Episode 52 Homes Under the Hammer

Hello. If you've got a little bit of money to invest, well,

don't hide it under the mattress.

How about investing it in property instead?

And that could be a wise move,

and I know somewhere you might just get more for your money.

Yes, where do you think? I know.

Head down to your local property auction.

There's no one reason why people buy at auction.

Maybe it's a new home or a regular rental income.

Yeah, perhaps they're looking to the future

and fancy property as a bit of a pension pot.

Yes, there are many auction stories to tell.

So here are the properties we've got lined up for you on today's show.

Up first, in Donnington, Telford,

Lewis and Annette and mindful of errors past.

And he bought the house, but he bought the wrong one.

HE GASPS

While in Ipswich, this modern office space gets my brain working.

This has consent to go from commercial to residential,

so my mind's working overtime.

And my mind is just...gone when it gets to this mid terrace in Wales.

I mean, does it really matter what it's like?

It's a house...for 12,000 quid!

-760...

-All these properties have been sold at auction.

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

when they went under the hammer.

Donnington, a suburb of the Shropshire town of Telford,

may have an industrial heritage,

but in more recent years it has offered some employment

through the Ministry of Defence,

and that is about to improve with a MoD army logistic centre being built

which will mean a boost to both jobs and the local economy.

Sounds like it could be a good time to invest in a Donnington property.

So, in this popular residential area,

just around the corner from some handy local shops

is the property I'm here to see.

The auction catalogue said it was in need of modernisation.

If I had £1 for every time I said that on Homes Under The Hammer...

But £45,000-plus was the guide price

for this three-bed mid terrace.

It looks neat and tidy at the front,

but there's no parking here which isn't ideal.

Still, the resident cat looks happy enough.

So, what have we got? OK.

That's a good start, a nice little porch area here.

And then that feeling of size,

almost surprising size, continues as you come in here.

Wow! A really nice big entrance area.

That really gives a good feel to the place straightaway.

Stairs to your bedrooms there.

Through to the kitchen.

Another really good feature for the house, a double aspect living room.

Lots of light coming in here. Obviously it needs redecoration.

Looks like you've got central heating, which is good news.

But in terms of the layout, it's working for me so far.

Big cupboard there.

All in all, it's a very good start.

Yep, double glazing, central heating, tick.

Flooring will need sorting, as will the decoration.

And the kitchen, well, you could clean it up.

New doors on the units, perhaps,

though I'd be inclined to replace it completely.

The downstairs loo and utility area certainly need addressing,

but are useful additional space nevertheless.

So, upstairs, and the very workable practical layout continues.

A bathroom and loo there, decent size.

And then three bedrooms.

First one at the back of the property.

Nice floral wallpaper, but in pretty good condition.

Obviously someone's going to have to spend money on carpets

cos there currently aren't any.

But again, they were probably in a bit of a state,

so nice that somebody else has got rid of them for you.

Second bedroom there. In-built storage.

Another storage cupboard on the landing there.

In a house like this, fantastic to have all that extra storage.

And then finally... A bit weird. ..final bedroom.

I'm not sure it's been decorated to my taste.

I think this would be more suitable in the bathroom. Oh, gosh!

It's got woodchip underneath it as well.

All that said, what you've got here is a real practical house.

It doesn't need too much work to sort it out. I like it.

It's been a while since I've seen this kind of material

on a bedroom wall.

I've heard of having a night on the tiles, but surrounded by them? Hm.

Well, that's a new one on me.

Once they're removed and the floral wallpaper is gone,

what lies beneath the surface of this house should be all right.

# Underneath it all

# I'm really lucky

# Underneath it all... #

And there's another area

which might benefit from removing a layer or two.

Well, at the back of the property

what you would describe as a low-maintenance garden.

Basically it's mostly concrete and slabs.

Not aesthetically very pleasing or a particularly good place

for kids to play, so I'd definitely spend some time and effort out here

turning it into a nice family space.

But...the parking issue.

Well, thankfully that is resolved

cos out here you have access to this space to park your car.

Thank goodness for that.

And I guess what that means is that the front entrance

really becomes a bit defunct.

You would basically park your car here

and use that as the entrance into the property.

If this is going to be your main entrance

then it's even more important that it should be made to look appealing.

I know I'm going on about this outside space,

but it is a waste, and I'm getting more green-minded

the more I see gardens concreted over. Come on,

a bit of green would be nature friendly and kid friendly too.

What does a local estate agent make of this property

guided at £45,000-plus?

This street is very affordable, I would say.

They're largely ex-local authority or bought privately to rent out.

Most amenities are within easy walking distance.

There's also bus routes very close by.

Everything you need, really.

Right, but in terms of this property,

what does he think needs changing to attract a local market?

I would do kitchen, bathroom,

just redecoration to a relatively plain standard

for the rental market, primarily.

This house was guided at £45,000-plus,

but fully refurbished, what might it be worth?

I would expect this to achieve, once renovated,

somewhere in the region of about £85,000 to £87,000.

Well, that's encouraging, but what about its rental potential?

Once renovated, on the rental market,

I would expect this to achieve

somewhere in the region of £585 per calendar month.

So, a good little property here.

Yes, it needs a bit of sorting out - decoration, new carpets,

new kitchen and bathroom obviously.

But apart from that, do that work and you've got yourself

a nice little family home or a rental investment.

