Episode 67 Homes Under the Hammer

Hello. For a lot of people,

-property starts off as a bit of a hobby, then just grows.

-Yes.

And the more you do,

the more you learn,

-and there are always new challenges ahead.

-Yeah.

Or if you're buying your first or your 101st property,

make sure you get it at a good price.

So, why not buy under the hammer?

So, what have we got today -

-a bungalow, a couple of flats, a terrace?

-Yes.

-And who bid on them at auction?

-Let's take a look.

In Carlton, Nottingham,

this three-bedroom semi has some appealing features.

The garden's beautiful, the inside of the house is beautiful.

I love it.

The same can't be said about certain features

at this terrace in East Ham, London.

Not sure about this feature.

Not typical of the Victorian period, I don't think.

And we revisit a property in Stoke featuring a whole lot of rooms.

A 43-bedroom former care home.

All these properties were bought at auction.

We'll find out who bought them and how much they paid

when they went under the hammer.

I'm in Carlton, which is a suburb on the outskirts of Nottingham,

and the property I'm here to see is a three-bed semidetached house

with a guide price of £73,000-plus.

And here it is, with garage and off-street parking.

It's got great views on the outside.

Let's see what it looks like on the inside.

Nice. Very nice feel to this house as soon as you come in.

You've got your stairs going up to your bedrooms,

your lounge, which is a good-sized lounge,

and really big bay window letting lots of light in as well.

You can see that whoever had this property last

has really looked after it, kept it in good condition.

And on this staircase here, I can see there's a bit of panelling,

but I would imagine, behind here, the original spindles.

I'd be inclined to get rid of this panelling,

expose those spindles again.

Through into the kitchen. Again, in good condition.

Lacking in work-surface space,

but it's in nice condition all the same.

In here, we've got a pantry area.

I'd be inclined to get rid of that,

give yourself a bit more work space, bit more kitchen.

And then you're into the dining room,

and it's an OK dining room.

You'd get a table and chairs in here no problem.

But I'd be inclined to take this wall out -

take this whole wall out - bring it into modern-day living,

give yourself a nice kitchen/diner.

And if you wanted to go a little bit further,

you could actually stick some patio doors in there as well,

straight out into the back garden. Spot-on.

Sometimes, you just walk into a house

and instantly get a good feeling.

It's hard to put a finger on exactly what it is.

This is one of those houses.

# Oh, oh, sometimes

# I get a good feeling... #

You can tell whoever lived here previously

loved this house and really looked after it,

but that has got to be one of the smallest work surfaces

I've come across in a house this size.

I've seen bigger in a camper van.

So, I'm upstairs and there's three bedrooms up here -

two overlooking the front of the house,

a smaller bedroom there, and a much larger one -

possibly double the size - just there.

And here's bedroom three overlooking the back garden.

And as of houses of this period,

you've got a toilet and a bathroom completely separate.

Some people like it and some people don't,

but it's mainly the back area here, the bathroom. There's no shower.

I always like a freestanding shower, so if you could rejig that

and squeeze one in, that would be my choice.

But in the main, this house has really been looked after,

it's in great condition, and I really like it.

MUSIC: 2 Become 1 by The Spice Girls

So, the age-old question - should two become one?

Well, I think so because this is not the best arrangement

for washing your hands.

So, I'm out in the back garden, and this too is in great condition,

just like the house.

You've also got some outbuildings, which are great for storage.

I have spied the garage,

which looks like it may have been built

with materials that contain asbestos.

If you are thinking of getting that moved, get the professionals in.

But the garden's beautiful,

the inside of the house is beautiful.

I love it.

So, obviously, I love this place, but what's a local estate agent

got to say about the area?

And what are his thoughts on the house itself?

Carlton's a popular residential area in the north-east of Nottingham.

It's popular with families, first-time buyers.

There's plenty of amenities

and good bus routes into the city centre,

and it's experiencing very strong demand at the moment.

I think it would benefit from a new kitchen.

Possibly look at the bathroom as well.

The bathroom's got a separate WC,

so putting those together into one larger room

will certainly be beneficial for the family market.

But that aside, it's just really cosmetic decoration throughout.

So, we agree - it's a good house, but needs updating.

But what could the house guided at £73,000 be worth

when it's done up and sold on?

Once the work's completed, I feel the property will be worth

in the region of 125,000 to 130,000.

In terms of the rental market,

in the region of £500 per calendar month.

When you walk into some houses,

they have a nice, warm feeling about them,

and this is definitely one.

Not a lot needs doing here, but if you did do anything,

maybe a bit of a rejig, a reconfigure

just to bring it into modern living.

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

Lot number one.

A traditional three-bedroom semidetached house

that requires a scheme of improvement and renovation.

The guide is 73-plus. Would you like to start me at 78?

-88.

-88. 88 on the telephone is the opening bid.

In the room? 89, I've got in the corner.

90 is bid there. Thank you.

91 on the front row here. 90. 92.

93. 93 in four places.

With a great deal of interest in the property,

the bidding was fast and furious.

We rejoin it when the bids reach £102,000.

102 in the centre. 103 at the back.

Going... 103.

104. 104 is bid.

105. £105,000.

Once, twice, third time.

Sold at 105,000. Thank you.

Making that final bid of £105,000 was James and father-in-law Malcolm.

They are both first-time developers,

and this is the first time they'll be working together.

I met them at the house to find out more.

# Yeah, yeah, yeah Come on, sing it now with me

# Like father, like son... #

-James, nice to meet you.

-Nice to meet you, mate.

