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Hello and welcome to the show.
Being a full-time property developer is a dream job for many people.
But before you give up your day job, there's a lot to consider.
Yes, it can be a risky business with lots of uncertainty
and things coming out of the woodwork you weren't expecting.
But it can be a very rewarding and fulfilling career.
But where do you start?
How about buying your next home under the hammer?
It's extremely satisfying to take a rundown property
and turn it into a beautiful new home.
But it's very hard work!
Yes, I can testify to that, Lucy.
But how did today's buyers get on?
There's only one way to find out.
Coming up, Lucy has lofty ideas for this former ambulance HQ in East Sussex.
These lovely beams!
But what could this become?
This two bed mid-terrace in Retford needs a loft investigation.
We have a problem here.
Not sure what's causing that, but it doesn't look good.
And in Erith, Kent,
words fail me on the length of this two-bed mid-terrace.
Through the kitchen you'd come to... A bit further...
Stop, stop, stop!
All these properties have been sold at auction,
and we'll find out who bought them and what they paid
when they went under the hammer.
Lucy's in East Sussex, in the charming town of Seaford.
It's only 11 miles from Brighton
and an hour on the train from London Victoria.
So you can work in the city, but live by the sea.
# I left my soul there
# Down by the sea
# Lost control of me... #
The property I'm here to see today is right in Seaford town centre.
But it's set back along this fairly quiet little lane.
Now, one negative - there is no off-street parking, as you can see.
We are literally just a few minutes' walk from the train station,
which is good, and the town centre.
So, not too bad.
Here's the property.
It's a former St John's Ambulance building
and it went to auction with a guide price of £100,000.
So what do we have?
Hmm, a small hallway.
You've got a couple of loos at the end there.
And into one big, large room.
Yeah, it's got that sort of underground feeling.
Bit hemmed in.
Got the kitchen area over here.
Now, I think this was used for meetings and training.
You can imagine them practising their CPR in here.
So you've got a big space
and I think it's about 591 square foot in total.
But I can smell and I can see damp over here.
Come and look at this.
It's a stone wall.
It's below ground level,
so there's no cavity to keep out the damp and keep in the heat.
So some sort of tanking will definitely need to be used,
and damp proofing.
But I think it's a good start.
You've certainly got a lot of space to play with.
That damp and the underground feel comes from the fact
that one wall is well below ground level.
A close inspection of the outside space reveals
this isn't the only issue.
It doesn't belong to this building, so there'll be no extensions here.
# I want you
# I want you
# I want you so bad... #
Well, that's just tough.
You'll have to make do with what's inside!
So, with that in mind, what's going on upstairs?
So upstairs, another big room.
Wow! It is vast.
There's two separate rooms off.
And, as you can see, it's opened up to the eaves.
Lots of light, lots of windows.
These lovely beams.
But what could this become?
Now currently this building has got D1 business usage.
But I don't think this will make a great commercial premises.
It's off the beaten track up this lane. The access is difficult here.
There'll be no passing trade at all.
I suppose it could be offices,
or you could use it as storage or even a showroom, possibly.
But another option is to convert this into a residential dwelling.
You could have two little one-bed flats here.
But I think this would make a fabulous two-bed house.
It would be open with loads of character.
But let's not forget there's no outside space and there's no parking,
and you will need to apply for planning permission.
And, of course, there's no guarantee you'd get it.
Very true, Lucy.
I think we've learned by now on Homes Under The Hammer
that nothing should ever be presumed.
However, there was a letter in the legal pack at auction from the planning department
which stated it would not be anticipated that there would be
any objection to a change back to residential premises.
It's no guarantee, but it's certainly a positive start.
Changing to residential seems like the obvious thing to do here.
But what about the opinion of someone who knows the area?
We asked along a local estate agent to find out.
With a commercial basis,
you're very, very limited due to the access routes to here.
So my personal thoughts, if I owned this,
I'd be looking to pursue the two one-bedroom flats, as it produces
the greatest return and will have the most appeal to a wider market.
That's what we thought.
But let's be honest, converting this old building for residential use
will be far more expensive than leasing it as a commercial property.
So would the increase in income make it worthwhile?
If you kept the property as a commercial basis,
I believe you could achieve a rental figure of around £6,500 a year.
If the property were converted into one-bedroom flats, I believe
you could achieve a rental
of around £675 to £700 per calendar month.
That's up to £700 per month for each flat,
so you could expect a rental income of over £16,000 a year.
What if you wanted to convert it to two flats and sell them?
What value could be achieved there?
If the property were converted into one-bed flats,
I believe the resale value would be in the region of £125,000 each.
Well, I've no doubt that this former meeting hall is set to be
transformed into something else entirely.
But will it stay as a commercial premises,
or will it become residential?
So many options with this one, so many choices.
But which one will the new owner go for?
Let's find out who brought this at auction.
Whoopsie-doodle-do, we missed this particular lot at the auction,
so can't bring you the footage.
But the former St John's Ambulance building did sell for £137,500.
That successful bid was made by Seaford-based Phil,
here on the left, who runs his own estate agency.
He bought the property in partnership with his brother Greg,
who's a builder.
Could their respective talents make for the perfect property developing duo?
Let's get Lucy to find out.
-Phil and Greg, congratulations.
Now, this is a rather unusual building, isn't it?
