Episode 11 Homes Under the Hammer

Welcome to the show!

Whether you're buying property as a place to live in

or as an investment, you still need to know what you're doing.

And with a fluctuating property market,

it's quite difficult to spot those bargains.

But a good place to start is an auction.

Well, literally thousands of properties are sold at auction

but the good news is it's not a long drawn-out process.

The hammer goes down and a few weeks later, you've got the keys

-to your property.

-But, of course, it's not as easy as that.

It is hard work.

Let's see what the bidders on today's show decided

to spend their hard-earned cash on.

First up, in Plumstead, London, right property, wrong time?

I'm not sure you'll leave this property.

We're going to buy exactly the same house in 20 years.

LAUGHTER

Whilst in Mickleover, Derby, there'll be no risk of broken nails.

-So, you don't want to have any involvement?

-No.

No, look at them nails, they're not geared for that.

And in Chatham, Kent, best-laid plans hit a snag.

This was our problem.

Flint. And there was loads of it, as you can see behind me.

All these properties have been sold at auction.

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

when they went under the hammer.

Sold, 295.

This is Plumstead,

an area of south-east London in the Borough of Greenwich.

Plumstead originally expanded rapidly in the 1880s

with houses developed for those working at the Royal Arsenal.

But does the capital's continuing housing boom

resonate in these parts?

I think I'd better go and check out what's on offer here.

# And I'm on my way... #

On this lovely kept street, I'm here to see a four-bed mid-terrace

property with three reception rooms

and a guide price of £250,000.

Now, it's got a small front garden but I do like that brickwork

up there, incredibly pretty brickwork, there.

Bit of TLC on the front of this house

and it could be a very pretty property.

I'm just hoping there are more glimpses

of these Victorian features inside.

Right. Lovely hall space in here.

And that ceiling has hit me straight away.

Lovely detail on the top, there.

Even longer hallway down to the kitchen in here.

Look at the space in here!

Look at this incredible room that would have been two rooms,

there would have been a wall here at some stage.

But what has caught my eye is this damage over here.

Extensive wall damage here, brickwork,

it's gone straight through to the brickwork. Plaster's away.

I don't think it would have been the weight of the television,

judging by the size of this stand.

Get that sorted, get it checked out, as soon as possible.

So, there's clearly an issue with damp here.

But all around, there are some fantastic original features.

Beautiful coving,

ceiling roses

and that bay window. I love it.

What I'm not loving so much are the fireplaces which,

though more modern than the other features,

haven't aged nearly as well.

They're definitely not keepers!

This'll be the third reception room, dining room,

next-door to the kitchen.

Nice big space again. Nice high ceiling.

Kitchen could do with a bit of an overhaul.

Take the whole kitchen out, start again.

Something nice and bright there

cos there's only a small window going out to the garden.

I'd be very inclined to take this wall out,

have a nice dining room/kitchen as one.

And there is a false ceiling here, a panelled ceiling.

If you were to take that out, go back to the original height

of the ceiling, the ceilings would match up, both sides,

and you'd have a really, really nice dining room/kitchen area.

It's the real lack of light that's the problem here.

The old, dark, wooden kitchen cabinets

aren't doing the space any favours, either.

So, strip it all out, open up the kitchen, lift that ceiling,

get some nice lighting in here and the whole area would be transformed.

# Come on and make it

# Come on and make it

# Just better. #

And there's a similar story upstairs,

with a toilet and separate bathroom which would also benefit

from removing that wall between them.

Bigger is better, in my opinion.

And then there's the bedrooms.

This is one of the four bedrooms,

the bedroom at the front of the house.

It's a nice size and next-door to this bedroom,

you've got a little boxroom here, as well. But having...

-KNOCKING

-..listened to that wall,

which is completely false, and there's another false wall

just here, again, it's false.

So, I'd be inclined, if you want to make this into a family home,

to knock that through, have a nice bedroom here

with an en-suite bathroom there.

I think in a big family home one toilet, one bathroom,

just isn't big enough. Make this one into a nice big master bedroom.

But you've got to remember,

if you want it for rent or you want it for resale,

you're going to lose a bedroom, so it might affect your income

when it comes to monthly payments or a sale at the end of the day.

So, think first before you do any work.

Generally, the more bedrooms you have,

the better the rental or resale return.

But in terms of making this a more balanced house to live in,

I think this property would definitely benefit from making

the master bedroom an en-suite.

# Come on and make it Just better... #

Another area which could certainly be better is outside.

# So much better. #

This could be a lovely family back garden.

You can't see it at the moment cos it's full of greenery

but it's on two or three levels.

If you could get the levels as one, get rid of all this mess,

put some grass down,

it could be a lovely family back garden for kids to play out.

Even trim back some of the trees, if there's no orders on the trees,

trim them back, bring a bit more light in.

I've got to show you one thing as we go in, I did notice this just on

the way out through the back garden. There seems to be a significant

crack that's going from the window all the way to the guttering.

Now, it can lead to subsidence or, already has subsidence,

but, in this situation, get it checked out as soon as possible.

It's the best way to look after things like that.

These types of cracks really need expert appraisal.

It could be something simple like a collapsed drain

or it could be something more sinister.

Either way, better get it checked out.

And while you're at it,

there are those signs of damp to be assessed, too.

But I can't help thinking that lurking beneath that shabby,

dated decor there's a house that has a lot offer.

But what does a local estate agent make of the property?

