Episode 55 Homes Under the Hammer

Hello and welcome to the show.

Now there are all sorts of reasons why you might want to

consider investing in property.

Yeah, but you'll need to be well prepared

if you want the route to success to be a smooth one.

Yes, everybody loves a bargain,

so why not try your local property auction?

Thorough research into the property and the area is vital

before you bid in the auction room.

Yeah, and that doesn't just mean a quick trawl of the internet.

You've got to visit the property beforehand and read the legal pack.

Yeah. Were today's buyers as prepared as they should've been?

Let's find out what they bought.

In Derby, it's the exterior of this house that is a cause for concern.

So, is there a solution?

Of course there is.

But in Nottingham, the problems with this property lie on the inside.

Get someone to look at it, get it sorted.

I don't like that.

Whereas in Kent,

the signs don't bode well for this building's future.

My fear is - will it ever be used again?

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.

It's gone.

This is Mackworth, a rather leafy district of Derby.

Mackworth largely consists of an estate of over 3,000

ex-local authority houses that were built in the 1950s.

And they thought it through, with schools and shops

and recreational areas.

Well, in the intervening 60 years,

some of the properties have been sold off.

And what you've been left with is a really pleasant suburb

with green spaces. Yeah. It's a good place to be.

In fact, Mackworth has around 40 acres of open green space

and parkland. And yet, it's only two miles from Derby city centre.

Well, up for auction with a guide price £65,000 was a

three-bedroom semi on this little cul-de-sac.

Well, first thing you notice...

Is it's what's called non-standard construction.

And a dead giveaway, of course, is those concrete panels or blocks.

Hey-ho.

But before I go worrying about the construction,

let's see what the inside has to offer.

So let's focus just on the layout for now.

What have we got?

Well, there's a reasonable sense of openness as you

come in through the front door.

Very strange-looking heating thing going on there.

Really old-fashioned gas heater thing, I think.

But it looks like we've got central heating as well.

Hmm. Bit strange.

Stairs up to your bedrooms there. And then through into the property.

Front living room there.

But straightaway, I'm seeing too many walls.

I mean, the house obviously needs walls, but not as many as it's got.

I'll tell you why. This is the kitchen.

And it just feels a little bit cramped.

And then you come this way,

and you've got what was obviously originally the dining room.

-But...

-HOLLOW THUD

A wall there which feels like a stud partition.

You've got another wall here.

Get rid of them. Open the whole thing up. Right.

That would give such a great feeling when you walk into the house,

cos at the moment, I...

HE MUMBLES

Which roughly translates to, "Nah, it's not working for me."

# Walls come tumbling down

-# Yes, they do

-Yes, they do

-# Yes, they do

-Yes, they do... #

Though it's a big job, I think

getting rid of these walls would make a big difference.

And besides, there won't be so much to do upstairs

as the layout works much better.

The two double bedrooms are in decent condition.

As is the third.

Although you might be pushing it to call it anything other

than a box room.

The bathroom and toilet are separate, and while I tend

to like that, I know most people would prefer one big bathroom.

Outside, the garden does need a bit of TLC,

but it's a good size and has a brick-built shed.

Talking of things brick-built, that reminds me.

Time for a history lesson.

After the Second World War, when a lot of houses were destroyed

and there was a huge demand for housing,

houses needed to be built quickly, and they stumbled on,

came across, decided on this way of construction,

which was basically using concrete blocks

to create houses that could be built quickly.

They were relatively cheap to do. And this is a classic example of it.

Basically, concrete panels form a skin on both sides

around the metal frame.

This particular house was built by a company called Unity.

But lots of companies had their own versions.

Some 400,000 prefabricated,

reinforced concrete houses were built.

Many were meant to have a lifespan of just 20 years.

Who would have guessed they would still be here today?

So why is that a problem?

They've lasted this long, won't they last a bit longer?

Well, they probably will.

However, some of them have started to deteriorate.

Let's face it, they weren't meant to last 50 years.

They had basically metal rods often inside them,

and if water gets in at any point, if the concrete starts to fail

or there are any cracks, then those reinforcing rods start to rust.

That causes all sorts of problems.

So, as a result,

these properties more often than not become unmortgageable.

They're not all unmortgageable. But it does create a bit of an issue.

So you've got to know what you're buying. So, is there a solution?

Of course there is.

For a start,

not all non-standard construction properties are the same.

So it's really important to know what you're buying.

And a good local surveyor will probably be able to help.

He'll be able to know what kind of construction was used in this area.

But there is one generally acceptable way of resolving

most of the problems which come with non-standard construction houses.

And that is to add a layer of bricks on the exterior.

That's exactly what's been done to this neighbouring property.

So basically,

what you do is you either just put a layer of bricks here

or you take this off and replace it,

leaving basically a skeleton of a house which you basically rebuild.

That then makes the property re-mortgageable,

you get a certificate, happy days.

Not doing any of that could mean getting a mortgage

will be difficult.

And my guess is, as it stands, this might be one for a cash buyer.

So, with all that in the mix, we've asked a local estate agent along

to give us an idea if this house, guided at 65,000,

could still be worth a punt.

With the thought of rental, if work is done just internally,

we'd be looking at around £525 per calendar month.

If they go the full extent and carry out the structural works,

it won't be a great deal different. Perhaps £550 per calendar month.

So, adding the brick skin doesn't give a huge

difference in the rental valuation.

Could the property be sold on the open market?

To sell the property onto the open market,

it will need the structural external brick skin going on.

And once that's completed, coupled with the internal works,

it will be £125,000 or so.

