Episode 25 Homes Under the Hammer

Hello and welcome to the show.

The thing I love about property in this country

is that there's such variety and something for everyone.

But knowing where to start looking can be the biggest challenge.

Yes, but I can almost guarantee you'll find

exactly what you're looking for

if you visit your local property auction.

Buying at auction can be so exciting,

but sometimes people get what's known as "auction fever",

where they end up bidding more than they intended to.

But that can still work in your favour,

as long as there are bargains to be had.

Let's see what our buyers on today's show went for.

In Crumlin, Wales, I'm not crazy about the house,

but I am mad about the garage.

Is it me, or is this just lovely?

In Westminster, London,

surely a basement office can't be worth over half a million quid?!

Welcome to the crazy world of London property prices.

And in Bootle near Liverpool,

two flats with a guide price of £30,000?!

And that's not the only surprising thing.

Again, a lot of the rooms here have surprised me.

All these properties were bought at auction.

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

when they went under the hammer.

Thank you, sir.

I'm in Crumlin, a town in Caerphilly, Wales,

where this mural reminds us

that once this was home of the highest railway viaduct in the UK.

200 feet high and made from wrought iron, it opened in 1857,

but now, all that remains are a couple of stone abutments.

Well, bridging the property gap

is the property that I'm here to see in Crumlin today.

Three-storey, three-bedroomed mid-terrace.

Guide price was £39,000 plus. Let's take a look.

OK, nice little entrance porch here with a separate door.

That's good for keeping the draughts out.

It does get a bit claustrophobic as you walk in though,

probably cos there are way too many doors. Front sitting room here.

It's not a bad size, it doesn't seem in too bad a condition.

But I'm wondering, straightaway,

if there's any way of combining that room with this one.

This wall almost... Grrr.

It just makes the house feel quite cramped.

Um...take it out? Big job. Worth doing?

Maybe. Depends what you do with the house - rent it out or live in it.

Getting rid of an internal wall can really transform

the flow of a house, but any structural alterations require

that you make a building regulations application and, of course,

it could be a supporting wall, in which case you would need steelwork

and props to stop the building falling down as you remove it.

This house is quite typical in its layout around here,

so the next stop is downstairs.

Ah, down here it's a case of good news and bad news.

The bad news is this is the only loo and bathroom in the property,

so you can imagine being on one of the higher floors,

having to come all the way down here to use it.

It's also just off the kitchen, so not ideal on lots of levels.

The good news, though - the kitchen itself is really nice.

It's big enough to be a sort of kitchen-living area.

It's got this little extension there with access out the back.

Not in bad condition,

but it's a nice size and has a nice feel to it,

so the biggest challenge is,

is there anywhere else in the house we could put the bathroom?

MUSIC: Popcorn by Herb Alpert and The Tijuana Brass

I'd want to keep a toilet down here,

as that would be much more family friendly,

but I don't think most families would fancy

coming all the way down here from the bedrooms

for a wash in the morning.

The stairs to the first-floor level can be found

in the back corner of the house.

Starting with the smallest bedroom, it's a comfortable single.

It's already got one in it.

Next to it, with the striped rug,

I'm going to declare it a bedroom number two,

but with so much furniture it's hard to gauge its size.

Then, last but not least, bedroom one,

and I don't think any of these rooms are big enough for a toilet,

let alone a bathroom. Whichever way you call it,

bedrooms two and one overlook the front of the house.

And then who could resist a peek in the loft?

So, up a loft ladder into what was obviously the loft at some point,

which has been converted into actually quite a useable space.

It's got a big roof light, it's got power, it's got lighting.

It certainly couldn't be a bedroom or anything like that,

but for a kids' play area or somewhere to store stuff,

absolutely ideal. What a bonus!

On second thoughts - playroom? Maybe not.

# All you ever do is bring me down

# Cos, honey, all you do is bring me down... #

Out back, the garden is, well, being kind, bijou,

and the chimney needs some fairly urgent attention.

Also, the outbuilding's window frames leave a lot to be desired,

but it's my favourite bit of the house!

A garage. But I just wish you could be here with me, cos it's the smell.

It's one of those garages that your granddad used to have.

In fact, it's identical to a garage I rebuilt an old MGB Roadster in.

It smells of old-fashioned oil. It's even got a pit. The oil stains,

the bench at the end... Is it me, or is this just lovely?

Hmm, OK, I accept the smell of old-fashioned oil

isn't to everyone's taste.

We called in a local estate agent

to see is SHE liked the smell of old-fashioned...

Only joking. ..to give us her views and valuations,

beginning with a bit of background on Crumlin.

It's for local people to live in, although it's quite central

for Cardiff, Newport, Abertillery,

Ebbw Vale and Pontypool, so it's a good commuting area.

If this property was yours, how would you renovate it?

I would put a bathroom on the middle floor.

Because it's three-storey, you can get access to it

from the lower ground floor and first floor,

so I would put the bathroom on the middle floor

and perhaps make a utility room-cum-dining room-kitchen

on the lower ground floor.

What could this house, with a guide price of £39,000,

achieve once refurbished?

Once renovated, I would estimate

that the sales achieve price would be in the region of £69,950.

Well, there are a few things you'd want to change with this place

but, primarily, it's a lot of house for the money

and when you've got that as a backdrop,

for that kind of guide price,

I don't think you can go too far wrong.

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

Lot number 64. Guided at £39,000. Start me, will you, somewhere.

