Episode 14 Homes Under the Hammer

Hello and welcome to the show.

Some investment properties need loads of work from top to bottom.

And others need just a bit of sprucing up and they do you well.

The trick is knowing what to do and what to pay.

And when you do know,

why don't you head down to your local property auction?

If you buy wisely, the property market can give great returns.

Yeah, but were today's buyers wise or not?

Let's find out. Here's what they bought.

Today we're all at sea.

There are stormy waters in this three-bed semi in Welling.

I am greeted by a sea of polystyrene ceiling tiles.

This terrace in Nottingham gives me a sinking feeling.

There's nowhere to put the captain's table.

Cos there's neither a kitchen nor a dining room in here.

And this three-bed detached in Callington, in Cornwall,

isn't exactly shipshape.

But will it float my boat?

I am expecting a complete wreck.

All of 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.

Sold.

This is Welling, in the London borough of Bexley,

which not only offers a quick 30-minute commute

by train to the city, but also has a lovely park, great schools,

and a high street with plenty of amenities on your doorstep.

It really does have...

# The best of both worlds. #

Well, this is a popular street.

Only a ten-minute walk from the high street.

And I'm here to see a three-bedroom semidetached house

which had a guide price of £220,000-plus.

So the neighbouring houses look well-kept.

And then, aha.

I think the port on these windows

have certainly seen better days, don't you?

Guess which one is the auction property.

The exterior is really very worn out.

The wood looks damp and rotten, which is a telltale sign

that there is worse to come.

So, on the inside, I am greeted by a sea of polystyrene ceiling tiles.

Look at them, they're everywhere.

And it is, to be fair, a bit of a state on the inside.

Although you could sand these back and paint them,

and they could look quite lovely.

But there are no '30s features in this property at all.

More ceiling tiles. More peeling paper.

I mean, it's bad enough out the front.

Let alone... Look!

I mean, that is wet to the touch. There's lots going on under there.

In fact, I'd probably get an expert in to have a look around this place.

You've got a radiator, which tells me there's central heating.

But you've got a gas fire over there.

There's stuff everywhere that's going to need to be cleared out.

But if you can see beyond that, you've got a nice big space.

The windows, sadly... Look.

You've got lovely leaded light there. Pretty little features.

But because they're only single-glazed, I think they're

going to have to go and be replaced with something a lot more modern.

-But for starters...

-SHE GROANS

..I'd be using that.

Getting rid of all that stuff in the house would certainly suck.

And at the moment,

it's making it hard to properly look around the house and investigate.

It's crowded, confined and cramped.

# I want to break free

# I want to break free... #

As I said, the trick is to look past all this stuff

and focus on the issues.

Upstairs, the plaster around the windows has completely blown.

The other rooms aren't so bad. But there are those awful ceiling tiles.

And as you would have heard me bang on about before,

they can be a fire hazard.

The bathroom is old and dated and needs to be replaced.

But at least it's upstairs.

Back downstairs, I think

I've found a way to get a bit more space out of this property.

As is typical of '30s houses, well,

the kitchen here is a little bit on the small side.

But the good news is - out here, well,

you've got a really long garden.

So I think there's just enough space to extend

and create a really nice, large kitchen/diner out the back here.

Though beware, you might get caught in the sticky web of planning.

This house looks as though it might have had an extension

added in the past.

So you might not be allowed to add anything else

under permitted development.

This is one to talk nicely to the planning department about.

If you didn't have the budget for an extension, another option could be

knocking the wall down between the kitchen and the dining room

to create an open-plan kitchen/diner.

A family house needs a family space.

So either option needs to be looked at, in my opinion.

There's just one last thing.

With this property, you do get a garage.

Wait a minute.

But to get there,

you've got to go through this very narrow shared driveway,

right the way down to the end of the garden.

Go on.

FRANTIC MUSIC

All right, you can come back now.

You see? I told you it was far away.

And I don't even think you'd get a car in

once you got all the way down there.

And then you've got to walk all the way back to he house. No.

I think it's fair to say you could use that for storage.

But a much better thing to do with this property would be to

create some off-road parking out the front there.

You feeling all right?

So, after a quick, old breather, we're back in action.

And just in time too, as a local estate agent has arrived to

give us his thoughts on the house.

Had a look round. You need new windows.

New kitchen, new bathroom.

The plasterwork is blown in many places.

It looks like the central heating would need upgrading.

Possibly a re-wire.

I would be inclined to remove the wall between the kitchen

and the dining room to make a nice kitchen/diner.

There's potential to extend the property,

particularly into the loft,

to create a fourth bedroom with an en suite.

A number of properties locally, they have also done the same.

Would parking out the front also add value?

Creating off-street parking at the front of the property would

increase the value by between £5,000 and £10,000.

What kind of figures could we be looking at

once the renovation is done?

Once renovated, the property would achieve in the region of £370,000.

And in terms of the rental value,

I would estimate around £1,500 per calendar month.

If you were to extend the property into the loft and across the rear,

I would estimate that the value would increase by around £60,000.

Yes, it needs plenty of work,

but this is a 1930s semi with a layout that could be improved.

And it's got a decent-sized garden.

So that really is a good start. Who wanted to take this on?

Let's head to auction and find out.

Three-bed semi. Needs some upgrading.

You've got a garage as well.

It's always dead handy to have a garage.

You can all get a chance at 200.

Are you sure?

200 with you.

Anyone else?

200. Anyone else?

205 with you.

You better not stop. You stopped halfway through the last time.

205. 210.

215.

Five.