Well, this could be a really nice family home.

Yes, it's non-standard construction.

But that does mean you get a lot for your money.

And as long as you know what you're buying,

maybe you could be on for a good deal.

Let's see who went for this non-standard semi

when it went under the hammer.

Lot 70 is next.

An investment property with a good yield.

65-plus. Start me on this.

I'll be generous and say 62 to start me.

62,000?

Who's got 60 for a three-bed semi?

£60,000. It's worth more than that, really.

60,000 to start me.

60? 58? 58,000?

Thank you. 58, I have bid here.

At 58,000. 59 is bid at the back.

£60,000.

At 60. 61. 62.

63. 64.

65. 66.

67?

66,000 I have here. It's against you. At 66,000. 67 somewhere else?

It's in the market, ladies and gentlemen. It's going to go.

At £66,000. It's handy money.

At 66,000 for the first time.

66,000 for the second time.

Third opportunity. Final bid.

At 66,000.

Sold at 66. Thank you.

That successful bid of 66,000 was made by a rather delighted

Anthea and her husband, Bill.

As they were on holiday,

their grandson, Rugni, came to meet me,

along with family friend Matt.

Rugni was also at the auction,

but was that just for moral support or did he have a vested interest?

Time for me to do a little digging.

-Rugni, Matt, great to meet you both.

-Morning.

-You too.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

I've always either lived in one of my nan's properties

or at my nan's house. And I've been trying to rent.

But rather than waste money renting, my nan came up with a scheme, you

know, investing money in a house and I mortgage it and buy it that way.

-So this is your granny?

-Yeah.

-Oh!

She went out and bought a house for me,

and now I'm buying it off her and such.

Fantastic. And how do you fit into this, Matt?

Well, I'm going to project manage it.

Do mainly the windows, joinery work, cosmetic work.

-Are you family, friends, what?

-Family. Friend of the family.

-It feels like a family.

-Yeah, yeah. Might as well be.

-Right.

-But you've got a bit of building experience?

-Yeah, yeah.

I've been in the trade 22 years. We've been doing it for the last ten.

-And doing well, really.

-Fantastic.

So why this particular house, then?

Well, I work in Mickleover,

it's literally less than a five-minute drive for myself.

-What do you do?

-I'm a kitchen manager,

-but I've just recently been promoted to an area support chef.

-Great!

So it's even better that I'm near the A38, the M1, so I can travel.

I've got to travel up to like, where is it,

Birmingham, Newcastle, Liverpool.

Yes, we are not joking

when we always say that good transport links can attract buyers.

And it's this house's location that will make Chef Rugni's commuting

so much easier.

But I hope that wasn't their only consideration.

Did they know this house was of non-standard

construction before they bought it?

I'm from off this estate, so I do know about the houses, yeah.

There's only a few left now that's not been done.

Done, you mean as in...?

Yeah, the outer skin being redone.

-Right.

-We've got an engineer coming from Bristol.

He's going to manage it. And he just gives us a certificate

when it's all done.

And then it's mortgageable and you've added the value.

What is the cost of doing just that, nothing else?

For taking the bricks down and putting a new skin on, windows,

we've had quotes of around 30 grand.

-OK.

-And we think we can do it for about 20.

Great. By doing some of the work yourself?

Yeah, well, doing all the windows ourselves, the fascias, soffits.

The builder is just coming in,

taking the skin off and re-bricking it up.

# And that perfect skin

# And that perfect skin... #

In a way, Rugni is future-proofing his house with its new skin

as it will be mortgageable should he ever want to sell.

But it's going to cost him at least £20,000.

So what does he intend to do to the inside, and more importantly,

will he have any budget left?

This wall is going to be knocked out.

The kitchen is going to be all open.

It's south-facing so this is going to be like, well,

-a wee kitchen and diner. This wall here as well, knocked down.

-Oh, wow.

And then pushed back so this room itself will be a lot bigger.

-The garden is going to have French doors opening into it.

-Nice.

So it's all going to very big, open, a lot of space, basically.

Right, cos obviously being a chef,

your kitchen's going to be quite important.

Yeah, kitchen's the most important.

-Going to have some nice equipment in there.

-Oh, really?

-What are you going to have?

-Nice big oven.

Five gas burners and then lots of preparation space in areas,

some decent cooking equipment.

Fantastic. And then what about upstairs?

Upstairs, it's obviously three bedrooms.

There's me, my cousin, and a mate moving in.

And then the bathroom, it's big.

Cos there's a wall in there separating the bathroom,

and that will be knocked through.

And then all modernised again.

Wow. So what's the budget in total?

Overall, we're looking to get in at around 100 grand with the house.

Right, time for me to get my trusty calculator out.

The house was bought for 66 grand.

£20,000 for the brick skin.

That will give Rugni a budget of £14,000 for the interiors,

if they want to keep that total spend below 100,000.

Rugni's hoping in about three months' time he'll be able to

move in, while some of the work is still being finished.

And he hopes he'll be cooking by gas in four to six months.

Is this something your granny has done before?

Has she done it a lot?

Yeah, she's got a couple of houses that she just buys from the auction,

does them up and then obviously either rents them or sells them.

But this is the first one where a family member has moved into it.

-Yeah.

-After this, another project perhaps?

Well, we'll see how things go.

More than likely cos there is more Rugnis, you know what I mean?

The grandchildren are queueing up.

-Good luck with it.

-Thank you very much.

-We look forward to seeing how you get on.

-Cheers.

So, big plans for this little house,

to make it mortgageable and liveable.

How will that fantastic kitchen turn out?

