Episode 20 Homes Under the Hammer

Each property market around the country tells

a very different story.

Yes, and knowing the story in the area you are looking to

buy in could just give you the edge.

Yes, our advice, do your homework, get some local knowledge,

and then head to your local property auction.

Finding a good deal at the auction, getting everything done on time

and ending up with a healthy profit. Job done.

Or maybe not. But that's what you're aiming for.

And as Dion says, the first step is the auction.

Yep. Shall we take a look and see what they've bought?

On today's show, an 18th-century farmhouse

in Wirksworth, Derbyshire, has room to expand.

You're going to end up with something really fantastic.

In Blackhall Colliery, this mid-terrace has damp problems.

Best expand the windows to fit the frames.

Huge gap here. You can actually push that out no problem.

And in Chatham, Kent, this plot has a huge bonus.

Planning permission for not one but two new properties to be built here.

All these properties were bought at auction.

We will find out who got them

and how much they paid when these homes went under the hammer.

You bought it, sir.

This is the market town of Wirksworth in Derbyshire.

It had quite an industrial past and was once a centre for

cotton milling, lead mining and stone quarrying.

So it's got a great industrial heritage,

but Wirksworth these days is used more by people exploring

the beautiful Derbyshire Peak District that surrounds it.

And it's a lovely spot in its own right.

Just on the edge of town is this.

It's a two-bedroomed former farmhouse. Fantastic.

Let's take a look.

The guide price for this lot, £200,000,

and, yes, it looks like it's a bit tired.

But so would you if you'd been around since 1700.

Well, what have we got? Stairs down to the cellar facing you there.

I'll explore that possibly a bit later.

But over this way and you've got your main living area.

And, whoa, I love this!

That is a wood-burning stove to beat all wood-burning stoves.

It looks, by the pipework,

that that's actually providing central heating.

And I bet it does a fantastic job as well.

What a cosy environment that is going to create.

Little feature windows with the large sort of area here.

Cos the walls are so thick. Probably just solid stone.

But these window seats are a really nice feature.

-You've got a beam.

-LAUGHING:

-Shame about the light.

In terms of the layout, it gets a little bit strange.

It's all fairly OK until here but then, look at that!

That's a kitchen. And off it, a bathroom.

So, you know, it doesn't really particularly work like that.

Sad to see the bathroom downstairs.

But you know what, it's character and... Yeah, wonderful.

Imagine this place lovingly restored with a fire roaring

away in the stove and a family and pets all snuggled up and warm.

I'm coming over all romantic.

# In an armchair

# By the fireside

# Just big enough for two... #

What is charming are all the nooks and crannies.

Next to the kitchen is a big pantry.

And, if you feel the need for one,

there is room for a wine cellar in the basement.

And the charm offensive just continues

with the second reception room.

I just love all the period features.

Upstairs though is a disappointment, only two bedrooms

and a very small loo.

Though, let's take a look out the back

and I'll tell you some good news.

The good news is that it has got planning permission,

which basically, primarily, uses this area to create what's here.

You've got the whole area, double-story extension.

Downstairs, a large kitchen/breakfast room.

Then out of the back, to where I'm standing now,

with even more lean-to conservatory space.

Upstairs, above that, a master bedroom and another bedroom.

Ending up with lots more space down here. The good news is,

it's been passed.

However, it does stipulate in the planning permission that you

do have to keep some of the existing walls.

We are in a conservation area. That's going to be fairly critical.

It could push up the cost

but you are going to end up with something really fantastic.

# And was asked what I do

# I'd build a dream house

# Just for two... #

The farmhouse and its planning permission are very desirable.

But there's more if you're interested.

There used to be a paddock attached to the property,

but that has been parcelled off as a separate lot at auction.

However, it does have planning permission to build a

three-bed house on this plot.

On top of that, there is also a meadow sold as a third lot.

So maybe you need to buy all three lots to have a true dream property.

What does the auctioneer who sold it think about this lot

that was guided at £200,000?

The farmhouse has got massive potential.

What you could make it into with the extension that they've got

planning permission for really, I think,

takes it to its ultimate, in terms of its potential.

And it will become, there is no doubt about it,

it will become a lovely house.

With just a renovation job,

the agent thinks the house could be worth £275,000 to £300,000.

But what could that ultimate house sell for?

If you develop it in accordance with the approved drawings,

then you could probably raise its value to £450,000.

Even without the plans for extending this place that had been passed,

this is a charming property.

I have no doubt it got lots and lots of attention

when it went under the hammer.

A lovely opportunity, ladies and gentlemen.

Fairly scarce, I might add.

Start me on it at 220.

210.

200?

£200,000 will start. At £200,000, opening bid.

202? 202.

204. 206 is bid.

206.

At 208. 210.

210.

Bidding was surprisingly sluggish on this lovely farmhouse.

Starting below the guide price, the bidding rose in £1,000

and £2,000 increments.

And we rejoin the bidding at £225,000.

225.

225. 26.

226. 27.

28.

228. 29.

229.

229. 230.

229,000. 230.

At £229,000 for the first time.

At 229,000 for the second time.

Third and last opportunity...

All finished at £229,000.

Yours, sir, thank you. £229,000.

So, at £229,000,

the successful bidders were a very relieved Mike and Emily.

But they couldn't take a breather for a moment

because the next lot up was the paddock with planning permission.

We joined the bidding on this lot at £140,000.

