Episode 19 Homes Under the Hammer

Hello and welcome to the programme.

Now, whoever you are out there,

there is definitely a project to suit you.

Yes, it could be a fast and neat spruce-up,

or a labour of love that never quite gets finished.

Whatever you're looking for,

I'm pretty sure you can buy it Under The Hammer.

There's always a huge range of property

you can buy at an auction.

Yes, and a wide range of buyers.

Let's see where the winning bids landed on today's show.

Coming up on the show, this developer in Carlisle

is making me a little nervous.

Did you view the property?

Well... At a distance!

Whereas in Manchester, I'm confident this flat

shouldn't take too long to sort.

-Timescale?

-I think it would take about 4-6 weeks.

-A weekend, I'd have thought.

-Possibly, yeah!

And I know there's options in Essex,

when just one lot will get you three properties.

So, loads of potential here.

It certainly gets my stamp of approval.

Back in at 51...

All these properties are being sold at auction

and we'll find out who bought them

and what they paid for them

when they went Under The Hammer.

I'm in Carlisle in Cumbria.

Positioned very close to the border of Scotland,

it has the honour of being Britain's most besieged place.

But on the positive side, it does have great transport links

to Glasgow, Birmingham, Manchester and London.

And besides, there's not been a besieging in ages.

Does that mean one's due?

Anyway, we're leaving the city

and going out to Carlisle's largest suburb, Harraby.

The property I'm here to see

is on a busy main road,

but just a stone's throw away from the shops.

It's a semidetached, three-bed property,

with a guide price of £40,000-plus.

Now, that's a bonus.

Busy main road, you've got off-street parking.

That's on the plus side.

On the minus side, it does rather look like these gates

haven't been painted since Carlisle was last under siege.

Maybe there's a clue there as to what's in store for me, inside.

Straight into the lounge,

the front room with an old-fashioned fire and fireplace there,

but a decent size.

But those old fires are a sign

to look around for radiators,

and, no, I can't see any.

So that's a job that'll need doing.

Through into the kitchen.

Small kitchen, old-fashioned kitchen,

just needs a refurb in here.

And a bathroom off the kitchen

with a sink...

..but no toilet as yet.

Let's have a look and see if we can find our toilet.

It's not there.

The toilet's there.

A lovely shade of yellow.

You could actually make that bathroom bigger

and there's endless things you can do with the kitchen,

so down here could be sorted,

but what's upstairs?

Probably not a bathroom, I'm guessing.

But what a difference you could make to the space down here,

if it were possible to relocate the bathroom

to its rightful level, upstairs.

# Oh, I'm in the bathroom. #

But let's check out the possibilities.

Right, upstairs to the three bedrooms,

which are here, here and here.

Now, this one seems to be the smaller of the three.

OK, your first option would be

to have this as your bathroom, upstairs.

It would be a nice-sized bathroom,

but it would take away a bedroom,

so you'd only have two bedrooms,

but the bathroom would be upstairs.

The other option is with this being the bigger bedroom,

you could actually partition off

part of this bedroom to make into the bathroom.

It wouldn't be as big, but you'd keep your three bedrooms.

And that would be my choice.

Some of the original features up here, like these fireplaces,

I'd keep and restore.

Some of the others, like the original wiring,

and the electrical fixtures and fittings,

well, they'll need bringing up to safe and modern standards.

Nothing short of a total rewire would be my route.

Out into the back garden, which is an OK size.

You've got a greenhouse here, which I'd look to get rid of

and maybe just put some nice grass here, level it out.

That's the side of the garage, just there,

and that, to me, looks like asbestos, which I'd want to get rid of,

get some specialist help in, get rid of that

in the safest possible way

and have a safe garage there.

If you see that type of corrugated cement,

it could be a sign of asbestos.

It was pretty common in out buildings and garages for a time,

and although safe enough unless damaged,

I always think it's worth getting checked out.

With that, it's time to see what a local estate agent

makes of the property, guided at £40,000.

First impressions, obviously, it's a three-bed semi.

It's a good, you know, ex-local authority house,

well built, you're going to be here for a long time.

The whole house needs a real good programme of modernisation.

That's its biggest problem, really.

So, what would the refurbished property's market value be?

Fully modernised up,

I would expect this property to achieve around £85,000.

And if it came to the rental market, I would expect it to achieve

somewhere in the region of £450 per calendar month.

This property does have a bit of a strange layout, downstairs,

but the possibilities are endless.

Who had the vision to take it on

when it went Under The Hammer?

Nice and simple, round figure of 40,

who's here? 40.

At 40, am I bid?

35 then start me.

At 35, here.

At £35,000.

36, madam. 37. 38. 39.

Concentrating on these two at the moment.

39. 40.

Can you at 40? 41.

42, here. 43. 44...

Bidding rockets past the guide price

and continues to where we rejoin, at £50,500.

Sick of waiting!

£50,500. To you, madam.

Back in at 51. Half.

It's with you, here, sir, at £51,000.

Against you and against you.

First time at 51.

Second time at 51.

Half.

Any time!

Selling this. Well done.

And if the successful bidder's face is familiar,

it's because Alex has been on the show before.

when he bought another Carlisle property

to add to his rental portfolio.

He came along to meet me with his Border collie, Pip.