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

Lot 31. Back to Telford.

It's a mid townhouse,

three bedrooms, is in need of modernising.

40, can I say?

40 bid, seated. Thank you. At £40,000.

42, can I see now? 42 on the phone. 42.

44. 46.

48. 50.

52.

54. 56.

58 on the phone.

Yeah. 58. 60, sir?

No. One? 59. 59.

60 on the phone.

60. You sure?

60,000. The bid's on the phone.

61 anywhere else?

If not, £60,000 once...

£60,000 twice...

Third and final time, at £60,000...

On the phone. 60,000.

And on the other end of the telephone line,

that £60,000 bid for the three-bed Donnington property

was made by construction site engineer Lewis.

Although Lewis hasn't been on the show before,

his mum Annette and stepdad Mike are familiar faces to the programme,

having appeared back in June, 2013, when they bought

a two-bed terraced house in the nearby town of Wellington.

I caught up with Annette

and Lewis to find out their plans for this one.

Annette, Lewis, good to meet you both.

In fact, good to see you again, actually.

It's a while ago that we monitored another property you did.

That's right, yes.

What was the story behind that one? Remind us.

Well, that one I bought at auction and gave as a gift to my son,

and he wasn't involved in any of it

until it was finished and then he got it.

But he's now got the bug, so he's bought this one

-and I'm still here to help him.

-Great.

Lewis, this is your sort of first...?

Well, actually, this one will be my fourth.

But was it that thing that your mum did for you that really got you...?

Oh, definitely, yeah. Yeah, she's really got me into it.

# I said, you wanna be starting something

# You gotta be starting something

# I said, you wanna be starting something

# You gotta to be starting something... #

Oh, boy, Annette really has started something, with Lewis planning to do

a couple of houses a year with the aim to build a portfolio

of ten properties over the next few years.

So why this particular house?

Well, I viewed ten properties in one day and this was the first one

I looked at and I thought it looked quite good.

But I had a figure in mind for all of the properties I'd seen

and I bid up to that figure for all of them until I got one.

And I think this was about the fifth one I bid on.

It was quite interesting in a way

because Lewis bid for this by telephone.

And the last time he tried doing this, he did it online,

bought the house, but he bought the wrong one.

-HE GASPS

-What?!

Yeah, it's embarrassing, really.

Bidding online, there's sometimes a bit of a delay

and there was a bit of a delay

and then the house came up which was the one that I wanted to bid on,

or I thought it was, so I bid on it

and then it wasn't the correct house.

-What did you do?

-I panicked, obviously.

-No kidding.

-You just bought a house you didn't want.

-Yeah.

And I phoned up the place where the auction was taking place

which was in Stoke and managed to get hold of somebody

and they said that because that wasn't the house

that I had expressed an interest in bidding on

that I wouldn't be able to buy it, so I hadn't actually bought it.

He was so lucky.

Auction houses generally require prospective buyers

to pre-register specifically for the properties

they're interested in when bidding online.

So Lewis was saved from making an expensive mistake,

and if possible I would advise you to go to the auction in person.

You get a much better feel of how bidding on a lot is going.

Not only that, it's really exciting.

So what was it about this one that you really liked?

Well, it doesn't look like there's too much work to do, really.

It's in reasonably good condition.

We're hoping we can keep the kitchen.

We're not sure about that at the moment.

New carpets and flooring throughout. New bathroom suite.

And it's got double-glazed windows

which hopefully just need a bit of TLC and they'll be OK.

So I'm hoping it will be just decoration,

won't take too long and then it will rent out for a reasonable price.

-What's the timescale?

-Hoping to get it done in about two months.

-And the budget?

-£4,000.

-Wow. OK.

-Maximum.

Well, that's providing we don't have to buy a new boiler

-or something like that.

-Yeah.

And you must be really thrilled that you've inspired your son

to get into this, and hopefully with big beneficial effects.

Well, I am.

-But it does mean the work comes my way.

-Oh, does it? Why?

Well, because Lewis is at work full-time,

so myself and Mike will be the ones doing the bulk of the work.

-Mike, your husband?

-Hm.

So who's going to the boss in this project?

I would like to be the boss,

but I'm pretty sure my mum just won't allow it to happen.

So Mum and stepdad are going to do all the work,

-what are you going to do?

-I'm going to do plenty of work.

They think they do the bulk of the work.

I think in reality Mike does the bulk of the work.

Mike does the bulk of the work.

I remember from last time you were a little bit...

-What's the word? Bossy. That was the word.

-Yes.

-Are you still sort of...?

-Oh, yes. He still gets a list.

Well, listen, congratulations. Good luck with it.

I look forward to seeing how you get on.

Nice to meet you.

So, thanks to mum Annette, Lewis has got the property bug

and on with his fourth house.

At least he got to choose what he wanted with this one.

Who will be the boss doing it up though?

What do you think?

Well, we can see how they all get on later in the show.

This is the market town of Ipswich in Suffolk.

And to be honest, thanks to the renovation of its famous dockside,

Ipswich normally looks a lot prettier than this.

But of course I decided to turn up when it was bucketing with rain,

so the boats in the marina could have easily

sailed down the high street.

# So sad

# Don't look so sad, Marina

# Save it for a rainy day

# Save it for a rainy day

# Save it for a rainy day. #

In the centre of town, tucked away in a little courtyard,

the property I'm here to see is an office block over three floors

that has planning for residential use.