My first impressions of the property

is it's got so much potential.

It's nice that it's still got some original features, as well,

with the coving in the lounge

and that is quite unusual cos a lot of people do get rid of them.

The main areas of concern is there's a crack to the rear of the property

and also the roof does look like it needs repairing.

And the general, sort of, the kitchen, the bathroom,

looks like it could do with some updating, as well.

Yep, there's no doubting this needs a full-scale refurbishment.

But what about the numbers on a house that has been

guided at auction for £250,000?

Once the property's fully refurbished, I would expect the price

to achieve £420,000

and the rental value to be £1,400 per calendar month.

Well, there may be a fair amount to do here but there's a fair amount

of reward to be had, both on the resale and the rental market.

Let's see who wanted to take it on when it went under the hammer.

So, move on to Lot 44.

Four-bed mid-terrace house.

I don't know, 250?

250 with you.

255 anywhere?

251?

251, 252, 253,

254, 255...

..256, 257...

..258...

So, there was a lot of interest in the Victorian four-bed house

and we rejoin the bidding at £300,000.

300.

301, 302, 303?

303, 304, 305?

305, 306, 307?

306, first time,

second time,

third and last time, if you're all done.

Sold, 306. Well done.

And so, hidden from our camera's view,

the four-bed mid-terrace house in Plumstead was sold for £306,000.

And those mystery bidders were Guillaume, on the left, and Gabriel.

Guillaume is an optician while his partner, Gabriel,

works in logistics.

And this is the first property they've bought together.

-Gabriel, Guillaume, nice to meet you.

-Nice to meet you.

-Congratulations, first and foremost.

-Thank you.

Tell me about the auction experience. Who went to the auction?

We both went to the auction. I was the one bidding.

-Were you not allowed to bid?

-I was too scared.

LAUGHTER

Because I didn't see the property.

-Oh, OK. So, who actually...

-I saw the property.

-OK.

-Yeah.

Just for five minutes.

And what made you want it so much?

Well, the area was nice, the house is big,

there's a lot of work to do but it's fine.

Guillaume, how about you now you're here and it's yours?

What are your thoughts on this property? Anything frightening you?

The crack on the back of the house.

-Yep.

-That, the big damp, as well.

But I think it will be fine.

Are you buying it to rent it or to sell it, to live in it?

-Initially, we wanted to live in it.

-OK.

But I think it's a bit too big for us.

-So, we're going to sell it, I think.

-OK.

-Yeah.

We didn't even start yet and I really don't want to sell it.

-Really?

-So, it's going to be hard to sell it.

-It's exactly the house that we love.

-So, what's making you sell it?

-Why don't you live here?

-Money.

-Money?

-Yeah.

# I don't want to let you go

# I never can say goodbye, boy. #

Ah. If you want to be successful at property developing,

keeping an eye on the money is definitely the key.

Mind you, one of the things is not getting too attached

to a property and making it like you want it.

So, I hope these guys can be detached enough not to make

it too personal.

Who's going to take charge of this project?

-Are you going to do it together?

-Yeah, we're going to do it together.

I'm going to follow the building structure, he's going

to follow all the design.

OK, so, what's the first thing you're going to do?

I'm going to do a beautiful kitchen

-and a beautiful bathroom.

-OK.

And I'm going to keep half very Victorian and half very modern.

And the dining room separate or are you going to make it one?

It's going to be a big room, kitchen and dining area.

-Good, you're knocking the wall down.

-Yeah.

-What about the ceiling,

you've got a ceiling in the kitchen, are you changing that?

Yeah, we're going to remove the ceiling.

So it's going to be higher and then we're going to put all spotlight.

We're going to combine the toilet and the bathroom together upstairs.

-OK, so you're knocking walls down again.

-Yes.

-OK.

And we're going to create another toilet downstairs.

Yeah, I think that's a sensible idea.

And outside, structurally, you mentioned the crack.

When we had our survey, he said it's not a big problem,

it's just a drainage problem, so we need to sort out the drainage.

-Fill the crack.

-That's good news.

-Yeah.

-Save on the money.

-Yeah.

And, also, the damp, as well.

There's a little bit of damp around the property.

-There's a little bit a lot.

-A lot of damp around the property!

Yeah, it's cos the roof is leaking a bit everywhere

so we need to repair the roof and then sort it out inside.

Do you have a budget?

I can see your faces are changing now when it comes to money.

-Yeah, budget is around 30.

-OK.

-Hopefully less.

-Yes.

Time, four months, maybe five.

Although Gabriel will oversee the work and Guillaume will design

the interiors, they will contract the work out to builders,

leaving the bulk of it to the professionals.

Always a good idea.

And I think their £30,000 budget

and four- to five-month timescale certainly isn't unrealistic.

-Is this something that you want to continue to do?

-Yes.

-Yeah?

And you want to have a portfolio of houses.

This one, sell it, maybe buy another one then sell it or rent?

Yeah, we can buy and sell it or buy and then rent it out. We'll see.

I'm not sure you'll leave this property.

-I think you'll find yourself...

-No, we will leave here.

I think we will leave it,

we're going to buy exactly the same house in 20 years.

LAUGHTER

-Maybe you can buy this one back.

-Oh, yeah.

-It will cost you four times the money!

-So, no.

Listen, Guillaume and Gabriel, I wish you luck. OK.

-Very nice to have met you and good luck, hey?

-Thank you.

-Take care.