-Malcolm, nice to meet you too, sir.

-Dion.

-And congratulations.

-Got yourself a bit of a gem.

-Yeah, it's not bad, is it?

-It's not bad.

-Who found it?

-James.

-Yeah.

-He only lives on the back road.

-Just up there.

And we drove around it and thought, "Let's go and buy a house."

THEY LAUGH Simple as that?

-Yeah, simple as that.

-Well...

-We had an idea.

I'd done the extension on our house,

and we always wanted to buy another one once we'd done.

And then just driving around,

we had a look and there it was, just round the corner.

-On your doorstep.

-That's it. Right on the doorstep.

Well, it's not every day you find a property as good as this,

let alone in your own neighbourhood.

What's made you want to go into property developing?

-Try and make some money.

-Yeah.

Watching your show all the time doesn't help either.

-And you thought, "I can do that myself"?

-Yeah.

-Starting with this one.

-That's it.

-So, how did Malcolm get involved?

He had a little bit of money behind him.

THEY LAUGH OK. And you're the money man.

-I'm the money man, yes. It's my son-in-law.

-Yeah.

We're pretty experienced at doing this sort of thing.

We built his extension,

I've turned my two-bedroom bungalow into a five-bedroom house,

so we know what we're doing.

So, tell us what you're going to do.

I think it's a really nice house. It's warm.

-It's got a nice, warm feel, doesn't it?

-It is a lovely home.

-The previous owner lived in it since it was built back in... 1947?

-'47.

-OK.

-68 years, they were here.

-That's brilliant, isn't it?

Yeah, and she's obviously looked after it.

We're going to modernise it a bit. Obviously, it's old-fashioned.

-We're going to knock through the kitchen/diner into...

-Yeah.

I mean, the kitchen, at the moment, is a sink

and a work unit about two feet wide, so we'll open it out,

make it into a proper kitchen/diner.

Anything else downstairs

that you're thinking of changing, reconfiguring?

Might put some French doors in.

-Oh, yeah.

-Where that window is at the back.

In the dining part of the kitchen/diner,

there's a window we're going to cut down

and put French doors in to open out onto the nice, sunny garden.

# All the small things True care... #

Oh, yes. We're all singing from the same song sheet here.

I'm especially chuffed they're going to be tackling

the size of that kitchen.

-Any changes upstairs at all?

-Yes.

-Just the bathroom, mainly.

It's a separate bathroom and toilet at the moment.

We're going to take a wall out

-so we can have a walk-in shower and a bath.

-Yeah.

We're going to have both. Yeah, make it really nice.

Other than that, I think that's it upstairs.

Yes, this is going to be good.

There was one thing I noticed in the bedroom

and that's an awkward junction where the stairs go through the room.

These are quite common and a real waste of space,

but it turns out Malcolm has a solution.

So, the plan is to build a captain's bed over the top of it

so you can utilise the whole of the floor space.

So, we'll build a captain's bed with a ladder up,

-rails round for safety.

-Nice little bunk bed for a kid.

-Those are great ideas.

-It opens all the room, then.

-Yeah.

So, rather than putting a bed in there

-and you've filled the room up already.

-I like that.

-The kids love it.

-Now I know why you've got him on board.

-Not just for the money.

-No.

-He's got some good ideas as well.

-He has.

Got quite a big brain in there, haven't you?

The son and father-in-law team seem to know what they are doing

and are full of ideas,

but what about the potential fly in the ointment - the garage?

-I see the garage as well.

-Yeah.

A lot of garages that are built in this kind of period

do tend to have asbestos.

-Is that the case?

-Yes, it is the case.

-It is the case?

-Yes, it is.

-But it is undisturbed.

Asbestos is only a problem when it's broken

and it releases the fibres into the air.

-But we're not planning on disturbing the garage at all.

-No.

-# Do not disturb

-# Do not di, do not disturb... #

They're quite right about that, so not a problem for them.

Now the money matters.

So, what's the budget for this project?

Apart from labour,

the only things we need to buy are the bathroom and the kitchen,

so we've set a budget of £5,000.

Maybe six or seven if necessary.

Basically, it's the spec of the bathroom and the kitchen

that's going to dictate the cost.

Will that change if you go to buy...?

Are you only going to buy to rent? Are you only going to buy to sell?

-No. We were originally going to buy this to sell it.

-OK.

But a friend of mine asked if he could have it,

so we've actually already got someone who's seen it,

-wants it and...

-It just gets better.

He's a builder as well, so he's going to help do it up.

And when it comes to colours and worktops and things like that,

he's going to have a say in it,

so it's going to be a nice, family home for him and his kids.

Everything is falling into place here.

Question is, will the budget? They're not quite certain,

but they reckon in between £5,000 and £7,000.

What about your timescales, getting all the work done?

-Three months, we think.

-We both work full-time,

-so it's going to be weekends and evenings.

-OK.

We've got the light nights now, so we'll be putting some hours in.

Think it's a pretty good buy, this one, to start with.

Not a massive amount of work,

but it'll look really nice when we've finished.

-I don't doubt that. It's got a nice feeling now.

-Yeah.

-When you're finished, it'll have an even better feel.

-Oh, it will.

You come back and see it when it's done.

I might just do that. THEY LAUGH

This is James and Malcolm's first venture,

and I think they've got themselves a bit of a gem.

But how will son and father-in-law get on working together?

You can find out later on in the show.

As you've probably guessed by the name,

East Ham is in the east of London,

and is a bustling area with lots of shops,

a Tube station and links into Central London,

and you've got easy access for motorists.

