.

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# You're just too good to be true

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# Can't take my eyes off you. #

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I can't get over these stunning views,

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especially on such a lovely sunny day.

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And outside has another pleasant surprise.

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Well, parking outside the front of the flat is a little bit snug.

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But, joy of joys, no problem at all because the flat comes with yet another bonus...

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its own garage.

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So, a balcony, garage and sea views - this place seems ideal.

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And guided at £155,000 plus,

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it could also be a bargain for the area,

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as a local property expert can explain.

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Property prices in Budleigh Salterton can be very high.

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Certainly, there are properties on the market in and around the area

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for £2 million, and a little bit less.

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But, also, there are properties available for purchase

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at more modest prices.

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This particular flat is pretty well kept, decorative-wise.

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The kitchen and bathroom suites are a little tired now,

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so they could do with a little bit of TLC.

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But not an awful lot of effort would put this flat into top-notch condition.

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Now, this flat is freehold. And as it sits in a block that is mostly leasehold properties,

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this can be a big advantage.

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Freehold means you don't have to pay ground rent,

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you're free to renovate the property without restriction

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and any changes to the block itself would have to be approved by the owner of this flat.

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Freehold flats are great if your neighbours are leasehold.

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It means there aren't any nasty surprises hidden away.

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Having a share of the freehold interest is actually quite important to some people.

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Because, with respect, some members of the public don't quite understand leasehold.

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So, having the freehold of their flat in a building where there's only four freehold,

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it means they've got total control and they feel more comfortable with that situation.

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Well, I'm wondering, with its size and location,

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if this might make a good holiday let for seaside visitors.

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Not THOSE kind of seaside visitors.

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This particular property - you're not allowed to do holiday lets here, for obvious reasons.

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If you lived in the building, would you want new neighbours every week or every fortnight?

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Although, differentiating from a holiday home,

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it would make a perfect holiday home for the owner.

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Oh, well. You don't ask, you don't get. So, what about values?

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Once this property has been refurbished, we would expect the value to be circa £210,000.

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Once renovated, we would expect this property, if it were exposed to the rental market,

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to derive a yield of about £750 a month.

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Well, a home by the sea is a lot of people's dream.

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And in terms of property prices, houses situated by the coast

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can often be a really good investment.

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So, absolutely loads going for this particular flat.

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

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Vacant, spacious, two-bedroom flat for updating,

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in a cul-de-sac location close to the town centre and seafront.

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It's £155,000.

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Anybody like to have a crack at this at £155,000?

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155, ladies and gentlemen? Come down from 175.

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Anybody like to have a bid at 155?

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Or a bid of your call? 155?

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Don't be shy, now's your chance. 155, back corner. Good man, well bid.

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155, with £20,000 under the original guide at 155.

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Any advance on 155?

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£155,000 standing. Looking for 160, if I can.

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A lot of debate going on over here. Do you like this one?

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No, thank you. That's very polite. Thank you.

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£155,000, one bid. Looking for 160.

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Well, we'll call it for first time, you know the routine now.

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Second time at 155, standing in the blue shirt.

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Third and last time.

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Nice little opportunity. Standing in the blue shirt,

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for the last time at £155,000 in the room.

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Done. Yours, sir. Thank you. One bid, one sale.

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# I am the one and only... #

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Craig was the one and only bidder at £155,000.

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I caught up with the one-bid wonder to find out his plans.

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-Craig, good to meet you.

-Good to meet you.

-Congratulations.

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-Thank you very much.

-Tell me why you wanted to buy this place.

0:19:440:19:46

Well, there were three reasons, really.

0:19:460:19:49

One was the location, two was the price,

0:19:490:19:53

-and three was that there didn't seem to be that much work to be done on the property.

-No.

0:19:530:19:57

So, I thought ideal first property to, sort of, do a bit of renovation on.

0:19:570:20:02

Right, so this is your first venture into this kind of thing.

0:20:020:20:04

-It's my first adventure, yeah.

-Right, so why now?

0:20:040:20:08

Well, my profession is a teacher. I was teaching for many years.

0:20:080:20:13

-What level? What age?

-Primary age children.

0:20:130:20:16

But in the last six to seven years, I've been working with special needs children,

0:20:160:20:20

-with children who have been excluded from school for behaviour reasons...

-Oh, wow.

0:20:200:20:24

..displaying challenging behaviour.

0:20:240:20:27

So, I thought it's about time I took a bit of a break from that line of work.

0:20:270:20:31

It must be quite challenging in itself. Rewarding, I'm sure.

0:20:310:20:34

Rewarding and challenging. So, I thought I need a new challenge.

0:20:340:20:38

-So, I thought property development.

-And why here?

0:20:380:20:41

It's a lovely coastal town. SEAGULLS CRY

0:20:410:20:43

Seaside, obviously we've even got seagulls.

0:20:430:20:46

THEY LAUGH

0:20:460:20:48

-Yeah, I thought ideal place and lovely.

-Are you local?

0:20:480:20:52

-Exeter, not too far away.

-It's a lovely flat. What did you like about it?

0:20:520:20:56

I like the fact that... Well, like you said earlier,

0:20:560:20:59

the location. Beautiful location.

0:20:590:21:02

And looking around it, there was nothing that frightened me about it

0:21:020:21:07

as regards to the work - it was all doable.

0:21:070:21:11

And I thought, "I can do this, I can do this."

0:21:110:21:15

I've done work on my own properties at home

0:21:150:21:19

-and so I thought it was a change in career.

-Yeah.

0:21:190:21:22

-This is a good start.

-A good start indeed.

0:21:220:21:25

A flat bought bang on the guide price and in a prime location.

0:21:250:21:28

You couldn't have asked for more. So, what does he plan to do?

0:21:280:21:32

The main thing is, I want to get central heating in.

0:21:330:21:36

At the moment it's electric storage heaters.