It's at a price of £90,000 to £110,000,

and I'm going to take a look.

Although it's currently a commercial property,

the exterior actually looks quite homely.

And as the entrance is off the main street, it certainly feels peaceful

for a town centre location. Let's have a look inside.

OK, this is clearly businesslike.

Very commercial. Reception area there.

And a kitchenette through there and a toilet over there.

So, yes, definitely business-minded here.

Let's see what we can find out upstairs.

OK, so all that strip lighting and office furniture

isn't very cosy.

Well, that's easily replaced.

More importantly, the way the building's actually laid out

makes it easy to imagine a reconfiguration

into residential space.

What am I going to find up here?

Another office space here, a smaller one.

Probably the boss's office cos he'll be in there on his own.

This would have been a communal office space.

There's still office table and chairs in here.

You can see the wires and the aerial points. But again, another big room.

And you've got to remember, this has consent to go from commercial

to residential, so the mind's working overtime

with what you can do with this property.

But I'll make my decision when I've seen upstairs. Bear with me.

# One, two, three, four, five

# Senses working overtime

# Trying to take this all in

# I've got one, two, three, four, five... #

And, yes, there's even more space and even more rooms.

Another office in here.

A toilet here as well with a small sink.

And another great big office here.

Would have been a communal space,

maybe four or five people working in here.

And you've got the town centre just there,

a stone's throw away, and a bus station as well.

The building was clearly once a commercial property,

but I think a change of use to residential is the best way to go.

I can see this as a really smart townhouse,

or maybe there's an even better alternative.

What I mean by that is convert it into two spacious flats.

Upstairs would be of a decent size, as it is already.

The garage downstairs could be part of the downstairs flat.

Knock that wall through and you have a spacious downstairs flat.

For me, that's the best way of

getting a great return on your money.

I do think flats seem the obvious solution.

But what does a local expert think?

We've asked along a local estate agent to get his opinion.

Potentially, if it was my property, I'd be looking at

converting this into possibly two or even three flats.

Obviously, not having a rear garden,

it limits it from being a house, really.

So I think the best route would be

to look at converting into flats.

What did I tell you?

I don't spend all my time thinking about sweeper systems

and dodgy offside decisions, you know.

Anyway, with a building being guided at £90,000 to £110,000,

if this were to be divided into flats,

what does he think they would be worth?

You'd be looking at achieving between

£100,000 for a two-bedroom property

and £80,000 for a one-bedroom property.

On the rental market, again, a two-bedroom property

you'd be looking around about £600 per calendar month.

And a one-bedroom property, around about the £500 per calendar month.

This is a simple one for me.

It's a three-storey building with consent to convert to residential.

It's a no-brainer.

Two flats, two rents and a big yield.

Let's see who had the vision when it went to auction.

The first lot I can officially offer is lot 33.

It's a vacant property. It has been an office building.

So who wants to be the first bidder?

Do we want to start off in the middle of the guide?

£100,000, someone?

90, then? £90,000.

And we're away.

At £90,000 in the middle of the room.

Do I see 92 anywhere?

At 92. 94. 96. 98.

No. At £96,000. 98. Fresh hand.

And 100. 102. 104. 106.

106.

106. 108. 110.

No. At £108,000, on my right.

At £108,000. 110. 112. 114.

No. 113, then?

At £112,000, standing. He's been with me all the way at £112,000.

Do I see 113 anywhere?

112,500, then? 112,500.

113. And a half. No. At £113,00.

For the first time, then, we're in the room at 113,000.

For the second time. Are you all done and out? At £113,000...

Third and final time. Congratulations, sir.

That determined and successful bidder was Glen.

I wanted to know what he had planned for his new £113,000 investment.

So I thought I'd better go and meet him,

even if he is an Ipswich Town fan, but nobody's perfect, eh?

Nice to meet you, Glen. Congratulations.

Thank you very much.

First of all, tell us about the auction. How did you find it?

My lot was the first lot. There was quite a few people who did bid.

I think there was four of us in total, so some competition,

but pleased I got it in the end.

Is this the one you were specifically looking for?

Yes, I bought it for a particular reason.

I hope to create a two-bed apartment on the ground and first floor,

so a duplex apartment.

And then a one-bed apartment on the top floor, so the second floor,

both using the shared entrance.

Have you done it before? Is this a small one for you or a big one?

This is a relatively small project. I've been doing projects since 2005.

So, yes, this will be a relatively simple one.

# That's what I want

# That's what I want... #

Well, Glen knows what he wants

and he certainly has the experience behind him.

But what was it about this specific property that attracted him

over all the others in the auction?

In the case of this project,

on this road where my office is we have a building there which is

a nice Georgian property which we've got five serviced apartments in

for short-term corporate lets,

and we've had, in the last year,

very good demand for those apartments.

We've only got one two-bed down there.

The other four are one-bed, so I was keen to create a second two-bed.

So it's for that purpose where we know we've got demand for it.

# Supply and demand

# Supply and demand Supply and demand

# Supply and demand... #

Glen's plan of corporate business lets seems a good idea,

and he knows his property.

He's been in business partnership with his sister Rebecca

and brother Ross and they've had experience in everything

from houses of multiple occupancy to property maintenance.

He even has a cafe in Ipswich,

although, as a former Norwich City boy,

I don't think I'll be welcome there.