I'm in your hands. 35, can we? Thank you.

35, I've got you there. At 35. 35. And 6.

This is late in the day, with only four more lots to go.

All the bidders are at the rear of the room,

making it difficult for our cameras to see them.

We rejoin the bidding at £47,000.

At £47,000, on my left-hand side. One more might get it for you.

I've got 47 then, on my left-hand side.

47.5. 48? 48, no.

There you go. At the back, for the first time, second time,

third and last time, at £47,500...

-GAVEL BANGS

-There you go. 61.

Thank you. We'll have somebody with you shortly.

The moral of the story is, whatever you think your maximum is,

-always go a couple of bids beyond.

-Hmm, he WOULD say that, wouldn't he?

At the very back of this auction crowd were successful bidders

Dave, Christie and baby Elliot.

Elliot's parents are IT consultants, while Elliot - well, he's a baby.

We all met up at this £47,500 purchase.

Dave, Christie and Elliot.

-Nice to see you all.

-And you.

-And you as well. Nice to meet you.

-How old is he now?

-He's just turned seven weeks.

-Oh, my golly!

So, you've got quite a lot going on in your life then,

-with a new baby and buying a new house.

-Yeah.

So, tell me why you wanted to buy it then.

Um, well, we've been thinking about it for a while,

and, yeah, just the opportunity came up really.

We ended up with a bit of money to invest

and we thought there's nothing in the bank at the moment,

so we wanted to find a nice property to do up

and, as Dave keeps saying,

blame your programme for us ending up at the auction.

It's definitely inspired what we're doing, I think.

You won't be blaming me, you'll be thanking me when you make money.

-Yeah, yeah.

-And why the Valleys of Wales?

-Well, we live about 20 minutes...?

-20 minutes away.

About 20 minutes from here.

We looked at a few other properties but they were a bit further away

and we liked the location of this one

and also, when we looked around,

we thought the place had a lot you could do to it.

What was it you liked about it, Dave?

Um, we like space, don't we? I quite liked having the three floors.

To me, that was quite interesting in a terraced property.

Bathroom downstairs, so that's the old conundrum -

what can you do with the bathroom downstairs versus getting it up?

We felt, structurally, it felt sound.

It's our first investment property.

-It just felt relatively of a safe one to go for, I think.

-Hopefully.

Hopefully. But one we can still flip relatively quickly

-and make some money on, hopefully.

-Right, and a good price.

-Yes.

Yeah, obviously paid more than we would have liked to, but yeah.

-Did you?

-We went to the top of our ceiling, didn't we?

Yeah, 47 was our limit and we got 47.5.

We were mentally out at that point

and willing the hammer to go down and it did

and suddenly we'd bought a house. First auction,

suddenly we didn't know where we were, but now we're here.

Wow, fantastic. So, what's the plan for it?

We'll probably rent it out for a few years, at least initially.

So, we're looking at a fairly quick turnaround.

The usual thing - paint throughout, plaster where needed,

new carpets throughout.

And probably knocking through the two reception rooms

-on the ground floor.

-Right.

There's a small sitting room and a lounge,

so try and open that up, although it is a load-bearing wall,

-so we're still consulting.

-Careful.

-Yeah, RSJs, etc.

And it's terrace so there's party walls, so we're consulting builders

to see, with what we want to spend now,

whether it's the right thing to do, but, ideally, we'd open that up.

-What about outside?

-Hmm.

-Hmm.

At the moment, probably, literally, lick of paint round the garage.

The gardener in me wants to go out and start making more space

and putting plants everywhere but, especially for rental,

trying to stay realistic and so, I think, at least for now,

we'll probably just leave that as is.

So, how much of the work are you going to do yourselves?

-In theory...

-If there's a wall to be knocked down,

-I'll always step forward to do that.

-Yeah, smashing stuff up.

Smashing stuff up, moving stuff around - that's definitely me.

You're a bit of a keen tiler.

Yeah, I'll do the painting and tiling and that sort of stuff.

Yeah, fit most of the bathroom,

but we probably need the electrics checked

and plumbing, we'll get the professionals in,

and the same for plastering, but we'll do as much as we can.

At our own property, we do quite a bit,

so we're happy getting our hands dirty around little one.

-And what's the budget?

-We'd like to try and get it done for 8.

That's putting the little shower room in, knocking the wall

-and then all the usual carpets, walls, etc.

-New bathroom.

I think that should be doable. Yeah, new bathroom suite.

As we're doing a lot of it ourselves...

You'll probably tell us otherwise - but hopefully, it should be doable.

As long as you do a lot of the work yourself, absolutely.

-What about timescale?

-Two or three months.

He will dictate a lot of that.

If there's a swimming class or something that he's going to,

that takes priority, so it really is, we'll do it as we need to

but, having said that, I don't want it to go for three years.

I think, ideally, we'd turn it around in three months,

get it on the rental market and then go from there.

-Well, congratulations.

-Thank you.

-Good luck with it.

-Thank you.

Good luck with the family and I look forward to seeing how you get on.

-Thank you.

-Thank you very much. Cheers.

Wow! Lots going on in the Dave, Christie and Elliot household.

New baby, new house,

lots of challenges ahead to sort this place out,

but it seems like they've got the right ideas

and the enthusiasm to make it a success.

How will they get on? You can find out later in the show.