Border collies are a local breed, here,

on the English-Scottish border,

used for herding sheep.

So, had Alex rounded up a bargain with his latest £51,000 purchase?

-Alex, nice to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

Tell us about the auction experience. Did you go on your own?

No, I went with my other half, who is a nurse,

and my other half's off work cos of the dog,

so she hasn't been into work.

Because of the dog?

The dog, well, Pip managed to injure her twice

in two separate dog-related walking incidents, so...

Oh, dear!

Yes. Managed to pull her over and do her wrist

and, also, she managed to just fall over herself,

down a pothole and break her knee, so...

-Keep away from Pip, then, when walking.

-I would say, yes!

Seems like Pip has a tendency to rush headlong into things.

Perhaps a little bit like his owner?

Did you view the property?

Well... At a distance!

As I drove past it, I kind of looked and went,

"It's got an asbestos garage" and that was it.

I didn't read the legal pack.

I didn't do any of the proper things.

-However, I have got three properties almost the same.

-Ah!

So I do, kind of...

I've got a lot in a similar kind of nature, so it's not a massive shock.

Oh, dear.

Not viewing the property, not reading the legal pack,

certainly not what we'd recommend here on Hammer.

Even though Alex does have experience

in dealing with this type of housing,

no two properties are the same,

as Alex discovered.

I was hoping slightly more in the way of electrics

-and central heating and general things...

-Yes!

..but it wasn't there, so... But the price was relatively OK for that.

The fabric of the building is sound.

I noticed there were double glazed windows in.

So, Alex, tell us what you're going to actually do with this property.

Right, well, starting from the back,

there is an asbestos garage,

which was one of the few things I picked up on.

That, I will probably take down.

There's no need to, because it's only a problem

when you're actually moving it,

but I think I'll take it down and just get rid for the time being.

There's a fence there to go.

The fence at the back's to repair.

The lean-to, at the back of the property, needs to come down,

because I'm going to have to use the outside wall

to get the bathroom moved from where it currently is,

next to the kitchen, upstairs.

I'm going to knock all the walls through in the kitchen

to make it one big kitchen diner.

And the third bedroom upstairs,

the big long bedroom, I'm going to subdivide that

and put the bathroom into that.

You'll project manage? Every...

No, I'll do a lot of the work.

You'll do a lot of the work yourself? Hands-on, obviously.

Yeah, well I'm a qualified electrician, allegedly,

although I don't do an awful lot of it myself!

Several electricians have just fallen over laughing at that!

I've got a painting and decorating business.

Also, it's getting the tradesmen when you want them.

It's all very well someone saying, "I'll do it at a good price",

but if it's going to be two months down the line

and it's going to hold me up, then... I'll have to...

So, what it is, you've got all the bases covered,

more or less, yourself?

I would say most of them. I am inherently lazy so...

Well, obviously not!

So if the price is right and I can get it done on budget and on time.

But I think with this house you could spend an awful lot of money for jobs that any man can do.

You mentioned budgets. What is your budget for this?

What would you like to stay underneath to get it from this to where you want it?

I would hope to be there for 65.

That will include the solicitors fees,

it will include the buyers premium at the auction.

65 or 66 is the target.

I would be disappointed if it was any more than that.

And the timescale in order to get this where you want it? The end goal?

I would say three to five months

but I have just bought some sheep, as you do.

-Obviously!

-Every man should have a flock of sheep!

Especially around here. It is a status symbol!

So I have got 50 sheep.

They lamb five months from now

so I need to have this done by then, definitely.

So I will be busy.

What part your partner is going to play? I am sure she will have some kind of part. Interiors maybe?

I can tell you now and she will know now, everything will be magnolia and white.

The tiles in the bathroom, I use the same tiles in every house.

The worktops are the same in every house.

The carpets, I know exactly... The carpets are the same. It's dull.

But she will come and help with the final clean up and tidy up

-and just general support. And walking the beast.

-Yes, the beast.

-The beast.

-The injury beast.

-The injury beast.

So is property in the family?

Have you started this generation of buying properties and renting them out?

I would love to think it was something to do with my great-grandfather

because apparently he was the mayor of Carlisle, a very capable man.

I think it skipped a lot of generations, including mine.

He was quite a bright fellow and he built about 200 houses,

at least 200 houses. Just normal terraced houses.

His comment was that whilst he stood none of his children would starve.

So when he died, the family sold them

and my grandmother kept her money to one side and I sort of suspect

the reason we have got some money now would be to do that.

So subconsciously then, you are sort of rebuilding that. That family...

Yes. Deep down buried in that tumultuous psyche of mine, there is

-probably some need to get back to the 200.

-Good luck.

I hope everything works out for you.

Thanks. Nice meeting you.

Alex seems incredibly confident about what

he wants to achieve with this property.

He has done it before so he is experienced.

He's got a bathroom and a toilet to move

and he's got to get rid of that asbestos garage as well.

Will he achieve it? You can find out later on in the programme.

Time to leave Cumbria and head towards Lancashire

and the hustle and bustle of Manchester.

And three miles north of the city is the popular suburb of Blakely.

10 minutes from the metro link with its five minute journey

into the centre of Manchester is the property I am here to see.

It's in this fairly substantial block of flats.

It was a fifth floor flat, guide price at £70,000. Let's have a look.