The coffee shop is directly behind the football ground,

so we might need to provide security for you there.

Moving swiftly on, what's Glen's plan for this property?

The main thing that needs to be done is

the rooms need to be reconfigured.

At the moment, it's sort of open-plan office space,

so we need to reconfigure it

so eventually it will be a lot of new stud work walls.

As I say, we'll go for good quality kitchens and bathrooms.

Obviously the flooring needs to be changed throughout.

The lighting at the moment is office-style lighting,

so that will need to be changed.

But as a whole, it's a relatively modern building,

there isn't any structural issues.

Glen will be using the team from his property maintenance company

to do the project.

And though he hopes that actual work should be completed between

two to three months,

the current planning permission only allows a conversion

to a single dwelling, so he'll have to reapply

if he wants to covert it to two flats,

and that can take some time.

You told me your timescales.

What about your budgets to get all this work done?

I'm expecting this to be in the region of about £30,000

to create the two apartments.

With the serviced apartments, they need to be of good spec,

so in terms of the kitchens and the bathrooms

we'll spend good money on those.

-Glen, good luck.

-Thank you very much.

-Wish you all the best.

-Thank you.

I wish you good luck - not Ipswich Town.

They don't need it.

Good luck.

So, Glen seems to know exactly what he's doing.

He's got the experience and nothing seems to faze him.

But will he get permission for two flats in this property?

Will he stay within his budget? And will he stay within his timescale?

You can find out later in the programme.

Still to come, in Wales,

a pair of developers have some big decisions to make.

And what's the budget?

-Well...

-Ah, right.

And I hope Glen had budgeted enough for his development in Ipswich.

We did come across some issues which we hadn't anticipated.

Donnington, in a suburb of the Shropshire town of Telford.

And it was here we first came across a three-bed, mid-terrace townhouse.

Yes, it needed a little revamping, and the normal culprits -

the bathroom and the kitchen - certainly needed to be upgraded.

But otherwise, this wasn't a massive project.

And it was bought for £60,000 by construction site engineer Lewis

who had got into this business via his mum Annette

after she bought him his first property.

But he's now got the bug, so he's bought this one.

Who's going to be the boss in this project?

Well, I would like to be the boss,

but I'm pretty sure my mum just won't allow it.

Mums are always the boss. Just give in, Lewis.

# Paid the cost to be the boss... #

And though Annette may be the boss,

it was Lewis's stepfather Mike who would do most of the work,

while Lewis would help out at evenings and weekends.

And Annette? Well, she would keep them both in line.

And with plans to make it a rental property,

Lewis hoped a budget of just £4,000 would get this one sorted out.

Now, nearly three months later,

we're back to check whether it all went to plan.

Well, there's certainly been a bit of tidying up at the front,

but it was inside where the majority of work was needed.

So, what's been done?

New carpets and vinyl throughout the house.

We then painted all the walls white.

Patch repaired the plasterwork where it needed it.

We put a new kitchen in, but we decided to keep

the old work surfaces rather than replace them to save some time.

And they've really improved the downstairs toilet and utility area.

-And upstairs?

-We've put a new toilet and sink in,

retiled part of the bathroom,

and some of the old tiles we've painted with tile paint.

And then the three bedrooms have been brought up to standard.

In the back garden, we've pointed the paving slabs.

We've turfed an area that was just weeds

to make it a more usable area.

Well, I think the "we" is more "Mike"

has done a lot of these jobs, most of the jobs.

I've done a lot of the jobs and Lewis has done some of the jobs.

OK, so the "we" might be more like "Mike",

but I'm sure I know who was in control.

Mum was still the boss

and she wouldn't really let me have my own way very often.

She did insist we put a new kitchen in

when I wanted an old kitchen, though she probably was right on that.

I never intended to keep the old kitchen.

It was never going to be kept.

Ah, but Annette didn't get everything her own way.

I would have really liked to have done a bit more

structural work in here and knocked the wall at the back down

to make a big kitchen/diner, but Lewis didn't want to do that.

It would have made it a much better house,

but it would have also cost a lot more money

and taken a lot more time, which is why I didn't want to do it.

And even without those structural changes, it took three months

instead of the two Lewis had hoped for.

So, what happened there, Annette?

Mike and I worked very hard down here many hours a day

while Lewis was on holiday for two weeks,

but we can't now manage to do 8 till 8 every day.

Of course it wasn't just her time and effort

that Annette has contributed.

My mum was kind enough to lend me the money to do this project,

so when the tenant moves in, I'll be able to

get a remortgage on the property to pay her back,

but I'm hoping she won't ask for the money back immediately

so I can then buy the next property and renovate that one.

Cheeky! You're trying it on now, Lewis.

You've gone over your £4,000 budget and have spent £5,400,

so now you owe your mum £65,400.

So, can this house attract a financial income that Lewis needs

to remortgage the house?

What do two local estate agents think?

The owners have done a fantastic job.

It's very clean and bright looking, very modern.

The finish is generally good.

It's all white walls, which is great -

makes everywhere light and bright.

It looks really fresh.

The only negative I can see with this property is

the configuration of the downstairs

isn't as popular as people would look for at the moment.

Most people prefer a large, open-plan kitchen/diner,

whereas this has got a small kitchen and is more of a living/dining area,

so that's the only negative I would see.