You can find out later in the show.

Nottingham is the birthplace for many great inventions,

from bicycle gears to ibuprofen, as well as many more.

The invention I like most from Nottingham is something

I used to wear during my 22-year career. It's the shin pad.

It was invented by Sam Weller Widdowson back in 1874.

Sam used to play a bit of cricket and he used to play a bit of football.

During a cricket match, he thought, "I'm going to

"chop these pads down into the size of pads that footballers can wear."

All I can say to you, Sam, is, on behalf of all the footballers,

thank you very much.

-# Can I kick it?

-Yes, you can

-# You can?

-Yes, you can... #

And there may have been some property developers

in the past years who thought they needed some protection

from the down-turning property prices.

But with the new tram system being constructed for easy

access into Nottingham town centre,

this area at least certainly seems to be on the up.

One good sign when you are looking for a property,

if you see building work, as you can see behind me, it's probably

a sign of investment and regeneration in that particular area.

Just a stone's throw away is the house I'm here to see.

It's a two-bed mid-terrace house with a guide price of £80,000 to £85,000.

I'm going to take a look.

Right.

We've come straight into the front room. Stairs at the back of the room.

Or is this the kitchen?

No, it's definitely the living room.

Through to the other reception room which, again, is a similar size.

Nice high ceilings as well.

The kitchen is through here.

You'd have to start again in there, but it's a nice, big space.

But over here is this.

A huge piece of damp.

Which looks pretty severe. Actually...

Yeah. It does go up a long way.

And you can see it flaking away there when I touch it.

So I think you'd have to go through the whole of this house to

make sure it's not too bad. Get a damp course running through here.

Get someone to look at it. Get it sorted.

Don't like that.

Damp isn't unusual in a house of this age with no damp course.

But it's worth also checking the guttering

and the drains to make sure they're not the cause of the problem.

For the most part, it requires the old plaster to be ripped off

and a damp-proof membrane to be installed,

then to have it replastered.

But get it checked and sorted. It needs to be your number one priority.

There's no point in putting in new flooring,

installing a new kitchen, or painting walls until it's sorted.

So get it done.

So upstairs doesn't seem as straightforward as downstairs.

They have a wet room just here.

And then in here, you've got the water tank.

And just here, you've got a bit of a void, a bit of a not-being-used room.

But if you were to relocate the water tank in the corner,

pop a door on here, it would

give you a really nice size family bathroom with shower and bath.

That's a bit of a no-brainer to me.

And if you go down the hallway just that little bit more.

I've got to show you these quirky, or should I say this quirky radiator.

It's sort of recessed into the wall,

which gives you a bit more space down this narrow hallway.

And then you get to the standard part of upstairs, the two bedrooms.

I guess this was originally a three-bed house with

an outside toilet.

And one of the bedrooms has been converted into this

wet room-cum-bathroom.

To be honest, it's hard to see how you could change it back

without ending up with a very tiny bedroom.

And a very small bathroom.

So I would stick with what's here

and give this house the family bathroom it deserves.

So, out in the back, small yard out here.

But if you were to tidy it up, get rid of all this rubble

and rubbish, you'd get a table and chairs in here no problem at all.

If you wanted to create a bit more space, you can

take out the old outside toilet and that storage cupboard there,

which would give you another few metres.

And then I think you'd have a small but very pleasant back yard.

OK, so it's not massive, but a few pot plants,

decent garden furniture, a barbecue perhaps,

and it could be made into somewhere pleasant to sit out in.

# Oh sit down

# Oh sit down

# Oh sit down

# Sit down next to me

# Sit down, down, down, down, down... #

But can the house as a whole be made into something that

a prospective tenant can sit up and take notice of?

What does a local property expert think of the house

and the area it's in?

Well, this property is based in The Meadows.

There is a mix of private ownership

and also council ownership properties.

I personally think it's under-rated.

It's very close to the city centre.

There's a plethora of amenities nearby.

And yes, I think it hasn't been fully appreciated so far.

Now that's music to my ears. Just as I thought.

A potential up-and-coming area.

But how is it best to maximise the house for the local market?

If this was my property,

I would certainly address the shower room area.

Convert it into an open-plan bathroom.

You've got plenty of space there.

Get rid of the airing cupboard. Have a combination boiler.

And obviously have a new kitchen.

Far more improved central heating system, new windows,

and just give it a really good spruce.

But will it be worth all the effort on a house that was

guided at £80,000 to £85,000?

I see this property, once fully modelled and completed,

and also once the travel links have been completed, you're

looking at this property within the region of £110,000 to £115,000.

With regards to the rental market,

you're looking within the region of £450 to £475 per calendar month.

So who wanted to get their thinking cap on and the wheels in motion,

and take on that damp in what otherwise should be a pretty

straightforward transformation?

Let's go to auction to find out.

Lot 28, ladies and gentlemen.

A lot of interest in this lovely,

traditional, two-bed, terraced house.

It is freehold with possession. Start me at 80 for it.

70 then, surely. 70 I've got. Straight in at 70.

72 for it. 72. 74. 76.

78. At 80.

80. 82 for us anywhere?

At 81 I will take. 81. 82? 82. 83?

No? At £82,000. I'll take half to help.

82,500. 83.

No? All finished with it then? Third row at £82,500.

I'm going to sell it then. First time on it.

Second time. Third and last chance at only 82,500.

That is yours, sir.

And that's bid of £82,500 was made by Ed.

Ed is a property developer but has bought the house as a joint

project with his friend Michael who works in finance.

They both join me back at the property to tell me their plans.