Now, it's a pretty convenient place to be,

but what sort of property will we find here?

Time to check it out.

Well, on that subject of convenience,

today's lot is only ten minutes from the Tube station.

So, what else has it got going for it?

Well, this is a pretty, tree-lined street,

and you have a little local cafe just at the end over there,

ready for your early-morning coffee.

So, all in all, a rather pleasant spot to be.

But what about the property I'm here to see?

Well, it's a three-bed terrace

and it had a guide price of £210,000.

Doesn't look too bad from the outside.

I'm going to head on in and see if I'm still singing its praises.

Well, you can always rely on there being an incy bit of character

in these Victorian terraces.

And, well, to be fair, it doesn't disappoint.

You've got a lovely ceiling up there with some coving.

You get that nice feel of ceiling height.

Through here, first reception room. A good space.

Incredibly dated everywhere. You'd expect that, really.

And a gas fire,

which tells me there's probably no central heating anywhere.

Stairs leading up to the bedrooms.

-Second reception room.

-SHE LAUGHS

Not sure about this feature.

Not typical of the Victorian period, I don't think.

Rather interesting bits of glass with sailing boats.

Not sure whether I'd keep that.

Again, another fire because there's no central heating.

But a nice-size room. Now, right at the back of the property...

Oh, no! Oh!

Saying that's lovely and big and spacious, this isn't.

This is the kitchen, and it's a disappointment.

It's small, it's poky. And look.

Downstairs bathroom, and it's tiny. Hmm.

I'm just wondering whether we can move that upstairs,

and then you'll have a much bigger kitchen.

Let's investigate.

There's a very individual approach to the use of glass.

I mean, glass walls on a bathroom?

The kitchen extension is not going to pass any inspections,

as far as I can see.

Let's have a little swan upstairs, shall we?

I can really visualise what this house will be like once renovated.

It's got a lovely feel to it. Quite excites me, actually.

Anyway, let's not detract from the reason I'm up here,

and that is to see if we can find anywhere to relocate that bathroom.

Through the double doors. The big reveal. Ta-dah!

That's a great surprise. In fact, that's a really huge door opening.

Rather grand, don't you think? So, this is currently a bedroom.

You've got two fabulous bedrooms already up here.

Now, would this be the ideal spot for the bathroom?

Well, I think yes, it would.

Number one, you've got the bathroom directly underneath you,

so that would be great for the plumbing just to come up.

The only negative is it will make this room rather small.

But you could think about taking this chimney breast away

so you could corridor along here.

You could push the bathroom over there.

You don't always need a window in a bathroom,

so you could put it to the side wall.

Lots of options, but if this were my house,

I would definitely get that bathroom from downstairs up here.

# Moving on up Nothing can stop me... #

With three good-sized bedrooms,

you can afford to lose a little space to move that bathroom on up.

Out the back, there's a good-sized garden.

And if there's enough space for all these weeds and a shed,

well, there's enough space for an extension,

and therefore, a much bigger kitchen.

Looking around the other properties in the street,

I see many have loft extensions,

so you could expand up as well as out.

What do you think? Is it worth it?

A local property expert can tell us

if it would be financially worthwhile.

In terms of renovation, I think the property needs a full overhaul,

full redecoration, possibly rewire.

It's going to need gas central heating.

Double glazing is going to need putting in as well.

I would have thought, by the time you start doing all the works...

A full new plasterwork as well.

Upstairs layout, really good. Three double bedrooms.

It's going to be very popular once it is turned into what it will be.

Well, let's turn it into some numbers first.

What if you modernised and put it straight back to the market?

With its current size and layout, with full renovation,

I'd say, realistically, you're going to be looking around about £325,000.

Current size property and layout, for rental purposes,

you'd be looking around about £1,400 per calendar month.

And if you extended out the back, that could be expensive,

but would increase the rental and sales values.

Doing the ground-floor extension only,

you're probably looking between £330,000 to £340,000.

If you go up into the loft conversion as well

and doing the rear extension,

you'd be looking around about £375,000.

Well, there is a lot of work to be getting on with here,

but what did you expect from an auction property?

However, there's plenty of potential,

and compared to a lot of houses I've seen,

well, I think it's looking good on the inside.

Let's head to the auction and find out who agreed.

Nice-looking property. Haven't seen this one.

I don't know. Start low.

I'll start at 200.

200 down here. 205. 210. 215. 220.

225. 230. 235. 240.

245. 250.

250. 255.

260. 265. 270.

265. 270 elsewhere?

266, as you've been so wonderful.

Yeah, with you. I've got 265.

I'm discounting it to 266 to you. 267.

She's struggling. 267.

It's a house in London. You won't get it soon.

267.

Can't believe this. Seems cheap, a nice house like this.

If not, 266. First time, second time...

267.

268.

269.

268. First time, second time, third and last time.

Are you all done?

Sold. 268. Well done.

The pleased-looking bidder

getting the property for that final bid of £268,000

was former nurse Rosie.

She's a full-time landlord with three properties she lets out,

so I wanted to hear her plans for this one.

-Rosie, congratulations.

-Thank you.

Why did you want to buy this property on auction day?

I had been looking at this area for quite a long time -

about a year and a half -

and decided they were really nice little houses.

And I didn't have the money a year and a half ago.

Had the money this year, and I saw this one come up at auction

and I thought I'd go for it.

-So, did you view this prior to the auction?

-Yes.

What did you think when you walked through the door?

I thought it was lovely because it hadn't been messed about with.