It's really with the downstairs layout.

Ah, so it sounds like Mum was right there, Lewis.

And though he did plan it as a rental property

for remortgaging purposes,

its current market value is important.

I think the property would be marketed at £89,950

to achieve somewhere around £85,000.

On the sales market,

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

That's what we thought it would go for, isn't it?

-I think that's about right.

-Yeah.

And a value of £85,000 could see

a pre-tax profit of just under £20,000.

Not bad. But what about those all-important rental figures?

I mean, in the rental market, the property ought to go on

at around about £575 per calendar month.

I would be confident in achieving £575 per calendar month.

It's currently on the market at £595 a month

and the letting agents think they've found us a tenant,

so hopefully we'll get £595, but we'll see.

And if that £595 per calendar month deal goes through

that would see a yield of nearly 11%.

It certainly seems to have been a shrewd move by Annette

to get Lewis into property developing,

and there's no doubting that he's got the bug.

I would like to have ten rental properties in total.

Then I can potentially give up my full-time job

and do property development as a full-time career.

Well, how does Mum feel about that?

Well, Mike and I just feel we've done enough, yeah,

and Lewis will have to do them on his own.

# That's why I'm leaving it up to you

# You decide what you're gonna do. #

We go now to Llanhiledd,

near Abertillery in Wales.

Sat within a picturesque valley,

this little town takes great pride in its local industrial history.

Well, there's a long tradition of coal mining in the area

and these lines of terraced houses - probably former miners' houses -

carry on that tradition.

This is the one that was up for auction.

Guide price, just £12,000-plus for three bedrooms!

Got to be worth a look.

So, what have we...?

Hang on a minute. Before I start talking about the house.

I just flippantly said that guide price - £12,000-plus.

I mean, in 2014, what does £12,000 buy you?

An average family car.

I mean, a square metre of some of the more expensive properties

in the posh parts of London.

£12,000 potentially buys you this.

I mean, does it really matter what it's like?

It's a house...for 12,000 quid!

Anyway. Sorry, I just had to say that.

Anyway, upstairs to the bedrooms.

Remember, there's three of those.

Front sitting room area here.

It doesn't look in bad condition.

I mean, it's not massive

and there's obviously signs of a few problems on the front wall, there.

Through into the rear of the property.

Well, yes, it starts to look a bit more problematic.

We've got lots of signs of damp in this chimney breast

and then over this way...

Right.

OK, bit of a problem there. The ceiling has collapsed.

Now, that generally means either somebody very heavy

jumping on it above there, probably not, no.

It's more likely that water

is coming through from the roof, perhaps.

It could just be flashing on the chimney. Who knows?

Obviously it needs investigation,

but it has caused all sorts of problems.

And what we don't know so far is if those problems have spread.

Has it rotted timbers, etc?

But through there into the kitchen,

well, first of all, I would like to see that wall gone

because that would certainly open this whole space out

because the kitchen as it stands is fairly tiny.

But one interesting feature you don't often see in kitchens...

is a shower.

Wow! That's really bizarre.

I suppose if you were hot after cooking you'd just nip in there

and clean yourself up before dinner.

It does have its advantages.

# Standing in the shower

# Thinking

# Yeah... #

Well, what I'm thinking is wash your hands of this bizarre set-up

and use the space more practically.

There's obviously a lot of work to be done,

but this house had a guide price of £12,000-plus.

Oh, did I already mention that?

So, up here, and it is a little bit...

-CLEARS THROAT

-..cramped. Tight for space.

It is an understatement.

But then again it's three bedrooms in a fairly small property.

So what have we got? We've got the bathroom upstairs, though.

That is good. You might have expected to find that downstairs.

So all your plumbing is there, all the pipe work, soil stack, etc.

So although you might want to replace it, you're only replacing

the suite and not having to do all the infrastructure, which is great.

Decent bedroom to the front there.

Another bedroom there, a slightly smaller one.

I mean, they're not huge, but they're not bad.

But up here in this room, the back bedroom, two chimney breasts

and again you can see all sorts of problems occurring here.

So my guess is, it is a problem with the chimney stacks.

Maybe the pointing, maybe the flashing, whatever.

You're going to have to get somebody up on the roof

and get that sorted immediately so the house can start drying out.

Looking past the obvious problems here,

this is a good-sized house with bags of potential.

Plus, there is a little yard out the back which is a nice bonus.

And of course, that guide price of £12,000-plus

could prove to be very attractive on auction day.

What does a local estate agent make of this terrace?

Even though the property requires quite a bit of work,

it is a really good rental area.

The rental market is buoyant

in this street and we should expect

once the property is completed to have a decent rental yield on it.

Good news for investors. So what kind of figures are we talking?

Once the property is done up, we expect the property to achieve

a rental figure of £375 per calendar month.

And what about sales figures?

Once renovated, we estimate this property to be worth

in the region of £50,000 to £55,000.

Well, obviously a bit of work required to sort this one out,

but it's intrinsically a good little property at a great guide price.

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

Guide at £12,000. Needs a bit of work doing to it.

Start me somewhere sensible. £10,000?

It's going to go for a lot more. A lot of interest in this.

£10,000. Somebody wave. It might be the only opportunity you get to bid.

Thank you. 10, I've got. And 11.

I've got 10 there. 11 I'm looking for.