140. Are you sure?

£140,000.

The hammer goes up. 140,000 once...

Twice...

Third and... 141.

142. 43.

143.

144.

144.

144,000. 145.

145. And 146.

£145,000.

146.

Definite?

You've done that before. £146,000. Once...

Twice...

Third time.

Sold at 146. Same buyer.

And so they made it a double.

But could they make it a hat-trick?

The meadow was in the final lot in this section

and we joined the bidding on this item at £44,000.

44,000 on the back wall.

45. 46.

46. 47.

48. 48.

49.

£48,000 then. We are selling for the first time at 48.

For the second time at 48.

Third and last opportunity. All done?

At £48,000...

Sold on the back at 48.

112. Thank you.

And so they miss out on the third lot.

But their total £375,000 spend has given them the house

and the paddock at the back.

# Now don't be sad

# Don't be sad cos...

# Two out of three ain't bad... #

-Mike, Emily, great to meet you both.

-And you.

-Likewise.

-Congratulations.

-Thank you.

So, tell me why you wanted to buy this place.

We just fell in love with the property.

It's just full of character. It's in a beautiful location.

What really excited us was the possibility of extending it.

We wanted the land that went with it.

So, with that in mind, you went to the auction thinking what?

We had a plan. We thought we would go to the auction

and just get some experience of the auction.

Yeah, right(!)

-THEY LAUGH

-That was never going to work!

We had set ourselves a limit.

If the house went for a certain value on the first hammer, then

we would obviously start to participate in the actual auction.

-Right.

-So as we started to see the bids slowing up,

that's when we decided to start bidding for the house.

Thankfully, we secured the house.

That's good. That's the first tick. Then what happened?

We decided, OK, we've got the house. We are now committed.

So we then started bidding on the building plot.

Thankfully we secured the building plot as well.

-That was really stressful.

-Yes, yes.

So that was part two. But it still wasn't over!

-Absolutely.

-No, it was the worst bit, the last bit.

-Yeah.

Obviously, you are a two thirds of the way through the experience.

Feeling confident that we could secure the land. So off we started.

-Mm.

-It was myself against another gentleman.

-Unfortunately, I just felt that it was going too high.

-It was crazy.

-It was becoming crazy.

-Crazy money for the land.

Let's get back to some positives. You got the house.

And you've got the bit of land. What are you going to do with it?

Big plans. Double the size of the extension.

Hopefully open up the cottage at the top, the two bedrooms.

Double the size of the existing extension?

That is there at the moment.

Yeah, you mean you're going to basically stick with

-the plans that are in place?

-BOTH:

-Yeah.

-Basically, yes.

And we hope to open up the bedrooms and make them a mezzanine floor.

Then the plans at the moment,

it doesn't...it blocks up the cellar but we are not going to do that.

We've had people, you know,

give us quotes what it would cost to open up the cellar.

And hopefully have that as a little room.

Make it a feature with lighting and keep it warm.

Could be my bolt hole. That's the plan.

If I know anything about kids, the couple's eight-year-old,

Harvey, and 11-year-old, Eleanor, will be commandeering that space.

I'm excited for this family. This is going to be a great home.

What the plan, I wonder, for the plot they bought?

We've got mixed plans.

We're not sure yet exactly what it's going to be.

-Probably 18 months' time we might have it as a holiday let.

-Mm.

Within the grounds. We don't know yet.

We've not finalised what we're going to do. So...

Mike is a company director

and he will be leaving the project managing to Emily.

And she'll be combining that with her role as a full-time mum.

This is a big project and this house, rather than the land,

will be the priority.

But it isn't going to be straightforward.

We've got to jump through hoops first with planning.

To get the spec of the windows right.

They won't let us start

until they've seen a draw-up of the windows.

Unfortunately, we didn't realise we had to go through all these

rigmaroles really, didn't we, to get there.

Cos they'll probably want to check out the stone you're using,

the roofing materials, all that kind of stuff.

An example of the windows as well.

So we've got to get on with all of that now and then,

as soon as all of that's been approved, we hope six months.

-Mm. Yeah.

-So... Do you have any idea of the budget?

Yes, we've got a rough idea. We're budgeting for about £100,000.

-With about 20% contingency.

-Right.

Split between doing up this place and building the extension?

-BOTH:

-Yeah.

But leaving the building plot and all that kind of stuff...

At this moment in time, yes.

-That will be the next phase, 18 months' time.

-18 months' time, yeah.

-Listen, congratulations to you both. Good luck.

-Thank you, Martin.

We can't wait to see how it all turns out.

-Thank you.

-Thank you.

So, Mike and Emily, not surprisingly,

falling in love with this place.

And going to turn it into their dream home.

Kind of sticking to the plans, a few tweaks here and there,

but I just can't wait to see how it all turns out.

You can find out later in the show.

Situated on the north coast of County Durham, between Hartlepool

and Horden, is the small village of Blackhall Colliery.

Blackhall beach is famous for appearing in the climactic

scenes of the classic 1971 film Get Carter, starring Michael Caine.

The film shows the beach covered in black coal spoilings dumped here

by the then-operational mine conveyor system.

A massive £10 million has been spent removing all traces

of the coal industry. And now, well, might be a bit too cold for a swim,

but what a lovely beach.

Not far from the now pristine Blackhall beach is the property

I'm here to see.

It's a two-bed mid-terrace house with a guide price of £15,000-£20,000,

which is incredibly low.