Gabriel and Guillaume seem to have this project all in hand.

But will it all go to plan? You can find out later on in the programme.

Located just two miles east of Derby is the suburb of Mickleover.

A highly popular residential area, it has a strong property market,

growing population density, good schools, shops and parks.

So, location wise, we're off to a good start.

So, it's certainly a desirable area and that's reflected

in the guide price of the property that was up for auction.

A two/three-bedroom ground-floor flat.

The guide price was £45,000 plus. Let's take a look.

The flat itself is situated in what was an old Victorian house

that has been converted into several flats.

It's accessed via the back of the property

with its own separate entrance.

-HE BREATHES IN SHARPLY

-OK.

So, through the entrance door - back, front, whatever it is,

it's the only one - into this little sort of covered courtyard area.

It's got this plastic sheeting roof.

I imagine it's just been covered up at some point

and this would have been open in earlier years.

This is a useful little space, somewhere to store your bikes

or dump your bags. But, then, you've got a choice.

You've got, basically, three doors leading to the rest of the flat.

Now, the moment you come in here, you do get a sense of it being

a bit like a basement flat.

It suffers from not having enough exterior walls with windows in them.

So, we've got two rooms here separated by sort of a divider.

It's almost been done as if it's some kind of an office.

You've got this office style ceiling

which obviously wants to come down.

Again, makes it feel a little bit...

..claustrophobic, for want of a better word.

You've got the two little rooms there. A room on the front,

then into this rear sort of living area.

Again, though, look at the size of that window,

I mean, tiny for the size of room.

-HE EXHALES LOUDLY

-What do I want to do?

I want to take out all these walls, every single wall out.

I want to stick beams here, there, everything else.

Create one huge open-plan space

and then maybe stick one or two very carefully chosen walls back.

That's the only way it's going to work.

Hm-mm, at present, this is a number of odd-shaped rooms at varying size,

strangely connected together.

There's no flow to the place.

And not only is the flat dark and gloomy,

I'm in the dark as to what the rooms are.

Is this a bedroom, a study, who knows?

Hence the two- to three-bedroom description in the auction catalogue.

Maybe the rest of the flat will shed some light on what layout

would work best here.

So, through into the kitchen area.

Well, I mean, obviously, it doesn't have a kitchen in it,

at the moment, which does throw up issues

when it comes to mortgageability.

And in here, some signs of some serious damp,

I don't know what's going on with the ceiling there.

And all around here, definitely, I'd want to probe about a bit more

and find out exactly what's going on.

But at least in this part of the flat,

you do get some natural light, which is good. And, bizarrely,

the bathroom is the one place where you've got loads of light.

Great.

And the bathroom off the kitchen poses yet another layout issue.

I think, perhaps, it would be worth seeing

if it was more feasible to make this into a bedroom or study

and use one of the back rooms as a bathroom.

At least that way you'd have a bedroom with some natural light.

All in all, this isn't the most practical flat I've ever come across

but it is still a residential space in a sought-after area

and that alone will give it some appeal.

But what can the auctioneer who sold it tell us about the flat?

There aren't very many flats in Mickleover,

certainly not purpose-built ones,

not that I'm suggesting this is purpose-built.

But it's not the sort of development

that you see a lot of in Mickleover itself.

But because of the appeal of Mickleover as an address,

flats as investment properties are always very good material

because you're never going to have void periods,

they are very lettable.

Good news if you're looking for a buy-to-let.

But what sort of numbers are we talking about?

Once renovated, this would command a rent in the order

of £425 a calendar month.

And the flat was guided at £45,000

so rental returns in the region of £425 per calendar month

could see a rental yield of 10%.

That's before any renovation expenditure, of course.

What about the resale potential?

Its sale value is related to its earning capacity, really.

And I would say, even if this was in good order,

you would only sell as an investment property.

So, its top value is probably no more than £65,000-£70,000.

So, a bit of thought required, particularly on the internal layout

of this one. But not a huge project to take on and a nice area.

So, yes, I'm sure it was popular when it went under the hammer.

Lot number 11.

This is a two- or three-bedroomed,

vacant, ground-floor flat.

Good residential area. 45 for it?

42, start me where you like, it's where we finish that matters.

42,000 I've got in the centre, thank you.

At £42,000.

43 is bid at the back.

43, 44.

At 44,000... 45, 46 is bid.

46, 47?

47, 48?

48,000, 49?

£48,000 here, seated bid. 49?

At £48,000, then, going once,

going twice, third chance, any higher bid for it?

Sold at 48,000, thank you.

So, just slightly above the guide price and for £48,000,

the successful bid for the Mickleover flat was made by John.

John, who has previously worked as a publican

and is currently a catering steward at a golf club, bought the flat as

a joint venture with his daughter, Kelly, who works for a charity.

I met them both back at the flat to find out their plans.

-Kelly, John, great to meet you both.

-Hi.

-And you, hi.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

Mainly an investment for myself and Kelly.

My first property, that I actually own, is just across the road.

Oh, really?

So I know the area well. Although I've had it for over 12 years,

-I've lived in it for about six months.

-Right.

Because various pubs and moving around the country...

-but I still own it and still rent it out.

-Right.

-So, it was this area of Derby specifically that you wanted.

-Um...

-Yeah.

-This isn't the one I came for originally. In the auction I...

-..went for another one but it went too expensive.

-Right.