MUSIC: Towers Of London by XTC

# Towers of London

# When they had built you

# Did you watch over the men who fell...? #

If you want to be in the heart of London,

well, it's safe to say you can't get much more central than this.

We're in Westminster and it's a buzzing area,

full of iconic landmarks.

However, the clock is ticking

and I need to find today's auction property.

No, it's never going to be the most peaceful place to be,

but I've turned a couple of streets and, actually,

the hustle and bustle of SW1 has become that little bit quieter.

Now, what about the property I'm here to see?

Well, it was last used as an office

and it had a guide price of £250,000 to £300,000.

It's in this eight-storey building here

but, no, I'm not going UP too many flights of stairs,

I'm actually walking down to a lower ground floor.

# I'm going underground... #

That's an attractive guide price for London

and, although it has a B1 classification for business use,

you might be asking yourself if there is an opportunity

for residential conversion.

Well, while I head down,

the answer to that question might be found if you look up.

These are all flats above.

Oh, this really does have the feeling

of going down, down, underground.

And it's not often I walk into a property

and I'm greeted by not one, but two, loos.

So, you know this is a commercial building,

you can just see this strip lighting everywhere.

This was obviously somebody's office.

Not a bad space, though. One big negative - hardly any natural light.

In fact, this ceiling is coming halfway down through this window

and you're looking straight out there onto another building,

somebody else's courtyard.

I'm just wondering whether you could take this ceiling higher.

Maybe somebody's tried to have a look

because you can see all the plasterboard here.

It's not ideal at the moment.

I'm just wondering if it gets any better when I go through there.

So, through here, you've got a fairly respectable space.

You've got the kitchen just through here.

Now, overall, this is a good size space

and, actually, I think, instead of an office,

it could be converted into a really good size two-bedroom flat.

My advice is to consult an architect who'll be able to advise you

on the best way to make use of the space,

although you will need to take into account

any walls that could be load-bearing.

And another thing - a big, big factor here

is the lack of natural light. Look at this.

Whoever takes this on needs to invest

in some really clever light-reflective materials.

I'm talking shiny marble tiles, mirrors,

spotlights everywhere, and that is just for starters.

Because of that B1 use classification,

if you do want to convert this into a flat,

you'll need to apply for change of use through Westminster Council

and, if you succeed, it really could be a very lucrative move.

Recently, a newspaper reported

that Westminster is the second most expensive place

to buy property in the whole of the UK.

So, picture this.

Once step forward - I reckon that's about a metre.

To the left, one to the back, and one to the right.

Well, that single square could be worth a whopping £8,925!

Welcome to the crazy world of London property prices, everybody!

That is hard to comprehend, isn't it?

Yes, a dark and dingy space this may well currently be,

but with approximately 77 square metres to play with here, ka-ching!

And just to demonstrate, here's a crazy comparison.

A square metre in Westminster costs £8,925

and in Stanley, County Durham, £818.

So, it's time to find out what a local property expert,

familiar with the Westminster property market,

thinks of the potential here.

This street is an excellent location, residential-wise.

Probably not quite as strong commercial.

Quite hidden away, so office users

would tend not to want to come here.

The property as an office is divided into several rooms

which is not really useful for office users today.

They tend to like total open-plan space.

It does lead itself quite well to a conversion to residential

or, possibly, an alternative commercial use

for medical or education.

This unit would require an awful lot of work

to convert it into residential.

It would need to be totally stripped out, bedrooms created,

bathrooms created, kitchen created,

new carpet, decorations and total renovation.

I would estimate, to make this

into a top-specification residential apartment,

somewhere in the region of £200,000 would be required.

When you add that figure to the possible price

you'll be looking at spending, at least a core half million.

So, what does our expert estimate a two-bedroom basement flat

could be worth in this part of London?

Once renovated to a high specification

as a two-bedroom apartment,

this could achieve a price in the region of £850,000.

Buy this for the guide and I think it could be win-win,

whichever route you decide to take.

You'd be really hard-pushed

to find something for that price in this prime spot.

Let's head to the auction and find out who saw the light

and, hopefully, the future of this office

will be that little bit brighter.

We move to lot 212, which is Westminster, SW1.

Leasehold, self-contained lower ground-floor office.

It's vacant, nice part of the world.

Let's start at 250, see where that takes us.

Someone bid me 250.

Unfortunately, we had a technical issue during this auction

but the bidder with the deepest pockets was Dilan,

who forked out a whopping £490,000 - almost double the opening bid.

-GAVEL BANGS

-That is sold to you, sir.

# Keepin' out of mischief now... #

Dilan is a retired property developer,

but instead of putting his feet up, he's out buying another property.

-Dilan, lovely to meet you today.

-Thank you, and you too.

Aren't you supposed to be taking it easy?

-You're retired now, aren't you?

-Well, I can't sit at home.

Why can't you sit at home? Is it too boring for you?

It's boring, but I need something to do.

What an interesting property this is.

First of all, what was it that attracted you to this area?

Well, I would like to buy in Westminster for a long time,

so this was the time to get in.

It's very rare that properties in this SW1 postcode come up.

-Did you view the property before the auction?

-That's right.

-And you liked it?

-Yes.

-So, were you happy with the price you paid?

-I'm happy,

because you can't get this sort of price in the centre of Westminster.

Currently, this is a commercial premises.

-Are you going to leave it commercial?

-No, I'm not.

I'm going to change it to residential.

It is very hard to get, in Westminster,

for the residential for the right price.