I'm going to find out what you get for that money. Let's have a look.

I know you think this must be the back of a house with the bins

and the rubbish, but no, this is the front.

And this is the front door.

The very sticky front door.

That was hard work getting in the building.

That would need changing straightaway.

And the windows as well. I had a look at the windows.

They look very weather-worn.

So...not a good start. But in here - kitchen - nice, big open space.

It is dated.

But you can change that. Just put a new one in.

Area here for dining, table and chairs maybe.

And you've got central heating, which is a good start as well.

Your boiler just there. Not too bad so far.

Into the lounge.

Nice-sized lounge. Decent-sized lounge.

Nice, big window going out there to the back of the property.

Bit of an off-centre fireplace, which is...hmm. It's a new one on me.

Apart from that, I'm quite happy so far.

Can't see any signs of damp as yet.

What am I going to find upstairs? Let's have a look.

If I'm going to nit-pick, it is

a little strange walking straight into the kitchen.

But, apart from that, it's looking pretty solid.

Upstairs to the bedrooms, which look OK to me.

Big one there, smaller one here.

Bathroom just there which does need some tidying up.

It looks dated again, like the kitchen is.

But you can turn that around, no problem.

This is the smaller one of the two bedrooms.

I'm not sure now. Bit confused. Is it the front or is it the back?

But the windows do need changing.

OK, into the big one here.

Which is a nice-sized double bedroom.

You'd get a double bed in here no problem.

I'd get these carpets changed, they look incredibly worn.

And I think I spoke too soon when I said there was no damp.

There's signs of damp just there.

Over to this window which has got gaps everywhere.

There's a huge gap here. I can just push that out no problem.

And you can feel that cold air coming in.

And there's signs, over the years, of water coming in.

It's actually still wet to touch as well.

So get those changed.

# Keep, keep, keep me warm

# Keep, keep me warm... #

Yes, this house needs to be made wind and watertight.

So it might be worth looking outside to see

if there are any clues regarding that damp.

OK, what about the back of the property?

Looks a bit of a mess, but... Oh, nearly!

This is unsafe decking. It's actually bowing under my feet here.

So that would definitely have to go.

There's no end on this back garden at all.

There's no fencing at all.

Let's investigate further.

You can see that these windows are in a terrible condition.

That's just down to the weather.

I can see an aerial on that chimney there and it's pulling out bricks.

The aerial is pulling out bricks from that chimney.

This just needs a massive overhaul.

But if you turned it round, it could be very nice.

It's not going to be easy and it's not going to be cheap.

But there is that guide price of 15-20 grand to consider.

Does a local estate agent think this is a golden opportunity or

a whole heap of trouble?

Apart from some general external repairs, such as roof

and pointing at the external walls, it internally needs a full upgrade.

New central heating system. It looks like it's past its sell-by date.

New kitchen.

Bathroom, full decoration.

In this local area at the moment, sales are very, very slow.

Values have been struggling for a while.

I wouldn't normally recommend selling cos you're not

going to make a quick profit. Rental-wise, definitely rentals.

They're doing pretty well.

Particularly with these garden properties.

As I thought, a long list of jobs for any potential buyer.

But what kind of returns could you expect once renovation is done?

Once the property has been fully refurbished,

I would expect a sale value of £48,000.

With a rental figure of approximately

£430 per calendar month.

To get this property back up to a decent standard, it would

cost around about £9,000-£10,000.

OK, so if you got the property for the top end of the guide price,

at £20,000,

and spent £10,000 on refurbishing it,

and were able to get £430 per calendar month,

that would mean a yield of around an amazing 17%.

Now that is impressive.

Yes, there are a few issues you would have to sort out.

Windows and doors definitely need changing.

That pointing out the back, not to mention the damp.

But, all in all, this is a good size house

and if you get it for anywhere near that guide price

of £15,000-£20,000, I think you've got yourself a potential bargain.

Let's see who thought the same when it went to auction.

Blackhall Colliery,

Hartlepool, 15,000 to 20,000 at guide.

Seems cheap to me.

Two-bedroom, mid-terrace home requiring a skim of refurbishment.

Where are we going to start?

15. 15 here.

At 15, I'm bid.

At £15,000, and once.

At 15, I'm bid.

At £15,000, we're done? 16 here.

17. 18. 19. You're out.

Here at... It's 18. At 18, I'm bid now. At £18,000, we're done?

19, new bidder. 20. 20, I'm bid.

One. Thinking about it. Here at 20.

At 20 in the room, then.

At £20,000, we're through. Against you two.

I'll take it. 20.5. 21.

Here at £20,500.

At £20,500, then.

First time.

Second time. Are we done?

I'm selling this to the gentleman behind you at £20,500

unless you stop me.

For the third and final time, giving you plenty of time. Selling...

-GAVEL DROPS

-Well done, sir.

The successful bid of £20,500 belonged to Glyn.

Glyn runs a business for investors that buys properties,

renovates them and then manages them as rentals.

This property is the latest in a long line.

# You can leave it to me I'll be in your corner... #

Sharp-eyed viewers might recognise Glyn,

as he has been on the show before in 2013.

-Hi, Glyn, nice to meet you.

-Hi, and you.

-Tell me about the auction, first and foremost. How was it?

-It was good.

Busy night. Yeah, a lot of activity there.

Because you bought it for somebody else.

-Yeah, I bought it for an investor.