And I thought this would be really, really expensive but it was well

within the budget I wanted

and I thought, "Well, I'll have a punt at that one."

So, we went to go for a house but instead Dad phoned us

and told us he'd just bought a flat.

LAUGHTER

-And that was the first you knew of it?

-Yeah.

-So, when was the first time you saw it?

-Today.

-Oh, wow!

Oh, gosh. Right. So, what do you think?

Yeah, I think it's quite nice, actually.

I think it needs a lot doing to it,

but I think the area is fantastic

so therefore I trust what he bought.

Well, it might have been not quite what Kelly was expecting to get

for her first investment property,

but dad John does know the area and having bought property here before,

hopefully knows a good investment when he sees one.

And Kelly is hoping that not only will it generate some income

but perhaps might be the start of a new career.

-In terms of a project, it's going to be your project?

-Yeah.

So, are you financially involved in it?

Sleeping partner.

-LAUGHTER

-What does that mean, Dad?

That means she isn't putting any more money into it, that's what she means.

-I'll be investing most of the money into it myself.

-OK.

And then if we ever sell it

and move it on, then Kenny will get a percentage of that.

What's the plans for it, then,

what are you going to do to it to sort it out?

-Well, I've got a budget of around £15,000.

-To do what?

Well, basically, knock the kitchen all through. Have one kitchen.

And move the bathroom into a separate room.

And two bedrooms on their own, keep the sitting room on its own.

-And redec it all the way through.

-But that's completely hands-off, is it?

-That completely hands-off, yeah.

-Right, listen,

this is your investment so get some hands-on,

-you can save your dad some money!

-Yeah.

I'll get my tools out right away!

-I'll crack on with it.

-Good.

Well, you can do things, though, can't you?

-Depends what the builders want us to do.

-What do you mean?

-You're not taking me seriously, are you?

-No.

-Do you want to be a property investor?

-Yeah.

-Do you want to be a property developer?

-Yeah.

-Right, then.

Full-time job doesn't allow me to do that, unfortunately.

-So, you don't want to have any involvement?

-No.

-Not even stripping wallpaper or doing a bit of painting?

-No.

-Oh, come on.

-No, no.

Look at them nails, they're not geared for that.

-I probably will, I'll probably come along when I get the chance.

-Right.

I'll ask the builder what they want me to do.

If he wants to strip out walls and knock walls down, I'll do all that.

-That's where you save your money, isn't it?

-Yeah.

-And then is the idea to rent it out?

-Yes.

-Yeah. What I said to Dad was,

if we're going to stick two bedrooms in that have both got en suites in,

then maybe it should be to two separate people.

I think we've got to think about who we want to let it out to.

Yeah, absolutely. Begin with the end in mind, and all that.

But, again, it's how much money you want to chuck at it, you know.

So, we've got to kind of keep our budget sensible.

So, the timescale, then, is what sort of length of time?

-I'd like it sorted out by...

-Six months, at least.

-Yeah, well, I want to before the end of summer.

-Yeah.

You know, while we still have the light and get it cleaned up.

-The heat.

-Yeah.

Um. And I think things look better in the summertime.

-Yeah, sure.

-Than when it's dark and damp and miserable outside.

Get somebody renting it at that point.

-Congratulations to you. Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Thank you, Martin, cheers.

Well, a slight hint of not being quite sure what they're going to do

with this place from Kelly and John, there.

But one thing for certain,

I don't think Kelly will be getting her hands dirty.

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

Still to come, in Chatham, Kent, we find out if a plot of land

we first visited over five years ago was worth the long wait.

And in Mickleover, Derby,

we get to see the renovations that John seems very happy with.

Yeah, I'd live here.

Before that, we head back to Plumstead, south-east London,

a popular area, where I looked around this

four-bed mid-terrace property that boasted three reception rooms

and a guide price of £250,000.

It had some great original features but signs of damp were worrying

and a crack at the back of the house certainly needed attention.

And, for me, the layout just didn't work.

I'd be very inclined to take this wall out,

have a nice dining room/kitchen as one.

And there is a false ceiling here, a panelled ceiling.

If you were to take that out,

go back to the original height of the ceiling,

the ceilings would match up, both sides,

and you'd have a really, really nice dining room/kitchen area.

It proved very popular at auction,

selling for £56,000 over the guide price at £306,000.

Sold, 306. Well done.

The successful bidders were Guillaume, on the left here,

and his partner Gabriel who, together,

were venturing into property development for the very first time.

Who's going to take charge of this project?

-Are you going to do it together?

-Yeah, we're going to do it together.

And then I follow the building structure,

he's going to follow all the design.

OK, so, what's the first thing you're going to do?

-I'm going to do a beautiful kitchen and a beautiful bathroom.

-OK.

And I'm going to keep half very Victorian and half very modern.

And the dining room separate or are you going to make it one?

It's going to be a big room, kitchen and dining area.

So, big plans were afoot for these developer novices.

They had a budget of £30,000 and a timescale of four to five months.

And having originally considered living there themselves,

they were planning to sell it once the work was done.

It's just over three months later

and we've returned to south-east London to find out how they got on.

Removing the wall between the kitchen and third reception room

has created a beautiful kitchen-diner,

complete with French doors leading to the newly landscaped garden.

With a keen eye on design and character,

they've managed to marry together the modern and the traditional.

Plus, signs of damp in here are all gone.

In the transformed hallway,

they've done very well to introduce a downstairs loo.