# Ten storey love song

# I built this thing for you

# And I love you true. #

And actually, I do love it.

There is nothing, absolutely nothing to worry about here.

The open plan living room kitchen is a real nice space

and the units look absolutely fine.

Neutral decor, all good.

If you are looking for something really

outstanding in a property, how about these views over Manchester.

And a little balcony to soak it all in from. Just glorious.

# Don't worry

# About a thing

# 'Cause every little thing

# Is gonna be alright. #

There are two good-sized bedrooms.

This was originally a local authority flat

so the proportions aren't bad.

Talking of which...

So often in a flat like this,

the bathroom would be a bit of a compromise.

Small, cramped.

You know, as with the rest of the flat, it is a bit of a surprise.

Yes, it needs a bit of modernising but the space...

Yes, it's a good size. Result!

A two bed of this quality just outside the city centre for £70,000.

It really seems a good deal to me

and the communal areas just outside the flat are well maintained

and even better, there is a real treat outside.

These flats are actually in a gated community

and are surrounded by fabulous green space and a lake.

Of course, communal space doesn't come for free

and the charges here are just over £100 a month.

So you need to factor that into your calculations.

We have asked along a local property expert to see

if he is as impressed with the property as I am.

First impressions, not too bad.

I think, a little bit of time on it, a bit of a clean,

it could be very nice.

I have to agree.

I think it will only take a little bit of work to really bring out the best here.

So what sort of price would you expect were you to sell the property?

Once renovated, I would put this property on the market at £75,000.

75,000 is quite disappointing.

I do appreciate there is not a lot of wiggle room to add any value here.

Its problem is, it is too good.

Fine if you want to live here though.

But is there any other reason for what seems to be quite a low resale value?

There are other properties on the market that haven't sold

so I don't know how fast you would be able to make a return.

OK, fair enough. But is there rental potential here?

The rental market at the moment is strong and I would imagine

this property would rent in the region of £550 per calendar month.

All in all, I can't seem to find anything wrong with this one.

It is a good flat, good location, pretty decent guide price.

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

This lot was later on in the day and though guided at £70,000,

the auctioneer had to go as low as 45,000 before anyone

in the room could be tempted into making a bid.

45, can I say? 45, I saw you first.

45. 46. 47. 48.

49. 50. 51. 32. 53.

54.

55. 56. 57. No?

56 with you. It is against you on my right. 57 anywhere else? Manchester.

First time at 56. Second time at 56.

1,000? 57. 58. First time at 58.

Second time at 58. For the third and final time at £58,000.

Are we all done?

I can't quite sell. It's not sold.

Yes, it seemed nobody wanted the flat in Blakely quite enough.

The reserve price wasn't met and it didn't sell.

# Don't you want me baby

# Don't you want me, oh-oh-oh. #

But don't worry.

This wouldn't be much of an episode if nothing had happened.

The flat was brought after the auction by Adrian,

a former financial professional and now property developer.

-Adrian, good to meet you.

-Good to meet you too.

-Congratulations.

Tell me why you wanted to buy this flat.

Well, I went along to the auction

but I left before this one actually came up.

I was a bit disappointed that I had to come home from the auction empty-handed.

So when I got home I had a look at the unsold lots

and saw this one was still available.

So the following day, I rang up the auctioneers and made them an offer.

-And it was 57.

-57,000.

-Wow!

It just goes to show because a lot of people don't know that

you can phone up if things aren't successful and you can make offers.

-You don't necessarily have to have been bidding on it.

-No.

-Are you pleasantly surprised?

-Quite pleased with it, actually.

I would have thought you would be. It is in great nick actually.

It is, yes. It should be quite easy to rent out I hope.

Adrian actually lives in Surrey, a fair old trek from this flat.

So what was he thinking in buying so far afield?

I was interested in investing in Manchester particularly

because I think it is quite a good rental area.

So this flat in particular then, what was it that...

I went for it because of the location. It's just outside the city centre.

And also I thought with a two bedroom apartment it would

appeal to quite a number of different types of renters.

Maybe young professionals, sharers, downsizers, single person.

So quite a lot of flexibility really.

Obviously being quite a long distance away does bring up issues of managing the property.

How are you going to do that?

I manage all of my properties myself

so if there are only maintenance issues,

I can get local people to help out.

-Local tradesmen, etc.

-But you find tenants do you?

-Yes, I do.

-I advertise myself.

-Tell me what you are going to do to it, if anything?

It is in pretty good condition

so I don't think it requires too much by way of decoration.

-I'm going to let it fully finished.

-So what is the budget?

It is more likely furnishings budget.

£3,000, something like that.

I think it will just be the cost of the furnishings and one or two bits of redecoration.

Carpets, curtains and that should be it. Job done.

And in terms of turning it around? Timescale?

-I think it would take about four to six weeks max.

-Yes.

-A weekend I would have thought!

-Possibly, yes. I hope so.

For the work that needs doing here, I think that timescale of four

to six weeks and the budget of £3,000 is more than generous.

So having picked Manchester specifically for its good

rental potential, what does he think he can get for the flat?

What kind of rental do you think you might be able to achieve?

I think it should get around 575 a month.

-That delivers a pretty impressive yield on your investment.

-Yes.

-Over 10%. Is this the sort of thing you are hoping to do more of?