-Michael, nice to meet you. Congratulations.

-Thanks.

-Same to you, Ed.

-Thanks.

What made you go into the property world, the two of you?

I first started when I was 25. Just given advice to invest in property.

So I went into buy-to-let.

I finished uni when I was about 23.

I had a bit of money to invest, so I just bought a house.

It was right at the start of a real bad time, so I found buying

really easy then cos you could pick things up so cheaply.

Did one just by itself, and I've been doing that ever since.

OK. And how long is this business relationship?

Oh, it is the first property we've done together.

-This is your first one?

-Together, yeah.

-First venture?

Ed has helped me with mine in the past when I have asked him

for advice, but this is the first time we've actually

put our money together and done a project.

What attracted you both to this area in particular?

You must have done your research and why it's going to work.

Both very local to here, we live just across the river.

We found a lot of our friends around our age are buying in this area

because you get so much more house for your money.

I think the area as a whole has changed quite dramatically

over the last few years.

It is attracting a new type of buyer or tenant as well.

Their land for the house is a long-term rental.

But what are they going to do to entice this new

type of tenant to come and live in their two-bed terrace?

It's just very simple.

Strip it back, get all the wallpaper back

and re-plaster complete throughout.

We'll probably carpet in here, strip the floor back down there.

I've already bought a fireplace,

an original fireplace to go back in the front room.

New kitchen, new bathroom.

We won't really do anything structural

apart from the strange bathroom that is upstairs.

Just kind of create a small cupboard,

so we'll knock that through and that will be a really,

really big bathroom for a house this size.

-You've got a bit of a damp issue, obviously.

-Oh, yeah.

I mean, these houses always do.

I've got guys who have been doing damp course for me for years

and years, so they will probably be in tomorrow,

hacking the walls off, and it will be done.

How long will this all take?

Be disappointed if we don't do it in three months.

Work-wise, you would probably get it done in six weeks

but it is just getting everybody in.

How much is it going to cost you chaps to turn this around?

Looking at about 10,000 to 12,000, I think.

If it was me, we'd be going a lot more,

which is why Ed is taking control.

So, why a difference of opinion? What is your thinking, Ed?

-Michael loves to spend money.

-OK.

-Whereas I know that I can...

Because I've been doing this, I know what things should cost,

whereas Michael likes more extravagant things.

And your thinking is?

I'm thinking that Ed makes a lot of sense right now.

ALL LAUGH

# You and I You and I too. #

Wise man, Michael.

There is no doubt between the two of them

Ed has the most experience in this type of extensive renovation.

He also has the contacts in the building trade to get the job done,

and more importantly, at the right price.

But I was wondering, how hands-on are they going to be?

Initially, I'll be doing all the stripping, ripping out.

I'll be making Michael pull his weight as well.

There was silence there.

Ed, when you said you're going to get Michael involved.

Nothing to talk him out?

-I've been known to be unable to put a picture on the wall.

-Ah.

-So this will be a learning experience for me as well.

-OK.

-It's that hammer and pin lark. It's hard work, isn't it?

-Yeah.

It's harder than you think.

So, Ed, when you start, where you get the guys in first and then you

do your bit, or will you start stripping, then they'll come in?

-Tell us...

-No...

First of all, I just rip everything out.

That will probably only take two or three days.

Bit of excitement there in his voice,

Michael, ripping things out, bit of aggression there.

He did say I was allowed to help with that as well.

-Which I think you'll be fine.

-Yeah, I can do that.

With the frame like that, mate, I think it'll go down well, to be fair.

-Michael, nice to meet you.

-And you.

-Well done, pal.

-Ed, good luck.

-Thank you.

Michael and Ed seem pretty competent and committed

in what they want to achieve on this project.

Ed has got seven years' experience,

so that should stand them in good stead.

Big question is, can Ed keep a lid on Michael's spending?

You can find out how they get on later in the programme.

Coming up, I'm exploring the Kent coast,

and I think I found a real treasure.

It's definitely a development opportunity in the making.

We returned to Nottingham to find out how Ed

and Michael's relationship is going.

We often had many discussions over a pint where we sorted everything out.

But first, it is a return to the Mackworth area of Derby,

where we came across a three-bed house.

From the off, it was clear that this wasn't

a standard construction property.

In fact, built after the Second World War in the early 1950s,

this unity construction of block concrete

and steel frame had potential corrosion issues,

which unfortunately, compromised its value

and ideally would need a new outer skin.

What you do is you either just put a layer of bricks here,

or you take this off and replace it, leaving basically

a skeleton of a house, which you basically rebuild.

That then makes the property re-mortgageable,

you get the certificate... Happy days.

And although obviously a big and costly job, in fact,

with a good internal space, three bedrooms and a large garden,

this house was perhaps worth the time and money.

Sold at 66. Thank you.

And it was bought at auction for £66,000 by Anthea

and her husband, Bill.

But it was their grandson, Rugni, and the family

friend and window fitter Matt who met me back at the house.

I lived in one of my nan's properties or at my nan's house.

And I've been trying to rent, but rather than waste money

renting, my nan has come up with this scheme, you know,

invest her money in a house and I mortgage it and buy it that way.

-Oh, great. So this is your granny?

-Yeah.

-Oh.

She's bought a house for me and I'm buying it off her and such.

Fantastic. And how do you fit into this, Matt?

Yeah, well, I'm going to project manage it.

Do mainly the windows, joinery work, cosmetic work.

And we've got builders coming to do the outer skin.

Granny Anthea has stumped up the cash

until the property becomes mortgageable.

Then, Rugni can take it over.