It used to be a St John's Ambulance,
and you guys are now looking to turn it into some sort of home, aren't you?
That's the idea, yeah. We bought it at the auction.
The plan is to make it into residential from commercial,
subject to getting the planning on it.
We're probably going to go for a two-bedroom property.
Now, for the money you paid on auction day, you've got quite
a lot of square footage here because it's a fantastic building, isn't it?
Yeah, it's a bit grim at the moment. But the square footage is good
so it will be a nice size once it's finished.
Hopefully we can turn it into something quite special.
Now, Greg, you are the building part of the combo brotherhood.
Have you guys done projects together in the past?
We've done a few.
This is probably our fifth or sixth one now, I suppose.
Yeah, they go well. We argued a bit, but...
So, Phil, how does it work out?
Who's the older brother? Who's the bossy brother?
I'm the older.
And slightly bossier.
-Better-looking, apparently. So they tell me.
Yes, we argue.
We seem to forget about it the following day, don't we?
Yeah, we have a big row on the one day,
then we're having a beer in the pub the next.
It's short lived.
-You really do argue?
I'm always right... Well, I'm not right. Greg's...
-You think you're right, but Greg IS right? Is that right?
He's a good builder, he's been doing it all his life
and I've been doing my job all my life, so it really works out well.
# Cos we got a good combination
# Yeah, we got a good combination
# Yeah, oh, yeah! #
Well, Lucy, it seems like you're talking to the perfect combo -
a builder and an estate agent.
As long as they don't let brotherly bickering get in the way, that is.
They've decided to convert this into a single residential property
as they believe it will take less time and expense
than converting it into two flats.
That's not to say there won't be a lot of work to do.
Down here, it's got that sort of underground just below floor level
feeling about it.
Yeah, it's low on this one side here cos it's got a higher level outside.
So, with that in mind, rather than having the living accommodation
on the ground floor,
we've decided to put the lounge and kitchen upstairs on the first floor,
have the bedrooms downstairs.
So it'll be an upside-down house?
It will be upside down, which is slightly unusual.
I'm not worried about it.
It's not ideal, but I think it's probably ideal for this building.
I think it will work like that
because to have all the lovely vaulted ceilings
and the living space upstairs,
which is how you'd prefer to live, I think.
Yeah, I think so. We want to make the best of the rooms we've got.
They definitely work better that way round, I think.
Big downside - no parking, no garden.
You're going to completely narrow your market with that.
The parking is a slight issue
but there is lots of street parking nearby.
We're going to create a courtyard as well.
There's a toilet and lean-to area which is along the side,
which is going to come down.
We're going to put a little courtyard in there with a gate on the front
so it will be like a gated mews-y type thing, I suppose.
And it demonstrates Phil's knowledge of the local property market.
By creating a courtyard,
Greg and Phil are trying to broaden the property's appeal
by negating one of its downsides - the lack of a garden.
However, it will add more work.
The brothers have a budget of £30,000.
Even using their own team of workmen and labourers,
that's not a huge amount. So, what about timescale?
I think once we've got the planning, it's going to be, what...
-12 weeks, do you think?
-Yeah, something like that.
About 12 weeks from start to finish, hopefully.
Are you going to be gung ho? You start and you absolutely crack on?
Once we're into it, we'll just crash it out
and hopefully shouldn't find any problems on the way.
It's all fairly open so you can see what's here.
There's not going to be anything hidden, hopefully,
that we're going to get tripped up by.
And what about the bit of damp that I can spy in the corner over there?
-Is that something to worry about?
-No, not at all.
We use tanking, we can tank all the walls and the floor.
We've done it before in other jobs, so it should be fine.
What are you most looking forward to with this?
Seeing it finished!
-And what are you most worried about?
-I'm not worried at all.
Greg doesn't worry.
I lie awake worrying at night, he doesn't.
So what are you worried about with this?
It's just the start of the project.
It always gets me down.
Nothing looks like it's happening,
then it all seems to come together quite quickly.
I sort of get a bit stressed in the early stages.
-And you just come in and actually do it?
Comes in, gets on with it, goes home.
I'm so excited to see how this turns out,
and how you've actually designed it and brought it back to life again.
Congratulations and good luck.
-Lovely to meet you.
-Lovely, thank you.
Well, Phil and Greg have got years of experience behind them.
I think they're a fantastic combo.
They buy, they sell and they put up buildings.
But they did take a risk purchasing this particular property
because there is no guarantee they'll get the planning permission
they need to convert this into a two-bedroom house.
We'll find out if they do get what they want,
and if those brothers get on or fall out,
later on in the programme.
Retford is a market town in north Nottinghamshire.
It has played some key roles in history,
having received its charter in 1246.
The market area has a cannon taken from the Crimean War,
and several of the nearby villages were the origin of many
of the first pilgrims on the Mayflower, bound for America.
# On the boats and on the planes
# We're coming to America! #
It's nice walking down a quaint little street
in a quaint little town.
It feels a little bit like Middle England.
And that's because we are in Middle England.
The property I'm here to see is this.
It's a two-bed mid-terrace house with a guide price of £48,000.
What do you get for that money? I'm going to find out.
So we're straight into the lounge, front room.
And it's a decent-sized room.
The decor is a little bit dated.
That, you would have to change.