-Yes.

I have bought a number of rental properties over the last few years

-so I have got 15 now in my portfolio.

-Brilliant.

And I am looking to grow that over time.

-What is your job?

-Full-time property investor.

-What was it before?

-I was in financial services before that.

-OK.

So a good background to have on the money side of things.

-Yes. Hopefully.

-What made you leave that?

I just wanted to run my own business really. To be my own boss.

So I decided to go into property.

What is on the agenda for you in the future?

I shall look to continue developing properties

and adding to my rental portfolio. I don't intend to retire actually.

I can see myself doing this for many years to come.

-Congratulations and good luck with it.

-Thank you very much.

-Look forward to seeing how you get on.

-Thank you.

Adrian highlighting a really interesting opportunity there.

It's always worth checking after the auction to see which

properties didn't sell and see if you like the look of them.

In this case, I think he has got an absolute corker.

It was good at 70,000. But for what he paid? Fantastic.

How will he get on? Visiting the local furniture shops!

You can find out later in the show.

Still to come, this couple find out auctions aren't always easy.

At a property auction you are there all day waiting for the next lot to come along.

The suspense will kill you at the house auctions.

And it's been a glamorous life for our developer in Manchester.

I actually had my camp bed here and stayed over

and cracked on and did all of the work.

It was in the historic Cumbrian city of Carlisle that we first came

across this three bed, semidetached house with a guide price of £40,000.

This house had a bit of a time warp feel to it.

With not only dated decor,

but a downstairs layout that didn't really meet modern requirements.

It had a small kitchen with a bathroom off it.

While the bathroom was missing one normally standard thing.

Let's have a look and see if we can find our toilet.

It's not there.

The toilet is there. A lovely shade of yellow.

# All by myself

# Don't want to be all by myself

# Any more. #

So really the layout downstairs was a bit of a nonsense.

It was going to need a complete rethink

and the man for the job was Alex and his trusty companion, Pip.

Alex had a range of skills from electrician,

property developer to farmer.

-Did you view the property?

-Well... At a distance!

As I drove past it I kind of looked

and went it has got an asbestos garage and that was it.

I didn't read the legal pack, I didn't do any of the proper things.

However, I have got three properties almost the same. So I do kind of...

I've got quite a lot of a similar kind of nature

so it's not a massive shock.

Alex had a total budget of £65,000.

This had to include the 51,000 he paid at auction,

plus all the refurbishment costs and the usual legal fees and expenses.

And he couldn't afford to have too many unforeseen issues

as he had a rather unusual deadline to meet.

I would say three to five months but I have just bought some sheep.

-As you do!

-Obviously!

-Every man should have a flock of sheep.

Especially around here. It is a status symbol!

So I have got 50 sheep.

They lamb five months from now

so I need to have this done by then, definitely.

So the clock was ticking, the sheep couldn't wait and nor could we.

Four months later, we are back to see if Alex had met his deadline.

# It's time to begin isn't it

# I get a little bit bigger

# But then I'll admit

# I'm just the same as I was. #

From the outside, there is no perceptible changes

but what about the inside?

Wow! Apart from carpets,

the front reception room is just about finished.

But remember, it was that kitchen and bathroom

and lean-to the area that really needed sorting out.

And boy has Alex sorted it.

The bathroom has gone

and the space is now incorporated into a much larger kitchen.

And with the lean-to removed,

there are now patio doors that lead straight out on to the garden.

But where have the bathroom and toilet gone?

Is that it? Now, at the top of the stairs.

Here, we have our bathroom.

We stole a bit from the bedroom,

the big long bedroom at the back of the house.

We're going to tile this, shower here, shower screen there.

It should be a nice bathroom and we're relatively happy with it.

It may not be the biggest bathroom in the world

but I think it is a great solution to that downstairs layout problem.

And more importantly,

Alex has managed to squeeze that bathroom in without losing a bedroom.

Though there may be a few more days work here,

predominantly, the inside of the house is ready to go.

But what about the outside at the back?

The garden is somewhat of a mess still.

We will be getting a digger in to take the garage down and at the

same time we will use that to level the garden and then we will turf it.

It was a bit wild and woolly out there

and there were a few wild trees and plenty of nettles and wildlife.

Talking about wild and woolly, what about Alex's pressing deadline?

I am lambing shortly, in about two weeks.

As the old saying almost goes, lambs wait for no man.

Not only that, but he has a tenant waiting in the wings.

Double the pressure so he can't hang around.

And although Alex has done a lot of work himself,

he has also had help from friends and family, especially his son.

And no doubt dog Pip has leant a paw or two.

But how much has it all cost?

My aim was, budget wise, to come in at 65 with the costs

from buying, the solicitors costs and everything else.

We will be broadly on that. 64,600 is what I'm expecting.

So an all in all total of just below £65,000.

It seems like Alex has got a lot of house for his money.

But what do to local property experts think?

First, the agent who saw it last time.

The layout is much better.

Before, the bathroom was really small with a little lean-to

on the back alongside the kitchen.

Now he has moved the bathroom to the first floor

and has also retained the three bedrooms.

The standard of the work done so far looks good.

The kitchen is virtually finished

and has been done to quite a high standard.

If the rest of the work's done to this standard then yes,

it will certainly complement the property.