0:21:360:21:39

There's gas in the building, but there's not gas in this property.

0:21:390:21:43

So, that's the first thing I need to do is get gas connected to the property.

0:21:430:21:47

And then the electrics look a little bit dated, so they need to be updated.

0:21:470:21:53

And generally, it's just decor. The kitchen is OK,

0:21:530:21:57

but I think it could do with updating again.

0:21:570:22:01

The two things you mentioned, the electrics and the gas, you have to get other people in to do.

0:22:010:22:05

-Yeah, yeah.

-What about the rest of it - could you fit a kitchen?

0:22:050:22:08

I could fit the kitchen, yeah. I could fit the kitchen and do the decorating, tiling...

0:22:080:22:13

Yeah. So, I will be fairly hands on.

0:22:130:22:16

What's the plan for it, then? Is it to rent it out, or to sell it on?

0:22:160:22:20

Hopefully to sell it on... as quick as possible, really.

0:22:200:22:23

-And then move on to my next project.

-How much budget have you got?

0:22:230:22:28

-I've got up to £10,000.

-OK.

0:22:280:22:31

Which should be OK.

0:22:310:22:34

I do have a contingency of a couple of thousand.

0:22:340:22:38

Because the gas and the central heating is going to swallow up probably half of that, isn't it?

0:22:380:22:42

-There's still a few unknowns there.

-OK.

0:22:420:22:45

So, hopefully, around about the £10,000.

0:22:450:22:48

If I can do a lot of the work myself, that would keep costs down.

0:22:480:22:52

Craig has a six-to-eight-week timescale,

0:22:530:22:55

but I do think he's been pretty optimistic with the budget.

0:22:550:22:58

There really isn't much room for any unforeseen costs that may occur.

0:22:580:23:02

-How was the auction experience?

-Lovely.

0:23:050:23:08

-It was a really, really nice experience.

-Yeah?

0:23:080:23:11

I've never been to an auction before of any type

0:23:110:23:14

and I couldn't believe it.

0:23:140:23:17

The property came up, I had an idea of what I wanted to pay for it

0:23:170:23:21

and it went for the guide price.

0:23:210:23:24

Which was... You know, I was prepared to go higher than the guide price

0:23:240:23:28

and I was the only person that bid for it.

0:23:280:23:31

So, there was either something that I was missing...

0:23:310:23:35

or I got a good property at a good price.

0:23:350:23:39

-Well, I think it's the latter, isn't it, really?

-I hope so.

0:23:390:23:42

-Yeah, definitely. Well, congratulations.

-Thank you very much indeed.

-Good luck with it.

-Cheers.

0:23:420:23:46

-I look forward to seeing how you get on.

-Thank you.

0:23:460:23:50

Well, it's a new career for teacher Craig,

0:23:500:23:53

but I think he's already learned some really important property lessons.

0:23:530:23:57

Choosing a good location, somewhere that doesn't need too much work

0:23:570:24:00

and buying things at the right price. He's done well.

0:24:000:24:03

Will his £10,000 budget stretch?

0:24:030:24:06

He hasn't had the quote from sorting the gas yet.

0:24:060:24:10

You can find out later in the show.

0:24:100:24:12

Coming up, in County Down, what looks like hard work could be deceptively simple.

0:24:130:24:19

-I've come into places far, far worse.

-Right.

0:24:190:24:22

This here wouldn't annoy me.

0:24:220:24:24

While, for Craig, something simple turns out to be very hard work.

0:24:250:24:29

Getting the woodchip off the ceilings took me three weeks.

0:24:290:24:33

And now it's back to Abbey Wood in south-east London

0:24:400:24:42

where this plot of land came with planning permission for two three-bedroomed houses.

0:24:420:24:47

It was snapped up by Pram, a full-time IT consultant,

0:24:470:24:51

who forked out 202,000.

0:24:510:24:54

Sold, 202.

0:24:550:24:58

Pram had good reason to be delighted.

0:24:580:25:00

With this area of London scheduled to become the final stop

0:25:000:25:03

on the new Crossrail service from Heathrow Airport,

0:25:030:25:06

an investment in property now could pay big dividends further down the line.

0:25:060:25:12

It's been predicted that property values in this area might possibly go up as much as 40%.

0:25:120:25:16

With existing plans already approved,

0:25:190:25:21

was Pram or architect Paul tempted to change the original design?

0:25:210:25:26

I've taken the brief from Pram to improve various aspects of the design,

0:25:270:25:31

which is fundamentally sound already. But we are going to improve on things like the green roof,

0:25:310:25:35

the photovoltaic cells and make the building even more energy-efficient.

0:25:350:25:39

Pram set his architect and builders a time of six to seven months

0:25:420:25:46

and allowed a budget of £210,000 for the build.

0:25:460:25:50

We returned 18 months later to see what he had managed to create

0:25:510:25:55

from his patch of scrubland at Abbey Wood.

0:25:550:25:58

Well, we were expecting square and boxy on the outside and that's what we've got.

0:26:030:26:08

Pram and his architect Paul decided to go their own separate ways

0:26:080:26:12

and so there were some changes to the initial plans.

0:26:120:26:14

I loved Pram's eco-ambitions and he did install the PV panels.

0:26:140:26:19

But, for the roof, he opted for a lightweight aluminium

0:26:190:26:22

rather then the sedum he'd planned to use.

0:26:220:26:25

We decided to have an aluminium roof because, as opposed to a green roof, the maintenance was a lot easier

0:26:250:26:32

and overall we thought that the life span of an aluminium roof would be much longer.

0:26:320:26:37

There's still landscaping work ongoing, but inside it's a different story altogether.

0:26:370:26:42

Both houses have identical layouts and fixtures and fittings.

0:26:490:26:53

Pram decided against having the shelving partition between the kitchen and living room,

0:26:530:26:57

preferring to keep it as one enormous space, which I agree with.

0:26:570:27:01

Pretty impressive.