There's stopping in this lot, so we join the action at 280,000.

282, sir? Try and help. 282.

284.

I think there's a bit more in this. I thought there was. 286.

288.

288, madam? 288.

290 standing up, sir.

With you. 290.

Taking your bid. 290.

292.

294.

You'll regret it going home.

294.

Just for a couple of thousand more. 294.

Yes? You've got to do it. 294.

Makes sense. 294.

296. 298?

298.

Round it off to 300? 298 here.

First time. Second time.

Third and last time.

Sold. 298. You got there.

Winning with the bid of 298,000 were husband and wife Andrew and Lale.

They've brought their son,

Jimmy, along to check out the latest purchase.

Lale is a Turkish interpreter

and Andrew runs a Turkish textiles and dance-wear company.

They bought this house to add to their rental portfolio

and hope to cash in on their rental properties in the future

to buy themselves a larger family home.

So let's hope this project turns out to be a delight.

Guys, congratulations. Lovely to meet you both.

-Andrew. Lale.

-Thank you.

-Now, tell me about this property.

Who was the one that wanted to bid for it the most?

We both wanted to bid.

We had a list of about ten properties at the auction.

And it was... We gave this one one tick, didn't we, on the list?

But there were some properties which had three ticks.

-Oh.

-But we didn't get to those.

So this wasn't your chosen property really?

Well, it was a bit disappointing,

because the property after this one, which we'd also had our eye on,

sold for about £100,000 less than we thought it would.

And how many ticks did that have against it?

-That had three.

-Oh!

-And this only had one.

This only had one and you paid more for this

than you would have paid for that.

So, I want to know about your level of research, guys.

Did you look at the property before you bought it?

-No.

-No.

We drove past after the auction and we were a little bit shocked.

We looked through the windows

and we could see that it was in a terrible state.

But I think it'll be OK.

We've got a good builder, who's done work for us in the past.

So I think it's cosmetic, most of it.

Apart from the wiring and the gas, which...

And the window and the doors.

And polystyrene tiles.

And the wallpaper and the carpets and the gas fires.

-It's a bit of a long list there.

-Yeah, basically, everything.

This property is one of those that you walk in

and it's absolutely rammed full of stuff.

Tell me what do you think and what you're going to do here.

We'll get a new kitchen and a new bathroom.

Probably need rewiring.

We probably... Haven't even found the boiler yet.

But once we've found the boiler,

I guess we'll probably have to remove it and replace it.

The windows on the front are a lovely period feature,

but I guess they'll probably have to go as well.

I know. It's a shame cos they've got the beautiful, lovely glass in them.

It's such a shame to get rid of them but they're not going to do the job

that you require them to do at this stage, because they're quite old.

-That's right.

-Yes.

In my mind, the kitchen is a little bit on the small side.

Have you thought about how you could change that?

Perhaps by knocking the wall down and having an open-plan

living/kitchen area.

Yes, I think we are going to knock through between the kitchen

and the dining room and make a large kitchen/diner.

Because I think that's more attractive to tenants these days.

I'm glad they agree and want to open out that kitchen.

And even though they only want to rent it for the time being,

when it's time to sell on - as is the plan eventually -

this would make it much easier.

There's a lot to do here and it's going to need a pretty

substantial budget to cover all the work.

I guess, including windows, doors, electrics, gas and everything,

probably about 20,000.

-OK, so 20,000 maximum?

-Yeah.

I mean, there is a lot you can do here.

You could extend. You could go up into the loft.

But are you feeling you might need to work within

the footprint of the building?

Yeah. I don't think...

In the buy-to-let framework,

I don't think it's worth doing an extension really.

Cos I don't think it would add enough value, rental value,

to make it worthwhile.

How long do you think it's going to take you

to get this project complete?

I would like to have it done within about six weeks,

if possible. So that we can get it rented out.

Wow, that is a quick turnaround for the level of work required here.

I hope their builder is up to the task.

They could also call on the help of their son, Jimmy,

who I'm sure will be looking into getting his hands dirty.

I think he will come and clean with us.

He will help us to clean and clear the clutter.

Yeah, just the design ideas. He's got some good ideas.

Imagination is clearly required here. As are some deep pockets.

I'm worried about that budget.

It's going to be a challenge, I think,

to be able to keep within the budget.

And who's the one that will be knuckling down,

making sure all the pennies come in?

-Andrew.

-Is it you, Andrew?

-Yeah, yeah.

I haven't actually got the money at the moment.

-He hasn't even got the pennies!

-It will come in.

I'm hoping, with my dance-wear business,

the belly dance stuff, there will be a bump this year.

Wow. So it's all about the belly dancing outfits?

-Yeah.

-I'm really excited to see the outcome of this property.

I hope you stick to that £20,000 budget.

-Thank you.

-Good luck.

-Thank you.

-Thank you. Lovely to meet you both.

Thank you so much. Lovely to meet you.

So, Lale and Andrew took a huge risk

and didn't even see inside the property before the auction.

Let's just hope Andrew's business thrives so they can fund

the works now they've seen what they've got to contend with

and it doesn't all go belly up. How will they get on?

Join me later on in the programme and you can find out.

Basford in Nottingham is only a 15-minute tram journey

to the city centre.

It's split up into two areas - Old and New Basford.

And that theme continues on this street.

As I'm walking up here,

I can't help thinking that this is a street of two halves.

One half has got original terraced houses.

And on the other side, there's more modern houses.

What they've both got going for them

is that there's a tram stop just at the bottom there.