And with a helping hand from Matt to oversee

and do some of the building work,

trained chef Rugni hoped, with a £35,000 budget

and a timescale of six months,

he could have his first new home.

And now, just over seven months later, we've returned to see

whether it has got a more modern exterior.

Well, take a look at that. Isn't it looking great?

# I love your skin

# And what's within

# I love you. #

I sure do. Just look at that kitchen!

The wall behind us, we knocked that down and moved it over three foot.

-Four foot.

-Four foot.

That has made the front room smaller,

this kitchen/dining room larger.

Cos it is south-facing as well, so we've got lots of light in here.

I guess being a chef,

the kitchen space was always going to be important to Rugni.

And it is certainly quite impressive,

with new patio doors which lead out onto a much-improved garden area.

Upstairs, we knocked the bathroom through so it is one large bathroom.

The bedrooms, we made the smaller one bigger

and the bigger one just slightly smaller but still a decent size.

Still got double beds in both of them.

Upstairs, the bedrooms are looking great

and have been finished off to a high standard.

And the bathroom is really quite swish

and now even has room for a shower.

I think the finished article is fantastic.

But this really was a renovation from the ground upwards.

# I love your skin. #

We dug out - I think it was 600 mil deep -

and widened the foundation.

Put steel reinforcing bars in.

Then once that set,

we took all the outer skin off and started re-bricking it up.

At one stage, this house wasn't much more than a shell.

And then bit by bit, it has been built.

# Build you together again. #

But apart from the main structural work which was carried

out by builders, who else was involved?

Well, Matt was project manager.

We have had lots of friends and family help, and my nan as well.

She has drove a lot as well with kind of helping me with ideas

and everything how to put it.

But again, Matt and friends and family have massively drove this.

Well, there is no doubting they've all done a brilliant job

and given Rugni a fantastic new home of his own.

I moved in not so long ago.

The plan was to, you know, one of my mates

and my brother wanted to move in with me.

But to be honest, it's, you know, it's so cosy and I'm thinking

of just living in it by myself for a while,

just to see what the outcome if it is, really.

It's a nice little spot around here. It's wicked.

Well, they do say you can have too many cooks in the kitchen,

so maybe it is a wise move to keep the space for himself,

if he can afford it that is.

So, budget was 35 and we have gone over budget.

-Not massively.

-No.

47,000 we spent in total.

But that is because we didn't expect to do the garden or the roof.

Especially with the interior, we didn't think we would put

as much stuff in it as we have.

A £47,000 spend on top of the £66,000 purchase price takes a total

cost here to £113,000.

But what do two local estate agents make of this new look house?

First, the agent who saw it last time.

The work that has gone into the property - both structurally,

dealing with some of the concerns, and the aesthetics - is super.

This is the first time I visited this house,

and I must say that the standard of work carried out is fantastic.

Every property will have its limits in any particular area.

The owners here really have taken it to the extreme,

and it is as good as it gets.

The only drawback to me with the whole house is

the size of the living room, which is quite small.

But I think that in the kitchen,

it would be quite easy to move a piece of the worktop

to create more space.

Well, perhaps some minor changes could be done, but this house

has really been designed and laid out how Rugni wanted it.

And it seems to work for him.

But has it worked as an investment

with £113,000 spent on the property?

If the property were to be sold at the moment,

I'd expect it to fetch somewhere between £135,000 and £140,000.

I would suggest the property, if it were offered for sale,

would make a sale price of around £150,000.

A lot better than what we thought, to be honest with you.

Yeah, definitely. We thought we were capped at 125.

But you're not going to sell it anyway, are you?

No, definitely going to keep it for myself.

Yes, there may be no plans to sell,

but along with a potential pre-tax

profit of £22,000 to 37,000 on the resale market, the agents

thought rental values of £600 per calendar month would be possible.

So, like its new brick structure, it now is a very solid investment.

And with the house now mortgageable,

Rugni will have to start paying back his grandparents.

But what do they think of their investment?

My grandparents, yep, they love it.

Especially the garden, they love, because it is south-facing.

They can come out here and just enjoy the sun.

They're thrilled with the house as well.

Today, I'm off to an island on the Kent coast.

36 square miles of the Isle of Sheppey to be precise.

I'm in the pretty village of Eastchurch.

The property I'm here to see is on the east side of this rural village.

It used to be a club and institute.

The building stands on about half an acre of land,

and it was up for sale with a guide price of £150,000 to 160,000.

And this formal social club at one time would have been

an important village gathering point

with, no doubt, many a wedding reception,

kid's party and anniversary dance held here.

A place full of memories.

But it does seem that echoes of its past still linger on.

Well, it really smells of stale beer and smoke in here.

So, this has been the old local social club of the area. Wow!

For many, many years, it would have been full of working men and their

families playing darts over there, having a game of snooker over here.

Somewhere just to relax and have some fun.

Order a few pints over here at the bar.

Wow. Got the manager's office just here, full of stuff.

Look, the fruit machine would have sat there.

It would have been heaving in its heyday,

despite the fact there are a couple of pubs just along the road.

Now...

..you can hear a pin drop.

They might say silence is golden, but not in this case.

# Sounds of silence. #

I think its golden days have long passed.

Though one thing that does continue on is the size of this building.

Now, the huge entertaining space through here.

Now, from what I can fathom, kids were allowed in this part.

You've got the bar here. I mean, the room is just massive.

You've got the dance floor.

See, this is where I would usually end up.

But, look, you can see the old parquet...

Look, it's all been lifted.

It hasn't been used for many, many years.

My fear is, will it ever be used again?