0:27:010:27:03

This is plot B and what we've decided to do was go for a black-and-white themed kitchen.

0:27:040:27:11

High-gloss kitchen units, integrated dishwasher and oven and appliances.

0:27:110:27:16

And at the same time we decided to go with porcelain white tiles,

0:27:160:27:21

so it's nice and airy and nice and bright with the reflective lights and LED lighting.

0:27:210:27:25

And I'm really pleased with the way it's turned out and the kitchen looks really fabulous.

0:27:250:27:30

Well, I can't argue with that, Pram.

0:27:320:27:34

Completing the downstairs accommodation is a nicely finished wet room.

0:27:340:27:38

Upstairs, the approved plan allowed for two double and one single bedroom.

0:27:430:27:48

But thanks to a clever redesign, the single bedroom has increased in size to a double.

0:27:480:27:53

What we've done is created an overhang on the first floor,

0:27:550:27:58

so the single bedroom has now become a double bedroom

0:27:580:28:01

and the bathroom has been pushed back further towards the back of the house.

0:28:010:28:04

We've gone for mainly a modern-style look.

0:28:130:28:17

Modern fittings and a lot of windows for a lot of daylight

0:28:170:28:21

and we've kept the overall appearance quite neutral.

0:28:210:28:25

Well, I'm glad to see Pram has been using his skills as an IT consultant.

0:28:250:28:30

Well, he must be familiar with installing WINDOWS.

0:28:300:28:33

Apart from some minor snags and landscaping,

0:28:370:28:39

the houses are finished and ready to sell.

0:28:390:28:42

Were there are any problems that Pram and his team faced along the way?

0:28:420:28:46

One of the challenges we had was, after the soil tests we had to do piling.

0:28:470:28:51

That involves basically doing some boring in certain points

0:28:510:28:54

down to a depth of about eight to ten metres.

0:28:540:28:57

And at that time the weather was quite bad.

0:28:570:28:59

It basically delayed us by about a few months.

0:28:590:29:02

And one of the other challenges was there was a shortage of bricks.

0:29:020:29:06

So, it took us approximately six to eight weeks to procure bricks

0:29:060:29:11

for both houses at one time.

0:29:110:29:13

As well as adding time to the project, those setbacks also cost money,

0:29:160:29:21

with the soil tests and piling alone adding an extra £30,000.

0:29:210:29:26

Another added expense was running services to the new houses.

0:29:260:29:31

We've gone over budget by about £70,000.

0:29:310:29:36

So, in total the spend has come up to about £280,000 for both the houses.

0:29:360:29:40

Add to that 280,000 the 202,000 he paid for the land and his

0:29:420:29:47

total spend comes to 482,000. Well, that's a big investment.

0:29:470:29:53

There's only one way to find out if it could pay off.

0:29:570:30:00

That's right, it's estate agent time.

0:30:000:30:03

I think the properties are quite unique for the area.

0:30:030:30:06

There aren't many new-build houses.

0:30:060:30:09

They're extremely light and airy,

0:30:090:30:11

and with off-street parking, which is quite important around here

0:30:110:30:14

with the parking restrictions

0:30:140:30:16

for a couple of hours during the day.

0:30:160:30:18

The houses have a very nice finish to them.

0:30:180:30:20

I like the open-plan living space

0:30:200:30:22

that you've got downstairs.

0:30:220:30:24

The owner's factored into the ground floor with a wet room

0:30:240:30:26

and a bathroom upstairs with three double bedrooms. Very good accommodation size.

0:30:260:30:30

Now, the houses themselves are mirror images of each other

0:30:300:30:35

but the plot of land on the right has a slightly larger garden

0:30:350:30:38

and parking area. It's not a lot but this is London, after all.

0:30:380:30:42

And any land is at a premium.

0:30:420:30:45

So, let's get those all-important valuations.

0:30:450:30:48

If the properties were to come onto the market,

0:30:490:30:52

I would value the property on the left

0:30:520:30:56

at between £360,000 and £370,000

0:30:560:30:58

and the property on the right, between £370,000 and £380,000.

0:30:580:31:03

The house on the left-hand side, I would place in the region of £370,000 to £380,000.

0:31:030:31:09

The house on the right-hand side, I would place

0:31:090:31:11

a value in the region of £380,000 to £390,000.

0:31:110:31:14

At those valuations,

0:31:180:31:19

Pram could be looking at a total price

0:31:190:31:22

of between 730,000 and 770,000,

0:31:220:31:26

giving him a whopping potential profit of 288,000.

0:31:260:31:31

That's before fees and tax.

0:31:310:31:33

Well, the properties are on the market for £400,000 each

0:31:340:31:37

and we have just recently accepted offers on both properties

0:31:370:31:42

and the valuations that the agents have given are in line

0:31:420:31:45

with the offers we have received.

0:31:450:31:47

So the £288,000 question is,

0:31:470:31:51

will Pram be going back to IT consulting?

0:31:510:31:55

I actually quite enjoy both, you know,

0:31:550:31:57

obviously I've been doing IT for a long time but I would say

0:31:570:32:01

that, in the long run, I would prefer to do property development.

0:32:010:32:06

It's nice to see what you started out with and what you've achieved

0:32:060:32:09

and the end result is always good.

0:32:090:32:12

20 miles south of Belfast, it's Downpatrick,

0:32:170:32:20

one of Northern Ireland's most ancient towns.

0:32:200:32:23

Legend has it that the remains of St Patrick himself lie within

0:32:250:32:30

this grave at Down Cathedral, making it a site of pilgrimage for many.

0:32:300:32:34

15 minutes' walk from Downpatrick centre is the property

0:32:360:32:40

I'm here to see. And it is this.

0:32:400:32:43

A three bed end-of-terrace, had a guide price of £30,000.

0:32:430:32:47

Big question is, is it a saint or a sinner?