That would be dangerous if you've got children around.
But it's not a bad start. Central heating, which is good.
And a gas fire.
But I'm liking what I've seen so far.
OK, in here we've got stairs down to the cellar,
and into the kitchen, which is a good size again.
All this is dated, though.
You would need to put a whole new kitchen in here.
We've got a bathroom at the end, just there.
That would have been added on at a later stage.
There's a bit of a gap between bathroom and kitchen, which I
like, which gives you the door out to the back garden.
But there is a lot of space here which you could actually
turn around and give yourself a nice kitchen.
You'd need to put a new bathroom in as well.
But it's good. I'm happy.
I'm always happy with a good two-up, two-down solidly built house
but some people do like to alter the traditional layout,
putting the kitchen in the extension at the back, where the
bathroom currently is, but that depends on whether there is
still space elsewhere to put the loo.
OK, upstairs, we've got two bedrooms.
Let's go to the front of the house first and you've got
a decent-size bedroom at the front. Good-size bedroom.
Let's check out the other one.
OK, over to the second bedroom and, again, it's of a decent size.
You've got some fitted wardrobes here, which are dated.
More polystyrene tiles here,
which you would definitely need to get rid of.
And unfortunately, I knew it was too good to be true,
we have a problem here.
I'm not sure what's causing that, but it doesn't look good and you
would need to get to the bottom of that, most definitely.
Apart from that, I thought I was going to be hitch free but
I'm not, but I still like it.
You need to take the polystyrene tiles off ASAP,
not just to find out where this leak is coming from or because
they're not exactly pretty, but because they can potentially
cause issues if there's a fire.
They're the type of tile that can spread fire,
release toxic fumes and drip blobs of molten plastic.
The more modern versions are treated with retardant
but why take the risk?
Another burning issue was to see if you can move the loo up here.
It could be done but I think you'd lose too much space in the bedroom.
Time to find out what a local estate agent thinks of this property,
guided at £48,000.
It's a very traditional style of property.
The overall condition of the property is very good.
It does want some cosmetic updating throughout
and the rear bedroom maybe wants some attention to the roof.
In my opinion, the property would take around £10,000 to bring it
into a condition of a rentable or saleable standard.
Speaking of sales and rent, what kind of numbers are we looking at?
First the sales market.
Once works are completed on the property, I envisage the sale price
would be between £80,000 and £85,000.
Pretty healthy numbers there. What about rentals?
Once works have been completed, I envisage the property would
rent for around £450 per calendar month.
This house is a little dated but it has been looked after.
It would need modernising
and you would need to get that ceiling checked out.
All in all, it's a solid little house and if you got it for
anywhere near that guide price, you've got yourself a little gem.
Let's see who wanted it when it went under the hammer.
48,000 to start me.
48, thank you. £48,000 I've got. 49, someone else?
48,000 the opening bid.
49. At 49. At 50. 50,000.
51. 52. At 52, 53.
55 somewhere else? At £54,000, it's going to go, ladies and gentlemen.
At 54,000 once, twice, third time.
Sold at £54,000. Thank you.
With a successful bid of £54,000, James secured the property.
He does have some rental properties around Bristol, and I was keen
to find out why he's reached out to Retford.
# Oh-oh-oh, James. #
-James, nice to meet you.
-Good to meet you too.
Tell us about this house that made you go to the auction and say,
-"I'll have it".
-Well, it's in an area I'm quite familiar with.
It's a nice area.
I was living ten miles away
so I sort of know the place quite well.
It was a good price so I thought it was a nice sturdy house,
no obvious problems so I thought I'd give it a go.
-You did get it for a good price didn't you? You're happy with that, aren't you?
I was expecting to pay a little bit more, maybe up to around 60,000,
but there was only one other person bidding so, yeah, I was very pleased.
How did the bidding go, then, with the other person?
-Well, the auction was a bit hectic...
-..cos I arrived late.
I hadn't got confirmation of the finance yet.
I didn't get an e-mail through until around lot four or five.
This was lot nine, so it was all a bit of a rush. Then I had to register to bid
so I wasn't even in the auction room until about lot seven.
-So explain that to me. You actually went to the auction...
I hadn't even got confirmation that I could borrow the money
until around lot four, five, then the e-mail came through,
so that gave me the go-ahead to bid.
No nerves there kicking in, thinking, "I need this e-mail"?
-I thought I might be driving to Nottingham for no reason.
-You were only four or five lots away.
-Yeah, exactly. Yeah, I got away with it.
Talk about cutting it fine.
James has used a bridging loan to secure this property, which is
a loan that some purchasers use if they are planning to flip the house
quickly or to get a finance on a house that may not qualify for
a traditional mortgage.
these loans carry monthly rather than annual interest fees
and can incur hefty charges for entry and exit from the deal.
# Play at your own risk, girl
-# Play at your own risk
-I'm tellin' you #
What are you going to do with it?
Plan A is to rent out so I'm going to keep things straightforward.
Replace the kitchen and bathroom.
-Sort out the ceilings upstairs.
I was tempted to think about moving this chimney breast to make
-More floor space.
Yeah, the roof space is the biggest concern but there is
a new roof on so some work's been done.
And also in the basement downstairs you can see joists and floorboards have been replaced.
So whoever lived here before, they've upgraded but not modernised.