That will get them into the centre of Nottingham in no time at all.

The house I'm here to see is this.

It's got three bedrooms and a guide price of £60,000-plus.

Let's get inside and have a look.

OK, straight off the street into the front room.

Some old-fashioned wallpaper there with flowers on.

And an old-fashioned gas fire.

Some really nice hardwood flooring here as well.

It's nice and bright. I do like it.

Straight through. Small corridor. What have we got here?

Storage in there with a few hangers for your coats.

Nice, big storage space there.

OK, and this would have been the kitchen,

judging by where the sink is.

And right at the end of the property, there's the bathroom.

And it's a good-sized bathroom as well.

It may need updating, just to freshen that up.

But in here was definitely the kitchen/dining area.

It's not that at the moment cos there's neither kitchen nor

dining room in here.

But spend a bit of time in here, spend a bit of money,

it could be a really nice family area.

Talking of money, if you need a mortgage to buy this property,

you might find it tricky.

Most lenders' criteria demand that a house be structurally sound,

insurable, and have a working kitchen.

We definitely don't have that here.

And remember, it's not just you who has to qualify for the mortgage,

it's the property as well.

Upstairs, we've got two bedrooms on either side of the stairs.

Front bedroom here in a nice, bright pink with some textured

wallpaper, which would have to come off. Just brighten it up.

New flooring in here as well. Nice, new carpet.

And on the other side, which is the back of the house, again,

more textured wallpaper.

And you'd want to put a nice, soft carpet there as well.

What I haven't shown you is this.

That's right. There's a third floor.

A word of caution, though. This house is described as a three-bed.

But I would want to check out this space meets building regulations.

You need to make sure of this before it can qualify as a third bedroom.

One thing, though.

If you're stuck up here in the middle of the night

and you want to go to the toilet...

# It's a long way down

# It's a long way down... #

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

I think that the house could do with an additional bathroom

on the first floor,

as it is a family property.

However, the bathroom is quite a nice size downstairs.

I agree. A bathroom upstairs would be nice.

But it's hard to see where it could go without sacrificing a bedroom.

What else would be worth doing to this house, guided at £60,000?

I would recommend to redecorate the property throughout.

Fit a new kitchen and new bathroom.

This is a good rental area and the agent thinks this place could

fetch around £525 per calendar month.

But what about sales?

The sales market of this property would be around £85,000.

That is a good, solid house in a good location.

It does need a total overhaul

and I would have liked to have seen a bathroom on that first floor.

But that's a decision for whoever buys it.

Let's go to the auction house and find out who that was

when it went under the hammer.

A large, three-storied, three-bedroom townhouse.

Start me where you like with this one.

I'll take 50. Thank you.

A starting bid at £50,000.

At £50,000.

51 somewhere?

51? 51 is bid. At 51.

52.

At 52,000. 53?

After a slow start, we rejoin the bidding at £57,000.

57.

At 57. 500? 500.

58?

Sure?

57,500 for the first time.

Second time.

Third time. 58.

58.5, sir?

58.5.

59.

59.

59.5?

500. 60 for you? 60,000.

At 60. 500?

500.

61.

At 61,000. Is that it?

£61,000.

Going once.

Going twice.

Third time.

Sold here at 61,000. Thank you.

With the successful bid of £61,000 was social worker Maria.

She bought the place with her partner, Wayne.

And I'm keen to find out what attracted her to this house.

-Maria, nice to meet you.

-Nice to meet you, Dion.

-Congratulations.

-Thank you.

Tell me what made you buy this house.

Well, I was buying a house nearby.

It fell through because it had rising damp.

So I had two days to buy a house

before my mortgage application ran out.

I went to the auction and I bought this house.

It was very quick decision. It was a big risk.

HE LAUGHS

And hopefully, it will pay off.

What made you, first and foremost, go into property developing?

-Recently, my partner had a health issue.

-Mm.

And it made us look at life differently.

And think that, you know, we want to spend more time with the children.

We want to do something positive and constructive.

We had some savings and we thought, you know,

I had to take some time off work to look after him.

So that's when I was watching Homes Under The Hammer every day.

That's when I was researching buy-to-let mortgages.

So it's something that we talked about for quite a while.

But because of his health issues, I think

it made us think about it more seriously.

-Of course.

-And we thought, "Yeah, we'll do it."

Maria and Wayne have obviously had a tough time of it.

And I wish them well.

But since Maria is such a big fan of Homes Under The Hammer,

she'll know our mantra off by heart. Won't she?

I know the golden rule is you've got to see the house before you buy it.

-Correct. Correct. Good work.

-And you've got to read the legal pack.

Exactly. Did you do either?

I didn't do any of those things.

We came to see the house the next day, and I was like,

"Oh, no, what have I done?"

# Regrets, regrets

# Regrets, regrets... #

To make matters worse, the bank refused to lend Maria

and Wayne the money to purchase the house due to its poor condition.

Their only option was to take out an expensive short-term bridging loan

in order to secure the house.

Hopefully, once the work is complete,

they can remortgage and pay this off.

They will also need to get some cash together

to pay for the improvements.

How much have they got to get this place in shape?

Well, the original budget was £5,000 with £1,000 contingency.

-OK.

-But now, when we've been speaking to people,

other people that have had a look at the house and given us quotes,

they're saying that we're looking at probably seven to eight.

-Any contingency after that or is that everything?

-No, that's it.

We've got no contingency after that. And that is pushing it.

We know that the windows and doors are going to be the most expensive.

Basically, the house needs renovating from top to bottom.