Always appealing to buyers.

I can't wait to see what they've done upstairs.

Knocking the wall down between the bathroom and toilet

has created a far more desirable space.

This couple have done a fantastic job.

Don't forget, Guillaume and Gabriel are novices...

..making what they've each done here even more impressive.

So, all the changes we did was to put a more

sense of space in the kitchen, in the bathroom.

So, everything had to be redone in the house, plastering,

the flooring, ceiling.

I wanted something pure, very simple but with a little bit of character.

My taste.

So, to add character in the house I wanted to keep the Victorian style,

so we kept all the coving

and the ceiling rose.

And I removed the old fireplace and I look for two new fireplaces.

The most important thing for me was to have two identical ones.

And we changed the whole bathroom, obviously.

I wanted to go downstairs Victorian

and upstairs completely modern

with a modern kitchen, as well, and modern toilet.

So, whilst Guillaume was in charge of all things design,

it was down to Gabriel to oversee the day-to-day.

Well, I follow the builders,

I make sure everything was done properly.

I organise the delivery, rushing delivery.

And that's it.

The crack at the back of the house, thankfully,

turned out to be historical.

But the damp wasn't so easily dealt with.

Well, the damp was caused by the roof,

so we repaired the roof,

plus we... we need now all the plaster inside.

We need to redo all the ceiling, the kitchen, and the bedroom upstairs

was collapsing down, so we need to change both of them.

Well, with all those repairs, plus the high-end finish,

they did go over their £30,000 budget by £9,000, but they kept

within their timescale, completing the job in just over three months.

Not too shabby.

The total investment plus purchase price, here, has been £345,000.

So, with Guillaume and Gabriel eager to sell,

it'll be interesting to hear

the opinions of two local property experts.

I think the house is very, very nice.

It's been done to a nice, high standard.

Very neutral.

It's also got a contemporary feel to the property,

as well as having the original Victorian features,

like the original cornicing and nice cast-iron fireplaces.

So it's got a mix of both, which I think is extremely nice.

I think the layout works really well within the property,

especially on the ground floor, it flows really well.

Shows what a great job Guillaume did sourcing those fireplaces.

Even the experts thought they were original features.

So, time to find out what their valuations are.

The resale value of the property would be

between £480,000 and £500,000.

I think this property would resell in the region of £500,000.

Well, we are happy with that.

It is what we were expecting,

so we're definitely going to put it on the market as soon as possible.

I think it's a great investment. Amazing.

Amazing is right.

That top valuation would mean a huge pre-tax profit of £155,000,

making this a great success for Guillaume and Gabriel.

But after all the hard work

and initially thinking they'd live there themselves,

will they be sad to see it go?

Well, I think it's always sad to leave...

to leave one house, that you've been working at that long,

but it's...it's part of the job, so it's fine.

For myself, it's going to be very sad to sell this house, because I

put all my design, my heart into it, to give the property a personality.

So, I hope the new owner will enjoy it.

Time to turn back the clock and returned to Chatham in Kent.

It was here, way back in 2009,

that I originally looked around this plot of land.

It had planning permission for a two-bedroom chalet bungalow,

and a guide price of £65-£70,000.

Now, straight away, I can see that this was part of somebody's garden.

I think it used to belong to this house, here,

because you can see, there's a fairly new fence that's been put up.

What I do like is that there are lots of trees here,

so it's shielding you from the road, although you will have to

take some of those out to create that entrance.

And now I'm standing here,

I can see that this plot of land is on a slight gradient,

so that's something for the builders to think about, as well.

You've also got views over the Medway, which is really nice,

so, all in all,

I can imagine this would be quite a nice place to live, and surely,

that's all you're looking for, when you're looking for a plot of land.

Yes, good views and a nice neighbourhood certainly ticks

a few boxes, and the fact the planning permission was

already approved was also another bonus.

Now, these are quite basic, but it does demonstrate the floor space.

Now, I can see that the downstairs has got a kitchen/diner,

which runs into the lounge, two lovely big double doors which

lead out onto the garden, which make the most of the downstairs space.

You've also got a bedroom, here, which is bedroom two.

So, the main bedroom is on the top floor of the bungalow,

which is upstairs in the eaves.

Now, I can see that there is a huge storage space

running all the way around the outside.

Now, surely, that is a bit of a waste of space.

Do you think, possibly, we could squeeze another bedroom out of that?

I think, by doing that,

you would then really appeal to the family market.

I didn't think a two-bed chalet bungalow would represent

a big enough return in profit,

but creating a third bedroom would have increased the value

by more than the work would have cost,

so perhaps, whoever purchased this property

would have to think outside of the plans.

So, it's a climb to get to it,

but it's no stretch of the imagination to see that

this plot could be a good development,

but spend too much on the purchase or the build, well,

you're then leaving yourself with a tight profit.

Let's find out what it went for at the auction.

Lot 25. Start me where you will on that one.

Erm... £65,000 anywhere?

65,000 anywhere?

I'm looking for £50,000 opening bid. 50, I'm on the way.

And five now, do I see?

Five, I'm obliged. That's 60. At 60.

62? 62.

65? 65.

67? 67.

And 70, and two.

And two I'm looking for. 72.

And five? And seven. 77.

77. And 80, and two.

At 82. And five and seven.

At 85... 87.

90 to the original bidder.

At £87,000 bid on my right.

It's against you in the blue on my left.

First time then at £87,000.