Well, I do like a good dance.

# Dance all days, love. #

There is plenty of room to strut your funky stuff in here.

# Dance all days. #

But, come on, let's stop sidestepping around the issue.

This place really is unlikely to be viable as a social club.

It is the site and the land that are much more interesting.

Follow me and have a look at this for a view.

Wow! That is the local cricket ground.

Now, wouldn't it be lovely to look out onto that?

You've got all this space along here to accommodate cars to park.

I think it is definitely a development opportunity

in the making because I certainly can't see any more

weddings or discos going on inside here.

Do you agree?

# Is this the end of the road? #

And the answer surely is yes.

Times change and I reckon a new development would be

good for the village as a whole.

But what would be the best option?

We asked along a local estate agent to tell us what she thought.

There are stacks of positives to this plot.

First of all, Eastchurch has a real community spirit to the village.

Everyone kind of knows everybody, and everybody is there to help out.

There is a great deal of interest with the island at the moment.

There is a lot of movement on the island from London,

suitable midway towns

and we are absolutely crying out for new properties.

Absolutely, this would not be any reason why this wouldn't get

planning commission.

OK, well, that really is encouraging. Planning commission.

For what, though?

I would see between seven and ten three-bedroom houses.

These days, the average build cost of a three-bed house

is in excess of £100,000.

So, with seven houses and with what was a guide price of

£150,000 to £160,000 for the plot,

could you actually get any return for the site if you did develop it?

In the current market,

I see these houses achieving between £165,000 and £175,000.

So, get that planning permission

and there might be a sizable return here.

Would they have much rental value?

For rental purposes,

I see these houses achieving £750 per calendar month.

So, a former social club which has clearly seen better days with

a lack of demand, leading to its inevitable demise.

But what now for this huge space?

Houses? I think so.

You can see what happened when this place went under the hammer.

We have the former Eastchurch club premises,

possible redevelopment.

And as you can see, it is a big site.

Can I see 150 anywhere? Give me 140 then. 140 I'm obliged. 140 I have.

At 140 I've got. And five now, do I say.

145. 150. Is that a bid? 150.

And five, 155 if you like. 155, 160.

160. And five. 70.

After a bit of a slow start, things really hotted up.

We rejoin the bidding at 195,000.

Fresh bidder. 195,000.

198. 198.

200. 200. And two. 202. 203.

204. 204. 205. 205?

No? At 204,000, second row back. Five I am looking for.

Are we all done at 204,000 for the first time?

£204,000 unless you come back with your hand in the air

for the second time.

Third and final time at 204,000.

Yours at 204,000, sir.

And your number please?

So, after a real battle out of sight of our cameras,

the successful bid of 204,000 came from Chris, who is on the left,

and Dave, a property duo who we have met before.

Dave has a background in finance while Chris has many years building

experience, and they came together as business partners a couple of

years ago and have since built and developed a number of properties.

So, I was interested to know what their plans

were for the former Eastchurch social club.

Dave and Chris, we meet again. Lovely to see you.

Did you view this property prior to auction?

We walked around the outside.

I don't think you saw it, did you?

-No, I didn't.

-So, what was it that took your eye?

Why did you want to buy this on auction day?

What we do a lot of the time is we look for the land now.

We don't look at the club. I mean, the club is semi-irrelevant to us.

We look at what is around it, the surroundings and all,

what is behind it.

So here there is a big cricket pavilion right behind,

so we are thinking if we knocked down the club and do houses,

they've got a lovely view out the back. And it is just huge.

It is almost half an acre.

This is a commercial property,

obviously going to need to get change of use for this.

What are your plans? Are you going to turn it

into something residential?

Yeah, definitely. We've already gone in with a set of plans.

We've gone for a terraced seven, three bedrooms with parking

out in the car...the original car park for the club.

See what the planners say.

Well, that sounds like the ideal scheme.

But planning is likely to take ten to 12 weeks.

And with other projects on the go, they don't anticipate doing

anything to the site until they've got the green light.

If you get the go-ahead,

how long do you think it's going to take you to do the actual project?

It really depends if we decide to the project. This is where we...

humming and hawing about at the moment.

Do we get a site like this, get planning consent

and the see what we would get on the market?

That would be our first option.

Would you consider putting it back in auction with planning permission?

-Yeah.

-Tell me.

It would be good to build some things and, you know, you can get

these timber-framed houses,

so that is what we're looking at, at the moment.

There's a local company who do these five-meter wide two-storey

straight three, one room in the attic,

-and they can go up within a month.

-Wow.

-Just for the timber frame.

-That is incredible. That is so quick.

It's so quick, but it is just an economic equation, you know?

What can we make money from? How long is our money tied up for?

And that means you've got to fund it as well.

Yeah. Well, this is it because banks will lend, but you have to own it

without a charge and you have to have planning.

So we are financing the initial leg of that,

but then we need more finance to come in.

You know, a friend of mine has come in on this as well,

and he is investing.

Do you fancy doing the project or do you think it will be much

easier and safer to flip it?

-You do.

-Chris, what do you want to do?

I'm either way, really. The project, I think, is a fairly easy build.

The site is clean.

Demolition isn't really a problem.

I don't think there's any contamination,

i.e. asbestos or anything like that. It's too young for that.

So, the build itself would be relatively easy.

Whereas, you know, my view is you can do a build, which is fine,

but your money is tied up longer.

Whereas if you do three projects here and you stagger them,

the cash is coming back, you're building up your asset in cash terms

and you can flip it, you know?

-Are you sort of disagreeing a bit on this one?