0:32:470:32:51

MUSIC: Saints And Sinners by Johnny And The Self Abusers

0:32:510:32:56

Ah.

0:33:020:33:04

Well, I think it's definitely coming into the sinners camp, for sure.

0:33:040:33:07

Let's look at what we've actually got rather than the state it's in.

0:33:070:33:10

That's a classic error.

0:33:100:33:12

Front room there, it's a good size. Nice sized hallway,

0:33:120:33:15

stairs up to the bedrooms there. It's obviously

0:33:150:33:18

had a few problems in its recent life

0:33:180:33:20

because there's quite a lot of damage inside and,

0:33:200:33:23

obviously, there's some major...

0:33:230:33:26

Sorry, cover your ears... Just do it, trust me.

0:33:260:33:30

GLASS CRUNCHES

0:33:300:33:32

Ooh, few bits of glass on the floor there.

0:33:340:33:37

Yeah, so the kitchen needs a bit of work. But I like the size,

0:33:370:33:41

I like the design.

0:33:410:33:43

I just need to really polish my rose-tinted spectacles.

0:33:430:33:47

So, first impressions not so good.

0:33:480:33:52

# Walking on, walking on broken glass. #

0:33:520:33:57

If this was a first date I'd be checking my watch,

0:33:570:34:00

scanning for the nearest exit and rehearsing my,

0:34:000:34:03

"Er, there's a bit of an emergency at home" excuse.

0:34:030:34:06

But let's see if this home emergency has spread upstairs.

0:34:060:34:10

# Walking on, walking on broken glass. #

0:34:100:34:13

Well, upstairs... And, surprisingly, it's sparklingly clean.

0:34:130:34:18

Er, no.

0:34:180:34:20

However, let's look again at what we've actually

0:34:200:34:23

got in terms of the fabric of the building.

0:34:230:34:25

Three half-decent-sized bedrooms.

0:34:250:34:29

Two at the front there and one at the back.

0:34:290:34:31

And, you might not have expected this, but look at that!

0:34:310:34:35

A really decent toilet.

0:34:350:34:38

So now it's a case of just figuring out what is actually stuff

0:34:380:34:42

that we can just dump in a skip and get rid of and sort the place out,

0:34:420:34:46

What is actually structural - I don't know if there's much of that -

0:34:460:34:49

what's cosmetic, there's probably quite a lot of that.

0:34:490:34:52

But do that, and what you've got here is a great house.

0:34:520:34:57

So things are looking up.

0:34:580:35:00

The fabric of the house seems to be in good order,

0:35:000:35:03

it just needs a really good clear out.

0:35:030:35:07

# Can't judge a book by looking at the cover. #

0:35:070:35:12

So, what do you think?

0:35:120:35:14

Well, I am now going to attempt what's called a paradigm shift.

0:35:140:35:18

That is where you change somebody's opinion or viewpoint

0:35:180:35:22

based on new information.

0:35:220:35:24

That new information is that there is a massive demand for

0:35:240:35:28

rental property around these parts and there's a shortage of houses.

0:35:280:35:31

A house like this could easily rent out for around

0:35:310:35:35

£450 a calendar month. That's £5,400 a year.

0:35:350:35:40

If you get this property for anything like that

0:35:400:35:43

£30,000 guide prize, that's an 18% yield.

0:35:430:35:47

Viewpoint changed, perhaps?

0:35:500:35:52

Potentially very impressive rental figures.

0:35:560:35:59

But for a sales valuation,

0:35:590:36:00

we've invited a local estate agent along to give us his opinion.

0:36:000:36:04

First impressions of the house,

0:36:070:36:09

it's a specious set-end terrace property

0:36:090:36:11

in need of total refurbishment.

0:36:110:36:14

It requires a new kitchen

0:36:140:36:16

but there's no signs of damp and, to be honest,

0:36:160:36:18

just cosmetic work, really, is required to the property.

0:36:180:36:22

I believe that the property would be worth around £65,000

0:36:220:36:26

once the work is done.

0:36:260:36:27

OK, when you consider that £30,000 guide price and the potential

0:36:300:36:35

rental yield, these numbers are beginning to look very attractive.

0:36:350:36:39

Well, you could easily set one foot inside this property

0:36:430:36:47

and say to yourself, "No way, Jose."

0:36:470:36:51

However, I think if you did that you'd be missing a trick.

0:36:510:36:54

Because, actually, intrinsically, it's a really good little house.

0:36:540:36:58

For that guide price, definitely worth looking at.

0:36:580:37:02

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

0:37:020:37:05

It's a three-bed end terrace, guide price is £30,000.

0:37:050:37:08

Someone like to get us away at £30,000?

0:37:080:37:10

We have 30,000 bid here, at 30,000.

0:37:100:37:13

Any advance on the £30,000 we have?

0:37:130:37:15

31 we have, at 31, we have.

0:37:150:37:17

32, we have 32 at the wall here at 32,000. 33, seated at 33,000.

0:37:170:37:22

33 again, 34. The wall, 34,000.

0:37:220:37:25

This man here, 35,

0:37:250:37:27

selling at 35,000.

0:37:270:37:28

A ding-dong battle got

0:37:280:37:29

under way for this property and we rejoin the auction with the bid

0:37:290:37:33

standing at 45,000.

0:37:330:37:35

At 45, 45, he's gone to 45.

0:37:350:37:38

At 46, 46, 46, seated at 46,000. All sure? Last call.

0:37:380:37:43

47, at 47 at the back of the room, at 47,000.

0:37:430:37:47

At 47, 47,500, 47,500, 48. 48 at the back of the room, at 48,000.

0:37:470:37:53

48,500, at 48,500, at 48,500, 49. At 49,000.

0:37:530:37:57

49,000 we have, at 50,000. Seated at 50,000.

0:37:570:38:01

Seated at £50,000, we have 50,000. Seated at £50,000.