Second time at £87,000.

Third and final time at £87,000.

You're all done. It's all yours. £87,000.

The successful bidder on the day with a bid of £87,000

was Frank from nearby Sittingbourne.

Frank was a self-employed builder

and developer who had already built around 35 homes.

I met him back at his newly-acquired plot of land to find out his plans.

-Frank, congratulations!

-Thanks very much.

How did you feel on auction day when the hammer went down

-and you'd won this plot?

-Fantastic. Really fantastic.

To be honest, it was only between me and the other man.

If he had gone over the top of my last bid,

I would have bowed out as well.

-Really?!

-Yes, so that was very good.

-So, were you happy with the price you paid, 87,000?

-Absolutely.

Yes, I didn't think I would get this at that price, to be honest.

-But, there you go.

-So, how much do you know about building plots

and what were you doing at the auction in the first place?

I'm a builder anyway.

I do loft conversions, extensions, that type of thing.

And I used to work for a developer and I was, if you like,

kept down there, but now,

managed to get a bit of money and bought the odd plot here and there.

That type of thing.

So, you used to work for a developer, but are you saying

-that you're doing it for yourself?

-Absolutely, yes.

# You can go your own way

# Go your own way... #

Frank was clearly delighted with his purchase

and I really could sense his passion

and enthusiasm for property development

and he'd need every bit of experience he had

to deal with this uneven plot of land.

If it had been a flat site, it would have been hunky-dory.

There's a bit of work to be done on it...

How are going to overcome this?

-Is there going to be an awful lot of excavation...

-No.

-..to get down onto the lower level?

-No, it will stay.

I will level it off slightly.

Obviously we've got to take the soil off the front

because the house to the right is at that level and I will keep to that.

Then we've just got to ramp from the pathway up to this level.

Frank certainly didn't seem fazed by the work ahead of him

and after studying the plans,

he'd seen the opportunity to add that extra bedroom.

If you look, that seems to me to be wasted space.

Look at the wasted space they've got there.

-That's just the loft storage space.

-Exactly.

The thing is, you're pitching the roof and that is quite a wide area.

You could get another bedroom in there,

but perhaps the planners don't want that particular situation.

But it does lend itself to another bedroom in that area there.

That will really affect the saleability.

-I really hope that does go your way.

-I would like that as well, yes.

It wouldn't have been a disaster if he didn't get planning permission

for a third bedroom, but it would certainly help his profit margins.

He estimated that the build would cost 80-90,000 and,

along with a two-month wait on planning permission,

he envisaged the work taking around six months.

It wasn't until two years later,

in 2011, that we returned to find

that Frank had put his plans on hold

due to the unstable property market.

The economic turmoil at that time meant that Frank

wasn't prepared to invest in new build.

But he had got himself ready for future work with new footings made.

Due to other business commitments, Frank waited a year-and-a-half

before starting work on the site.

But he needed to dig foundations and lay the footing

so that planning permission didn't expire.

What Frank had essentially created was the floor plan of his property

and he was able to talk us through what eventually he would build.

As we come in the front door,

we do a left into double doors into the lounge.

Within the lounge, we've got

a nice bay window with some patio doors out onto the patio there.

We then come out into the hallway,

come into the kitchen here, which is a nice kitchen in regard to

a window over the unit there, another patio door there.

Going back to the plans, the ground floor would have a downstairs loo,

utility room and an en-suite bedroom.

Upstairs, along with the second bedroom,

Frank still planned to create a third,

although he still needed to submit planning permission.

It may not look like Frank did much here, but he's actually removed

450 cubic yards of soil in order to level the plot.

It was no easy task!

# Can you dig it? Oh, yeah!

# Can you dig it? Oh, yeah!

# Can you dig it? Oh, yeah! #

Obviously not knowing what the ground conditions were like,

perhaps I should have had a soil sample, but I didn't.

I chose to go down the road of getting a five-tonne digger

which would normally have gone through anything.

This was our problem. Flint.

And then clay within that and there was loads of it,

as you can see behind me.

And we had to go through this

in order to get to a decent footing, being chalk.

Talk about being stuck between a rock and a hard place, literally!

On top of a year-and-a-half of the land lying untouched,

it took Frank and his team five months to get to this point.

Plus, he'd already spent 20,000 of his 80-90,000 budget,

meaning that, along with his purchase price,

he'd invested £107,000.

However, he hadn't been put off and was planning for the future.

Batten out the site and then I would have said

about eight months' time,

have a reassess of the situation and what the market is doing

to whether we actually go ahead or we prolong it a little longer.

It had certainly been a roller-coaster for Frank

up to that point and if he were to spend his entire budget

of 80-90,000, that would mean an investment of around £180-£200,000.

Would he be able to make a profit?

We asked to local estate agents for their evaluations.

If I had to put this property up as a two-bedroom property,

I'd be looking to market this property in the region of £210,000.

If this property was to be sold

as a three-bedroom property,

I would be looking to market it in the region of £250,000.

If I was going to market it as a two-bed,

I'd look at marketing it at around £210,000-£230,000.

If it was a three bed,

I'd be looking at around £250,000 for the property.

So, clearly, it would pay dividends to get planning permission

for a three-bed,

but would Frank get the permission?

And, after all the problems he had to overcome,

would it be plain sailing from thereon in?

You can find out how Frank got on later in the programme.

-Shall we check on progress?

-Yes, we've seen how one developer got on.