-Tell me, how does that work?

What's the ins and outs of that when you are buying for somebody else?

I go and look at properties, give them a quotation for what

I feel it needs spending on it to bring it up to a rental standard.

And quite often, they don't even come and see them themselves.

So then, with our own building company,

we then do the refurbishment, find tenants and manage it for them

and do maintenance afterwards as well.

Now you've got this one. This is for an investor as well.

You'll turn it around, rent it.

What are you going to do it?

Put new windows, new front and back door.

Fascias and guttering will be sorted. Fences will be done.

The garden will be made over. Pointing on this wall out here.

Kitchen will get a make over, as well as the bathroom.

We'll strip and plaster the stairs, landing.

New carpets. And decorate through.

Glyn, I've seen some damp upstairs, in one of the bedrooms.

Can you tell me what you think is causing that?

Might be flashing around the chimney or maybe there is a tile

missing or something. But that will be, you know,

looked at and put right.

-What budget has the investor given you to turn it all around?

-8,000.

-And you think that will be enough?

-Yeah.

Probably the majority will be on the windows and the doors.

And how long are you expecting that to take you?

Probably about three weeks.

To get the whole property done from start to finish?

Three weeks?! Now that is impressive.

Glyn's own team of builders will be starting on the house right away.

With the investors making returns like 17%,

getting the property refurbished as soon as possible is

the name of the game here.

He's been in the building game since he was an apprentice,

so clearly knows the building and property trades.

And it is all about getting this house ready for rental.

So, Glyn, tell us about the exterior of the house.

What are you going to do with the back garden, front garden?

Yeah, no, we'll clear this.

The decking needs some, you know, removing from there.

We'll put a fence out the back.

Obviously, we talked about pointing. So that will all get done.

-Glyn, good luck. I hope it works out for you.

-Thank you very much.

So Glyn doesn't seem fazed by anything this property has

to throw at him. He's given himself a very short timescale of only

three weeks and a small budget. Will he turn it round?

You can find out later on in the programme.

Coming up, this plot in Chatham has permission but much work ahead.

You need to remain in close contact with the local authority

throughout the build.

And there is more advice coming your way from Glyn in Blackhall Colliery.

Don't just jump in, do your research,

know what you are getting into.

Back now to Wirksworth, in Derbyshire,

a delightful market town that we first visited back in 2012.

It was home to this promising two-bedroom former farmhouse

that had a guide price of £200,000 plus, and fortuitously,

planning permission already in place.

You've got a whole area...

It's a double-storey extension. Downstairs,

a large kitchen/breakfast room.

And out the back, to where I am standing now,

with even more sort of lean-to conservatory space.

Upstairs, above that, a master bedroom and another bedroom.

So ending up with lots more space down here.

Yes, I was a big fan of this house and its potential, but it would

require some deep pockets and some level heads to be realised.

Enter husband and wife Mike and Emily,

who bought the property on auction day for £229,000.

They fell in love with the property and were eager to create a

family home for themselves and their two children, Eleanor and Harvey.

Are you going to stick basically with the plans that are in place?

Yes, basically.

And we hope to open up the bedrooms and make them a mezzanine floor.

So this property was destined to become a family home.

But it was by no means a straightforward job.

And even though the couple had a healthy budget of £100,000

and a timescale of 18 months, they had taken on a big project.

It is almost 2.5 years since we last visited

and, clearly, from the outside, there has been big changes.

So will it be the cat's whiskers inside?

My goodness, unrecognisable.

What a stunning transformation.

In fact, I think

we'll need a little help to figure out what is what.

So this was the original kitchen.

Around about here was the original back door.

You can see where the stonework starts to change from the dress

brickwork here.

This area here was the external window

that led through to the pantry.

And you can see where we have kept in the original stonework,

now in-filled with a somewhat empty wine rack.

And as we step down, this was the step down into the back yard,

with the shed to the right-hand side

and then the wood store to the left of that.

So all of the bathroom and the kitchen area were off to our left,

we have completely demolished that

and then built this new extension, which is now the kitchen/diner area.

This stunning new living room leads into

a guest-room-cum-games-room, complete with foldout bed.

And a beautiful en suite which can also be

accessed from the conservatory.

And the high-spec finish just continues.

Originally, this house had just two bedrooms.

There are now one, two, three,

four double bedrooms.

Three of which have their own en suite facilities,

all on this upper floor.

The fourth and master bedrooms have

Jack-and-Jill access to the bathroom.

And at the moment, Emily

and Mike use the fourth bedroom as a dressing room.

So with that downstairs guest room, this house now has five bedrooms,

four bathrooms and a very flexible layout.

Not only is the finish fabulous, Emily

and Mike have succeeded in creating a family-friendly home for Harvey

and Eleanor, though just not with the plans that came with the house.

So despite purchasing the property with full planning permission,

when we actually came to look at the property

and review the plans in more detail,

we actually discovered that we were unable to access the new extension

from the original property, that the roof height was incorrect.

So we reviewed this with a new architect

and we discovered that we had to go back to planning.

Unfortunately, what we thought was going to be a minor amendment

and literally take a matter of weeks,

we had to go and get full planning permission over again,

so that took us a further three to four months to get full planning.

So we used the opportunity to take advantage of going for full

planning to make some further changes,

which included changes to the conservatory,

changes to the front garden and also being able to utilise the cellar.