Let's get down to the nitty-gritty

and talk about how you can improve this space

because it's a fantastic location but, at the moment,

ceilings are all a bit too low, it's very dark.

I just want to see this light and open. How are you going to do that?

We'll try to take this ceiling out and see if we can raise it up

or in a bedroom, it doesn't make much difference.

In the lounge and the other bedrooms and kitchen, ceilings are high.

-OK, so you can take the ceiling up a little higher here...

-Yeah.

-..which is really going to improve the feeling of space.

-That's right.

You don't have much natural light in here. Does that worry you at all?

Well, it doesn't worry me because, being a basement,

I don't have enough window lights,

but I'm going to put artificial lights.

So, Dilan isn't worried about light or height, but what about space?

What ideas does he have about the layout?

I already submitted a plan to Westminster Council

-for two to three bedrooms.

-Really?

-Yeah.

Don't you think three might be a little bit on the small side?

-Each room would be a bit tight?

-Not really.

Kitchen can be converted into the bedroom.

-Ah, and then you'll put the kitchen in the lounge.

-In the lounge.

-So, you are absolutely maximising this.

-Yes.

Dilan is confident that he can add a third bedroom

without compromising the overall layout, but I'm unconvinced.

Let's recap.

The manager's office will be extended to make one bedroom,

the main office space will be the master bedroom,

and both of these will be en suite.

The kitchen will become the third bedroom,

with the remaining space being a lounge and kitchen area

and there's a bathroom to fit in there too.

Seems like a tight squeeze to me.

To what standard do you think you're going to renovate?

-I'm going to have a high standard in this.

-So, high-spec.

-Yeah.

Are you talking wooden floors, top-end kitchen,

-lovely fixtures and fittings?

-That's right.

-What's the budget for you to do the work here?

-£20,000 to £25,000.

Do you think that's going to be enough money for you?

-I don't think so. I'll probably need some more.

-And have you got more?

-Have you got a little bank that you can dip into?

-Yes, I can afford to.

How long do you think it will take you before the work is completed?

Well, work completion is six to eight weeks.

And I'm waiting for six to eight weeks

for the planning permission to come through.

-So, as soon as you get the planning permission, you'll start work.

-Yes.

I'm really excited to see how you do it

and what it looks like and how high-spec it's going to be.

All right, thank you, you're welcome to it.

-Congratulations. Well done.

-Thank you.

-Can't wait to see it.

-Thank you.

-Thank you very much.

If you're going to have a hobby,

it might as well be one that can make you some money.

However, I really don't think that Dilan's £25,000 budget

is going to cut the mustard here

and bring his new flat up to the standard that this area commands.

Join me later in the programme and you can find out

whether it's lighter, brighter, top-notch and tip-top.

Coming up,

a familiar face with an unusual income in Bootle, Merseyside.

There's an advertising hoarding on the side of the building.

-That's a nice little bonus, isn't it?

-It is.

And Dilan's had an unusual problem in Westminster, London.

Flood risk in this area.

They are not allowing any more planning permission.

We're returning now to Crumlin in Caerphilly, Wales,

where earlier, I looked around this three-bedroom mid-terrace,

sold at auction for £47,500.

It does get a bit claustrophobic as you walk in,

probably cos there are way too many doors.

Front sitting room here is not a bad size.

It doesn't seem in too bad a condition,

but I'm wondering, straightaway,

if there's any way of combining that room with this one.

This wall almost... Grrr. It just makes the house feel quite cramped.

With open-planned being the order of the day,

I would have preferred one larger open space.

The new owners were IT consultants Christie and Dave,

who came along with their recent addition to the family, baby Elliot.

-How old is he now?

-He's just turned seven weeks.

-Oh, my golly.

So, you've got quite a lot going on in your life, with a new baby

-and buying a new house.

-Yeah.

-So, what's the plan for it?

We'll probably rent it out for a few years, at least initially,

so we're looking at a fairly quick turnaround, the usually thing -

paint throughout, plaster where needed, new carpets throughout.

And probably knocking through the two reception rooms

on the ground floor, although it is a load-bearing wall,

-so we're still consulting.

-Careful.

Well, I was pleased to hear THAT.

The couple had planned for a three to six-month turnaround.

We're back nearly two years later to find out what caused the overrun

and see what they've done in their first renovation.

# We just now got the feeling that we're meeting

# For the first time... #

Well, it couldn't be more open-plan than that.

But remember, if you fancy doing this under building regulations,

you'll have to engage a structural engineer to calculate the size

of the steelwork needed to support the rest of the house.

The kitchen and bathroom are still located on the lower ground floor,

but both have had a large refurbishment.

Upstairs, the old beds and furniture have given way

to new doors, carpets and decor.

It's a massive improvement.

# Even after all these years

# We just now got the feeling that we're meeting

# For the first time... #

By stealing a bit of space from one of the bedrooms

and relocating the boiler to the lower ground floor,

Christie and Dave were able to fit in a shower room and toilet.

It was the first time that this sort of plumbing

had reached the upstairs,

so was the going tough for our two novices?

The project's taken just under two years - a little bit longer

than initially estimated, or than Dave's original estimate.

We did think that, for just a cosmetic change,

that would probably be sufficient.

We were looking at three to six months, I think,

for just a cosmetic change.

However, we have done quite a lot of additional jobs,

such as adding in the shower room,

taking out the wall between the two small reception rooms.