What about the other two?

Did they manage to stick to their timescales and budgets?

How did they get on? Let's find out.

We now head back to Derby

and the leafy, residential suburb of Mickleover

where earlier, in this grand Victorian house,

we saw a two/three-bedroom ground floor flat

that wasn't so much run down and tired, more dead on its feet.

The place had a messy layout and lack of external windows which

meant there was a real shortage of natural light about the place.

But looking on the bright side of this investment opportunity

were father and daughter team, John and Kelly,

who bought the flat at auction for £48,000.

John is a catering steward for a golf club

while Kelly works for a charity.

And this was going to be their first joint property development,

although something told me

Kelly wasn't exactly enthusiastic about doing any DIY.

-Do you want to be a property investor?

-Yeah.

-Do you want to be a property developer?

-Yeah.

-Right then.

Full-time job doesn't allow me to do that, unfortunately.

-So, you don't want to have any involvement?

-No.

No, look at them nails. They're not geared for that, no.

Well, fortunately, the team plan to get tradesmen in

to turn this into a two-bed flat

with ensuite bathrooms all in six weeks and on a £15,000 budget.

But it was seven months later that we returned to see the final result.

The tiny courtyard has been spruced up and a new double-glazed window

and front door lead into a transformed entrance hall...

..helped no end by the new roof with windows.

Already this place is far more inviting.

Overlooking the entrance to the left is a wonderfully warm,

stylish new kitchen.

Which, in turn, leads on to a stunning new bathroom suite.

Due to work commitments, Kelly wasn't able to meet up with us,

but John was there

to take us through his favourite changes to the flat.

This is the bathroom and the kitchen, which flows into one.

We were very, very pleased with the result here.

We put in new porcelain tiles down here, and a new kitchen installed.

We decided to make it floor all the way through,

so the flooring's exactly the same.

But I think it gives a lovely finish.

You know, we're very, very pleased with it.

And the living room has had its makeover too,

complete with new doors, flooring and a fire.

And while the front bedroom has also been renovated,

the big change is at the rear.

The main bedroom had a partition through the middle of it,

but we decided that wasn't going to work,

there wasn't enough light coming into the place,

so we stripped all that back and made it one big bedroom

and enclosed a little storage room in there as well.

And despite losing a bedroom, it's a definite improvement.

But with one of their objectives achieved, another had to be ditched.

Our main design when we first came here was to en suite both bedrooms

and make the kitchen all in one,

but the cost was horrendous for digging up floors,

putting drainage in, so we decided it wasn't cost-effective enough,

so we decided to leave the kitchen and the bathroom where it was

and leave the bedroom as one big bedroom, which I think works well.

This flat has seen a total renovation,

from wall-to-wall, top to bottom,

from new electrics to gas pipe works,

plumbing and new central heating.

And those skylights in the entrance hallway only came into being

when the original plastic roof became leaky.

But it's another big improvement

on what was originally a grubby entrance.

Contracted builders did the major renovations,

while friends and family helped out with the rest,

so did that include Kelly?

No.

HE LAUGHS

Very supportive, though, very supportive.

Every now and again she would say... I'd moan about how much work I've done, and she would say,

"Oh, Dad, you're doing too much, you want to take it a bit more easier."

That's about the only support I got from Kelly but, apart from that, she was great.

From what could have been a troublesome project,

John and Kelly's only major problem was the walk-out

of their contracted builder midway through the renovations.

Fortunately, they were able to find somebody

to finish off the main build,

but those delays meant the flat took six months to transform.

Was that delay reflected in the budget?

We planned to spend £15,000, but we hadn't really

budgeted for central heating as such, and then when the roofing...

we found out it was leaking,

it added another couple of thousand pounds to the job.

And the finish, we decided on a better finish than the builder quoted us for.

In total we spent around £18,500.

Having bought the flat for 48,000,

that renovation cost of £18,500 has pushed their total spend to £66,500.

John and Kelly aim to put this flat on the rental market,

and while the finish and style here is excellent,

I'm worried their new investment might not pay for itself.

But it's time to find out

what two local property experts think of the new flat,

starting with the auctioneer

who originally sold the flat to John and Kelly.

The standard of the property they have achieved is good.

It looks very clean, tidy and of good specification.

And I think, you get people through the door,

and they will be impressed by what they find.

This is my first time inside the property,

but I understand it was a little bit scruffy the first time around.

So they've done a very good job of smartening it up to make it

quite appealing. Selling points are a smart new kitchen,

lovely new bathroom and two decent sized bedrooms.

So, with the flat bound for the lettings market,

what sort of rental return could John and Kelly expect?

If this was rented out, there's no doubt about it,

you'd achieve at least £550 a calendar month.

You might even get £575.

I would expect a rental value of up to approximately £600 per calendar month.

We are in the market at the moment for 595, so it is in the ballpark, yes.

We are very happy with that figure, yes.

Well, if John and Kelly get that rental figure of £595

per calendar month, it would mean a fantastic yield of just under 11%.

It's easy to see why they plumped for the rental option,

but if they decide to sell,

the agents reckon they could expect to achieve from £60-£70,000.

Well, all I can say is you won't get much for a makeover at that price.

But I'm happy with those values.

As long as I get what I paid for back again, I'm happy with that.

It is a rental, so it was an investment,

it is a long-term rental. I am happy with that.

Well, with their spend of 66,500,

there wouldn't be much profit to be made from selling the flat.