The original plans actually had the cellar filled in with concrete

and a downstairs toilet placed over it.

And as you can see, it is one of the features that we've wished to retain.

And again, we've been able to do that.

Unfortunately, we encountered difficulties with our original

contractor, which meant that we had to part our ways.

But from a very dark cloud, there was a very good silver lining.

And that meant that we met some very good tradespeople who were

very sympathetic to the build and did an excellent job for us.

I am really delighted with the craftsmanship and the quality

of the workmanship which we were able to achieve with the new builders.

The delays over the plans meant that they were not able to begin

work for ten months.

Unfortunately, some of the original works carried out were not

passed by building control and had to be redone.

In the end, the work did take a year,

the only remaining work being the back garden,

and there are big plans for that.

At the moment, it looks a bit of a mess,

but we are planning to have a lovely vegetable garden, a pond.

We'd like some chickens and goats.

A modern patio, actually, on that side. Some fruit trees.

Definitely vegetables.

That's what we are going to be doing next for this spring.

Sounds lovely, but with the timescale out the window,

how is their £100,000 budget looking?

Today, I would estimate that we have spent

somewhere in the region of £210,000.

Left to go, we have still got the landscaping

and to finish off the driveway,

so I'd say probably another £5,000 to £10,000 just to

finish off the property.

Mike and Emily did also spend 146 grand buying an adjacent lot

with land and a barn to enable them

to complete their dream of having animals

and converting the barn to holiday homes.

But that is the next stage,

so we'll concentrate on the house at the moment.

As it stands, they've more than doubled their renovation budget

and have spent £439,000 on their farmhouse.

But what a house!

Emily acted as project manager and the couple did a fair bit

of work themselves, so a real labour

of love to create their dream home. I'm guessing

this is not going to come

to the property market any time soon, however, we do have to ask.

So what do two local agents make of this lovely house?

The work that has been carried out is absolutely amazing. It is beautiful.

Really special finish.

The standard of work that has been achieved here, I think,

is absolutely top-notch.

I think they have put a huge amount of thought and effort into it,

and they clearly haven't skimped on money.

As I suspected, very impressed agents.

So, let's hear their valuations.

If this went on the market today,

I would expect it to achieve in the region of £600,000.

So if this came onto the market,

I would be recommending that it came on between £600,000 and £625,000.

We didn't actually do it for profit, we wanted to make a lovely

family home, so we're pleased that we have made some profit out of this.

Well, they have certainly achieved what they set out to do.

Plus that top valuation of £625,000 would mean a whopping

pre-tax profit of £186,000.

But it really is just academic because Mike, Emily

and their kids couldn't be happier in their new home.

We are really pleased with the property,

absolutely delighted with what we have achieved.

I don't think we ever envisaged that we would be able to achieve

this standard from the original property.

So, yeah, absolutely delighted.

I'm here in Chatham, Kent, one of the five Medway towns.

And it is a green and leafy area with great schools

and even has its own football club - Chatham Town FC.

Now, it is not far to the auction lot I am here to see.

Let's hope it doesn't fall foul of my expectations.

Well, this family-friendly spot is off to a good start so far.

Along this attractive tree-lined road is the lot I am here to see.

Now, it went auction with a guide price of £140,000 to £150,000.

Now, it is hidden behind this gate here.

What am I going to find behind?

I do love a surprise!

So, behind the gate, you have... Dah-dah-dah!

A pretty big plot of land.

Now, that guide price might sound expensive for this,

but not when I tell you it already has planning

permission for not one but two new properties to be built here.

That's two semis, each with three bedrooms and two bathrooms.

And I think these houses have been well-designed.

From the front, they look like a single detached dwelling.

They are a little different from one another, which makes them unique and

well thought-out rather than just being carbon copies of each other.

But a potential sale price of £150,000 to give up a little

bit of your garden, well, it makes you think, doesn't it?

# Give a little bit Give a little bit... #

Now, originally, the planning permission

for these houses was turned down.

And that was due to their confined back gardens.

Now, each garden now will only be seven to nine metres in depth

and five to six metres in width,

which won't be for everyone because they will be small.

Unfortunately, that is often the price you'll pay

when you buy a new-build house. And if you like period features

and a sense of history, well,

these properties will not be for you.

However, they do appeal to a lot of people as they are more

energy-efficient, they are chain free and if you buy early enough

on in the build, well, you might be able to have a say into the design.

Really, it is a matter of personal preference.

And I think it could be argued that new-build houses, well,

they are more practical.

So small gardens on an old garden site, that is slightly ironic.

And there is another small problem that might slow

progress down here in that plans may have been passed

but building regulations haven't yet been obtained.

And of course, there will be the challenges of getting all

the services in - gas, electricity, water, drains...

So there is still an enormous number of things to sort out here.

As with any planning application,

there are conditions attached to this development.

And I think it is worth me running through these

so you know what to expect if you take on a similar project.

Firstly, the development must be started within three

years from the date of the decision.

Secondly, no development can take place

until samples of the proposed external materials have been

shown, such as bricks and maybe even roof tiles.

And also, you have to consider both hard and soft landscape works.

They have to be submitted and approved by the local authority too.

These are fairly standard regulations,

but it is a worthwhile reminder that even once you have planning

permission, you need to remain in close contact with the local

authority throughout the build.

So what does the local estate agent

think about the plans and, in particular, the small gardens?

With new builds, you tend to find

that the gardens are smaller.