We're going to have to get a new kitchen, a new bathroom,

new windows and doors.

And I've been researching where's the cheapest place to get them.

-Cos we obviously don't want to do it to a really high standard.

-OK.

So we just want to try and keep our costs down to as low as possible.

Has Wayne got a say in this as well or is it just...?

Well, he wants to do everything to a high standard.

-OK.

-And he wants to spend an absolute fortune.

I'm like cheap as chips.

I want to do it as cheap as possible

and spend as little money as possible.

But that's where we've got conflicting views at the moment.

-Do you?

-It's causing a lot of arguments.

Great(!)

That's a great place to start a property-developing partnership.

So I'm like, "Are we sure we really want to do this?"

Cos it has caused a lot of stress and arguments and stuff.

But we'll get there in the end. We'll just reach a middle ground.

A middle ground is the right answer.

Because they plan to rent out,

they don't want to overspend on fixtures and fittings.

Although, I do think it's good practice to

give your tenants as good a finish as you can afford.

Happy tenants tend to rent for longer.

Standard of finish isn't the only area for a good old barney.

Who's going to do the work?

Well, I'm going to try and do a little bit of work.

Because I've just started a construction course.

-I started that at a local college.

-OK.

-And you can pick three trades.

-So I've picked carpentry and joinery.

-Yes.

-Painting and decorating.

-Yes.

-And tiling.

-Tiling?

-Yes.

-That's a hard skill.

-It is.

-So I want to try and do some of the work myself.

-Of course.

But my partner's saying he wants to get proper people in

and he wants to have a proper job. If I start tiling the tiles,

they'll probably end up falling off the wall.

HE LAUGHS

Wayne's not sounding like he's got a lot of confidence in his missus.

He's got no confidence in me whatsoever.

But I'll prove him wrong.

# I'm going to prove myself true to you somehow

# Have faith Have faith... #

Maria and Wayne's son, Kiel, is along to give support.

And I've no doubt he believes his mum

and dad have what it takes to turn this house around.

So we've got three months to basically do the work

and remortgage the house.

OK. So is there penalties after that?

Basically, what will happen is, the monthly payments will double.

So that's why we have to keep everything as tight as possible.

And meet deadlines. We do have a lot of pressure.

So I think it's best we leave you alone as soon as possible.

So you can get on with the work.

As soon as you've gone, that's when we're going to start doing the work.

All the things that we've ordered are coming tomorrow.

From tomorrow, that's when we're going to be on it.

All the stuff is going to be delivered, and that's

when we're going to start doing the work.

-Good on you. Positive thinking. I like it.

-Yes.

-Good for you.

I hope everything works out for you and your partner as well.

-Thank you.

-Good luck. Wish you all the best.

This is Maria's first venture into the property developing world.

I do like the fact that she's trying to learn

the skills in order for her to do the job.

But my main concern is that timescale.

Will she get this project finished

before those repayments start to double?

You can find out how she gets on later in the programme.

Coming up...

Although I'm in idyllic Cornwall and this house seems like a bargain,

I'm not optimistic.

But there's got to be something wrong.

And in Basford, Maria was hoping her DIY courses would help.

What could go wrong?

I dropped out after a few weeks.

We're back in Welling, in the London borough of Bexley, to see

this three-bedroom detached property which had some characterful,

pretty windows. Pretty rotten, that is.

And things, well, they weren't much better inside.

I mean, it's bad enough out the front, let alone... Look!

I mean, that is wet to the touch. There's lots going on under there.

Yes, there was lots going on in the rest of the house too.

Blown plaster, polystyrene tiles

and a cramped kitchen were some of the other issues here.

Andrew and Lale weren't put off by the state of this house,

because they didn't see it first.

Tut-tut. They paid £298,000 for it

and planned to rent it out in the short term.

I know they have developing experience, but was there

a chance Andrew was underestimating the level of work that was needed?

I think it's cosmetic, most of it. Apart from the wiring and the gas.

-And the windows and the doors.

-And the polystyrene tiles.

-Yes.

And the wallpaper and the carpet.

Yes, it was quite the list to be getting on with.

And originally, Andrew hoped to get the work done in about six weeks.

Three months later, those rotten, old windows have gone.

And with some rendering and a paint job,

the house can now sit proudly with the others in the street.

But what's happened with that small, pokey, little kitchen?

Yes, that's just what I had in mind.

This is a much better use of the space.

A new fully-fitted kitchen with additional breakfast bar,

all with easy access to the garden

thanks to some new double doors.

This whole property has been stripped back to the brick,

getting rid of the damaged plaster and old polystyrene tiles.

That tired, old bathroom has had a total refit.

It's now fresh and clean.

I did say you have to look past other people's stuff

when you're viewing a property.

These neutral colours will really help a prospective renter or

buyer to imagine their own stuff in the property.

Time now for Andrew to explain how they went about tackling this

very tired, old house.

As you can see, we've knocked through

between the old, original kitchen and this second reception room

to make a large kitchen/diner.

There used to be a door there, which we've blocked off.

So now we're just using this doorway to gain entrance.

We had to actually keep this beam here,

because it's a supporting structure.

So we incorporated it into a breakfast bar

by accident. But I think it's actually worked.

But it's no accident that we're here eight weeks later than planned.

Why the delay?

There has been basically a full house of issues.

I was hoping that one or two things wouldn't need to be done.

But, in fact, everything needed to be done.

Oh, dear. I can't say I'm surprised.

I was a bit concerned about Andrew's timescale and budget.

So has he managed to stick to that?