0:38:010:38:05

All sure? Last call at £50,000. Going once,

0:38:050:38:08

seated at 50,000, going twice,

0:38:080:38:11

sold 50,000.

0:38:110:38:12

Number there, please.

0:38:120:38:14

MUSIC: Big Brother by Stevie Wonder

0:38:140:38:17

Paying £20,000 over the guide price was Michael.

0:38:170:38:20

Who, together with brother Adrian, run a building contractors,

0:38:200:38:23

an estate agency and also let out properties in the local area.

0:38:230:38:27

Busy boys.

0:38:270:38:29

I met up with the fabulous builder brothers back at the house.

0:38:290:38:32

# Your name is big brother. #

0:38:340:38:36

-Michael, Adrian, good to meet you both.

-Good to meet you, Martin.

0:38:360:38:39

-Nice to meet you, Martin.

-Congratulations, I think

0:38:390:38:41

you got yourself a bit of an investment here.

0:38:410:38:43

-Yes, well, so we have, yes. Hopefully it goes well.

-Hopefully it will.

0:38:430:38:47

Tell me why you wanted to buy this house.

0:38:470:38:50

Well, we were looking for houses

0:38:500:38:52

and I had seen this was coming up auction.

0:38:520:38:55

Went and viewed it, thought it was a good area,

0:38:560:38:59

thought the house was in good shape, even though it may be wrecked inside,

0:38:590:39:03

but I knew it was a good standard house, so that's why I went for it.

0:39:030:39:06

So how do you divvy out the work?

0:39:060:39:08

Mostly, Michael will do most of the estate agent work. Well,

0:39:080:39:10

he does all the estate agent work and I got the short straw.

0:39:100:39:13

HE LAUGHS

0:39:130:39:15

I could have guessed that by the way you're dressed.

0:39:150:39:17

You look like an estate agent

0:39:170:39:19

and you definitely look like you're ready to do some work.

0:39:190:39:21

Ready to do some work and I do all the rough work

0:39:210:39:25

and all the building end of things.

0:39:250:39:27

Right, and how do you make the decisions in terms of which

0:39:270:39:30

properties you going to go for? Again, that's a joint decision, is it?

0:39:300:39:33

No, generally I would try and find the properties, mainly online,

0:39:330:39:38

go to the auctions, see what the area's like,

0:39:380:39:41

potential of the property...

0:39:410:39:43

Generally would probably make the decision.

0:39:430:39:46

-And Adrian would then come and do the labour-intensive work.

-Right.

0:39:460:39:51

That's generally what happens.

0:39:510:39:52

So you pick up the pieces of his decisions?

0:39:520:39:54

I pick up what's left over, yeah.

0:39:540:39:55

MARK LAUGHS

0:39:550:39:57

There are plenty of pieces for Adrian to pick up in this house.

0:40:000:40:03

But being experienced contractors,

0:40:030:40:05

the brothers obviously aren't put off

0:40:050:40:07

by the appearance of the property.

0:40:070:40:09

When I was here viewing the property, there was a lot

0:40:110:40:14

of people here and when you come in

0:40:140:40:16

and you see such a mess that it's in, you think,

0:40:160:40:18

"My God." They just couldn't see past a skip full of rubbish, you know?

0:40:180:40:23

Plus the windows smashed and all that would generally put people off.

0:40:230:40:28

We've come into places far, far worse and we've done them up,

0:40:280:40:31

renovated them and put them back into the control of the tenants.

0:40:310:40:37

This here wouldn't annoy me.

0:40:370:40:39

And you paid a bit more than the guide price, obviously.

0:40:390:40:42

Yeah, well, I knew 50 was my mark. I thought it would go to 50.

0:40:420:40:47

I probably might have put another couple of bids on

0:40:470:40:51

-but I knew 50 was the mark for it.

-Sure.

0:40:510:40:55

But even at that, you're getting over 10% as a yield, aren't you?

0:40:550:40:58

Yeah, yeah, you would be, yeah. So, happy enough.

0:40:580:41:02

So, Adrian, tell me what you need to do to get it into a habitable state.

0:41:020:41:07

First thing I'll do is get it all cleared out

0:41:070:41:11

and get a kitchen ordered, get the glass ordered.

0:41:110:41:14

You won't replace the windows, then? You'll put new glass panels

0:41:140:41:17

-in, will you?

-Yeah, we'll put new double glazing units into it.

0:41:170:41:20

Is that cheaper? A lot cheaper?

0:41:200:41:21

There's really nothing wrong with the windows except the glass

0:41:210:41:24

is broken in them.

0:41:240:41:26

The windows are not damaged. The window frames themselves,

0:41:260:41:29

just the glass.

0:41:290:41:31

Central heating, there isn't any at the moment.

0:41:310:41:33

-Well, there's radiators but there's no boiler.

-Well, there's no...

0:41:330:41:37

copper cylinder, it's gone.

0:41:370:41:39

-But there is a boiler out the back in the boiler house.

-Ah.

0:41:390:41:42

I didn't find that, you see.

0:41:420:41:44

I didn't find that the first day I was here either.

0:41:440:41:47

-But I found it at a later visit.

-Oh.

0:41:470:41:50

-It's there, hidden round the back.

-Right.

0:41:500:41:54

But the copper cylinder, it's disappeared.

0:41:540:41:56

-It was probably worth a few pounds, so it's gone.

-Right.

0:41:560:41:59

Bathroom's obviously quite spectacular.

0:41:590:42:01

Yeah, that's the surprising thing about the house, the bathroom.

0:42:010:42:06

Really, the only problem with the bathroom is that the shower

0:42:060:42:09

door's been smashed. Apart from that, pretty nice bathroom.

0:42:090:42:12

Yeah, so what's the budget for the work?

0:42:120:42:16

Probably 7,000 to 10,000 at the maximum.

0:42:160:42:21

-Is that costing in your time?

-Well, that would include my time.