It tends not to be a problem when you are looking to resell or

indeed rent the properties out.

You do have access to local parks as well in the area,

so it doesn't deter from sale.

Ah, but most importantly, how do the figures stack up?

Once the properties have been built,

I would put a value of between £220,000 and £240,000.

And that is times two, of course,

so that could be a value of up to £480,000.

And what about the rental market?

In the current market, rental is still very popular.

I would say each property could rent anywhere between £950 to £1,000

per calendar month.

This might only look like a little patch of garden land at the moment,

but that planning permission makes it oh-so much more than that.

These semis have been well-designed, and once built,

there could be some serious money to be made here.

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

Lot 34.

It is land with planning permission for a pair of three-bedroom

semidetached houses.

140, might I say.

Can be 130 then. At 130. Bid. I'm on the way. 130.

And five. 135. 135.

140 now.

140. 140, I'm obliged. 145, it's against you.

Take two if you wish.

142. Now five.

147. 150, can I say?

148.

148. 149.

150. And one.

So competition for the land was hotting up,

and we rejoin the auction with bidding now at £190,000.

190. And one. And two. And three.

And four. And five. And six. And seven.

Seven. £196,000, I've got.

197,000, I am looking for.

Are we all done at 196, then? For the first time.

196 for the second time. Third and final time, £196,000...

You bought it, sir.

And so after a bit of a tussle,

the successful bid of 196,000 was made by...

Hang on a minute!

# I've seen that face before. #

That is builder Ray who has got 30 years' experience in the industry

and who I met back in 2012.

He and his sister, Louise, were doing a bit of property

developing as a hobby.

From the renovation of a house to a plot of land and a new build,

wow, that is quite a jump.

I need to find out more from Ray.

# I've seen that face before. #

-Ray, we meet again. Congratulations on this plot.

-Thank you.

The last time I saw you, it was a little wooden house in Dunton Green.

-Did you end up selling it?

-We did, yeah.

We put it on the market one day and, two days later,

we had six or seven viewings on it, and six offers out of that.

-Wow!

-327,500. We were well pleased with that.

-So things are going well for you.

-Yes.

-And here you are back for your next project.

-Yeah, a new build.

-So is this project number three now?

-This is, yes.

-Incredible.

The last time I saw you, you were with your sister.

Yep, sister is away on holiday at the moment. So...

She's still involved, though, same as my partner.

But they just can't make it today.

Ray's partner, Julia, will be mucking in when

she's not working at her HR job.

And since this is Ray's first new build,

support from Louise and Julia might well be crucial.

So what was it that appealed to you about this plot?

There wasn't many plots available on the auction day,

so this was within our budget to build.

We think we can make a good profit on it. So we went for it.

Did it appeal to you that this site came with planning permission?

It did, yeah. It saves a lot of hassle.

But not realising it didn't come with building regs - a bit of a shock.

But there we go.

It's all in process now, so a week or two, we'll be starting.

And how much extra cost is that going to be?

£1,000 or so. Over £1,000.

So it is not too bad, but...

Also, we've still got to get the building warranties,

which we did not allow for. Another couple of thousand pound there.

-But we'll still be OK.

-It's a learning curve for you.

Yeah, it is, definitely.

A new learning curve, and I'm looking forward to it.

And so Ray is already learning the hard way,

and that is that new builds are different from renovations.

There are certainly more hoops to jump through.

And so despite 30 years building experience,

he is just a rookie when it comes to building a house from scratch.

# First time

# First time... #

How do you feel yourself about starting out as a house builder?

I mean, this is a really different deal for you.

Nervous and daunting, but I think I'll be OK.

I mean, it's... I put it down to being like

I build a big double extension.

It's nothing different, really, but you're not joined onto nothing,

you are just doing a completely new...new build.

Are you going to be laying the bricks?

I can lay bricks, but I'd probably take three or four times longer

than a bricklayer, so I shall get two bricklayers in.

And probably three or four weeks, they'd have it all up.

So cost-wise, it's not going to cost that much.

Then your expertise is all the other bits and pieces?

Yeah, I'm going to do all the groundwork.

Roof, everything else.

I'll get my brother-in-law to do the electrics.

We get someone in to do the gas and everything else will be me.

So what is your budget for this build here?

I'm going to say 120,000 to do both houses.

It's going to be tight, but I think we can do it.

Is that absolutely it?

Kitchens, bathrooms, groundworks, everything, driveways,

gardens, landscapes.

That's the lot. That is it.

-120,000, 60 grand a house?

-Yes.

Timescale?

I'm going to say ten months, but my partner insists I say a year, so...

You say a year for the telly.

-Yeah.

-But ten months in your head.

-I'd like to do it in ten months.

-So we won't tell you off.

-No, I'd like to do it in 12 months, but...

I see no problem with that, I think we can do it.

I know you've been really working hard at this,

-this is what you really want to do.

-God, yeah.

-You love it.

Are you taking a wage yet?

Are you actually earning any money out of it?

How is it working financially for you?

My lovely partner supports me,

but I take a minimum wage just to cover household bills at home.

And then at the end of it, we just split the profit.

-Are you excited?

-I am excited.

I can't wait, but we can't start yet till we get the project writs.

I love that you've got more energy and a new-found love for building.

-Yeah.

-It's great to see you again,

and I'm sure we're going to meet again in the future.

-I think so, yeah.

-Congratulations, Ray, well done.