And we also wanted to make sure that we weren't just spending

every waking hour that we weren't working in the property.

I've got my now two-year-old son

and we didn't want to be missing his first couple of years,

just by being at the house, so we have had to balance

looking after Elliot with the house and also with our jobs.

Shouldn't forget my job!

No, don't forget your job, Christie.

You didn't forget the £8,000 budget, did you?

We ended up spending pretty much exactly £15,000,

which is a little bit more than our original budget.

We didn't want to just cut lots of corners

and end up having to redo it in two years.

We tried to get the balance between having a nice, clean finish

and somewhere that a potential renter is going to look after,

but balance that against not spending an absolute fortune on it.

It all looks quite balanced to me, so who did what?

I spent most days going backwards and forwards to the dump,

pretty much removing the old bath, the old bricks

and everything that was in the property,

so really hands-on, where I could be, supporting the professionals.

Having spent a few days trying to do the painting

and also finding childcare for Elliot,

which my parents have been really helpful with,

we realised it was going to take us forever,

trying to do that just in the odd days that we had.

At the point where we felt it was becoming

too much for us to manage,

that's when we looked to bring professionals in,

so I think we saw, then, an acceleration of the project.

I'm sure I must have done something else, but I can't think what.

Being a full-time mum and an IT consultant's enough for me!

-What about Elliot?

-I don't know how much of this he'll remember.

Again, that was one of the things we were juggling,

so Christie would sit with Elliot so I could come here

and then we'd do a bit of a switch-around,

so making it work while still looking after Elliot

was one of those things that was quite key.

Must have been quite a struggle at times,

so is it something you'd repeat?

It's a project that we've enjoyed

and it's the first of many, hopefully.

We called in two local estate agents

to give us some views on valuations.

Let's start with the agent who saw it almost two years ago.

The changes that have taken place

since the last time I came to the property are really good.

They've made good use of the space

and it should suit most people.

Having looked around the property,

it's been done to quite a nice standard. I like the fact

they've put a bathroom up and down, which is a big benefit.

We know Christie and Dave aim to let the property,

but let's see what values they have added here first.

They paid £47,500 at auction and a further £15,000 refurbishing,

making a grand total of £62,500.

So, what's it worth now?

The recommended asking price for this property

would be in the region of £70,000 to £75,000.

We would hope to achieve between £76,000

and £78,000 for this property.

Taking a sales figure of £78,000

would produce a gain in value of £15,500.

We wouldn't want to be working solidly for two years

and get that sort of return

but, given that we've been living life at the same time,

personally, I think that's been worth it.

Yeah, I think, to be honest, there's a ceiling in the property

and I think we pretty much probably hit that.

Now, onto the figure that the couple are really interested in - rental.

The rental value for this property

would be in the region of £400 to £450 per calendar month.

The property would probably rent

for between £400 to £425 per calendar month

because of what they've done to it, the improvements they've made.

Taking the higher figure of £450 a month

would equate to a yield of just over 8.5%.

-It's pretty much what we expected, so...

-Yeah.

Given how it's turned out,

I think we might be seeing mum and dad at the auctions again -

not to mention Elliot in 20 or so years.

I'm in Bootle, halfway between Southport

and the centre of Liverpool, so great for commuting to both.

I'm here to see this property.

It's two flats - a one-bedroom and a two-bedroom.

It has a guide price of £30,000 plus.

Now, it's not looking too welcoming at present.

Let's hope it improves on the inside.

# I see trouble on the way... #

We often mention kerb appeal on Homes Under The Hammer.

Well, this isn't it.

OK, we're into a small hallway.

I can see the door with the stairs

going up to the two-bedroom apartment.

Down here, we've got the one-bedroom.

I'm straight into the lounge, with a nice big window there.

There's the shutters which are stopping the light coming in.

When they've gone, it will be so much brighter in here.

It's in decent condition. I can see they've got central heating.

Up a step into the kitchen, again, which is in OK condition.

There's new units and a new sink as well.

In here, we've got...a shower room and toilet.

There's bit of mess around here and a bit of rubble

but you can get rid of that no problem at all.

And we're in to the bedroom. A very small bedroom.

You'd get a double bed, nothing more than that.

But I think, overall, it's not a bad start.

Not forgetting this has a guide price of £30,000 plus.

Down here, I think it's more or less ready to go.

Let's hope upstairs is the same.

# Judge not

# Before you judge yourself... #

Yes, I can safely say I was a bit quick to judge

because of the outside appearance.

If upstairs is in a similar condition,

this could be a great investment.

So, upstairs to the two-bedroom apartment.

This is one of the bedrooms here.

It's got a bit of rubbish in it, a bit of old furniture.

Get rid of that and you'd have a decent size bedroom.

Up a couple of steps here and you've got the kitchen.

You wouldn't be able to resurrect it,

you'd have to start again in there, put a new kitchen in.

And down the hallway to the bathroom.

Again, a lot of the rooms here have surprised me.

This is a decent size bathroom. It's got a shower into the bath as well.

I can see on the wall there there's a bit of damp.

Get that checked out, make sure it's not too bad.

And we're into the lounge area,

with reasonably high ceilings,

two big windows letting lots of light in.

Another light and airy room is bedroom number two,

which is at the top of that damp staircase.

Again, a surprising amount of room up here.

So, get rid of all this rubble and all the mess in the house,

take the shutters off the windows and I think this would appeal

to the investors' market that are looking to rent.