Mm. It's been a little bit more expensive than

we thought it would be.

Originally, we did say a budget of around £20,000.

But it's been more like £30,000. Unfortunately.

To be honest, I haven't actually

been keeping proper track of the budget.

So I'm saying £30,000, but hopefully I didn't go beyond that.

Who knows?

Who knows?! Andrew! You need to know.

You are naughty.

Especially since you said you didn't have any pennies.

Thankfully, he's delighted his business selling Turkish textiles

and goods has been doing rather well.

So they have been able to get the refurbishment funds together.

Lale has more or less left Andrew to it.

He dealt with everything. He project managed everything.

He works very hard with his job.

And also, he managed to fit this project in.

He did really well.

I'm really proud of him.

Yes, Andrew has done well.

But he's also got to share some of the credit with his son, Jimmy.

Well, I remember when the counter, the kitchen counter...

I decided to go for like a darker colour.

They wanted to go for a lighter one.

But most of the room they wanted to go with white and maybe grey,

but I thought putting a little bit of black maybe would have

made it look a bit better.

Looks like Jimmy can teach us a thing or two about design.

The main problem with this project has been that we spent too

much money on the initial purchase of the property.

Plus the renovations that we needed to do.

So I don't really think that we're going to generate much profit.

This is where I bang on again about the importance of viewing

a property before you bid in the auction room.

However, Andrew and Lale

have done a nice job.

So hopefully, they can make something

from the £328,000 investment.

We asked two local agents to come along and tell us if that's likely.

The main selling points

of the property are that it's a blank canvas.

So the buyer can move straight in.

Nothing to do. It's got a nice, large garden.

And a spacious kitchen/diner.

Largely, a lot of people would extend the property to gain

a bigger kitchen/diner.

They've knocked down the kitchen between the second reception area,

giving a kitchen/diner aspect.

Saves a lot of money having to extend the property

and gives the aspect of what everyone desires.

The couple hope to rent initially, but with £328,000 invested

in this property, are they right to be worried that they've overspent?

What could it sell for?

In the current market,

I would estimate the price would be in the region of £380,000.

For rental, I believe the property would rent for

approximately £1,400 per calendar month.

I believe you could achieve 380 to £385,000 on the sales market.

And for rental,

I believe you'd be able to achieve £1,300 per calendar month.

That top figure of £1,400 per month would give them

a yield of around 5%. And the profit,

if they sold for £385,000, would be a handsome 57 grand,

minus the usual taxes and expenses.

So I'm guessing a sigh of relief?

That's really good. It's a bit more than we were expecting. So, yeah.

That's been a good result.

Yes, it's very good. Yes. We were expecting under those values.

Could you be tempted to sell now?

Selling is more of an option now that the valuation has

come in higher. But I think that wouldn't really fit in with

our plans because, long term, we're hoping it will gain more

in about three or four years' time.

That's when we'll think about selling.

Callington is a small town in south east Cornwall.

It's formerly a busy mining area,

but it's now more known for farming, tourism and one other thing.

It has a unique feature that no other town in Cornwall has -

a mural trail, which I think really paints a nice picture of the town.

The property I'm here to see is just ten minutes' walk

from the centre of Callington.

But the fact that it's on a fairly busy main road

and right next to a garage is going to put a few people off.

But that still doesn't explain why the guide price of £85,000

was £200,000 less than the average cost of a detached property

round here. I need to investigate.

# Oh, I'm looking for clues... #

So, at that price, I am expecting a complete wreck.

No. Doesn't look too bad.

You've got a front living room area there.

It's very tired and dated and of its era. But we've got double glazing.

Another bay-fronted living area there.

Steps up to your bedrooms. I mean, it's freezing cold.

But it doesn't smell particularly damp or look particularly damp.

Into the kitchen here. We haven't got much of a kitchen.

Just got a sink.

Um...

Electrics look like they're fairly old. But...

nothing that sets my complete alarm bells ringing.

But there's got to be something wrong.

# You've got to dig a little deeper

# Dig a little deeper... #

Upstairs are three bedrooms, a separate loo and bathroom.

Yes, it needs modernising, but my alarm is still not ringing.

Hmm. There's clearly something else wrong here.

I'll have to do some digging to get to the bottom of this.

OK, so what is the problem?

Well, Callington's mining history should give you a bit of a clue.

Because this house is at least partly built of mundic block.

Now, between 1900 and 1950, a lot of houses were actually

built of blocks made partly from mining waste.

That contains aggregates which,

over time, basically destabilise and go all horrible.

So the result is that houses made of them

potentially have a serious issue.

There are different levels of problem.

And if it's isolated, say, maybe in a chimney stack or something,

it can actually just be cut out and replaced.

I am told, however, that the

mundic block in this particular house is fairly substantial,

which means that getting finance on it is going to be really tricky.

Nigh on impossible.

Yes, the mundic is going to be a stumbling block for anyone

who isn't a cash buyer.

And it could cost tens of thousands of pounds to put these issues right.

But is there a better option?

So what to do with this unmortgageable house

on this extremely large plot?

Well, it doesn't take a rocket scientist to work out

that they only way to go here really is to knock the place down

and start again.

I mean, you've got a really, really good-sized building plot here.

Great access with the road.

There's obviously electricity and all your services in place already.

So that's going to keep your costs down.

And I think the plot is easily big enough to get maybe

a pair of semis on here. Or even more.

You'd have to look into the local market

to make sure it was worthwhile.

But you know what, I hate to say it cos

I hate to see houses knocked down, but in this case, it's got to go.