0:42:210:42:24

Need to get stuck into it.

0:42:240:42:26

Yeah, yeah, for sure. And what is the timescale, then?

0:42:260:42:29

-Five, six weeks.

-OK. And then on the rental market.

0:42:290:42:33

I've already been approached by a couple of people just today here.

0:42:330:42:36

-Really?

-Yeah. To move in, so...

-Wow.

0:42:360:42:41

Well, didn't I tell you there was a shortage of houses in this area?

0:42:410:42:45

It looks like these brothers have got this business sewn up.

0:42:450:42:48

And how does it work, the two of you working together?

0:42:480:42:52

We played football often enough together for a long time

0:42:520:42:55

and we never fell out during that. It's just the next move on.

0:42:550:42:59

When we were young we would have hung round together, so...

0:42:590:43:02

-It's really nice, then, that you can both...

-Natural move.

0:43:020:43:05

Yeah, and you've both got complementary skills

0:43:050:43:07

-and areas of the business you're happy to sort of focus on.

-Yeah.

0:43:070:43:12

-Yeah, that's great.

-Well, listen, congratulations, good luck with it.

0:43:120:43:15

-Thank you.

-I look forward to seeing how you get on.

0:43:150:43:18

Well, it seems that brothers

0:43:190:43:22

Michael and Adrian have certainly got the winning formula

0:43:220:43:25

and all the expertise it needs to take on this project.

0:43:250:43:29

Lots to do but how will it turn out when they're finished?

0:43:290:43:32

You can find out later in the show.

0:43:320:43:35

Well, we've already seen how one property did,

0:43:380:43:41

but what about the other two?

0:43:410:43:42

Will we see big changes and potential profits?

0:43:420:43:45

Let's find out.

0:43:450:43:46

We're back in the quaint seaside town of Budleigh Salterton

0:43:480:43:52

in East Devon.

0:43:520:43:53

With seagulls and sunshine and sand

0:43:530:43:56

and this two-bed purpose-built flat with a guide price of £155,000.

0:43:560:44:02

It was bright and spacious and, although it didn't have central

0:44:020:44:05

heating, when it offers views like this,

0:44:050:44:08

I think we can forgive it.

0:44:080:44:10

What a great feeling this place has. It's only a two-bedroom flat

0:44:110:44:15

but it immediately feels so, so nice.

0:44:150:44:18

MUSIC: Perfect by Fairground Attraction

0:44:180:44:21

And buyer Craig must have thought it was perfect too, especially

0:44:260:44:29

when he was the sole bidder paying the exact guide price of £155,000.

0:44:290:44:36

Craig was taking a career break from teaching children with

0:44:360:44:39

special needs and thought this was an ideal first property to develop.

0:44:390:44:44

I like the fact that looking around it, there was

0:44:440:44:47

nothing that sort of frightened me about it - it was all doable.

0:44:470:44:51

And I thought, you know, "I can do this, I can do this."

0:44:510:44:56

# I wanna do great things I don't wanna compromise. #

0:44:560:45:02

That's the spirit but will spirit be enough?

0:45:030:45:06

Craig had a budget of £10,000 but wanted to install new gas

0:45:060:45:10

central heating which could take up almost half that money alone.

0:45:100:45:15

Would he be able to stay within budget

0:45:150:45:16

and finish within his six-to-eight-week timescale?

0:45:160:45:20

Well, three months have passed

0:45:220:45:24

and we've returned to see how Craig got on.

0:45:240:45:26

The flat looks great - but, then, the flat looked quite good before.

0:45:350:45:39

So, how much work did Craig have to do?

0:45:390:45:42

I put gas into the property and put in central heating.

0:45:440:45:49

Prior to that it was the electric storage heater.

0:45:490:45:52

I've had to rewire the whole property,

0:45:530:45:56

which was an unexpected expense

0:45:560:45:59

cos I wasn't expecting it to be needing a total rewire.

0:45:590:46:03

I've put a new kitchen in completely.

0:46:040:46:08

The old one was ripped out and I've had it redesigned.

0:46:080:46:10

And now this is a kitchen-dining room.

0:46:100:46:14

One or two of the walls needed replastering

0:46:140:46:18

and redecorated, and new flooring throughout.

0:46:180:46:21

So, in the end, quite a bit of work needed.

0:46:210:46:23

In all seriousness, though this flat didn't look too bad

0:46:230:46:26

when we first visited, Craig's work sorting out the central heating

0:46:260:46:30

and electrics makes the flat so much more practical.

0:46:300:46:34

He even got rid of that unsafe frosted glass

0:46:340:46:37

and his cosmetic changes in the kitchen,

0:46:370:46:39

and throughout the rest of the flat, bring the style bang up to date.

0:46:390:46:44

Craig got professionals in to install his gas central heating,

0:46:440:46:48

rewire his electrics and fit his kitchen.

0:46:480:46:51

But he wasn't afraid to get stuck in himself. How did he find it all?

0:46:510:46:56

I'd always done a little bit of DIY but with a project like this,

0:46:590:47:04

obviously, you needed skilled tradesmen to come in

0:47:040:47:07

and I think you learn by watching the tradespeople.

0:47:070:47:11

So, if I did this again, obviously I picked up a few skills from them

0:47:110:47:15

but, yeah, it has been a learning curve as well.

0:47:150:47:18

But a very good learning curve.

0:47:180:47:20

The most onerous job, I would say,

0:47:200:47:22

was getting the woodchip off the ceilings off all the rooms.

0:47:220:47:26

Believe it or not, it took me three weeks to do that job.

0:47:260:47:30

# And I hate everything about you

0:47:300:47:34

# Everything about you. #

0:47:340:47:39

Three weeks up a ladder scraping woodchip is not the most

0:47:390:47:42

glamorous of development jobs.

0:47:420:47:44

Good thing he had these views to keep his spirits up.