Yeah. I've popped down into the cellar. It's not built for me.
No, it's... If you're 5'7" or below, you'll get away with it.
-But it's good storage space.
-It's good useful space.
-It's clean, it's dry. Yeah, it's got potential.
-What will you do with that?
Just whitewash the walls and maybe put a bit of nice flooring down
but then leave it for any potential tenant to decide on.
You mentioned the kitchen. You're doing the kitchen, brand-new kitchen?
Yeah, that's in here so it will be a kitchen-diner area.
-I was on about the chimney breast.
That would give a nice row of units but I don't know if the numbers
will stack up for that. So I'll see what the spreadsheet says.
I think just leaving the layout as it is will suffice.
Tell us about upstairs, what are you going to do?
The ceilings seem to be collapsing.
The joists are falling away from the support. It's not just the weight of the plasterboard.
That all needs ripping down and having a good look at that.
There might be more problems ahead but it definitely needs a new ceiling.
That's one of the things, James, you never know what you're going
-to find when you start taking things away...
-That's true. I didn't even look in the ceiling.
-I came round to view this place twice but I didn't put my head in there.
I didn't have a ladder.
But I could see there was a new roof so I wasn't massively concerned.
But, yes, that's right, you never know what you're going to get.
There will be loads more that I'll find as well. When I start moving fireplaces
-the lintel will probably collapse or something.
-No, don't say that!
-You never know.
-Don't say that.
Well, a contingency for the unexpected is a must in any project.
So what does James have in the kitty for the work?
The budget is going to be about 10K but that will include all my
finance costs, legal fees, everything, I would think,
give or take 5K, just to cover my back a little bit.
Yeah, around the 10,000 mark.
-That's not too bad. That's not too bad at all, is it?
-Is that realistic?
Yeah, very realistic, I have to say.
A realistic budget but there is real pressure on his timescale.
James has to get the property valued after five months to meet the conditions of his bridging loan.
So all the work needs to be done by then.
Plus, in that time, he's got to finish work on another property
and he will be doing all the work on this one himself.
This all meant he had to cancel a holiday.
And James takes some very adventurous holidays.
I like the outdoors and I like mountaineering and hillwalking
and such. I've got my motorbike as well. I've done
-a bit of travel in the past.
-You're playing it down slightly.
I've done a bit of research on you.
You've done some long trips on your bike, haven't you?
I did go to Cape Town a few years ago now, which was 17,500 miles
through 27 countries.
And there's plans possibly to maybe do a Mongolia trip next year
but nobody knows about that yet.
Who was with you? Did you do it with a friend or...
Well, the Africa trip,
I just went on my own and met people on the way
but I'm planning on going across Central Asia
-with a friend.
I've come across loads of pastimes and hobbies, but 27 countries
-on your bike?
-Yeah, in about six months.
So I had to crack on with that. Yeah, it was good.
What an achievement though. Good man.
Yeah, and people are nice everywhere.
-That's what the lesson is. It's nice.
-Good luck, James.
-Thank you very much.
-Wish you all the best.
-Yeah. Thank you.
This should be a pretty straightforward refurb for James.
There doesn't seem to be that much work needed doing.
Now, there is the issue of that ceiling upstairs and you never
know what you're going to find when you have a look at that
just that little bit closer.
And he's got the pressure of that bridging loan timescale but
he seems to be the kind of person that thrives on pressure.
Will he get it right? Will it be an easy ride?
You can find out how he gets on later in the programme.
Coming up, guess the guide price of this two-bed terrace in Erith, Kent?
Answers? Now, don't make any phone calls.
No texting, all that kind of stuff.
And in this two-bed mid-terrace in Retford,
James had a little help from a canine companion.
Back we go now to Seaford in East Sussex, where Lucy saw this
former St John's Ambulance building bought at auction by brothers
Phil and Greg for £137,500.
There was plenty of square footage to play with, and the brothers
had a bit of a topsy-turvy idea to utilise it.
So, it will be an upside-down house?
It'll be upside down, which is slightly unusual.
I'm not worried about it, but it's not ideal.
But I think it's probably ideal for this building.
I think it will work like that because,
to have all the lovely vaulted ceilings and all the living space
upstairs, is how you'd prefer to live, I think.
Yeah, I think so. You want to make the best of the rooms you've got
and they definitely work better that way round, I think.
An ambitious plan that Phil and Greg thought they could pull off
in just 12 weeks on a budget of £30,000.
But to turn this utilitarian space into a desirable dwelling,
the boys would need plenty of vision.
The early signs were that sibling rivalry could mean they
wouldn't get any work done at all.
Yeah, but we seem to forget about it the following day, don't we?
Yeah, we have a big row on the one day and then we're sort of
having a beer in the pub the next day so it's short-lived.
-No! You really do argue?
So, we're back, one year and four months later, to find out
if the bickering has been the cause of their overrunning schedule,
and to discover how you turn this kind of space...
..into this kind of space.
Of course, is relatively straightforward if you're like Greg.
He stripped everything out, re-insulated,
damp-proofed, woodworm-treated, dry-lined,
a new inside skin, re-insulated, re-plastered, rewired,
re-plumbed, got the old radiators refurbished...
I'll just pause here for Paloma.