Wipe the slate clean. Start again.

And you could actually be in for some big profits.

Of course, obtaining planning permissions, demolition

and building a new house will cost time and money,

while sorting out the property

and refurbishing might be the cheaper option.

We invited an agent along to get his thoughts on this lot.

If the property was fully repaired and renovated

and the mundic was all repaired, you'd be looking at a resale value

of 160 to £170,000.

That means there could be a profit in just repairing the house.

But does the agent agree with me

that starting from scratch is the best thing to do here?

In my opinion, I think the best use of the site would be to

demolish the property and put a small development on the site.

The type of properties I'd like to see built here would be

two-bedroom semidetached properties. Maybe three-bedroom semidetached.

Or road closed properties.

The agent thinks that you might fit six three-bed terraced

properties on the land.

And they could bring sales values of roughly £800,000

and a monthly rental income of £300,000 per calendar month.

So, if you have the right skills, you can make a handsome profit here.

Of course, you could look at this in a slightly different way and say -

for a cash buyer who didn't have to get a mortgage

and didn't worry about the mundic block,

this is actually a chance to get a pretty big house for a fraction of

the cost of something similar which didn't have this one's problems.

However, I think it's probably suited to a developer.

So let's see what happened when it went under the hammer.

OK, lot six.

Two-storey, three-bed, detached house.

Shown on the screens here. Guide of 85.

Somebody like to start me? Lot of interest in this one.

Somebody like to start me around about 100?

100 to go?

Anyone want to start at 100?

95 will do.

95 will do.

Thank you. £95,000 then.

95. Any advance on 95?

95 standing. 97.5 somewhere?

£95,000. 97.5?

Any advance on £95,000? We're ten over guide.

£95,000 standing.

I'm going to call it for the first time at £95,000.

Standing here.

That's the first call.

Second call at £95,000.

Gentleman scratching his head.

Second, third and last time at £95,000.

Are we sure we're all done?

We are, and we're not going to sell it to you at that level.

We're very close. So we'll turn on.

The property failed to make the reserve price at the auction.

However, negotiations afterwards secure it for John and son,

Richard, for £103,500.

I met them back at the house to find out why

they didn't bid for it on the day.

John, Richard, great to meet you both.

-Nice to meet you.

-Nice to meet you.

-Congratulations.

So how was the auction?

Well, we got there rather late.

We got hung up in traffic and...

And you missed the auction?

-Yeah, we missed the auction.

-Yeah. THEY LAUGH

We bid 110 for it, which was accepted,

the day before.

But because they didn't get all the paperwork

and we couldn't get up to Exmouth on time, it went to auction.

Then we bought it for 103,500.

-So you saved yourselves £6,500?

-That's right.

Somebody's smiling on you there, aren't they?

-I think so.

-Yeah.

-Result.

-Yeah.

-So, tell me, why did you want to buy the house?

We bought the house really for the plot of land.

We've put in planning for five two-beds.

Which is all in a terrace.

Or we could put two two-beds and two three-beds.

And we put in for flats.

You can put as many developments as possible on planning

and then they'll go for approval that way.

That's what I call hedging your bets.

These two have given the planners plenty to think about.

# Decide, decide

# Make up your mind

# Decide, decide. #

Does it make any difference to you which plan is accepted?

We'd prefer either the five two-beds or two-bed and two three-beds.

-Right. Not flats?

-No. Well...

Not really, no.

I think, more for the area, it would be better as a terrace of houses.

-Mm.

-But it's all down to planning, really.

As long as one of them goes through, then we're happy, really.

Have you got any indication really that they're going to

go for anything? I mean...

Yeah, before we bought the plot, we had our architect come out

and have a look around.

And we had some of the local council people come out.

They don't see any objection to it.

It'd improve it really, so.

There would be more affordable houses in the area

if we go down the terrace of houses.

-Right.

-That's the demand at the moment, really.

Right. So tell me about you two. Is this something you do?

-Yes, I'm in plant hire and groundworks. And...

-I'm a builder.

-Right. Good combination there.

-That's right.

I work with another guy, a carpenter.

And we really go round as... Well, as a pair.

And obviously Dad goes in first of all.

Just two of you plus Dad doing all the groundworks?

-Yeah.

-Really?!

-Yeah.

Wow. But you get electricians in and plumbers...?

Yeah, electricians and plumbers, obviously.

Fantastic. Great team.

And there could be a new addition to the squad,

as Richard's 12-year-old son, Rhys,

is also keen to get involved in the building trade.

Hopefully he will be able to get on the tools,

get to his piggy bank, and help out with the budget.

-We've got about 200 to 280,000 to spend on the developments.

-Right.

200 being the cheapest and 280, we don't really want to go over that.

So, OK. That's... Let's take the middle and say 250 plus about 100.

So 350-ish. What kind of cost do you think you might be able to get?

Or what kind of sale price do you think you'll be able to

get from the finished things?

-Two-beds - we're looking at anything from 110 to 130.

-Ooh.

The three-bed will be 140 to 160.

If we'd done the flats, it would be approximately 100 to 110.

The three three-beds, the detached ones,

you're looking at probably 150 to 180.

-So there's probably...

-There's a good margin of profit there.

Yeah, over 200,000 whatever you're going to do.

-Mm-hmm.

-Good.

-So hopefully...

-Worth doing.

-..it'll be worth doing.

Yes, with a project of this size, it will take some doing indeed.

How long will it take to complete?

All down to planning. It's a nine-month project.

Once we've got approval, it'll be up and finished within nine months.