0:47:440:47:47

Craig's original timescale was six to eight weeks -

0:47:500:47:53

it's actually taken him three months.

0:47:530:47:55

But it wasn't the timescale I was worried about, it was his budget.

0:47:550:47:59

So how did he get on?

0:47:590:48:01

I think I said my original budget was between 8,000 and 10,000.

0:48:030:48:07

I think I've actually spent just a little under 12,000.

0:48:090:48:15

The overspend went on the electrics

0:48:150:48:19

and the central heating was a little more than we thought.

0:48:190:48:24

I've also gone for a slightly higher spec on the kitchen.

0:48:240:48:28

But I'm pleased, I'm pleased with what I spent.

0:48:280:48:32

And that is why it was very wise for Craig to have his contingency fund.

0:48:330:48:39

Even in this flat where everything looked pretty sound,

0:48:390:48:42

there were a few hidden problems.

0:48:420:48:44

However, I certainly think it was worth spending the extra

0:48:440:48:47

to get that central heating in. And the kitchen looked great.

0:48:470:48:51

But will he be able to recoup those £12,000 development costs

0:48:510:48:55

on top of his £155,000 purchase price?

0:48:550:49:00

We've asked along two local estate agents

0:49:000:49:02

to get their opinion.

0:49:020:49:03

He's added some really nice contemporary touches,

0:49:030:49:07

i.e. the kitchen particularly, but I do like the doors

0:49:070:49:10

which are a major uplift and really do work well in the property.

0:49:100:49:14

Nice light carpets

0:49:140:49:16

because, being south facing, you get plenty of sunlight.

0:49:160:49:19

Because of the colour schemes on the walls, that reflects the sunlight

0:49:190:49:22

and gives the whole flat a nice warm sense about it.

0:49:220:49:26

There aren't any obvious negatives, really.

0:49:260:49:28

Other than the fact that the flat market

0:49:290:49:31

is not particularly strong.

0:49:310:49:33

It hasn't been good for two or three years,

0:49:330:49:37

and it's quite well supplied with properties.

0:49:370:49:39

Craig's done a great job sprucing the place up

0:49:390:49:42

but it sounds like he's fighting against quite a weak market.

0:49:420:49:46

Both estate agents recommend a rental valuation of £800

0:49:460:49:49

per calendar month but Craig wants to sell, so what could he expect?

0:49:490:49:55

My recommendation would be an asking price of circa £190,000 to £195,000.

0:49:550:50:02

So currently I wouldn't expect it to sell for more than £200,000.

0:50:020:50:06

If they delay a sale until the spring,

0:50:060:50:09

the market could be tested at perhaps £225,000.

0:50:090:50:13

But I think that would have to be kept under close review

0:50:130:50:16

dependent on the viewing levels generally.

0:50:160:50:19

If I need to wait till spring to sort of get that sort of figure of 225,

0:50:190:50:25

really it might be worth me

0:50:250:50:27

hanging onto it for a couple of... Three months

0:50:270:50:30

and then try the market then.

0:50:300:50:31

-So, that sounds OK.

-It wouldn't half.

0:50:310:50:35

With his total spend of £167,000,

0:50:350:50:38

that top valuation of 225,000 would give Craig

0:50:380:50:42

a profit of £58,000 minus the usual taxes and expenses.

0:50:420:50:47

And despite those expenses increasing the longer

0:50:470:50:50

he holds on to it, Craig should still be in for a healthy profit.

0:50:500:50:54

So, knowing that,

0:50:540:50:55

how does Craig feel about his first property development?

0:50:550:51:00

It's turned out far better than I thought.

0:51:000:51:03

I've had such a positive experience doing this one so, you know,

0:51:030:51:07

I can't wait, really, to go ahead and get another property.

0:51:070:51:12

Time now to return to Downpatrick in Northern Ireland.

0:51:150:51:19

This three-bed end terraced house had a guide price of just £30,000.

0:51:190:51:23

It was going to take some renovating, though.

0:51:230:51:26

The place was a mess.

0:51:260:51:28

# Big mess, big mess He was a

0:51:290:51:33

# He was really mixed up. #

0:51:330:51:35

But here on Hammer we try to see past the superficial.

0:51:350:51:39

It had good-sized rooms

0:51:390:51:41

and was in an area with a very high demand for rented property.

0:51:410:51:46

So, now it's a case of just figuring out what is actually structural -

0:51:460:51:51

I don't know if there's much of that - what's cosmetic.

0:51:510:51:54

There's probably quite a lot of that.

0:51:540:51:57

But what we've got here is a great house.

0:51:570:52:00

Brothers Michael and Adrian clearly agreed.

0:52:000:52:03

They were successful at auction with their bid of 50,000.

0:52:030:52:07

The brothers run building contractors and estate agents

0:52:070:52:10

and are a well-oiled machine when it comes to renovation.

0:52:100:52:14

Generally I would try and find the properties

0:52:140:52:17

-and Adrian would then come and do the labour-intensive work.

-Right.

0:52:170:52:23

-That's generally what happens.

-So you pick up the pieces of his decisions?

0:52:230:52:26

I pick up what's left over, yeah.

0:52:260:52:28

MARK LAUGHS

0:52:280:52:29

# It takes two, baby

0:52:290:52:32

# It takes two, baby

0:52:320:52:34

# To make a dream come true. #

0:52:340:52:37

With a budget of £7,000 to £10,000

0:52:370:52:39

and a time scale of five to six weeks,

0:52:390:52:41

could the two of them transform this terrible terrace

0:52:410:52:44

into a dream come true?

0:52:440:52:47

# Just take two. #

0:52:470:52:49

Just under four months later, we're back to find out.

0:52:510:52:55

Outside certainly looks good. Let's see what they've done to the inside.