-No, no.

-No.

-We'll just have a pint and we'll work it out.

-Oh, boring!

-I thought you wanted it, you didn't.

-No, we're not...

To be honest, we'll do whatever is economically sensible.

If we build them, great, we build them.

Well, you can see where each of their passions lie.

Dave used to work in finance

and Chris worked in the building trade before they got together.

So it is not hard to see how this partnership works so well.

And so successfully.

So, let's get back to that build or not to build conundrum.

What do you think you'd get for something like this with planning?

-So, all-in costs versus what we could sell it for?

-Yes.

You know, if we can turn 50k on it, I'd...

Cos if you are doing this on a regular basis,

a lot of 50ks build up.

So, yeah, I mean, you know, if our all-in costs on here

is going to be 208 to buy,

let's say it's 220 grand, 225 to get us the planning.

Yeah, if we sell it for 300-odd then that is an easy turnaround.

Just from commercial to residential, you've earned yourselves 50 grand

-for not having all the hassle of building the houses.

-Yeah.

And we haven't got paint all over ourselves for months.

-Exactly. You like to keep clean, I know you do, Dave.

-Yes, I do.

So, it's pleasant.

It's been such a pleasure meeting you both again.

I'm really excited to find out, do we see the houses,

-do we see it back in the next auction?

-Yeah.

-Good luck with it all.

-Thank you.

-Thank you.

-Take care.

Thank you.

So, we meet again.

Ex-banker Dave and carpenter Chris, well, they certainly make up

a great team to bring this project together whatever the outcome.

But will they get planning for those seven houses or will

they sell with planning? Or will they build the houses themselves?

It's all up in the air.

You can find out what the outcome is later in the programme.

We've seen how everything turned out for our first buyer,

-but what about the others?

-Ooh, was it a bumpy ride?

-I wonder, Lucy.

Let's see how they got on.

The Meadows area of Nottingham certainly looks like it's

going places, with a soon-to-be finished tram line taking you

directly to the centre.

And it was here where I first came across a two-bed terraced house,

slightly dilapidated, a bit run down and certainly had some damp issues.

This property needed some attention to get it back on track.

But in an up-and-coming area, it suddenly had long-term

investment material written all over it.

That is yours, sir.

It was bought for £82,500 by friends Ed and Michael,

as their first joint property investment.

Ed is an experienced property developer,

having done refurbishment work for seven years.

Michael's expertise lay more in finance.

So each of them brought something different to the table.

So, initially, I'll be doing all the stripping, ripping out.

I'll be making Michael pull his weight as well.

There was silence there, Ed,

when you said you're going to get Michael involved.

Nothing to talk him out? Nothing?

I've been known to be unable to put a picture on the wall.

-Ahh.

-So this will be a learning experience for me as well.

-OK.

So, this might not be a perfectly balanced partnership,

but Ed was hoping that the combination of tradesmen,

his know-how and Michael's, um,

picture-hanging skills, they could get the house ready for the rental

market in just three months and on a ten to 12 grand budget.

And now, just over 3.5 months later, we've returned with Ed

and Michael to check on progress.

Yes, it is looking good with new doors and windows.

Nice touch with the hanging baskets, lads.

Inside, the wood flooring certainly gives it a welcoming feel.

And they've put some character back into the rear reception room

with a traditional fireplace.

But perhaps the biggest change here isn't

what they have added, it is what they have got rid of.

We had rising damp down here and penetrating from some

historical bad guttering where rainwater had just been coming in.

So, the whole of this section had to be taken right back to brick,

injected all the way around here

and then rendered in a waterproof sand and cement.

So, that was probably the biggest bit of damp-proofing we did.

So, with the damp sorted, they could tackle the rest of the house.

There is now a stylish, modern kitchen.

While upstairs, the two bedrooms benefit from new paintwork

and flooring.

But up here, it is the bathroom that has the most impressive change.

So, in the bathroom, we opened it all up.

There was a room here with a door with the hot water tank.

We took all of that out.

It gave us a big space so we added a nice bath,

which of course we have tiled all the way around.

Shower in the corner.

All in all, we are absolutely delighted

with the finish of the bathroom.

Well, great minds do think alike. Opening up the bathroom is fantastic.

I like it.

And remember the outside space,

which I reckon could be turned into somewhere pleasant to sit.

Well, it is spot on the money again. It looks brilliant.

But try as I might, I can't see any pictures on the wall, Michael.

So, how much was he involved?

Everyone likes to have a joke about the fact I can't do anything,

so I thought I might as well learn.

So, we started off ripping the kitchen out, which was

actually really good fun.

With the wallpaper stripping, started off quite fun

and then after probably three, four, five, six days, got very tedious.

The main thing, I was asking a lot of questions.

# There are more questions than answers

# And the more I find out The less I know. #

Well, hopefully Michael has learned from his experience.

One question I had for Ed was, what was it like working with

a business partner having gone solo for so many years?

It took a bit of getting used to just having to run every decision

through somebody else, whereas I have never,

ever had to do that before.

But, I mean, we always managed to find an answer to every problem,

didn't we? And come to an agreement.

Yeah, but we often had many discussions over

a pint where we sorted everything out.

That sounds like the way forward, boys.

But did they stick to their agreed ten to 12 grand budget?

It came in at about 15 now.

But we have increased the spec with a view of me possibly moving in

in maybe six months.

Now that is a bit of a curveball. I wasn't expecting that.

But I can see this being a great home for Ed.

And if he does move in,

then he will pay Michael his share of the rental income.

But what will that be?

We asked along two local estate agents to assess the work done here.