Alex is now committed to renting out the house

but if he did look to sell on at a later date, what might it be worth?

If brought to the market, we would market this property at £89,950

with a realistic expectation, we could get a sale in the high 80s.

If I was to put this property on the open market I would market

it at around £95,000 with an aim to achieve around 90,000.

Far better than I thought. I thought I was shooting high at 85.

Now, I probably should be selling it!

But I have agreed a contract and the tenant is in in ten days.

So without that agreement to rent in place, based on that

figure of £90,000, he could have seen a pre-tax profit of £25,000.

But what about those all-important rental values?

If the property came to rental market, I would expect it to

achieve somewhere in the region of £450 per calendar month.

The rental demand for something like this would be quite strong.

We would expect to achieve £450 per calendar month.

I am slightly under that. I am 430, what I'm renting it for.

But I aim for long-term tenants.

£430 per calendar month still isn't bad

and would see an annual rental yield of just below 8%.

For the next few months, he has got his sheep to think about

and Alex is building a couple of flats.

But after that, will he do another renovation?

I would.

The only thing is,

I have done about 11 properties in about just over two years.

I think currently, I am probably not going to.

I think my family will kill me if I do!

They are getting a bit sick of the long hours and a grumpy father!

This is the village of Stansted in Essex.

# Airport

# Airport...

No, not the airport.

Stansted Mountfitchet, as the village is known.

Surprisingly, it's not even under the flight path.

I bet you didn't expect that.

What you might expect is good transport links to London

and of course you get them.

# Airport

# Airport... #

Just off the main road is this quiet little lane,

which is only a couple of minutes walk from the train station.

And perhaps more importantly, the local pub.

But what about the property I'm here to see? Or properties should I say.

Well, the guide price was £175,000

and for that you get this building here.

Now, pay attention. Not the one in the middle.

But you do get the one right on the end and one just around the corner.

I am not going to try and explain any further. I'm going to investigate.

This lot is not straightforward so just bear with me.

We have the brick building near the top of the lane.

This smaller wooden structure further along on the corner.

And then opposite that, this detached two-storey building.

All three are commercial properties

and some of it lies within a conservation area.

The question for me is,

could there be potential for residential use here?

This building has a commercial feel to it.

I know it has currently got B1 business use attached

and it feels like you are walking into offices.

Look, you have strip lighting, an office through here with loads of paper and a couple of desks.

At the back, you have got some stairs which

I don't think comply to building regs judging by the look of them.

And through here, another office.

There is no character at all in here.

You can really imagine people doing lots of work. And look at this.

An old photo copier that doesn't work.

I am going to investigate further but so far,

there is not that much to write home about here.

There is also a little loo at the back

and up the stairs another two offices.

Another two boring offices!

But as always, I have a potential plan up my sleeve for that.

But more on that later on.

For now, it's across the courtyard to the wooden building

and it seems to be two rooms in a sort of L-shape.

It is pretty derelict with some spots of damp.

But if you can see past that, there is enough space here

that presents a good opportunity.

# You suddenly hear a bell

# And right away you can tell

# That this could be the start of some thing grand. #

Right. Ready to be befuddled again by the layout?

The entrance to the red brick building is actually behind it,

so we go back up the lane and there's a gate just to the left-hand side.

This really is an interesting building.

You've got that lovely red brick on the outside.

The weather boarding on this side.

Then you get in and it is a right old state.

But this is amazing because I know this is an old printing press

and for love nor money, you could not move this thing.

That must weigh tonnes.

It is potentially worth a fortune because you don't see those around.

But you can see this was obviously a little printing room.

There is remnants of business cards everywhere.

So what can you do in here?

Well, here is a little nugget of information.

This is the only one out of the three that sits within the conservation area.

So if you wanted to make any changes, you would have to chat

to the local conservation officer and adhere to those regulations.

That could throw a spanner in the works.

I also think it is probably single skin.

So loads of potential here.

Pretty on the outside, not so great on the inside,

but it certainly gets my stamp of approval.

Sorry about that.

There is a second room behind the wall at the end of this building

that can only be accessed by a door out in the lane.

But it gives you even more space.

This certainly is a quirky lot and a blank page at the moment.

But with some imagination and a lot of hard work,

there could be some profit in this development.

Especially when you know this.

As of May 2013, regulations were relaxed

and new permitted development rights came into play, allowing

change of use from offices with a B1 business classing, like this

behind me, to residential without applying for planning permission.

Now, previously there was no guarantee this consent would be

granted so this is great news and it could save you time and money.

Now that's not to say this is a walk in the park.

There would still be planning and conservation hoops to jump through,

which of course costs time and money.

Talking of money, time to ask a local estate agent

to take a look and see if the market here

is ready for some interesting residential property.

The red brick building behind us,

potentially, would be ideal for perhaps one person downsizing.

Currently, that would be in very high demand.

It does need quite a lot of maintenance but I think the finished article could be fantastic.

I think the single-storey property on the end, potentially,

it could be a great one bedroom apartment or a buy to let.

Very close to the station

so I think it would suit quite a few people in this location.

I think the two-storey building is quite interesting.

We would have a high demand for a two bedroom house.

Because it is in such a good location you wouldn't necessarily need a garden,

but as long as there is parking, it is just a couple of minutes from the station.