0:52:550:52:59

-# Sunshine on a rainy day

-Sunshine

0:53:000:53:03

# Makes my soul, makes my soul, drip, drip, drip away. #

0:53:030:53:10

Wow, the kitchen is spacious and bright with new appliances

0:53:100:53:14

and room enough for a dining table.

0:53:140:53:16

And in the living room,

0:53:160:53:17

they've even managed to keep some of the house's original features.

0:53:170:53:22

Upstairs, the bedrooms have been redecorated in neutral tones,

0:53:220:53:26

while the bathroom has had a new shower and taps fitted

0:53:260:53:30

and a general clean and tidy up.

0:53:300:53:32

This could now be a lovely family home.

0:53:320:53:35

There was nothing structurally wrong with the house.

0:53:350:53:38

The biggest challenge was probably with cleaning it out at the start.

0:53:380:53:42

Two skips had to come out of the place.

0:53:420:53:46

Just cleaning it up, general cleaning it up.

0:53:460:53:48

When we had everything cleaned up we were fine.

0:53:480:53:51

# I can move, move, move any mountain. #

0:53:510:53:56

I think Adrian's underplaying just how big a job clearing

0:53:560:53:59

this place out would have been.

0:53:590:54:02

Still, taking on the lower skilled labour-intensive jobs

0:54:020:54:05

yourself is exactly the way to keep costs down.

0:54:050:54:08

Of course it helps

0:54:080:54:09

if, like Adrian, you have your own team of builders you can call upon.

0:54:090:54:13

But that wasn't the only way the brothers found to keep costs down.

0:54:130:54:18

So, when we arrived the windows were all smashed

0:54:210:54:24

but they were boarded up and we just took out the boards, put new glass

0:54:240:54:29

in and managed to save the windows, which saved a fair bit of money.

0:54:290:54:34

Michael, who's in charge of the administrative side

0:54:360:54:39

of the project, estimated that by only replacing the glass

0:54:390:54:42

they saved up to £550 per window.

0:54:420:54:45

Money they needed as, when we last looked at the property,

0:54:450:54:49

the central heating needed a major upgrade.

0:54:490:54:51

And someone had stolen the copper cylinder.

0:54:510:54:54

What we more or less had to do with the heating was to replace

0:54:560:55:00

all the copper pipes in the dwelling.

0:55:000:55:03

So we have replaced all them with PVC plastic,

0:55:030:55:08

so there's going to be... Nobody's going to be near them again.

0:55:080:55:11

So did they manage to keep within their budget?

0:55:110:55:15

We spent roughly £7,200 to get it to this current standard.

0:55:150:55:21

We had hoped to have the project finished in about six weeks but

0:55:210:55:24

it's taken a bit longer because we had other projects going on.

0:55:240:55:27

But, overall, we're pleased.

0:55:270:55:29

In fact, it took the brothers 16 weeks in total

0:55:300:55:33

to complete the renovation.

0:55:330:55:35

However they did only spend £7,200 on it, along with

0:55:350:55:40

the £50,000 they paid at auction.

0:55:400:55:43

We've asked along two local estate agents to see

0:55:430:55:46

if Michael's good eye and Adrian's hard work have created a winner.

0:55:460:55:50

From the last time I was here, there's been quite a change.

0:55:510:55:55

In fact, it's hard to believe, actually, it's the same house.

0:55:550:55:58

The vendor has done a very,

0:55:580:56:00

very nice job of refurbishing the property.

0:56:000:56:02

Particularly downstairs in the kitchen.

0:56:020:56:04

Main selling points - it's a very spacious terrace property.

0:56:040:56:08

Every room is a very good size,

0:56:080:56:10

particularly the kitchen's got a lovely open-plan feel to it.

0:56:100:56:13

And you got a separate lounge and three good-sized bedrooms

0:56:130:56:16

so it makes it a family home.

0:56:160:56:18

There's a good demand for both buying and rental of this style of property.

0:56:180:56:23

This property would appeal to investors or, most likely,

0:56:230:56:27

a first-time buyer or a young professional couple.

0:56:270:56:29

Michael and Adrian have turned this mess of a house into a desirable

0:56:300:56:35

family home and in an area with goods demand for property like this.

0:56:350:56:39

Can they make a profit on their total spend of 57,200?

0:56:390:56:44

Let's get those all-important figures.

0:56:440:56:47

In the current sales market I would expect this property

0:56:470:56:50

to achieve between 65,000 and £70,000.

0:56:500:56:53

In the resale market I'd expect this property to achieve around £65,000.

0:56:530:56:58

Were they to achieve the higher value,

0:56:580:57:01

this would give the brothers a pre-tax profit of £12,800.

0:57:010:57:06

But it was always their plan to let the property out,

0:57:060:57:09

so what could they achieve on the rental market?

0:57:090:57:12

In the current rental market,

0:57:120:57:14

I'd expect to achieve £450 per calendar month.

0:57:140:57:18

In the rental market I believe this property could achieve

0:57:180:57:20

£450 per calendar month.

0:57:200:57:22

Yeah, well, I'm happy with both valuations.

0:57:240:57:27

Obviously, we've made a bit on the property

0:57:270:57:30

and the rental value would be where we would think it would be.

0:57:300:57:34

So it gives us a good return.

0:57:340:57:35

That rental value would give the brothers a yield of over 9%.

0:57:370:57:41

It looks like their teamwork has paid off.

0:57:410:57:43

So, do they have any tips for us?

0:57:430:57:45

To any would-be developers my advice would be, don't take on

0:57:470:57:51

too much financial stress on the property

0:57:510:57:55

and make sure you see a way out financially.

0:57:550:57:57

Yeah, and get a good tradesman.

0:57:570:58:00

Especially me.

0:58:000:58:01

Well, that's all we have time for today.

0:58:050:58:08

But we'll have plenty more stories for you next time

0:58:080:58:10

here on Homes Under The Hammer.

0:58:100:58:12

-See you then.

-Goodbye.

-Goodbye.

0:58:120:58:13

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