It's got all the old cornicing. It's got the tiles at the front.

I loved it, but there's a lot of work to do. I recognise that.

So, what are the downsides, in your mind, of a property like this?

Well, the downside is, this area is relatively cheap for London,

so that's how I was able to get it,

but, then, I won't be able to sell it for very much,

so I could over-invest in it, and I recognise that.

So I think that I've got choices to make, basically.

Rosie is hoping any profit she makes from this venture

will help her daughter Kate get on the housing ladder

as she's just returned from Africa, where she's been working.

This house has definitely got to earn some money, so...

If I were to go the whole hog, I would put the bathroom upstairs,

extending the kitchen to the side and a little bit to the back,

not to lose too much of the garden.

And to open up the back room

with the kitchen that will then exist

and make a nice, big, living/kitchen.

And the bathroom upstairs taking part of the third bedroom.

That would really create a lovely, open-plan space,

but it would also take quite a bit of your money.

It would. That's the problem. That's the dilemma.

I think the minimum, probably, would be to put the bathroom upstairs,

although the agents tell me that they sell perfectly well

with bathrooms downstairs. But it's poky, isn't it?

It's very small. It's a small kitchen and it's a small bathroom.

Yes, exactly.

Of course, Rosie could do very little and hope prices rise.

Sometimes, too many options can make for confusion.

Oh, they're nice little houses.

It's a shame not to do anything with them,

but a lot of them are overdeveloped in London.

I don't like that very much.

I like them to retain their original features.

# You know you better make up your mind

# Pick up on one and leave the other behind... #

Well, Rosie's going to have to make up her mind.

Will it be the whole hog or a little piglet of a renovation?

The good thing is that Rosie has experience

with this type of property.

It was a house that I bought with my mother in the '70s

for her to live in.

And it was getting seedy and run-down,

and it was either sell it or do a development, so I developed it.

Turned it from a three-bedroom, one-bathroom

into four bedrooms, three bathrooms.

-It's a really nice place now.

-So, you are a dab hand.

-Hmm.

-You've done this before.

-I probably spend too much money.

Well, it'll be a shame for you

not to do anything to a property like this

because this is the sort of house that,

I'm sure you know, you won't believe,

if you do a development on this, it will look stunning.

-It's a fantastic little house.

-It's got great bones.

It's really asking for a good development.

Rosie's really torn between her heart

and the need to make a profit to help Kate.

She knows she can't afford an overspend,

which brings me to the budget.

To put an extension at the back downstairs

would cost about 20 grand.

To do the loft would cost about 30 grand.

All the other bits and pieces,

I don't think I'd come out with spending less than 70 grand

-if I did the whole thing.

-Mm-hm.

So, what about if you just do the bathroom

and you open up the kitchen space to just make the kitchen larger?

I'm guessing about seven and a half grand, maybe.

But then, do you leave the electrics as they are? Uh, I don't know.

See, once you unpeel something, the rest uncovers

-and you have to keep going backwards.

-Yes, yes.

And it makes something else a bit worse.

You're appealing to the side of me that really loves developing houses.

I love it.

So, Rosie, I'm going to ask you this question,

and you need to tell me right now.

-THEY CHUCKLE

-What are you going to do?

Come on. You've got to make your mind up.

I need to get the builders' prices in,

and I'm definitely going to hang onto it for six months,

and during that time, I will make up my mind.

But you're not going to tell me, are you?

I don't know. I don't know. THEY LAUGH

Rosie, it's been really lovely meeting you today,

-and I cannot wait to find out what you're going to do here.

-Yeah, yeah.

-Lovely to meet you.

-Nice to meet you too.

-Thank you.

-Thank you.

Well, what a dilemma Rosie has.

Will we see a dramatic transformation

or will the property look exactly the same?

Either way, it sounds like Kate is going to benefit

from the best bank of all - the bank of mum.

Join me later in the show and you can find out what happens.

Coming up, you won't believe what's in this care home in Stoke.

A pub, a hairdresser's, a coffee shop, a sweet shop.

Well, Martin, I believe Rosie has a budget issue in East Ham.

I estimated around £100,000. Always, works come to more.

Now we return to Carlton on the outskirts of Nottingham,

where, earlier, I saw this three-bed, semidetached house

that was bagged at auction by first-time property development team

James and father-in-law Malcolm.

Having spent £105,000 at auction,

they were hoping this would be a successful first foray

into development.

What's made you actually want to go into property developing?

-Try and make some money.

-Yeah.

Watching your show all the time doesn't help either.

-And you thought, "I can do that myself"?

-Yeah.

-Starting with this one.

-That's it.

This much-loved and well-maintained family home

was in need of a little modernising,

including a new kitchen/diner and large family bathroom.

I think it's a pretty good buy, this one, to start with.

It'll look really nice when we've finished.

You come back and see it when it's done.

I might just do that. THEY LAUGH

Thanks for the invitation, Malcolm.

And here we are three month later.

Let's see what the boys have done to the place.

And as promised, Malcolm and James have removed the supporting wall

from the kitchen and dining room,

opening up the space to create a slick and modern kitchen/diner.

When we first came in, there were walls everywhere

that needed taking out, so they've all gone.

The massive fireplace, so that had to come out.

-That was...

-Good fun.

-Yeah.

-Yeah.

-James is the demolition expert.

-I enjoyed that, yeah.

I've just taken these walls out, taken the doors out,

put the RSJ in.

Everything was just done so it looks like it does now.

Nice, open, spacious kitchen/diner now.

So, I'd say a very successful renovation downstairs,

and the transformation continues upstairs.