So, Dion, I hear you ask,

why not turn these two flats into a family home?

Well, there is a problem with that.

# Tell me, where do the children pla-a-a-ay? #

Yes, there's no garden,

so I think that seals the deal on this staying as two flats.

And with that very attractive guide price of £30,000 for two flats -

not one, two - I think this is an investor's dream.

What can an agent from the auction house who sold it

tell us about this lot?

The area, generally, is young families and young couples.

It's renters, mainly.

I don't think there'd be much point

in changing this back to one property.

The main income would come from it being two flats.

So, I was spot-on in my thinking for this one.

What does he think of the two flats?

The property's in a fair condition.

Someone's obviously started the renovation works.

There's still a fair bit to do.

There's some damp in one of the upstairs bedrooms

and around the upstairs of the property

that would need seeing to and then, finally,

just cosmetic work to the bathrooms and kitchens to finish off.

Yes, there are a few issues to attend to,

but let me tell you that guide price just one more time. 30 grand!

Now, although these flats are more likely to be bought

by a landlord, it would be useful to know what they would fetch

on the open market once the work had been carried out.

Once the works are complete, the building, as a whole,

should sell somewhere in the region of £75,000 to £80,000.

What kind of rent could an investor expect from these two flats?

I would estimate, once the works are completed,

this one-bedroom flat should rent for about £250 per calendar month.

The two-bedroom flat should rent

somewhere in the region of £350 per calendar month.

At a guide price of £30,000 plus for this,

I think it's a great investment.

If you can see beyond the shutters and the rubbish,

I think you'll discover a great prospect.

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

Lot number 9. £30,000.

Lot 9. £30,000.

20 then. £20,000.

20 on the front row. At £20,000.

At 21. 22. 23.

No? 23 here. 24. 25. 26.

26, on the front still.

At £26,000.

27. 28. 29.

And 30. 31.

32. 33. 34.

-35. 36...

-The price continued to rise,

as these two competitive bidders battled it out.

We rejoin the bidding at £50,000.

50. 51. 52.

53. 54? £53,000. You've had a good go there.

£53,000 in the doorway.

53 for the first time.

Second time at 53.

Are we all finished? It's the standing bidder, £53,000.

Shout if I've missed you.

-GAVEL BANGS

-Thank you, sir.

And that successful bid of £53,000 came from Adrian.

MUSIC: I'm Your Man by Wham!

Adrian owns a property development company,

not just for his own properties

but also managing and developing properties on behalf of investors.

As some of you may have noticed,

Adrian's no stranger to Homes Under The Hammer.

I met him back at his new property to find out his plans.

-Adrian, good to see you again. Welcome back to the show.

-Thank you.

-Adrian, take us back to the auction. How was it?

-It was good.

It was competitive, a busy auction room.

A couple of people bidding on this property,

-so we did have competition.

-And how did it go?

-Were you below budget, or above?

-It ended up on our maximum price.

-You were going no more?

-No more. It's a client's money, so no more.

-Is that all you had?

-That's it, yes.

That was our final bid and we secured it, so quite lucky, really.

So, you've bought this for somebody else.

Yes, for a client in Southern Ireland, actually, County Cork.

So, a client of mine who already has three flats with me.

Could you tell us why you chose this particular property?

It's a good-value property.

This particular client was looking for yield, a good strong yield,

which this one will produce, with it being two flats in one building.

It's a no-brainer, this one.

Even paying so much over the guide price,

it should mean a steady income for Adrian's investor.

Finding a company to research, buy renovate and manage a property

is an option if you don't have self-confidence or time to do so,

but you should also do your homework as well,

and check the company thoroughly.

So, what do these kind of investors want

-from the properties that they buy?

-The majority want to rent out

because they're looking for mid to long-term investment,

so they're looking for either pension money

or investment on their savings which is better than the banks'.

People like to see their investment.

It's bricks and mortar, they can see it, they can visit it,

so people do seem to like that.

# I demand a better future... #

So, with investors looking for a better future,

this property seems to be the answer.

And it's not just the rental income

that makes it an attractive investment.

There is actually a third income on this building.

There's an advertising hoarding on the side of the building

and that brings in £600 a year, so that's an extra £50 a month,

which brings the yield up as well, so you've got the three incomes.

-That's a nice little bonus, isn't it?

-Yeah, it is.

That's quite rare. I've never known that.

It doesn't happen very often but, with it being an end terrace,

main road, it's going to get a viewpoint there from the public,

so there's an advertising company involved,

-which is good for the client.

-What's the yield on this then, Adrian?

With the three units, taking into consideration both flats,

plus the advertising hoarding,

you're looking at 14% gross yield, which is excellent.

-In the property world, that's a good return.

-It's quite high.

It is high, yeah, hence the attraction to this building, really.

# You bet! If you're gonna do it, do it right, right

# Do it with me

# If you're gonna do it, do it right, right

# Do it with me... #

If you fancy earning some extra money that way,

you will need a gable end on a good spot.

Before you get too excited, you will need to apply for -

you guessed it - our old friend planning permission.

And if it's decided that it could be a distraction for drivers,

you can kiss the idea goodbye. Back to the flats.

What's the plan for the inside?

It's a basic refurbishment, so we're going to change one of the kitchens,

refurbish the other kitchen, general decoration, paintwork.

There's some water ingress on the roof coming in,

which is causing a bit of damp, but it's just tiles

and which tile's missing, so that's a quite straightforward job.