At £10,000, with the maiden bidder. It's going to be sold. Going. 11.

Where were you? 11. 12. 13. 14.

With the price quickly going past that guide,

we rejoin the bidding at £25,000.

25.

25,500? No. At 25 with you for the first time.

Second time.

25,500. 26. 26,500.

26,500 to you. 27.

27, and a half?

27,500?

No. At £27,000 on my left-hand side for the first time.

Second time. Third and last time. At £27,000.

Yours, sir. Well done.

The successful bid of £27,000,

more than twice the original guide price,

belonged to Jason, here on the left.

Jason will be working on the property with his uncle Kuldip.

Both are builders and came along to the house to meet me

so I could find out more.

Jason, Kuldip, great to meet you both.

-So, a house with a bit of work, then.

-Indeed.

Tell me why you wanted to buy it.

I wanted to do a project for myself.

I've done a few projects for clients and customers over the years

and do developments and renovation work

and I wanted to try something and have a go for myself.

And why this particular house?

When I came here, I looked at it and thought,

"This is going to be a nice challenge."

Obviously, as you can see, it definitely will be.

I've just got a good feel for it.

-And you're a builder?

-Yes.

-So that's really convenient

cos a lot of this stuff might put some people off.

-Yeah.

-Well, you've got to see what's ahead.

You can visualise what you can make out of it at the end of the day.

-That's part of the game.

-Yeah.

-Visualising is always important.

Yeah, basically have the vision of what could be achieved at the end

and I think the transformation should be quite nice.

Spectacular.

Kuldip, where do you come into this equation?

This is my nephew.

And you just want to be a... I'm a builder myself,

been in the game years and so he just asked my opinion.

We came to have a look at the property and we looked at the sum,

we worked the calculation and I think it was feasible.

-Right.

-Set the price in our mind, what we're looking for.

-Yeah.

-And obviously the figure, we were happy with it,

and Jason went for it, and I'm pleased for him.

MUSIC: The Man From UNCLE Theme by Jerry Goldsmith

Well, the help from this man's uncle will be invaluable.

Yes, having two builders tackling this property is just what it needs.

Time to hear exactly what it is that Jason has planned.

We're going to start by totally stripping this back to brick,

predominantly because of the damp situation.

There is a major issue with the roof and the chimneys,

so maybe one or possibly two stacks might have to come down.

-Totally redo the roof.

-New electric, new gas, new plumbing.

Take the whole plaster off, brickwork, skirting,

-the flooring, the lot.

-Yeah, kitchen, bathroom.

Till it looks beautiful.

Right.

Any sort of structural changes planned?

Taking out walls,

this wall here in this room between here and the kitchen, for instance?

Well, we've looked at maybe taking part of this wall out,

just to give it a bit more of an open-plan and make it feel

a bit more spacious and light.

-That's something we're going to look into.

-Yeah.

Take some of the walls off and make it a bit more wider

because the rooms are a little bit small,

especially downstairs in the kitchen and the dining.

Yeah, maybe even, if we can remove the stack.

Well, if you're having to take the chimney stacks down

or renovate them anyway, maybe makes sense.

-Yeah, strong possibility.

-Do you plan to sell it on or rent it out?

Well, we're looking to hopefully rent it,

but just having a few chats with the locals,

they seem very keen to have a friend or a family member rent around it,

so I don't think there will be an issue at all.

That's terrific, isn't it? They've already approached you.

Oh, yeah.

That's great. That's a real bonus. What's the budget?

-Well...

-Ah, right.

I estimate between 12,000 to 15,000.

OK. And why the pause?

Well, we've been thinking about it a long time, about obviously

your heart versus the head, that could come into play a little bit

and basically how far we are going to take it, you know.

Which side have you come down on, heart or head?

I'm undecided. MARTIN LAUGHS

What's the timescale?

Well, we've had a bit of discussion about this.

-We're thinking around six months.

-Six months, roughly, we're thinking.

If any unseen work come then maybe, but I think six months should be OK.

Are you doing this alongside other things as well?

Yeah, I'll be working hopefully at the same time

and then do as much as I can myself

and obviously my uncle's going to help when he can.

Do as much as I can physically.

-Friends and family.

-Well, listen, congratulations.

-Thank you.

-Good luck with it.

-Thank you.

-And we'll look forward to seeing how you get on.

-Thank you.

-Thank you.

-Nice to meet you both.

-Thanks.

Well, I think Jason appreciates there is a bit of work to be done

to sort this place out,

but hopefully, with the help of Uncle Kuldip,

it will all turn out just fine.

You can find out if it does or it doesn't later in the show.

So, we've seen the first of today's auction property stories.

Well, what about the next two? What tales will they have to tell?

I think we should find out.

Back to Ipswich now,

where, off the main street within this courtyard

was a three-storey property with a guide price

of £90,000 to £110,000.

If that seemed a little low, it was because despite outward appearances

this was in fact a former office.

That's right. It was a commercial property.

# We need to talk

# Step into my office, baby... #

However, it did have planning permission

to convert into a residential two-bed single dwelling.

But I had different ideas.

What I mean by that is convert it into two spacious flats.

Upstairs would be of a decent size, as it is already.

The garage downstairs could be part of the downstairs flat.

For me, that's the best way of getting

a great return on your money.

And converting it into two flats was exactly what Glen intended

when he bought it at auction for £113,000.