Totally re-laid out the bathroom area.

We had to move the door in the bedroom

to make the bathroom bigger.

And the nice, separate bath.

-Nice, big space to walk around in.

-Yeah.

Just moving that door made so much difference to that bathroom.

So happy with that bathroom. Absolutely love that.

-Mm. It's come up well.

-Yeah.

# You know that you make it shine

# It's you that I've been waiting to find.... #

James, it turns out, has a bit of bathroom envy,

and wouldn't mind this in his own house.

They really have done a cracking job.

Each of those bedrooms have been re-skimmed and repainted.

And don't forget that space-saving solution

in the room with the staircase junction.

How chuffed are they with the end result?

We are really, really pleased with how it's come out.

I think the kitchen and bathroom really set it off.

We actually spoke to the previous owner,

and she came and actually had a look and saw what it was like.

She couldn't believe her eyes of what the house was like

that she grew up in.

When we first met, Malcolm and James had already changed their plan

from developing this for resale

because a friend had shown interest in the property.

So, what happened with that?

My friend has rented it out off us.

We've given him an opportunity to buy if off us

in a couple of years' time, so he hasn't got to move his family again.

-So, yeah, really happy with how it's all worked out.

-Yeah.

It seems everything has gone really well with this project.

The tenants have moved in

and done a bit of painting and decorating themselves.

They've already made it their home.

As far as budget goes, Malcolm and James were pretty flexible,

and figured between £5,000 and £7,000.

In the end, they've spent 5,600.

But has that spend been worthwhile? We called in two local

estate agents to give us their opinion on the property.

My first impressions of the property are very favourable.

I think they've done a nice job.

The kitchen has been opened up,

which I think has been a real plus for the property.

A lot of people want the open-plan, family living area.

I really like the layout

of the kitchen,

how they've knocked through the kitchen/dining room.

That's really popular nowadays -

to sort of have that open-plan sort of living facility.

Eager to make a good profit

from their first venture into the property developing market,

Malcolm and James have spent a total of £110,600.

So, what could this sell for?

I think, on the sales market,

this property would achieve between £125,000 and £130,000.

The current market value,

I see in the region of £115,000 to £120,000.

That top valuation of 130 grand

could give them a potential pre-tax profit of nearly £19,500.

-What do they make of that?

-I think they're a little bit low.

-I think we could possibly get a little bit more.

-Yeah.

-I think we're pretty sure we can get a little bit more than that.

-Yeah.

But, obviously, we do the bits and bobs,

then we know it's obviously going to be more.

And plus, the house prices are going to rise again, so...

-Yeah, we're pretty happy with it, aren't we?

-Mm. Yeah.

-Yeah.

-We're in profit.

-Exactly.

Content with renting for now,

I wonder how the agents value the property on the rental market.

On the rental market, I think this property would achieve

in the region of £595 per calendar month.

In the current rental market, I would expect the property value

to be in the region of £550 to £600 per calendar month.

£600 per calendar month would mean a yield of 6.5%.

Are they happy with that?

-Spot-on.

-They are bang on.

-Spot-on.

-Aren't they?

-Yeah.

That's exactly what we're getting, so...

-At the top end of those as well.

-Yeah, so, we're...

-Well, we're definitely happy with that.

-Yeah.

-Yeah.

So, a straightforward, profitable renovation

right round the corner from James' house.

Not bad for a first property.

Will we be seeing him in the auction room again?

-Oh, yeah. I'd go back to the auction again, yeah.

-Yeah.

I enjoyed that. That was a good experience.

-That was a bargain, what we got.

-Yeah, we were happy.

It was more than we thought we'd have to pay, but in the end,

-we realised it was a reasonable price.

-Yeah.

Still made money out of it.

-That's the important thing.

-That's it.

-MARTIN:

-Back in 2013, I was in Stoke.

And if you're a regular viewer, you'll know that,

when it comes to housing stock in Stoke,

a firm favourite is the two-up, two-down terrace.

So, surely, that's what I was here to see.

# I thought that I would be above it all by now

# In some country garden in the shade

# But it's business as usual

# Day after day... #

No. No, no, no, no, no.

I'm here to see this -

a 43-bedroom former care home

sitting on an acre and a half of land.

So much to see, I don't know where to start.

But with a guide price of £200,000,

you might start with the word bargain.

Now, clearly, we are entering the realms

of a fairly specialist opportunity scenario here,

but I shall try and inspire you with the options.

Through what is a temporary door at the moment

into what I guess was the main community area,

it's a big space.

You kind of get a feeling, when you come in here, of...

Well, that there's a lot of clearing out to do,

and also the age of the building.

And so you've got to be aware of some of the building practices

of the era in which this was built.

One of the things I'm definitely looking out for

is signs of asbestos.

Other than that, let's just see what we find.

And what a warren it was.

With 43 bedrooms, beauty parlour areas, a kitchen,

it just went on and on and on.

I was feeling a little lost,

so there was only one solution to help us grasp the geography.

# Get out the map

# Get out the map and lay your finger anywhere down. #

A map. A layout of the actual place. Here's where I came in.

There's that big lounge area there.

Through here, the kitchen there,

down here to where I was just a second ago,

and I'm now at this point.

You can see the bedrooms spreading out

down this long corridor here and down here,

so you get an idea.

A really, really extensive building.

And, OK, this wasn't a starter project for someone,

but there were a number of options.

Well, this place has certainly got my developer's mind racing,

so let's just look at the options.

First of all, you could leave it pretty much as it is.