-So, who's going to do all the work?

-Our own team.

We've got decorators, builders,

central heating guys, joiner for the kitchen,

so we've got our own team we've established over the years.

They'll be in there, starting tomorrow.

-Get rid of us, get them in?

-That's it - get you out, get the boys in.

And how long will it take the boys to get this finished?

Two to three weeks, maximum of three weeks,

so we'll have this turned around.

-And the budget to get everything done?

-£3,500 for everything.

-And that's from start to finish?

-That's start to finish.

-That's everything.

-Adrian, good luck.

-Thank you.

-Wish you all the best.

-Thank you very much.

Adrian's a confident man

and seems to have a system that works for his clients.

This might not be everybody's cup of tea,

as it's two properties in one, but with that yield of 14%,

I think this is a property developer's paradise.

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

Well, we've seen how our first developer got on,

-but what about the other two?

-Yeah, will they come up smelling of roses

or something a little less pleasant?

Hopefully, it's not the latter. Let's find out.

BIG BEN CHIMES

It's time to head back to Westminster in London

where, earlier, I walked from Big Ben

to our big basement auction lot -

an office, guided at £250,000 to £300,000.

# Step into my office, baby

# I want to give you the job

# A chance of overtime

# Say, my place at nine... #

But, bearing in mind that residential square footage

is amongst the priciest in the country, in Westminster,

it's real potential, for me, lay in converting it.

It could be converted into a really good size two-bedroom flat.

My advice is to consult an architect

who'll be able to advise you on the best way to make use of the space.

Semi-retired property developer Dilan paid £490,000 for the lot,

nearly 200 grand over the guide price.

Somehow, I suspected he hadn't bought it

to host the most expensive retirement party ever.

No, I'm not. I'm going to change to residential.

It is very hard to get, in Westminster,

for the residential for the right price.

With a total of £20,000 to £25,000 budget,

Dilan planned to have this ready as a three-bed high-spec flat

in over 16 weeks,

as he was leaving eight weeks aside for planning permission.

So, surely two years on, when we peek through the letterbox,

there's a gleaming modern flat!

# Still the same

# I caught up with you yesterday

# Still the same, still the same

# You're still the same

# You still aim high... #

And so, nothing has really changed over the past 24 months

bar a bit of explorative demolition in this wall.

The reason? Well, unfortunately for Dilan,

it's a common stumbling block for property developers -

planning permission and change of use.

The application has been submitted

soon after I take over this place and it take more than a year.

They haven't decided so far, at the moment,

so I withdraw my application.

Dilan has decided to withdraw his application,

as he and his architect discovered, during the lengthy process,

that getting the change of use

to convert this property to residential

was not as straightforward as it first seemed.

So I came to know, in the end,

there's a flood risk in this area

and they are not allowing any more planning permission

in future for the basement.

They may change the policy in the future,

so I withdrew the application but did not wait for their result.

A flood risk in somewhere like Westminster may seem unusual,

but planning departments have a duty to consider many things

when it comes to change of use, including if the property is listed,

if it's in a protected area of outstanding natural beauty

and even ventilation.

But despite that flooding-related decision,

the tide has turned for Dilan.

He's been able to sell the property on to another developer for £600,000

and, after his cost, that should give him a very healthy return.

Altogether, roughly about £10,000.

The architect fee, I gave him £2,500,

and the service charge we are still paying,

council tax, all that blah-blah, included.

Well, that takes Dilan's total spend to half a million quid,

giving him a pre-tax profit of £100,000.

Very nice, but for retired Dilan,

property development isn't just about the business.

It's my hobby as well. I can't sit around all day at home.

I need something to do.

Well, this one was a challenge.

So, let's ask a local property expert,

who came along the first time, to tell us more

about the planning issue that has bogged Dilan down.

Since we were last here,

there has been a planning policy, created by central government,

of permitted development.

Local authorities, generally, have tried to resist it,

but it is now much, much tougher to try and get this change of use.

I think it would still be difficult to achieve planning for residential.

Local authorities would keep on trying

to keep employment in the area

but, with careful consideration to the sort of residential unit,

there may be a small chance.

So, Dilan has found himself caught up in two different issues -

firstly, the planning laws

that protect residences from potential flooding

and secondly, the local council's desire

to keep commercial businesses and jobs in the area.

Dilan has sold the property for £600,000,

so has he got himself a good deal?

I believe the commercial value of the property,

without any residential consent, would be in the region of £675,000.

So, this sounds like Dilan might have gotten himself £75,000 more

for doing nothing except waiting,

but would he have done even better

had he renovated the offices and sold them on?

If you carried out a total office refurbishment here,

which would mean spending approximately £75 per square foot,

you would achieve a price in the region of £750,000 to £800,000.

Well, it's a very good value at the present.

If the sale is not gone through, I might pull it out

and put it under auction or sell it through the agents.

A wise idea, Dilan, and perhaps refurbish as well.

By the agent's calculations of £75 per square foot

for refurbishment, it might cost £63,000 to renovate,

but that top figure of £800,000

would give Dilan a profit of £237,000,

before the usual taxes and expenses.

Now, what about the chance of actually getting change of use?

What could it fetch as a two-bed flat?

If the property did achieve planning for residential

and it was refurbished to top quality,

it should achieve between £950,000 and £1,000,000.

Well, when you're thinking about the money, then...