-# I tell you what
-I tell you what
-# What I have found
-What I have found
# That I'm no fool
-# I'm just upside down
-I'm just upside down... #
Thank you! Now, where was I?
Fitted new windows, flooring, tiled the new bathrooms.
Plumbing and electrics were done by specialists.
Then a new staircase for the bedrooms up to the living room.
# You start to see the world a little differently
# When you turn it upside down. #
He did get a company in to treat the woodwork, but the net result,
to turn this uninspiring place into this...
-# I tell you what
-I tell you what
-# What I have found
-What I have found
# That I'm no fool
# I'm just upside down
-# Ain't got no cares
-Ain't got no cares
-# I ain't got no rules
-Ain't got no rules
# I think I like...
-# Living upside down
-Living upside down... #
The brothers' choices of all the fixtures and fittings,
whether it be tiles, bathroom furniture,
kitchen units, etc, are all of very high spec,
but was the working relationship as harmonious
as the end result would suggest?
Working together with Greg has been OK.
We've done many projects together now.
We've had our ups and downs, but, generally,
at the end of the day,
we have a bit of a row about something or other, but we end up
down the pub afterwards having a beer and sort it out there.
We argue quite a bit, but maybe that's for the better because
the jobs do come out good in the end. They always do.
Well, there's no disputing that,
but if bickering didn't cause the delays, then what did?
When we bought the property at the auction there was no planning on it.
It was a commercial property and we had to change it to residential.
Fairly straightforward. It took about two to three months
for that process, and we had a couple of local objections,
but nothing other than that and it went through fairly smoothly.
The build has probably taken about four months, all in all,
but we've really been using it as a...
We've got a lot of other projects going at the same time,
but, generally, it's taken about four months' work.
And, presumably, more than the £30,000 budget?
We have gone over that by about 10,000, so round about 40,000.
We've not quite got every bill in,
but it's going to be there or thereabouts.
That's basically on better fittings, higher-spec finishes.
Initially, we were just going to rent the property out
so we were going to do a fairly basic finish on it.
We decided early on in the build to sell the property
so we've up-rated the specification.
Hopefully, they will add to the saleability of the property.
Well, we have a way of finding out.
We invited two estate agents along to give their impressions and
valuations to the finished two-bed upside-down cottage.
First, the agent who saw it when it was an ambulance headquarters.
I've had a look about around the property and...wow!
The changes are immense from what it was when we first came round.
They've done a cracking job.
The standard of finish seems to have been to a very high standard.
Good, spacious accommodation and a really nice finish.
Philip and Greg have decided to sell so what could it fetch on the
So far, they've spent 137,500 on purchase
and 40,000 on refurbishment, taking their total to 177,500.
I think this property on the current market would be looking to get
offers in the region of £300,000 to £325,000.
The selling value of the property would be round £300,000 to £325,000.
Taking that top figure,
that's a huge 147,500 potential profit before tax and expenses.
How do you feel about that, guys?
Pretty much what we had in mind.
We've got it on the market at the moment for 325.
It's been on for a week so we've not had any offers yet, but it's,
hopefully, what we're looking for.
No surprises there, then, but then again, Philip is an estate agent.
How about the grafter, Greg?
Yeah, that's what we're expecting.
Well, what we're hoping for, so that's good news, yeah.
Glad we've got an agreement about that.
What about future projects, though?
We got nothing else directly in the pipeline.
We sort of keep an eye on the auctions and properties that
come on to the market locally and if the right thing comes up,
then we'll definitely be looking to do something else.
Well, brief but to the point, Greg. Thank you.
I'm in Erith, a district of the London Borough of Bexley
in south-east London.
Once the site of a Saxon village and bordering the Thames,
its name means "old haven", and if the settlement originally developed
because of the location of the river, in recent times it
has lacked the all-important rail connection into central London.
This has kept property prices relatively low compared to
other parts of outer London.
But with the advent of Crossrail, things are likely to change.
# ..Are gonna come my way... #
Well, the property I'm here to see is clearly very close to some
really good transport links,
possibly even a bit too close for some people's comfort.
But one bit of transport that everyone is really excited
about is the Crossrail link.
It's coming really close, which means house prices in
this area can only go in one direction. Two-bedroom mid-terrace.
Let's have a look.
The front area might give the house a bit of a rubbish start,
but let's see if someone can clean up here.
So, how much do you reckon that you have to pay for a simple little
to-up, two-down terrace with a bit at the back around these parts?
Well, up in the north, some of the northern towns,
I reckon you'd be looking at 20, 30, 40,000 quid.
So, let's have a bit of a quiz.
What you reckon the guide price for this place was at the auction?
Was it A, 80,000 quid?
B, 100,000 quid?
C, 150,000 quid?
Or, D, 140,000 quid plus?
Now, don't make any phone calls, no texting, all that kind of stuff.
Just for fun. But it was that one!
£140,000 plus. It's interesting, isn't it?
Twice or even three times what it would cost if you were up north,
but that's just the northern boy in me being incredulous.
What you have got is a pretty standard two-up, two-down terrace
with a bit at the back, as I said.
Front room there, back room here,
stairs in the middle, and then through to that bit at the back
that has been added on at some stage in the past.
It's currently a kitchen. Well, a sort of kitchen.
It just needs a lot of work. What else is there?
Go, go! Go!
Right, so, past the kitchen... Keep going!