He seemed pretty confident about it all.

Have you done it before?

Is this a small one for you or is this a big one?

This is a relatively small project.

I've been doing projects since 2005,

so this will be a relatively simple one.

# If that's the biggest problem I've got

# No problem... #

Glen had given himself a budget of £30,000

and a timescale of two to three months.

And from his experience he was sure there would be a market

to rent these two flats as short-term serviced apartments.

But there was a lot of work to be done before then.

Would everything go smoothly?

Seven months later and we're back to find out.

The ground floor and the first floor have been turned into

a two-bed duplex apartment.

Gone is the strip lighting and the worn carpet,

replaced with a modern kitchen/living area,

a bright good-sized bedroom,

and shower room, all on the first floor.

If we go down the new internal spiral stairs to the ground floor,

the reception will become a second bedroom that's currently unfinished,

with an en-suite shower room.

And now for the second flat on the top floor.

Who better to show us around than Glen himself?

This is the second-floor one-bedroom flat,

which was an open-plan office with a toilet in that corner.

We've increased the size of that room to create a nice shower room,

and then through there we have an open-plan kitchen and lounge.

I think, overall, it's worked out really well

and I'd have to say... I would...

Yeah, I'd say this top flat is my favourite.

Glen always intended to use these flats as serviced apartments.

These are flats generally rented out on a weekly basis,

mainly to businesspeople or tourists.

They offer an alternative to a hotel,

providing services such as regular cleaning and fresh towels and linen,

and Glen chose the interior specifically

to appeal to this market.

We've gone for a more contemporary feel on these apartments.

White walls.

The kitchens, we've got high gloss and finished doors,

and even down to the furniture,

we tried to have more of a contemporary feel.

Glen co-owns a property maintenance company

with members of his family and he's been involved in developing

and managing properties for over ten years.

So, with the workforce and his experience,

he was fairly confident the development would go smoothly.

But best laid plans and all that.

We did come across some issues which we hadn't anticipated.

The building had permitted consent for one residential dwelling.

I wanted the building for a one-bed and a two-bed,

so we resubmitted for permitted consent which, to be honest,

took more weeks than I expected.

We hoped to use more of the original heating system.

That wasn't possible, the boiler just wasn't adequate.

We discovered, for building regulation purposes,

we had to change all the windows,

and what we didn't anticipate was the amount of soundproofing

we'd have to do between the flats.

# It ain't easy

# It ain't easy to get to heaven when you're going down... #

It's worth remembering that problems can hit

even the most experienced developer.

All that extra work will inevitably take time

and cost that little bit more.

So did he manage to stick to that budget of £30,000?

It is going to be around that £30,000.

It might just tip it,

but with those extra costs I'm quite pleased with that.

I think he's done very well to keep to that budget of £30,000,

although those problems, along with the fact his maintenance company

have been incredibly busy with other jobs through the year,

have meant that the redevelopment took seven months

rather than the planned three,

and having already spent 113 grand at auction,

can he still make a profit?

What did two local property experts think?

I think both of the flats are developed to a very high standard.

I think that would certainly appeal to anyone that's looking to

come into the property, whether it be for rent or for sale.

I think the decision to do the two apartments was the right decision.

Without a garden, although it's a town centre location,

I think the flats work better.

And having spent a total of £143,000 on the development,

were Glen to sell both the flats,

the agents thought he could achieve up to 220 grand,

giving him an overall pre-tax profit of £77,000.

What about if he were to rent the property?

If the owner wanted to offer this property for let,

the one bedroom I would foresee achieving £550 per calendar month.

With the duplex,

I think you'd be looking at about £650 per calendar month.

For the one-bedroom apartment with parking, I would suggest

a rental value of between £525 and £550 per calendar month.

And for the two-bedroom apartment,

I would suggest a rental of £650 per calendar month.

Based on the top valuations,

that would give Glen a yield of just over 10%.

But he wants to rent them on a weekly basis as serviced apartments,

so what could he achieve there?

The two-bedroom serviced apartment, I would suggest at £650 per week.

And the one bedroom serviced apartment, at £495 per week.

Yes, that's similar to what we do charge.

We charge 450 for a one-bed and 650 for a two-bed,

so, yeah, very similar.

With those valuations,

it's easy to see why serviced apartments appeal to Glen.

But his costs will be significantly higher

due to the weekly maintenance, covering all the bills,

and a much higher chance of flats being empty for

long periods of time.

However, there's no doubt that there's potential for good profit.

So what's next for this property professional?

We've got a project, which has now got permission last week,

for another two apartments - a one-bed and two-bed -

so that could well be the next project.

Yeah, I'll keep going, keep looking at auctions and see what comes up.

Time now to return to Llanhiledd,

near Abertillery in Wales,

and this three-bed terraced house with a guide price of 12,

yes, just £12,000-plus.

And if you find that difficult to believe, well, so did I.

In 2014, what does £12,000 buy you? An average family car.

I mean, does it really matter what it's like? It's a house!

Well, yes, unfortunately it does matter.

Though the rooms were a good size, I found lots of damp upstairs.

So much so, that it's soaked through

and caused the kitchen ceiling to partially collapse.

Oh, and did I mention that there was a shower in the kitchen?

# How bizarre

# How bizarre

# How bizarre... #

Well, despite its condition,

it surpassed that £12,000-plus guide price

and was bought by Jason for £27,000.