Obviously, you'd have to spend a bit of money doing it up,

but converting it back into a care home

or some kind of residential care facility -

that's number one.

Number two - you could think about keeping the existing building,

but putting it to alternative uses.

Thirdly, what about the option of developing it?

Well, I've just been kind of going through

some back-of-an-envelope calculation in my head,

and I reckon, as an average in the UK at the moment,

between 12 and 17 houses per acre, ballpark.

So, you've got an acre and a half,

so that's between 18 and, say, 25 houses on here.

Let's say each of these houses would be worth a value of 150,000,

and let's say each of them cost around about £50,000 to build.

Take off the cost of buying the land,

social housing you might have to build,

putting in utilities, general bits and pieces,

architects fees, blah, blah, blah, blah,

I reckon - ballpark - if you built houses on here,

the profit could be anywhere between 1.5 million and 2.5 million.

Hmm.

Hmm, indeed.

But you would need permission for change of use

and that isn't always easy to get, particularly on sites this size.

Still, it was a fascinating prospect,

and let's remind ourselves who fancied it

when it went under the hammer.

Lot number six is a former

residential care home.

It has on-site parking with gardens. There's kitchen and lounge.

Site area of 1.5 acres.

So, lot six.

170, can I say? 170, bidding. Yeah? £170,000.

Standing left at £170,000.

I can go 175 now. At 175. At 175.

180 right at the back. At 180. 185.

185.

Maybe not surprisingly, this was a popular lot,

and we rejoin the bidding at 350,000.

350.

355. 360.

365. 370. 375.

Shaking his head. At 375, bid seated right.

At £375,000.

Bid is seated right at no mistake.

At £375,000, then, for the first time.

At £375,000 for the second time.

Third and final time, at £375,000.

You bought it, sir. Well done.

At £375,000, the buyer was businessman Bill.

He had bought it in partnership with his sons Will and Phil,

the latter of whom came along with his dad to meet me.

A family business run by Bill, Will and Phil, eh?

# You and I

# We're partners in rhyme... #

-Bill, Phil, great to meet you both.

-And you.

-You too.

-Congratulations.

-Thank you.

-Why have you bought this place?

It's a good business proposition.

And tell me more about the business proposition, then.

Well, we're going to convert it back to its old self.

Right. So, old self being a care home.

It'll be a care home with particular interest

to those who have got dementia and Alzheimer's.

Are you going to do anything to sort of make your care home

sort of stand out?

We will have speakers throughout the corridors

-playing soothing music.

-Oh, great.

-And maybe music of the era as well.

-Oh.

We might have a sensory area or a sensory room,

we might put into the premises.

-Nostalgia, reminiscence.

-Reminiscence.

Though we'll have a sensory garden as well,

which will be a secure sensory garden.

What do you mean by sensory garden?

Um, so the residents are able to sit down, relax,

have things that will heighten their senses.

So, smells, visual things.

So, from floral plants to fruit plants

and fruit trees as well.

A very noble idea indeed.

And Bill and his sons knew the industry well

as they owned four other care homes already.

But this wasn't Bill's first career.

Well, I opened the first discotheque in the country in Hanley

more or less 50 years ago this month.

What kind of music were you playing? I suppose stuff of the era.

It was The Beatles, Rolling Stones.

You had a lot of live bands as well, though, didn't you?

-We had a lot of live bands, yes.

-Like?

Well, there was Elton John, Rod Stewart, Drifters, Four Tops,

The Supremes, Martha Reeves and the Vandellas.

Well, Bill's certainly rubbed shoulders

with the cream of popular music

at his Hanley disco called The Place.

Absolutely fascinating.

However, we're here to talk about this place.

Bill reckoned a budget of £0.5 million would be required

to achieve the specialist care home they planned,

and that it would be ready for its first residents

in about eight months.

But when we came back a year later and Phil showed us around,

with Bill being away in America,

things hadn't quite gone according to plan.

# And don't it seem like a long time?

# Seem like a long, long time... #

It had been a long time

because another nursing home they were renovating

had taken priority.

But they still had big ideas for this place.

In this entrance area, we're going to have a cafe.

We're going to knock through the front area there

and have a bar with a coffee shop

with maybe even like a The Place coffee shop,

which would be quite nice.

We're going to have seating through here,

maybe windows into the dining area over there.

And just on the left here, we're looking at having an old sweet shop.

But the ideas weren't just sweet. They were practical.

Having stripped everything out,

rewired and re-linked the utilities to the building,

they now plan to extend.

When the care home is complete,

in about five or six months, we hope,

we're looking to have 47 bedrooms,

of which we'll have about four or five en suites.

And we're looking at putting a large living area in

with an extension, and that's going in any minute now.

But adding an extension was going to cost,

so how was their budget holding up at this point?

So far, we have spent about £200,000 on the project,

and we have another £500,000 to spend on the project.

We will look, in total, at spending about £1 million.

But that £1 million did include the 375,000 they spent at auction.

But it was a good family team.

Phil was in charge of renovations

and his brother Will was the finance director.

You've always got your problems working with your family members,

as I'm sure many family businesses would agree.

We cover different areas, so there is a little bit of overlap,

but not massive overlap, so it's working well as a team.

Well, that was in October 2014,

but was the project complete when we came back a year on?

Well, you can find out later in the show.

So, we've seen how one of today's properties turned out.

Now it's time to find out about the other two.

So, let's see what a lot of time and hard work has produced.

Back now to East Ham and, you've guessed it,

the East End of London.