So I feel that could potentially be a house really, not an apartment.

Excellent.

And if this interesting lot goes for anything like the £175,000

guide price, I think there could be some real potential to make

three fantastic properties and a good profit.

What does the agent think?

I think if the properties were to be converted into residential

properties, the property behind me would be in the region

of £225,000 to maybe £250,000, depending on the specification.

I think the single-storey property on the end, if decorated to a very high

standard, would achieve something in the region

of £175,000 to £200,000.

I think the two-storey building,

if it was developed into a two bedroom house,

as a freehold property, would be in the region

of £240,000 to £250,000.

It's not often I get to say this, but with this auction lot,

you get not one, not two, but three properties.

Yes, it's an ambitious project,

but what an exciting opportunity it could be for someone.

Plenty of options and so much potential.

Let's see who agreed when we went to auction.

An interesting little lot this, down in Stansted Mountfitchet.

Who would like to give me a start on this? I don't know.

160, something like that to start me off.

What about 150 then to try and help? 140?

OK, 140 I have got. 141 anywhere?

141. 142. 143.

144. 145. 146.

The auctioneer started the bidding well under the £175,000 guide price

but bidders soon came thick and fast.

We rejoin the bidding at £180,000.

180. 181. 182.

183. 184.

185. 186. 187.

188. 189. 190. 191?

No? With you sir at £190,000.

Selling in the middle of the room there at the back.

It is against the gentleman here on my left.

190 for the first.

190 for the second.

190 for the third and final time.

Are we all done? Sold for 190.

Bidding right from the start was Paul

and his determination paid off at 190,000.

I met local property developer Paul and Heather, his wife and company

secretary, to find out what his plans for these three buildings are.

-Paul and Heather, congratulations. Well done.

-Thank you.

-Lovely to meet you both today.

-You have got three little lots in one here.

-Yes.

What was it that took your eye, Heather?

It is local so it's a nice project for us to have on our doorstep.

And it's just looks like something interesting,

something a bit more unusual.

Not a modern property and something we can get our teeth into with designing.

This is something that is not going to be for everybody on auction

day because you are almost sort of dipping your toe into the unknown.

As it stands, it is a commercial lot really, isn't it?

Did that not put you off on auction day?

I think that is what really kept the price down to be honest.

There are planning issues. It's a bit of a tight site.

You are on the edge of a conservation area.

But we did our research before we bought the lot and found out

what we could about the site and we decided it was worth a go.

So what are your plans? What are you going to do with these properties?

We hope to do the office into one bedroom flats.

That should make two very nice properties.

The smaller, long building, that will be again

a one bedroom little house.

And then with the third corner office,

that could be either commercial

or it could still be another one bedroom dwelling.

Tell me, why are you thinking about turning

the two-storey building into flats? I see that as a house.

I think the reason why we'd prefer to make it two flats,

it'll be worth more money as two flats because we're looking at

renting the units out rather than selling them on,

and also there's no garden for it, and I think people want a house,

expect a garden, whereas perhaps people with a flat are

prepared for a bit of parking and a flat and they won't want the garden.

We're lucky, in as much as, with the two-storey office building,

we're hoping to get that converted under the new

permitted development rights.

There is a prior approval process that you need to go through

first, which basically means you're writing to your local planning

authority, tell them what you plan to do, and they'll either say yes

or no, or they'll consult with highways and people like that.

So, I mean, this isn't going to be a straightforward little number

-for you guys, is it?

-No.

-There's a lot of hard work that needs to be put into this...

-Yes.

-Yeah.

-..but it'll be so rewarding

if you get it right and if you get the permissions.

That's right, yes. Three separate projects.

And each one is different and comes up with its own issues.

Yeah, but all bought under the one hammer, which is what I love.

I mean, the nice thing about it is each property has got its own

separate title. So we haven't got to start splitting titles up.

They've all got their own services, their own electric, sewage,

everything, so half the work's been done.

And the way we looked at it was, as a fallback,

if we don't get any residential use, we'll just restore it,

use it commercially and get some income that way.

These guys have really done their homework,

as you would expect from professionals,

and they have a healthy £30,000 per property as a budget.

The first stage of development is to convert the two-storey offices,

and they're hoping to get them completed in three to four months.

-So I know you're no novice to the auctions, are you, Paul?

-No.

No, I'm more familiar with the motor trade auctions.

I've been in the motor trade all my life,

and I was a car auctioneer for sort of four or five years.

And how does it differ from a property auction,

apart from spending loads more money?.

Yeah, the speed of it is the main difference, really.

A car auction is a hell of a lot faster.

The suspense will kill you with the house auctions.

Oh, Paul and Heather, I'm so excited for you.

I hope you get the yes, yes and yes,

and we can come back and see three amazing developments.

-Definitely.

-Lovely to meet you.

-Thank you very much.

-Thanks, Lucy. Nice meeting you.

Well, I think it is great news

that Paul is now focusing on his property developing career.

The difference between cars and houses,

cars usually go down in value, whilst houses tend to go up.

Will that be the case here, and will Paul and Heather get their

all-important planning permission so they get three for the price of one?

You can join me later in the show to find out.

Well, one property is done and dusted but don't go anywhere yet.

-What about the others?

-It's been a while since we visited.