-Thank you very much.

Well, Ray might have 30 years of experience in the building industry,

but he's never built a whole house from scratch before, let alone two.

So I'm sure there'll be lessons for him to learn along the way,

but I hope this does prove a profitable venture for him

and not double the trouble.

You can join me later on in the programme to find out

how Ray gets on.

So we've seen what one of our buyers has achieved.

-What about the other two?

-Yes, did everything go to plan?

I think we should find out.

Back to the Northeast and the village of Blackhall Colliery,

where I looked at this two-bed mid-terrace.

It had an odd back-to-front sort of feel about it

and wasn't in a great state,

but that was reflected in the guide price of 15 to 20 grand.

There was definitely work to do,

and the work started right at the front door.

That was hard work, getting in the building.

There's signs of damp just there.

Over to this window which has got gaps.

It's actually still wet to touch as well, so get those changed.

And on top of that, there was also dodgy decking.

Let's investigate further.

Battered brickwork and the guttering was a goner.

Step up to the plate, Glyn.

He didn't pay £20,500 for this for himself,

it was bought for an investor.

Glyn runs a company that sources rental properties for investors,

buys them, renovates them

and then maintains them once they are rented out.

Nothing about this property fazed Glyn.

He was confident that he and his team would be able to overhaul it

to a budget of just £8,000 in a timescale of three weeks.

Three months later, we return to see if Glyn has made good

on his investor's money.

With tenants clearly already in, the downstairs has been freshened up

with new flooring, a lick of paint, and in the kitchen, new units.

And I'm also glad to see that those dodgy windows have been replaced.

Upstairs, and everything has been freshened up

with new paint and carpets.

Plus, in the master bedroom, that damp has been dealt with.

We had a damp patch on the ceiling in here.

When we looked on the roof, there was two cracked tiles,

and they were easily changed.

It's all watertight up there now, the ceiling's been repaired.

In this room also, the window was particularly bad.

So the new replacement windows made a huge difference to this room.

The back garden has also undergone a makeover and is far more appealing.

Plus, you can see the newly rendered brickwork.

Although the chimney doesn't look pretty, Glyn has made it safe.

A clever idea here is that they've pushed up the fence line

in the back garden in order to create some off-street parking,

which is a real bonus.

The key with properties of this kind, especially when buying for investors,

is to keep the costs down

so you can achieve the maximum yield whilst also creating a family home.

And Glyn certainly had quite a list of jobs to do

to get to this stage.

We've done new windows, replaced the doors, we've done fencing.

Inside the property, we've put new kitchen unit doors on,

stripped wallpaper upstairs, plastered some of the walls,

tiled around the bath, added a mixer shower to that,

decorated right through, carpeted right through.

And the brickwork to the rear of the property has all been repointed.

And the majority of the work has been carried out by my employees.

I have a building company.

We do sub contracting, plumber and electrician.

And on this one, we had a company fit the windows.

So, for Glyn, this one has been pretty straightforward.

But how did he find tenants so quickly?

For finding the tenants, the day we picked the keys up

from the estate agency,

on the way back from the estate agent, I received a call -

somebody looking for a property in the area.

So I came straight here, arranged to meet with them.

They liked the house.

When I talked through what we'd be doing with it

with the refurbishment,

and they moved in the day that it was completed.

So Glyn has been able to fulfil one promise to the investor by finding

a tenant, but did he stick to the budget and timescales that he quoted?

I said that the budget would be £8,000.

We've come within that £8,000.

The only thing that we'll have probably gone over

is the boiler needed a repair.

But that's going to be somewhere in the region of £170.

I said it would take about three weeks,

and we did it around that time.

There was a holiday period in between us doing

the refurbishment, but the actual time on site would have

been around the three weeks.

So, with all targets met, time for the all-important question.

Is the investor happy?

Yeah, investor is very happy,

and that it was tenanted so quickly as well.

The house was always meant as a rental vehicle,

but let's take a look at the values.

It cost £20,500 at auction and has had £8,000 spent on it.

So a total of 28.5 grand.

What do two local estate agents think about it?

This is my second time to visit this property.

It's been upgraded to a decent standard.

The standard of the finish of the property is ideal.

It's appropriate for the area and it should be good for a tenant.

The exterior of the property is much improved.

The gardens were a real mess and they've been tidied up,

so they're nice and useful now for a family.

So, with the estate agents impressed, let's see the evaluations.

If I was to put this property on the market for sale,

I would expect to achieve around about £48,000.

If this property was put back on the market,

I would expect it to achieve £54,950.

I was expecting it to come in around £50,000,

so, yeah, we're both OK with that.

Glyn's ballpark figure of £50,000

would mean a pre-tax profit of £21,500.

But this house was bought for its rental yields,

and Glyn already has a tenant in place.

How would evaluations of the agent stack up

with his current rental figure?

If we do advertise this property for rental,

I would suggest it should be on for £400 per calendar month.

If the property was put back on the market for rental,

I would expect it to achieve £425 per calendar month.

We're actually getting more rent than that -

we're renting this out at £475 month.

But, you know, it's obviously giving a quick return.

It certainly is.

Yes, that rental figure of £475 per calendar month means a huge

yield of 20% for his investor.

So, has the super-experienced property developer got any advice

for the novices amongst us?

Advice I would give to people looking at this -

don't just jump in, do your research,

know what you're getting into

and make sure that you don't spend more than the end value, erm,

and that it'll be in an area where it's all rent OK.