Through the kitchen, you come to...
A bit further. Stop, stop, stop!
You come to the bathroom. Yeah, a downstairs bathroom.
But I'm guessing probably fairly standard in this area.
The whole house, from what I've seen so far, is going to need
a fair amount of work to get it straightened up, and I don't know
whether it's just me, but this place feels rather narrow and long.
# I made it through the tunnel
# I came out the other side. #
We're at the back of the property.
You get an idea, yes, there is a bit of renovation required,
although, generally, it's not in too bad a condition.
It probably looks worse than it is. Not a massive back garden,
as you might have expected. Just a little bit of space.
You are going to have to spend a bit of money on fence panels
and tidying this up. But it is a bit of a bonus.
The fact it's small, if you're going to rent this place out,
that is actually a good thing. So, maybe not surprisingly,
the garden is narrow and long, too, but it does offer, at least,
some outside space. Certainly room for a washing line,
a patio area and, potentially, subject to planning,
you could get a bigger and better extension up,
which would then allow the kitchen to be expanded, and the bathroom
could be moved to the first floor.
So, upstairs, two reasonably-sized bedrooms -
one at the back, one at the front. They have both got these large
chimney breasts in them. Now, clearly, that is taking up
quite a lot of space. Whether or not it is worth
going to the time and trouble and expense
of getting rid of them depends really if you're planning to live
in the house long term or just rent it out.
If you're renting it, then probably not.
If you're living here, space could be at a premium.
One improvement definitely high on the agenda, though,
is upgrading the double glazing. You want triple glazing in here,
to try and cut down on that road noise.
Sounds like the road noise isn't great,
but modern insulation on the windows would do wonders.
# Stop the noise, stop the noise
# I wish that I could stop the noise... #
And, perhaps, when fully refurbished,
this could be a big noise
on the rental market. But what does a local estate agent think?
My first impressions are that,
although the property needs a fair bit of work,
once the property is fully renovated,
there would definitely be good demand for rental and resale,
especially in the coming years.
I would recommend that you hang on
to this property and rent it out, until the Crossrail is definitely
up and running.
Yes, one suspects this is better as a long-term investment,
but could there be any immediate growth in a property that was guided
at £140,000 plus?
Once this property has been renovated, I would anticipate
a resale value of £235,000.
And what about the more likely investment route - rental?
How would it fare on that market?
If it was going to be rented, I would look at a rental in the region
of £1,000 to, maybe, £1,100 a month.
Well, there's a bit of work to be done to sort this place out,
but I definitely think it has potential for price growth.
And that's what we're all after. So, who bought it? Let's find out,
when it went under the hammer.
Lot 57 has been withdrawn, prior to auction.
We'll move on to Lot 58. Two-bed mid-terraced house.
Who'd like to kick off?
150 with you. 155 elsewhere?
With you, 155.
Blimey. Can't believe it. It's going at £170,000. 172.
172, right at the back.
176, right at the back.
Third and last time. If you're all done...
Sold. 176, at the back.
So, for 176,000, the two-bed Erith house
was bought by local man Harbinder.
Harbinder has been a property developer for a number of years
and he knows the area well.
He joined me and his builder Robert back at the house.
Harbinder, Robert, great to meet you both.
-Congratulations. Tell me why you wanted to buy this place.
It is basically to add to the portfolio for rentals,
so we are looking at, basically, putting it back on the market
and bringing it back to life. It has seen better days.
It certainly has. Why did you choose this particular property?
It's location to the town centre and the train station.
-We have Crossrail coming to Abbey Wood...
So, over time, I think it will prove to be a good buy.
Let's talk about the Crossrail effect, if you like.
How noticeable has that been to this side of London?
Erm, very noticeable,
especially the Abbey Wood, the Belvedere and Erith market.
I think you will find it is very difficult to buy properties
at this moment in time and the prices have gone up substantially
-over a very short period.
-Can you quantify it?
I'd say, over the last 12 months, the average three-bedroom house
-has gone up between £70,000 to £100,000...
..in the Crossrail vicinity, and as you come out to
the neighbouring train stations, you will find that it's just
a drip-down effect, but it has had a big increase.
-And that is before it is even finished.
The skill of any property investment is to see areas of growth
in both the location and the property, and Harbinder
clearly knows his local market well.
He has also identified that there is a shortage of rental properties
in the location and sees this as an ideal house to rent out.
So, let's talk about this place and what you're going to do
-to improve it.
-The property looks in a bad condition but, actually,
it's not in bad condition. It's only...well, mainly decoration,
new kitchen and bathroom.
A medium-range bathroom and kitchen.
What we are trying to do is, in the kitchen,
-maximise the space, because it's a small kitchen.
-And a new boiler, heating. New heating, yeah.
Obviously, the bathroom is downstairs at the back.
-Is that staying where it is or...?
-For now, it will do.
You have to take everything in perspective,
in terms of how much the house was bought for.
If we were to spend money... It has potential.
We can go out to the side and we can also take the bathroom upstairs.
But as it stands at the moment, we are going to renovate the property
for rental and it has the potential for the extensions, as and when.
-Right. So, keeping the budget really quite tight?
Talking of that, what is the budget?
I would say, approximately - we have been having this conversation -
-£8,000 to £10,000.
-We wouldn't want to go over ten grand.