And with that incredible yield of just under 11%,

it's easy to see why they're going down the rental road.

And in fact it sounds like John is so taken with it, he might be its first tenant.

Very, very pleased with the finished product. Surprised myself, actually, when it was finished.

When all the...paint goes on, the gloss goes on...

and you touch up the bits and pieces, clean the windows,

then you look at the finishing on the doors, etc, and think,

"Yeah, yeah, I'd live here."

Back to Chatham in Kent now.

It was way back in 2009 that

I first visited a plot of land

situated in a highly desirable residential area, that had

a guide price of £65-£70,000

and, crucially, already had planning permission

for a two-bedroom chalet bungalow.

Now, I can see that there is a huge storage space

running all the way around the outside.

Now, surely that is a bit of a waste of space. Do you think, possibly,

we could squeeze another bedroom out of that?

I think by doing that,

you would then really appeal to the family market.

It was certainly a popular lot on auction day, and it eventually

went for £87,000 to experienced property developer Frank...

..who, like me, had spotted the issue with the approved plans.

-That seems to me to be a waste of space.

-That is just the loft storage.

That's... Exactly. The thing is, you are pitching the roof,

and that is quite a wide area. You could get another bedroom in there.

But perhaps the planners don't want that particular situation,

but it does lend itself to another bedroom in that area there.

Adding a bedroom would need further planning permission, but Frank was confident

and had earmarked an £80-£90,000 budget

and a timescale of six months, once planning permission was granted.

Well, fast forward two years,

and we return to the site to find that, thanks to the financial

instability of the property market at that time,

Frank had decided to put his plans on hold

and had only dug the foundations and laid the footings

so that the original planning permission wouldn't lapse.

He'd spent £20,000 of his original budget

and was going to wait eight months

to see how stable the property market was

before making a decision about when to complete the build.

It's almost three-and-a-half years since our last visit,

and I can barely look!

Has Frank finally completed the property?

Well, it looks like a fabulous new home from the outside.

Let's take a look inside.

Wow! It has been worth the wait.

After almost five-and-a-half years,

we now have a beautiful, bright and spacious property,

absolutely ideal for the family market.

Moving upstairs, and I'm delighted to report that not only did

Frank get planning permission for a third bedroom,

but he also got permission for a fourth bedroom, making this

a brilliantly proportioned four-bed chalet bungalow.

Time to hear from Frank exactly how it's been and what he's done.

We've got a chalet bungalow.

On the ground floor, we've got a bedroom and an en-suite.

We've got a wide hall.

A very nice lounge with a bay in it.

You move back, you've got a big kitchen.

And then you've got a downstairs loo, the stairs,

and equally you've got a utility room.

Upstairs, you've got...

three beds upstairs, er, one en-suite,

one family bathroom.

Whilst there are still a few finishing touches needed,

particularly outside where the lawn is still to be laid,

Frank is almost finished.

But how is his original budget of £80-£90,000 looking?

We're at about 150,000.

And...obviously we've got...

extra on the bedroom,

which we wouldn't have had to do,

so, yes, there's certain things.

I've put, er, some, um, good fittings in there, and so on.

So roughly about 150,000, I suppose.

£150,000 is almost twice his original budget,

although he does say that was before he budgeted for the extra rooms.

So with the project all but complete,

what is he most pleased with?

Well, the whole thing, to be honest.

The...the style, I like the style, from the beginning.

The gentleman I bought it off actually had the plan done, outline.

And, um... we tweaked it a bit, but nothing much. And I do like it.

Everyone around seems to like the style of it as well, you know.

Well, it has taken just about five-and-a-half years

and, along with the purchase price,

Frank has invested 237,000 into this property.

And with him eager to sell, it's going to be interesting to hear

the thoughts of two local estate agents,

both of whom visited the site last time we were here.

Yes, I'm very surprised to see it,

it's much bigger than I thought it was,

and I think they've made a real good job of it.

It's amazing, the changes. The last time I came, it was just a base.

And now that the chalet bungalow is on here,

it is so much bigger than it was.

The base looked so tiny, but now the house look so big.

I think, for the person who bought it, it was the right move to

move from a two-bed to a four-bed.

Two bedrooms is just not enough for a family,

and this design just asks for a four-bedroom.

So the estate agents are sounding pretty impressed

and are particularly keen on the addition of the fourth bedroom.

Back in 2011, with just the plans to go by,

they both predicted a resale value of around £250,000

for a three-bed chalet bungalow.

So how does this completed four-bed compare?

If I was going to put this on the market,

I would be looking in the region of

£350,000-£375,000

for the property.

If he was to sell this property, I think he would achieve

a price in the region of

£350,000-£375,000.

That's more than I thought.

Yeah. Absolutely.

That is very good, very good indeed, yes.

Well, that top valuation of £375,000

would mean a pre-tax profit of around 138,000...

..meaning Frank's decision to wait out the financial crisis,

and to add a fourth bedroom has been a huge success,

making him a very happy man.

Over the moon, absolutely over the moon.

It's been a joy to do. The...

the value of it now is, um...

You know, when we're coming to the end and the value is that, well, that's good.

You've got two agents with a similar figure, that's good.

Yeah, very good.

Well, that's it for today's show, but we'll have plenty more

stories from the auction rooms for you next time.

Yes, you can join us for the ups and downs

-of property developing!

-See you then. Bye.

-Goodbye!

-Bye.