It's a lot of profit in it, at the present,

if I get the residential planning permission.

Could Dilan put that residential application in again?

And who could blame him if he did,

with £1,000,000 price tag on a basement flat

and a potential profit of £500,000, minus renovation costs and fees?

And with money like that, supposedly retired property developer Dilan

doesn't show any interest in putting his feet up just yet.

I'm still interested in property and I will keep going on to it

because it's my hobby and it's a part-time job.

If there's any potential to make some money, why not?

Time to return to Merseyside and the tale of two flats.

They were guided at £30,000 but even that attractive price

couldn't overcome the initial lack of kerb appeal.

Now, it's not looking too welcoming at present.

Let's hope it improves on the inside.

'And it did just that.'

Two flats over three floors with that low guide had me intrigued.

A lot of the rooms here have surprised me.

This is a decent size bathroom. It's got a shower into the bath as well.

You could keep that. You'd get away with that.

I can see, on the wall there, there's a bit of damp.

Get that checked out, make sure it's not too bad.

The upper flat across two floors

impressed me more than the one on the ground floor,

but overall, they were all in pretty good condition,

so I thought this would be perfect for an investment market

and I wasn't wrong.

Adrian, who I'd met before, is a property developer,

who bought this on behalf of his clients for £53,000.

Apart from being a good rental machine,

there's another billy bonus.

There's an advertising hoarding on the side of the building

and that brings in £600 a year, so that's an extra £50 a month,

which brings the yield up as well, so you've got the three incomes.

-That's a nice little bonus, isn't it?

-Yeah, it is.

The refurbishment here seems pretty minimal.

There are roof tiles to be sorted, which probably caused the damp.

Adrian wanted to salvage what he could from the kitchens

and redecorate throughout, all within a three-week timescale

and for a budget of two to three grand.

We're back five weeks later to see how he's got on.

Outside, the shutters are obviously gone

and the brickwork has had a fresh lick of paint

and looks so much better.

What about the inside?

That's a big improvement.

A fresh modern kitchen with hobs, new white goods and tiling to match.

And the same can be said for the downstairs flat.

The other rooms in the two flats haven't changed much,

but they didn't really need to.

They've had a good clean and freshen-up,

with a lick of paint and some new blinds.

It certainly looks as though it's ready to be moved into.

One question though - those kitchen units don't look

like the original ones, so what happened to the salvage plans?

Initially, we were going to keep the original kitchens,

but we saved some money on the flooring

because the laminate flooring that was already down cleaned up nicely

and we were able to use those funds, instead, on two brand-new kitchens.

We managed to put in new worktops, tiling, ovens and hobs

and this turned out really well,

this nice, modern, fresh look for the new tenants coming in.

It's certainly a lot smarter

and Adrian has done well to find two new kitchens

and fit them in time. But has that bust the budget?

The original budget we had for this property was £3,500

and, even with the new kitchens going in,

we've managed to come in slightly under at £3,350.

You are good, Adrian. I need to know where you shop.

What about that timescale?

We had a three-week timescale on this property to refurbish it.

It did take slightly longer. We had some other projects on the go,

but also, we wanted the gable-end wall to dry out

after the roof was repaired

and we did some extra work with the new kitchens,

so slightly over the three weeks, but not too much.

Overall, I'm really happy with the way the property's turned out.

The kitchens look really good, this room is nice and bright.

We fitted a new fire. You'll see some snagging.

There's some wet paint behind me there.

The contractors were finishing off yesterday,

but we are ready to go now for the new tenants.

Adrian's clients live in Ireland,

so how did they keep an eye on their investment's progress?

They've had photographs every week.

Our property manager sends pictures of the refurbishment

and regular updates and now they've had the pictures

of when it's finished and they're happy for us

to progress to the management side and put tenants in

and receive a rental income.

So, job done. Almost.

Adrian spent a total of £56,650 here

and it's time to find out if he's achieved

that 14% yield he thought these two flats would earn.

First, what do the agents reckon of the improvements?

When I walked in the property,

as soon as I'd taken in the new features in the property -

the wooden floor, the new paintwork, the new kitchen -

I think it's done to a good standard and will rent easily.

The main selling points of the property,

from an investor's point of view, would be the high yields.

Now that the property's been renovated,

the rental income would potentially be a little higher than previously.

That's good news.

Both agents think if the property were to be sold as a whole,

it would sell for £60,000,

making a potential pre-tax profit of just under £3,500.

And another bit of good news is that the income from the hoarding

has gone up from £600 to £1,000 a year.

So, if we calculate that in,

Adrian needs to get a combined rental figure

of around £580 per calendar month from the two flats,

so he can reach the magic figure of 14%.

So, keep that number in your head.

The one-bedroom flat would rent for £295 per calendar month

and the two-bedroom flat would rent for £325 per calendar month

on today's rental market.

That's a combined £620 per calendar month,

so Adrian has, in fact, surpassed the 14% yield on that calculation,

coming in at nearly 14.9%, to be exact.

So, is he happy with how it's gone?

The experience on this one has been very straightforward.

It's a basic refurbishment, it's a very quick turnaround, three weeks,

and to achieve a yield for the client of 14%, it's a good result.

It's always fantastic to see

when a property renovation ends in a positive way.

But as we know, from many years on Homes Under The Hammer,

that's something you can't always take for granted.

So, join us next time for more auction highlights and lowlights.

-See you later.

-Goodbye.

-Goodbye.