East Ham is on the up, and so are the house prices,

although not quite at the same rate as a lot of London property,

so you can still bag a bargain.

Well, it's a three-bed terrace and it had a guide price of £210,000.

Doesn't look too bad from the outside.

I'm going to head on in and see if I'm still singing its praises.

Of course, at that price in London,

you'd be expecting a bit of work that needs to be done,

and you wouldn't be wrong.

-# A change

-# A change would do you good

-# Would do you good

-# A change would do you good... #

This property was in need of some serious investment,

including the installation of central heating

and double-glazed windows,

as well as new electrics and decoration,

not to mention the kitchen and bathroom situation.

Oh, no! This is the kitchen, and it's a disappointment.

It's small, it's poky. And look.

Downstairs bathroom, and it's tiny. Mm.

Well, it looked to me like the best solution

was to lose a bedroom upstairs and put the bathroom there,

which, of course, means a loss in value,

but the answer could be in doing, as the neighbouring properties had,

extending up to the loft for that third bedroom.

Who wouldn't prefer a decent-sized kitchen

rather than this strange arrangement?

Bedrooms with an en-suite? Yes.

Kitchens with an en-suite? No, not really.

But a big yes to the garden. Bags of potential, I thought.

And evidently, so did lots of bidders at the auction.

Sold 268. Well done.

The house was snapped up by former nurse-turned-developer Rosie

for 268,000.

That was 58 grand over the guide price.

Rosie's main aim was to make a profit

which would be a deposit for daughter Kate to buy her first home.

Determined to maximise the investment,

Rosie was wary about overspending,

and, try as I might, she wasn't for making her mind up

on how she was going to do that.

What are you going to do? Come on. You've got to make your mind up.

I need to get the builders' prices in,

and I'm definitely going to hang onto it for six months,

and during that time, I will make up my mind.

But you're not going to tell me, are you?

I don't know. I don't know. THEY LAUGH

It's now 15 months later,

so let's see what Rosie's done with the place.

# You ain't seen nothing yet

# B-b-b-baby, you just ain't seen n-n-n-nothing yet

# Here's something that you're never going to forget

# Nothing yet You ain't been around... #

So, uh, did Rosie forget that she had a house to do?

Because I'm seeing nothing yet.

No extension, no upstairs loo, no loft conversion, nada.

She's not even done the dishes.

So, what has Rosie been doing for the last 15 months?

I was getting quotes in

and trying to decide what to do for the best.

The total cost of refurbishing and to put a loft extension

was just quite a lot of money.

I estimated around £100,000,

and I got estimates from a few contractors.

And always, works come to more money than you think they're going to.

Rosie also tried to sell the property on fairly quickly

after buying it.

I did try putting it on the market initially,

and the market price, the selling price last year, was very low.

Although London house prices do tend to rise faster than elsewhere,

it can vary from area to area, and timing can be everything.

It's also a risky strategy to assume values will always rise.

Rosie decided to wait it out, but this can mean incurring other costs.

I bought it at auction for 268,000.

I estimated that all the costs...

Because I had to pay for the seller's costs

and my own costs at auction - stamp duty, all the legal costs...

I estimate that it cost me about 285 at that time.

I think my financing since has cost about 15,000, plus council tax.

Those costs can start to mount up.

However, in this case, patience has paid off.

I put the property on the market in early August,

and they were going to market it for two weekends running.

I had 17 offers on the first weekend,

so I got what I thought was a good price.

Rosie sold the property for 337,000.

Once other costs like seller's fees and taxes are factored in,

her profit comes to about £30,000,

which is not bad for doing nothing to the place.

We invited along two local estate agents

to get their opinion.

I think it's a very popular location.

That's your biggest thing. You're on the Burges Estate, which is

really popular with a lot of buyers.

You're very close to the station as well,

so good selling points for the local area.

I think an extension would appeal, actually,

because you could open it right out into possibly

a kitchen/diner and maybe move the bathroom.

Especially if you were to do an extension to the side,

it'd give you more room on the ground floor.

Considering it's the same as when we came last time,

same sort of condition, obviously...

In fact, it's probably deteriorated a bit in the kitchen.

The way the market is, I think it's possibly had a good result

by keeping hold of the property.

Yes, it needs a huge amount of refurbishment work,

but I think keeping onto it was potentially a very good idea.

Well, it sounds like Rosie has lucked out here,

with the market demand increasing dramatically

over the 15 months she's had the property.

So, let's hear the agent valuations, sales first.

In my opinion, as it stands now,

the property would be worth in the region of £350,000 to £360,000.

As the property stands now in its current condition,

she'll probably be looking for a sale value

of between £350,000 and £375,000.

Well, I didn't get that much. SHE CHUCKLES

So, I don't know. But I've sold it for 337, so...

Hmm. Well, what did I say? Timing is everything.

However, Rosie is happy with what she got,

but what if she decided to play the long game instead of selling,

and had chosen to renovate and rent?

Once extended and refurbished fully, I would think the rental value

is in the region of £1,600 per calendar month.

As a three-bedroom property, refurbished, rental value -

you'd be looking between £1,600 and £1,700 per calendar month.

I think that's probably pretty accurate, actually.

Assuming she hadn't just hung onto the place,

but had spent that 100 grand she'd estimated,

that would have brought her total spend to 385,000,

so that top rental would have given her a yield of about 5%.

But she would have had all the hassle,

and had to have spent time on it.

Looks like selling on was the smart move.

And will daughter Kate now have that deposit for her new home?

Yes. Yes. That will go towards her.

Don't tell her that, though. SHE CHUCKLES

But, yes.