What do you reckon? Will there be surprises?

Let's go back and find out.

Time now to return to North Manchester,

and this fifth floor, two-bedroom flat in Blackley.

It was situated next to a picturesque lake,

it had beautiful views, and with a guide price of just £70,000,

what's not to love in this high rise?

Well, so often in a flat like this, the bathroom would be

a bit of a compromise, but the space, yeah, it's a good size.

Result!

It was bought after auction by Adrian.

That's right, after auction.

I went along to the auction, but I left before this one actually

-came up.

-Oh.

-When I got home, I had a look at the unsold lots.

So the following day, I rang up the auctioneers and made them an offer.

But it just goes to show, because a lot of people don't know

that you can phone up if things aren't successful.

-That's right, yeah.

-You can make offers.

Yes, Adrian was delighted to get his hands on this place

for the price of just £57,000.

He lived in Surrey but had seen Greater Manchester

as a good location for rental investments.

He had a budget of £3,000 and a timescale of four to six weeks

to spruce it up and get the flat ready for rental.

Well, seven weeks have passed.

Has Southerner Adrian suitably souped up this Manchester suite?

The changes may be subtle

but they all add up to make it feel more homely.

We caught up with Adrian to find out what he'd done.

Well, it took about a day to clear out all the furniture that was left.

I contacted a local charity and they came

and took all the furniture free of charge, which was good.

Which saved me a bit of money.

I redecorated the flat throughout,

fitted new carpets and curtains,

a new tap in the kitchen,

and just generally tidied it up and cleaned up all of the apartment.

This always seemed a good property, but I don't think you can

underestimate the difference that new carpets

and a new coat of paint, not to mention a thorough clean, can make.

No more so than in the bathroom.

It was quite grubby when I bought it, so I gave it a good clean.

I painted the walls with a special bathroom paint,

fitted a new loo seat, new mirror,

bathroom cabinet and some towel rails,

and it's come out really well. Looks as good as new.

I think it's gone from grubby to great,

and all just using a bit of elbow grease.

And while we're talking about small changes making big differences...

We had to change the lock on the balcony door

because I didn't have any keys at all,

so I was pleased to get that open,

and I worked out that it was a south-facing balcony,

so you get quite a lot of sunshine in

during the day, which should be nice for our tenants.

Well, Britain may not always be sunny but come that summer,

the balcony will be a wonderful place to relax.

Just look at that view.

Other than using a plumber for the kitchen tap,

Adrian has done all the work himself, so how long did that take?

Well, originally, I was looking at probably six to eight weeks,

but as I actually stayed up here

and did all the work in a concerted period, it only took eight days.

Living some distance from the property,

as long as you sort of coordinate all of the work and get other people

to come when you're actually up here, it's not too bad at all.

I actually had my camp bed here and stayed over and I worked for

12, 14 hours each day and got it done.

Obviously, if you do the work yourself, it does save quite a lot of money, so it's, you know,

if you're able to do the decorating, it's well worth considering.

Well, I imagine those eight days working were a slog,

but I think that's so much more sensible than having to travel

between Manchester and his home in Surrey.

Not only will he have saved money by doing the job himself,

but he can get the flat on the market much quicker.

But have those concessions helped Adrian stick to his budget?

Well, originally, I was going to spend about 3 or 4,000,

but that was on the basis that I was going to go down the fully furnished route,

but having spoken to some of the agents,

they recommended that I went unfurnished

because they said there would be a greater demand for unfurnished.

So, in the end, I came in substantially below that at £950.

Only 950 quid?

Suddenly, those long days all seem worth it.

Adrian only paid £57,000 for the flat at auction.

Will changing his mind about furnishing it be a good decision?

We've asked along two local property experts.

Do they think this flat will appeal to the local market?

I love the property, the way it's presented.

We've got high levels of demand for properties like flats

and like houses as well,

and I do feel that it will attract interest in the rental market.

The owner has done a nice job with the property.

It's clean, it's bright, it's airy,

and I believe it would be very popular.

Sounds good, but how will Adrian's investment of £57,950

stand up in the open market if this flat was put up for resale?

I think this property could achieve, in the current market,

offers in excess of £75,000.

In the current market, I would put at asking price of £75,000.

And if Adrian were to rent the property?

In the current market,

I would set a rental value of £575 per calendar month.

The rental market is strong.

My rental valuation is £575 per calendar month.

I'm very pleased with those valuations.

They're a bit more than I was expecting.

Those valuations would mean a pre-tax profit of around £17,000.

However, Adrian always intended that this would be for rental,

and if he achieved those rental figures,

his investment would yield nearly 12%.

It all seemed very easy-peasy,

but Adrian has a tried and tested formula

and it makes for good advice, so listen up.

Saves me from telling you.

If you're buying at auction, you need to buy at the right price,

do your research carefully and keep a tight rein on the budget.

Time now to return to Stansted in Essex,

where, on this sunny summer's day, I came to see not one, not two,

but three properties, all selling as a single lot

with a guide price of just 175,000.

The three were commercial properties,

but a local estate agent didn't think getting permission to change

them to residential would be a problem,

opening up a wealth of possibilities.

# Anything you want, you got it... #

It was bought at auction for 190,000,

by local property developer Paul and his wife Heather.