My first impressions of the property are it is...it's been done very,

very well.

It is nice to see some more features like the fireplace

and the cornice coving in some of the rooms.

Yeah, it is good.

The property is very nice. It's very spacious.

It's been nicely refurbished.

I particularly like the bathroom and kitchen.

There's an old adage that bathrooms and kitchens sell properties,

so it is good to see that the owner has spent time

and effort getting those two areas right.

The plan here is to rent the house out, possibly to Ed.

But how does it fare as an investment?

Their total spend now is standing at £97,500.

I see the value of the property being in the region

of £105,000 to £110,000.

I would look to market this property at £110,000.

One around the corner just sold for 130,000.

That was a three bed, so I'd be minimum 150.

I'd be very, very confident we would get that within a week.

Well, some disagreement about values,

but even the £105,000 would see a small profit of 7,500.

But do the rental figures match up to their expectations?

The rental market, they would be looking to

achieve in the region of £500 to £525 per calendar month.

I would look to market this property for a rental value

of £550 per calendar month.

Yeah, that's also very poor.

We've literally this morning spoken to somebody and agreed 650.

OK, well, 650 per calendar month would see a rental

yield of around 8%, so whoever the tenant turns out to be,

that is a good return on their investment.

But did they experience any ups and downs working together?

I think we had a mixture of both.

We've had arguments which end in laughter.

Arguments which end in a meeting with a beer which end up with

a really good night out.

I think like with any relationship in business,

it is healthy to have disagreements.

Yeah, it's just how you overcome them, and we are fine.

Still friends now.

HE LAUGHS

It was on the Isle of Sheppey in Kent that we first

came across a former social club that was well past its sell-by date.

Sitting on half an acre of land,

it did offer some real development possibilities,

and that potential was spotted by familiar faces to

Homes Under The Hammer Dave and Chris,

who bought it for it 204,000.

They were looking to get planning permission for seven

houses on the site.

Whether they build them or just sold the site on with planning permission

was still up for discussion.

Do you fancy doing the project, or do you think it will be much

easier and safer to flip it?

-You do.

-Chris, what do you want to do?

I'm either way, really. The project, I think, is a fairly easy build.

The site is clean. Demolition isn't really a problem.

Whereas my view is, you can do a build which is fine,

but your money is tied up longer.

Whereas if you do three projects a year and you stagger them,

the cash is coming back, you're building up your asset.

-You can flip it, you know...

-Are you sort of disagreeing on this one?

-No.

-No.

-We'll just have a pint and will work it out.

Oh, boring!

-I thought you wanted it, you didn't.

-No.

I mean, to be honest, we'll do whatever is economically sensible.

Dave had a background in finance

whereas Chris was a carpenter by trade,

so perhaps it wasn't surprising which approach they erred towards.

But neither options would be possible

without planning permission.

And now, nearly ten months later, we return with Chris.

And he has some very sad news.

Unfortunately, Dave, my business partner, suddenly passed away.

So that has changed our business...route somewhat.

It's currently on the market and we are due to sell it very shortly.

This has obviously been a devastating time for Dave's

family and for Chris.

But Dave's widow felt it was important that his legacy

should go on and that Chris would finish what they started together.

The business we did run, it is going to close down.

It was named with our initials in it.

I'm starting a new business,

but I am retaining the same initials within the wording so I can keep

Dave's influence within the business as we grow and as we go forward.

Part of this process is to sell the plot on which the planning

permission for the seven three-bedroomed houses to let

someone else build these properties.

And they do look like they'll sit beautifully on this plot.

However, Chris will be taking the path favoured by Dave,

which was to avoid tying up the money in the demolition

and building and just selling it on with planning permission.

And that could well prove to be a very shrewd strategy.

We bought this for 204.

Collectively with other bits and pieces,

fees and architect fees, we have spent a total of 214,000.

£214,000 seems like a great investment on a site

that you can now build seven three-bed homes onto.

What do a local estate agent

and a chartered surveyor think of the plans

on what these houses might bring to the local community?

The plans that's currently in which the council is staggered

terrace properties, which I think is best suited for the location.

Semi-detached probably would have commanded more in resale,

but the terraced properties will sell well.

I think, viewing the plans, I think what they have gone for,

terraced, or maybe

adapt it to be semi-detached homes is the best option.

I believe that there is always demand for new properties on the island,

and although there are quite a lot of new builds

happening at the moment, there is always demand for more.

So, it seems that Dave and Chris got their plans just right for the area.

How much value will they add to a site they had spent £214,000 on?

I believe the site with seven units planned on it should achieve

between £295,000 and £300,000.

I would value this plot with planning at just above £300,000.

We've got a buyer for it now and he has agreed a price of 300,000.

And it has worked very well for us.

It is testament to what Dave and I

sort of built together, that the system works.

You know, there is a loon to be made.

Yes, £300,000 will see a tidy pre-tax profit of £86,000.

And in the circumstances, it is

understandable why Chris is selling the site on.

So, how does he see the future?

The fact that we are going to continue, cos we built up

quite a little team of contacts and a business together,

I'm going to carry that forward. I'm not going to let that stop.

Dave's committed enough of his time, and so have I, to make that work.

It would be foolish of us to just not utilise what we've now got.

He'd be very pleased that we are going to continue.

And he'd be very pleased that we sold this at a profit.

David was such a lovely guy and I really enjoyed meeting him

on the occasions he appeared on the show.

It's just great to know his legacy continues in Chris' new company.

I hope you can join me,

Martin and Dion next time for more Homes Under The Hammer.

Goodbye.