-Right.

-So hopefully it'll be...

We've planned that, hopefully, it'll be three months for the planning.

So it's a 12-month project, really.

Great. Well, congratulations. And good luck.

-We can't wait to see how you get on.

-Thank you.

So it's goodbye house, hello new development.

I think Richard and John have certainly got the experience

and the right idea with what they're planning here.

And it'll be fascinating to see what's here when we come back.

You can find out later in the show.

Doing up a property can take much longer than you think.

Well, we saw how one property did, but what about the other two?

It's time to find out.

It's time to return to Nottingham and the suburb of Basford.

Here I saw a pretty tired-looking three-storey terrace.

The upstairs wasn't great, with no loo.

And a top floor that didn't look like it complied with building regs.

But it was downstairs that really bothered me.

But in here was definitely the kitchen/dining area.

It's not that at the moment cos there's neither kitchen nor

a dining room in here.

Maria and her husband, Wayne, weren't aware of these issues

because they bought the house for £61,000 without seeing it.

They then discovered that because of its poor condition,

they couldn't get a mortgage.

Instead, they had to take out a bridging loan.

So they've now found themselves in a race against time.

We've got three months to basically do the work

and remortgage the house.

OK, so is there penalties after that?

Basically, what will happen is the monthly payments will double.

So that's why we have to keep everything as tight as possible.

And meet deadlines. We do have a lot of pressure.

Three months later,

we're back to see how Maria dealt with the pressure.

Pressure can burst your pipes, but can also create diamonds.

It's deadline time, and we're back.

-# So shine bright

-Shine bright like a diamond

-# Oh, oh

-Shine bright like a diamond

-# Oh, oh, oh

-Shine bright like a diamond

# We're beautiful Like diamonds in the sky

-# Shine bright like a diamond

-Oh, oh

-# Shine bright like a diamond

-Oh, oh, oh

# Shine bright like a diamond

# We're beautiful Like diamonds in the sky... #

The bathroom sparkles too.

It's been fully tiled and has a fresh, modern suite.

The tired, old living room has been transformed

with a contemporary colour scheme, and hardwood floor restored.

The other three rooms have also had a makeover.

Outside, the new rendering

and painting match the clean look of inside.

But as this was Maria's first time, it couldn't have been easy.

Unfortunately, we had a leak in the front room,

and it came through the ceiling.

What happened is, the boiler, the pressure was too much for the pipes.

More pressure, just of a different sort.

And then there was more bad news.

We found out that the house didn't have any gas.

And we had to dig up the pavement, which...

didn't go very well.

The other challenge was, we didn't have water for quite a while.

Cos we couldn't find a stopcock.

No gas or water. What more could go wrong?

Also, there was a flood in the garden.

The drain got blocked. I'm not sure what was down there.

But the neighbour was knocking on the door

saying her garden was flooded.

So we had to get the drain sorted out.

So it was just one thing after the other.

In the end, they have a really nice property here.

The finish looks lovely.

So I'm guessing those building courses Maria took paid off.

I dropped out after a few weeks.

So that all went out of the window.

So I think the only work that I did,

I just helped with a bit of painting.

And I helped strip the wallpaper.

But everything else, we had friends who were tradespeople.

Oh, Maria, I can't believe you gave up.

But it's probably best to take advantage of professionals

with mates rates.

The original budget was £8,000.

So what did they actually spend?

So the budget now, we've added up all the figures this morning,

and the budget has gone to £12,300.

Which is a shock. But...

you learn from your lessons and mistakes, don't you?

Maria, don't beat yourself up.

It looks like you've had some really bad luck.

But you've done a great job.

And it's all part of the learning process after all.

Of course, the biggest financial pressure on this project

was the prospect of those loan repayments doubling.

It took just over two months,

because we had tenants that wanted to move in.

So the last, I'd say, two weeks was mayhem.

We had to get everybody on site.

We had to say, you know, "We've got a deadline."

And we had to put the tenants off for a week

because the house wasn't finished,

which they weren't very happy about,

because they'd already given notice. So, yeah, it was very rushed.

And a lot of...

..shouting and arguing and just stress.

Well, now a tenant is in and the house is mortgageable,

all before that three-month deadline.

Let's hope all that stress has been worth it.

We've asked two local estate agents around

for their opinions on the house.

This is the second time I've visited this property

and I'm incredibly impressed.

It's certainly a phoenix that's risen from the ashes.

It's in very good order.

It's got a lovely kitchen. Nice bathroom.

Very bright light. And the standard is very high.

There's been a lot of attention to detail paid to the finish of the

property and it's above and beyond some of the standards of

accommodation in the area, which really makes it stand out.

Maria is already renting this out and plans to do so long-term.

However, the sales figures the agents gave

vary from 90,000 to £105,000,

which could mean a pre-tax profit of in between 17 and 32 grand.

That is really good for a first-time developer.

However, rental is the name of the game here.

In the estate agents' opinion,

is she getting the best return for her £73,300 investment?

For rental, I would anticipate the property

achieving in the region of £500 per calendar month.

With regards to placing this property on the rental market,

you're looking within the region of 500 to £550 per calendar month.

I think the rental value of 500 was a bit on the low side.

We've managed to rent it out for 550.

And we've got really good tenants, really nice tenants,

and we're really happy with them.

Maria's rental figures mean a yield of just over 8%,

so after a reasonable return and a lot of learning under her belt,

what has she made of the experience?

The experience was full of highs and lows.

But I think what you have to do is turn a negative into a positive

and make the most of what you've got.