Small budget, yeah.
Yeah, OK. And along with the £8,000 to £10,000 budget,
they are hoping to complete the work in around three months.
Though Harbinder can control what refurbishment work takes place here,
there is certainly one thing he can't do very much about.
The road at the front is very busy, very noisy.
I mean, is that not a problem to people around here?
Do they just accept that is the way it is and it is not going
-to affect rentals?
-No, I don't think so.
I think you will find it is very difficult to get rental properties,
because of demand and supply. That sort of negates
the situation on the main road, because you're so close to
the town centre, you can get there within walking distance
and it's walking distance to the train station.
These things take away from the main road.
Good. What is next on the agenda for you two guys?
We are looking at other opportunities.
There's a lot of growth happening on this side of London.
We're looking for properties that we can work with within our budget
-and renovate them to sell or keep them, if we can.
Sounds like a good strategy. Well, listen, congratulations
-to both of you. Good luck with it.
-Look forward to seeing
how you get on.
So, Harbinder and Robert doing exactly what is required
to turn this place into an attractive little
rental proposition. How will they get on?
You can find it later in the show.
So, we've seen what's happened to the first of today's properties.
But what about the other two?
-Time has passed and they're ready for us to go back.
-Let's find out.
Back now to Retford in Nottinghamshire
where, earlier, I looked around this two-bed mid-terrace.
Sold at auction for £54,000, it appeared to have
a recently retiled roof
and on the face of it, it looked quite a solid investment.
All this is dated. You would need to put a whole new kitchen in here.
You have got a bathroom at the end. That would have been added on
at a later stage.
There's a bit of a gap between bathroom and kitchen, which I like.
The bathroom extension did provide enough room for a back door
into the garden.
The house was bought by James, who was hoping to add it to
his rental portfolio, but the auction was a bit hectic
and he only got the finances just in time to bid.
I did not get an e-mail through until about lot four or five.
This was lot nine, so it was all a bit of a rush.
Then I had to register to bid, so I was not even in the auction room
until about lot seven.
Getting the go-ahead two lots before the one you are after
has to be a record, I would think.
It looked like the ceiling coverings were going for their own record
for the biggest variety of retro styles, from textured wallpaper
to textured paint and a selection of polystyrene tiles -
although some of those looked like they were failing in their mission
to conceal what lies beneath.
The ceilings seem to be collapsing. The joists are falling away
from the support. It is not just the weight of the plasterboard
at present. So, that needs ripping down and having a good look at.
-There might be more problems ahead.
-James was predicting a five-month
timescale, spurred on by the pressure of the bridging loan.
We are back 11 months later to find out what problems lay ahead
for James and how he got through them.
With the fireplace opened up, the kitchen looks much better
and brighter, not to mention these really smart kitchen units.
# Oh-oh, oh-oh, oh-oh
-# I'm going to follow you home
-Oh-oh, oh-oh, oh-oh
-# I'm going to follow you home
-Oh-oh, oh-oh, oh-oh
-# I'm going to follow you home
-Oh-oh, oh-oh, oh-oh, oh-oh... #
James fitted the new kitchen units himself, as well as tackling
the plastering of the downstairs rooms,
tiling, flooring and plumbing.
Through to the bathroom,
which used to looked like this.
Now, there is a P-Shaped bath that gives plenty of width
for a shower above.
Although the layout is the same, the end result is a vast improvement.
The lounge, too, with its new neutral tones,
front door, laminate flooring and the carpentry completes
the changes in the downstairs rooms.
# Oh-oh, oh-oh, oh-oh
# I'm going to follow you home
# Oh-oh, oh-oh, oh-oh
# I'm going to follow you... #
James moved into the house during the refurbishment,
sometimes with the company of his partner's dog, George.
So, was moving into the house a good idea?
Probably, it turned out to be a false economy, because I thought
I would be able to save money by living here at the same time,
but as it happened, it made me take longer, I guess,
because you become comfortable. So, I have been paying council tax
and gas and electricity for far longer than I should have done.
I should've got on with it much, much quicker,
so I'll not make that mistake again. Yeah, it's a lovely street,
very nice neighbours, so I've been quite happy being here, anyway.
Well, the sleeping quarters have definitely improved during the term
of James's residence,
with a more soothing colour scheme, comfier bed...
..and George on guard duty.
The upstairs ceilings were creaking under the weight of something.
-So, what did it turn out to be?
-It wasn't as bad as it looked.
There was a lot of weight and rubble and debris and the water tanks,
which caused the bowing of the ceiling.
So, I did knock the ceiling through, but the joists still useable.
And, finally, going from top to bottom,
-how did the cellar turn out?
-Although there is damp down there,
it's not bad. I did run a radiator down there.
I did whitewash the walls, but otherwise, there's not a lot
can be done down there. The ceiling is a little bit low.
James predicted a ten-grand budget, with a five-grand contingency fund.
How did it all end up?
All in all, it has turned out to be about £12,500 to £13,000.
A couple of little bills still to pay, but I am not
unpleased with that.
It's now 11 months since our first visit,
so it looks like the five-month estimate was way off.
Any excuses, James?
Since you were last here, I have now become a father,
only last week. Got a little baby girl called Penelope.
So, that has taken up a bit of my time more recently.