Earlier in the show, we were following the story

of this 43-bed care home in Stoke, which I first visited in April 2013.

It was bought for £375,000 by a family business

headed by dad Bill and with his sons Will and Phil.

Bill originally had a career in entertainment,

and stakes a claim of opening the first ever disco in Britain.

But their current business and plans for this place were very different.

Well, we're going to convert it back to its old self.

Right. So, old self being a care home.

It'll be a care home with particular interest

to those who have got dementia and Alzheimer's.

But when we came back in October 2014,

Phil explained to us that another care home they had been renovating

had taken precedence, and the home wasn't anywhere near ready.

But over two years on from the project's start,

this care home might have taken time,

but it's certainly been worth the wait.

# Time will take care of everything

# There's no need to rush and get myself all worried

# Time will take care of everything

# There's no need to rush and get myself all worried... #

The promised sensory garden is being planted out, but there's more.

Yes, you did see a sign for a pub. And that's not all.

In fact, it has all the amenities a little town or village could offer.

# It'll take care of everything... #

Time for the father and son team to explain what's been going on.

We've completely gutted every part of it.

We've extended the lounge dining area,

and we put in a pub, a hairdresser's,

a coffee shop, a sweet shop.

We have an activities room,

we have a training room, and we've got a library.

We've fully wired the whole home with new electrics,

we've got nurse call system,

we've fully furnished the whole home, obviously,

and we're just in the final throes

of completing a sensory garden as well.

It really is a home away from home,

but all these additions have a more important use

in helping the residents.

There's been a lot of good practice that has shown

that these reminiscence aids of sweet shop

and old memorabilia and old items

do encourage and stimulate people's memories and thoughts,

and it's good to keep them active.

And that's the same reason why we thought we'd put a pub in the home -

so they've got another place to go.

They can play darts, go to the pub for a pint,

play some dominoes or have a pub quiz.

We wanted to build almost like a community hub in the home

rather than it be a home with a community outside.

We wanted to bring the community inside.

This is now the family's sixth care home -

quite a departure from Bill's original career.

But he's still technically got a foot in the music game,

with the hallways having speakers to pipe in songs.

Well, we wanted reminiscent and therapeutic music

throughout the corridors.

We feel that the benefits of the music should help calm

and soothe some of the residents, and we will be taking requests.

Well, I'd like to make a request just now, please, Phil.

MUSIC: Bein' Green by Frank Sinatra

Ah. There we are. I do love a bit of Frank Sinatra.

But when it came to replacing the boiler,

Frank can sum it up for us.

# It's not that easy being green... #

We decided to install two biomass boilers,

which will reduce our carbon imprint.

We'll be producing the right amount of power,

but in a greener way with renewable trees

that are called virgin trees,

which have been cut down specifically for this.

And they grow as many as they cut down.

And they're from the UK rather than getting it shipped in.

And there's very, very little wastage.

There is a very small amount of ash,

which appears in the bottom of the biomass boiler.

And that ash will go onto the garden.

That green energy system and this terrific finish

has all come at a price.

Well, we expected to spend around £600,000.

In fact, we spent more like £700,000,

and we've got about another 50,000 to finish it off

over the next three or four weeks.

We spent roughly £100,000 on the biomass boiler.

Every other cost came within budget.

This project has been highly successful,

and everyone in the family has had their part to play.

Both Phil and his brother Will have worked hard here,

and their dad must be very proud.

Well, working with the boys is great.

I delegate to them. I'm a marvellous delegator.

Phil is quite capable of handling all the refurbishment,

as you can see.

Will is the finance director, and he holds the purse strings.

And my wife is the power behind the throne,

as anybody will say.

Phil will tell you I always have the last word,

-and that's, "Yes, dear."

-MARTIN CHUCKLES

Absolutely no comment from me, Bill. But let's get the comments

of two commercial property experts.

And we begin with the agent who saw it

the very first time we visited.

I think they've done a fantastic transformation.

They've incorporated

some great features into the care home

to include amenities for the residents,

like the bar area, the sweet shop, the coffee shop, the library.

They've significantly extended the living room area,

so it's a really good facility.

Yeah, the standard's very good.

You can see the original building showing through in parts,

but the standard is generally very good,

and it has been tastefully decorated.

The family business will have spent a total of roughly £1.1 million

when everything is complete.

And the agents believe it could generate a rental

of between £75,000 to £95,000 per calendar month

if all the rooms were full.

But what if they sold the building on?

When you consider the rental income

that the property should be able to produce,

the property, in my opinion, will be worth somewhere in the region

of between £20,000 to £25,000 per room,

which will equate to a capital value

of between £1 million and £1.2 million.

In my opinion, when the work is completed,

the property will command a sum in the region of £1 million.

We have had specialist care home valuers in

who have valued this, on a going concern basis,

at 2.47 million.

As bricks and mortar, they value it at around 1.3 million.

So, selling up as a going concern at Bill's figure could net them

a pre-tax profit of just under £1.4 million.

But the plan is to make this home the flagship of their business,

and keep on expanding.

So, is Bill pleased with his son's hard work?

Phil's done a terrific job.

This is what I would call a state-of-the-art conclusion

to all his efforts.

-I can't see it being beaten in the future, but hopefully...

-We'll try.

-Hopefully, you'll do your best.

-Do it again.

Well, we hope you enjoyed seeing what our buyers did

with their auction purchases.

And who knows, maybe you picked up a few useful nuggets along the way.

Yeah, so make sure you join us next time for Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Bye-bye.