Both he and his uncle Kuldip were builders,

so they seemed the ideal people to take this project on.

But Jason seemed concerned he might get carried away.

Well, we've been thinking about it a long time,

about, you know, obviously, your heart versus the head

and basically how far we are going to take it.

Which side have you come down on, heart or head?

I'm undecided. I'm undecided.

# It's never too late

# Too late to

# Stop, look

# Yes, listen to your heart

# Hear what it's saying... #

Jason had given himself a budget of £12,000 to £15,000 for the work,

and a timescale of six months.

But could listening to his heart

actually eat into his potential profit?

So what would rule in the end? Head or heart?

Well, 11 months later, we've returned to find out.

# Shake it out, shake it out

# Shake it out, shake it out

# Ooh, whoa Shake it out, shake it out

# Shake it out, shake it out

# Ooh, whoa

# And it's hard to dance with a devil on your back

# So shake him off... #

It feels like a new house,

and the way Jason and Kuldip describe it, it almost is.

Completely stripped the house back to brick.

Yeah, joist, strip the joist down, ceiling down.

Lintels, some lintels were rotten that we couldn't see.

Obviously once we started,

we exposed them and then we had to remove those.

We had a local roofing company come and slate the roof for us,

and they did an absolutely fantastic job.

Apart from that, we pretty much did the whole lot between us.

The damp and the damage meant

that Jason and Kuldip almost rebuilt the interior from scratch.

But because of that, they've been able to create some wonderful rooms

and none more so than at the rear of the property.

We're in the kitchen/lounge/dining area that we've created.

There used to be a wall going across here

that used to have an old shower in it, believe it or not,

and it used to be the kitchen there.

Now the wall has gone to create a nice open area.

There was an old back boiler there, with the fireplace -

that's been removed to create some space.

We've put a new floor down with a membrane

and a new heating system in the corner.

There's also some extra cabling so you could put a TV on the wall.

You know, with the extra lighting, it's a nice place.

But if you're impressed by that - I know I am -

well, Jason's got an even bigger surprise.

A whole new room's been created in the attic space.

Right, this is the new additional loft space that we've created.

The timber joists were rotten, so we've dropped the floor level.

It's gained extra head space.

We've fitted a new dormer window to increase the head space again.

Radiators fitted, multi-point lighting to make it user-friendly,

and also a nice new staircase for an entrance into it,

with the fire door at the bottom.

# You just build me up

# Yeah, yeah... #

So the three-bed terrace has become a four-bed terrace.

Jason and Kuldip weren't initially planning on

extending into the attic, but when the ceiling had to come out

and several of the joists be replaced,

they saw it as an opportunity to add value to the house.

And it's not the only addition they've prepared for.

We also, at the same time, put a planning application in

for a small extension to the rear of the property.

In the future, we could have a bigger room down here,

but we didn't take that on. But it's there if needed.

That is a smart move.

And given that they've already extended their timescale,

probably a very wise decision not to continue

with more work at the moment.

And remember, if your redevelopment needs planning permission,

keep time and money in the budget.

So, how long has the work actually taken?

-In the beginning, we thought five to six months.

-That's right.

But at that time we didn't think we were going to go into the loft.

And then once the decision was made, obviously, the extra three months

was pretty much all the work on the loft.

So, the work's taken nine months in total.

And having spent £27,000 on the terrace at auction,

how much have they spent on the redevelopment?

Well, in the end we spent...to my knowledge,

the last sort of count was around 25,000.

Ouch! That's £10,000 more than they'd initially budgeted for.

Well, it certainly seems like Jason's heart won out in the end.

But he has created a four-bedroom house and it does have

extra planning permission as well as a cracking finish.

But will it be enough?

Two local estate agents came to give us their opinion.

The property's been renovated to a high standard.

They've used space really well by putting

an additional bedroom into the loft space.

The loft space will add value to the property

and make it more appealing in the area.

I think they've done a really good job on the house.

I think having the four bedrooms is great.

It makes it a family house,

however, it's got a very small back yard

and that will detract from it.

Not such an issue if you're looking to rent,

where four-bedroom rental properties in the area are fairly rare

and a small back garden isn't really such a problem.

Jason bought the house for 27 grand, way above the guide price,

and then spent 25 grand on the renovations, way over his budget.

So, were he to sell, could he make a profit on this,

his £52,000 first investment?

I estimate the property to be worth in the region of £70,000 to £80,000.

I think it would be worth

about £65,000 to £70,000 on the open market.

That top valuation would give Jason a profit of £28,000,

minus the usual taxes and expenses.

What could they expect were they to let the property?

I believe the property could achieve a rental income of

about £500 per calendar month.

If this property were to be offered on the rental market

it would achieve a figure of about £500 per calendar month.

-Yeah, I think 500 is quite reasonable.

-Yeah.

I think, for that sort of money,

you're getting quite good value for money.

So that's a potentially cracking profit or a yield of over 11.5%.

Not bad options to have for a first development.

So what's Jason taking from this first project?

-Be positive and you can achieve the goal.

-Oh, yeah, definitely.

Yeah, it was worth it in the end.

So have you been inspired by the people and properties

that we've shown you on today's show?

If so, then you know what you need to do.

Yes, join us next time for more Homes Under The Hammer.

-Goodbye.

-Bye-bye.

-Goodbye.