It was in the Kent town of Chatham where we first came across

a rather tranquil spot.

The current residents already came supplied with their houses,

but for human habitation, some building work would need to be done.

Planning permission was already granted for two semidetached

three-bedroom houses, making it a rather sought-after lot.

And the man who emerged triumphant from the auction was Ray,

who, together with his partner, Julie, and his sister, Louise,

purchased the land for £196,000.

And although he'd been in the building trade

for over 30 years, this was to be his first new build.

So how do you feel yourself about starting out as a house builder?

I mean, this is a really different deal for you.

Nervous and daunting, but I think I'll be OK.

I mean, it's... I put it down to being

like I build a big double extension.

It's nothing different, really, but you're not joined onto nothing,

you're just doing a completely new...new build, so...

And if you were to choose a spot for new build number one,

then this could be it.

It was relatively flat with good road access...

# Need a place, need a place

# Need a place to start

# Ohh

# So build a home

# Put pictures on the wall

# Choose a colour for the door And let me in... #

And with a budget of £120,000 to build both properties,

Ray was hoping he could complete his premier new build

in ten months to a year.

And now, just under a year later,

we're back with Ray to check on his progress.

Wow.

Both semidetached houses are up and looking good.

Not bad for starters, Ray, not bad at all.

# For the first time Ooh-ooh ooh-ooh ooh-ooh

# Oh, for the first time... #

And the house on plot one hasn't got far to go,

while the house on plot two,

with its entrance facing the opposite way,

looks like it still has further to go.

The layout on plot one ground floor is,

as you come into the hallway here,

on the right we have, like, a downstairs cloakroom.

Next to the downstairs cloakroom...

is a utility cupboard with all the electric services in.

On the left, opposite that, is a kitchen, where the kitchen is

starting to go in now. And we're just waiting for the granite people

to come and do a template there.

Opposite the kitchen, is the stairs up to the first floor.

And then you come in through the hallway into the lounge area,

out two patio doors, onto a patio in the garden.

The layout works really well in this house.

It's not a massive house, but I think it'd be a nice family home.

Upstairs, there are three bedrooms - one reasonable double,

a smaller single and then the master bedroom complete with en suite.

And the house will be finished off with a good-sized family bathroom.

What about the second semidetached house?

Plot two has got the bedroom over the garage, which makes it

slightly bigger than plot one, but it's still three bedrooms,

main bathroom and en suite.

Well, it will be when it's finished.

This second semi needs a bit more work

and a bit more imagination to see the layout.

But the structure is taking shape,

and that's a year since we were last here.

Ray has actually only been working on this

house for around eight to nine months.

With initial delays getting the building regulations sorted

and then getting the utilities in - especially the drains -

it's been a protracted process.

But, at last, he can see the finishing post.

Plot one, we're 97% there.

Plot two is probably 50%, so two or three weeks on plot one

and then probably a month or so on plot two.

And certainly what we can see so far looks pretty promising.

And I really like the look of these properties.

Ray clearly has worked very hard to get to this point.

My main role is just overseeing everything.

The only outside contractors I've had is the bricklayer and the roofers.

I've done everything else on my own, really, and just now we've got

a local tradesmen in just to help us with the finishing touches.

But has all his input meant he was able to stick to

that £120,000 budget?

Original budget, yeah, we're probably at 120,000 now, actually.

We've probably got 30,000 left to spend,

so it'll probably be about 150 in the end.

The reason we've spent more on the budget is mainly utilities,

drainage, building regulations, so it has just been added on.

Yes, those utilities came to cost.

The drains alone cost £8,000 to get sorted.

And the rest cost in the region of 10,000.

And with his projected total spend of £150,000 on top

of that £396,000 purchase price, Ray and his partners will have

sunk £346,000 into their two semidetached houses.

So, has all the effort and money been worth it?

What do two local estate agents think of what Ray has built so far?

Having looked around these two properties, I think

they're very smart.

The quality of the build is first class.

I think the properties are a very good standard.

A lot of thought has gone into them.

I think the layout is really good.

It's good that they are unusual.

Plot one is a bit different from plot two,

and plot two is facing the rear.

If the properties are completed to the same standard

as I've seen today, they are going to be excellent.

Well, pretty positive responses and, in fact,

Ray has had a number of enquiries from potential buyers.

But will all that result in some financial reward for a project

which, when completed, will have cost £346,000?

Once these properties are finished, I would anticipate them

selling for around about £250,000 each.

If the properties were brought to the marketplace today,

I would envisage an asking price of £250,000.

I think that's probably what about we was looking at.

250, I think. If we clear 250, we'll be happy.

£250,000 apiece will make this a half-a-million-pound project,

which could see a pre-tax profit of around 154,000,

less expenses, of course, which certainly seems worthwhile.

And though Ray has no plans to let the houses out, they do have

a rental potential of between £900 to £950 per month,

which would equate to an annual rental yield of around 6%.

But most importantly,

will Ray's first new build be the first of many?

Definitely, yeah. It's been a learning curve

but I'd definitely like to do one again,

maybe just one house next time, not two.

It's been an experience and I'd love to repeat it.

Many different people buy all kinds of properties

for lots of different reasons, and there's more every day.

So get in on the auction action.

Yeah, here on Homes Under The Hammer.

-We'll see you next time.

-Goodbye.

-Goodbye.

-Bye.