And I think we've managed to achieve that.

And I'm really pleased with the outcome.

But it was really stressful.

And I was constantly telling people what to do and how to do it.

Some people took offence to it cos I was quite blunt.

So I just have to try and be nicer to people now,

if we buy another house, if they want to work for us again.

Cos I'll probably put them off.

SHE CHUCKLES

We're heading back to the picturesque town of Callington,

in Cornwall, now to see what's happened with this three-bed

detached house which was guided at what seemed a remarkable £85,000.

Why was this house a good 200 grand less

than the average house in this area?

Well, there was a big stumbling block.

Mundic block to be exact.

The house had largely been constructed using concrete

blocks made using mining waste that can become very unstable,

which means that getting finance on it is going to be really tricky.

Nigh on impossible.

The buyers paying £103,500 for the lot were not in the least bit

bothered by this issue.

John and his son, Richard, planned to flatten it and build, well, what?

Terraces, semis or even flats.

One thing was certain - they had plenty of options.

We'd prefer either the five two-beds or the two-bed and two three-beds.

-Right. Not flats?

-Not really, no.

I think, more for the area, it would be better as a terrace of houses.

They had three different outline applications in.

Option one - a row of terraces.

Option two - some semidetached properties.

Option three - a block of flats.

I tell you what, join in and have a guess at which one they got.

Was it option one, two or three?

# Can you believe it?

# I'm down on my knees, yeah

# Tell me, what can I do? #

Ah. It's option four - a pair of bungalows.

Now, if you got that right, then this must be

a repeat of the programme and you've seen this before.

Cheater.

No short cuts were taken when designing these properties, though.

The front door is set-back from the road

and the curb has been lowered for easy off-road parking.

The old plot had a lot of space at the back,

so both houses have good-size gardens.

Still, the two bungalows were not part of the original plan.

So what happened?

We put planning in for two semis, a terrace of houses, flats,

which we got recommended by the councillors.

But in the end, they all got turned down.

The problem we had with the neighbours is that they

didn't want anybody overlooking their property, so we could

only put bungalows in, rather than a two-storey or flats as we intended.

It took two long years to get planning approved,

which was double their original timescale,

even before a single foundation was dug.

Six months later, the build was complete.

They are still putting finishing touches on this one,

but here's one they made earlier.

This one was finished first and has been lived in for a few months.

I think it looks lovely.

It has a nice open-plan kitchen and living area.

Two good-sized double bedrooms.

And one practical single.

The new owners had a choice in the standard of finish.

I really like the design of the bathroom and especially the kitchen.

However, getting to this stage was no easy task.

First, they had to demolish the old house.

To save money, John did this and the groundworks himself,

where he ran into a problem.

When we had the drainage inspected,

the inspector said they needed different sort of tanks put in.

So we had to put in a sewage plant.

The ones that we'd put in we had to take out.

Then buy another two to put in.

That near enough doubled the expenditure on that side of it.

Then it was Richard's turn.

He and a small team had to make the plans a reality.

First of all, we dug the foundations, put the blockwork in.

We decided to go for a joist floor system with insulation underneath.

Then obviously blockwork and stonework on the outside.

We had somebody come in to do the plastering.

But all the other works, me and my friend did all the work.

And Dad did the driving side, digger side.

I'm the digger man.

I'm below ground, then Richard takes over.

# Can you dig me?

# Oh, yeah

# Can you dig me?

# Oh, yeah... #

What about Richard's son, Rhys, who we saw back in 2013,

when he was 12 and was keen to help out?

Now 15, the passion to be in the family trade is still strong.

My son came over in the holidays and helped put the fittings in.

And some of the blockwork outside.

He was helping me labour, mixing up concrete, everything.

He's decided when he's older to become a plumber,

which is another trade in the family for these projects.

A third generation of the family in the trade, that's great to hear.

It should also help save some money on bill costs in the future.

But how much has this one set them back?

We spent approximately 100,000 on each plot, which was our budget.

And we were pretty much within 95, 105, depending on the spec.

John and Richard bought this site for £103,500.

So add their spend of £200,000 to that,

and it means each bungalow has cost roughly £150,000.

Let's see what two local estate agents think of their hard work

and if there's profit to be made here.

What they've done is a superb job for what was here previously.

The finish of property one is absolutely outstanding.

Really, really good.

The second property, yet to be finished, but I'm sure,

looking at the first property, the standard will be just as good.

First impressions of the layout is

it's a really wide-open, friendly space, as I would call it.

The wide sort of hallway area that leads through to the bedrooms

gives it a massive wow factor.

The agents think these bungalows could rent for between 750

and £800 per calendar month.

That's not a particularly exciting yield of just over 6%.

But John and Richard always wanted to sell.

So, will the bungalows make a profit on their total £200,000 cost?

If I was putting the properties onto the market today, I would

certainly put both properties on the market at £220,000.

I think each of these properties will fetch

somewhere in the region of £200,000.

That's an average price of £210,000.

That will land the father and son team a pre-tax profit of 120,000.

So what do they think of that?

We were quite happy with the valuations.

We sold both of them for £210,000 each.

So, pretty good all-round, really.

Well, it's been a bit of a slog.

But with a pre-tax profit of £120,000 in the bank,

they should be pleased.

It's been quite an experience, actually.

We can work together, father and son partnership.

And yeah, it's been really good.

Find out what more proud owners did with their new properties next time.

Yes, make sure you join us for more Homes Under The Hammer.

-Goodbye.

-Bye-bye.

-Goodbye.