They saw the potential, but knew the risks and had a backup plan.

We hoped to do the office into one-bedroom flats.

The smaller long building, that'll be a one-bedroom little house.

And then with the third corner, that could be either commercial

or it could still be another one-bedroom dwelling.

And the way we looked at it was, as a fallback,

If we don't get any residential use, we'll just use it commercially

and get some income that way.

With so much to be finalised, Paul and Heather could only give

themselves a ballpark budget and set it at around 30,000 per property.

They planned to start with the two-storey office

and hoped it would be converted into flats in three to four months.

Eight months later, and we're back to find out

if Paul and Heather's ambitious plans have come to pass.

First, the two-storey building they intended to turn into flats.

Well, even though it's not quite finished,

it's still difficult to tell that this used to be an office block.

There is a world of difference from their previous layout.

We caught up with Paul and Heather to talk us through the changes.

Yeah, we've completely stripped it back to a bare shell.

Because it was offices, it had no insulation in it,

had to be rewired, replumbed, all the usual.

We've had to smash all the floor out, put insulation in.

-New steel across here.

-New stairs.

-Pulled walls down.

-And, uh, reconfigurated the rooms.

-Yeah.

Yeah, the staircase didn't comply, that was at the back,

so all we were left with was the roof and four walls with this building.

The roof was the only bit we didn't have to touch.

But it wasn't all that building work that caused the couple the most problems.

Originally, they thought each building came with all the services

set up and running. It turned out that wasn't the case.

There was no gas,

and there was only one water main, so we've have to have gas brought in

and an extra water main.

It took months to get the water put on,

the gas brought in and it just holds the whole project up,

so that was a learning curve.

Trying to get services into a new build can take a lot of time.

We've now got gas and electric and water into all the properties,

so at least the messy, hard bit is out of the way.

Yes, for all your best laid plans,

your schedule will depend upon availability of people

like service providers, material suppliers and tradesmen.

# When I'm, when I'm good and ready... #

But this was only one of the three buildings, so what about the others?

Let's get Heather to talk us through.

Well, what was the corner property...

With the corner stores, because it was single skim

on the outside walls, we had to knock that down,

and so we're now going to put cavity walls around here,

and then this is going to have to be taken down as well

and have cavity walls put in.

And we've had to level the floors.

We're hoping to have two bedrooms in here,

instead of the one bedroom that we first thought.

This was originally going to be a bedroom and the lounge,

and now we're going to turn these two into two bedrooms,

so we have a bedroom and an en-suite at this end,

and then up towards the front,

another bedroom and this will then be a lounge-kitchen-diner.

So each bedroom will have its own en suite

and should look quite nice when it's finished.

As they hoped, there wasn't a problem getting planning permission

under the new permitted development rights.

But the third red brick building is in a conservation area.

However, Paul and Heather have submitted an application to convert

it into a one bed cottage, so the process is underway

and, for the moment, it makes handy store room.

So after eight months and all that work, how's that budget looking?

We've spent about 50,000 on the project,

but that includes getting all the services into the other properties.

But we're probably going to be, realistically,

we've set ourselves a target

of probably up to 200,000 on the whole project,

and that would be rebuilding that corner store

and virtually rebuilding the red brick building.

£200,000 is over double the original budget,

and that's on top of the 190,000 they paid at auction.

Still, for that, they will have two one-bed flats,

a two-bed flat in the corner and a one-bed cottage.

Time to ask a local estate agent what he thinks of the plans.

There is big demand for apartments

at the moment in Stansted Mountfitchet.

It's in a very quiet location,

but not too far away from the centre of the village.

I think the finish and the level that they're doing with the property

is great. I think they've really worked making great inroads

into going in the right direction, so really and truly,

I think they've done the best with the space that they have available.

Well, that's praise, indeed,

but Paul and Heather have a total projected spend 390,000.

Does he think they'll be able to make that back?

What would be the value of these two one-bed flats once completed?

I believe these particular flats are worth £160,000 each.

I believe each one of these flats

would get £650 per calendar month.

Wow. That's a total of 320,000 for these two flats alone.

What about the proposed two-bedroom corner flat?

If we was looking to market that property,

we'd market that property at £185,000.

For the purposes of rental, I believe we'd get £800 per calendar month.

And if Paul and Heather get permission to convert the red brick building?

If I was asked to market that property,

I would market it at £215,000.

If I was asked to rent that particular property,

I would be looking between 850 and £900 per calendar month.

Yeah, that should be good, yeah. Yeah, we're not planning to sell them anyway.

We want to keep them long-term,

but it's nice to know that there's some profit there.

Well, this certainly is a profit there

and with all those figures flying about,

I got out the official Hammer calculator, and I can tell you

that the properties would give Paul and Heather

a potential pre-tax profit of 330,000,

or a yield of over 9%, and that is great news!

And although the couple have a long way to go before it's finished,

they won't have such a long way to travel to check on the property.

-We've enjoyed the village and the town...

-Yes.

..and decided to move here ourselves, so yeah.

And we'll keep looking at the auctions just to see what comes along.

Well, lots of hard work

and determination has gone into the projects on today's show.

Absolutely, and for some,

the hard work is only beginning here on Homes Under The Hammer.

-We look forward to seeing you next time.

-Yep, goodbye!

-Goodbye.