My partner being pregnant, that has kept me away from here,
so that slowed things down. But, yeah, absolutely delighted.
Your excuse is accepted and congratulations to you
and your partner.
Let's see if James is as delighted when he gets two valuations
from the estate agents we have called in.
The aim has always been to rent out the property. First up, the agent
who saw it before the work commenced.
The replacement of the kitchen and bathroom has obviously enhanced -
a required enhancement - and it has created a good rentable property.
The big selling points regarding this property
is the light and airy rooms, the modern bathroom and kitchen,
and also the large garden.
James has spent a total of 67 grand and whilst rental is his thing,
let's find how much value he has added.
If you were to place the property on the open market for sale,
we would expect to achieve between £80,000 to £85,000.
I think, if this property was put on the market for sale,
it would hope to achieve between £85,000 to £90,000.
That is what the bank assessed the property to be worth,
so that's exactly what I anticipated its value would be
some time ago, so I am very happy with that, yes.
Taking the top figure, that is a potential pre-tax profit
of 23 grand in the 11 months. Now the rental.
If I was to place this on the rental market, the property would fetch
between £450 and £475 per calendar month.
If this was put on the rental market, I would expect it to achieve
between £475 and £495 per calendar month.
Again, taking the top figure and assuming a full annual term,
that would be a yield of just short of 9%.
The rental income I have achieved is within that range,
so I am happy with that, yes.
With baby Penelope now on the scene,
James might have to hang up his motorcycling gloves just for
a little while. This is him pictured in Kenya a few years ago,
but this refurbishment has some consolations.
I have tenants moving in next week, so a few days of effort will...
The property will be ready for them. A local agent found those
and they do actually want a 12-month contract and they've also stated
that they want to work on the garden, so, hopefully,
they will be excellent.
Back now to south-east London and the district of Erith,
which is in the Borough of Bexley. It is a part of London
that is becoming more and more popular
with renters and buyers alike, thanks to the Crossrail effect.
I had the pleasure of looking around this two-bed mid-terrace property
that had a guide price of £140,000 plus.
Although it looked in poor condition,
it seemed like the property was solid enough
and had good proportions upstairs and down.
For me, the biggest issue was that it sat on a very busy road.
One improvement that is definitely high on the agenda, though,
is upgrading the double glazing. You want triple glazing in here,
to try and cut down on that road noise.
The busy city road didn't put buyers off, with it racing past
its guide price and screeching to a halt at 176,000.
The successful bidder was property developer Harbinder
who, along with his builder Robert, had done his homework in the area
and spotted the potential.
We think you'll find it's very difficult to buy properties
at this moment in time and the prices have gone up substantially
-over a very short period of time.
-Roughly, can you quantify it?
Over the last 12 months, the average three-bedroom house has gone up
-between £70,000 to £100,000.
Harbinder planned to add
this property to his portfolio of rentals and had earmarked
a modest budget of £8,000 to £10,000
and a timescale of three months to get the jobs done.
It is now seven months later and time to see if Harbinder
has been able to turn this from derelict to delicious.
Well, my goodness. The brand-new kitchen is incredible.
They have cleverly used the space to maximise what they have got.
The bathroom has stayed downstairs, but has a whole new suite
that looks really smart with its high-end finish.
There is still work to be done, but they have rewired
the entire property and then skimmed and decorated the walls.
Due to some old joists, they also took the decision
to lay new flooring down. Very wise.
Upstairs, the bedrooms are 80% there. You can clearly see
the high-quality finish that is being strived for.
They have also replaced all the windows in the property, making sure
they are double glazed, to keep that traffic noise out.
New fencing has gone up out the back, but the garden itself
is still a work in progress.
Despite this only being partially finished, Harbinder and his team
have clearly done a huge amount of work and have completely transformed
We are nearly finished now. I would say about four or five days.
We've come to the end now, other than outside.
The inside of the house is pretty much finished.
There is a few odd bits that need to be done and snagging at the end.
For me, the biggest challenge here was that it is a busy time
and it is getting the right contractors at the right time.
That has been the biggest challenge. It has taken longer than expected.
We have been here five months. Initially, if we had a full team
on site, and there was four workers here, you could probably
do it within two, two-and-a-half months.
Where we've had contractors
coming in - electrical, plumbing - and then fitting them in around
their times, because everyone is busy at the moment,
it has taken longer than expected. Due to personal reasons, as well,
we've been doing other stuff, so we have not really given this
property the attention for the timescale, if you want.
Initially, the budget was around the 10,000 mark and I was thinking
a maximum of 14,000. That was with a mind to rent the property out.
On the course of the journey, it was apparent that I needed
to sell the property to release some finances.
So, we then decided to renovate the property to a higher spec
and higher standard, so the budget has taken me up to £24,000 now.
# You've got to roll with it
# You've got to take your time
# You gotta say what you say Don't let anybody get in your way
# Cos it's all too much for me to take... #
Yes, plans changed so much for Harbinder, and his builder Robert
had to move on to a bigger project, due to the delays here.
But Harbinder is an experienced developer
and knows that the goalposts can move on these sort of projects,
although the flooring in the property
-did pose something of a challenge.
-Basically, we knew there were issues
with the floor, when we came to view the property, but when we looked,
basically, the middle joist had warped, so we had to replace that.
And we had to re-strengthen the existing joists
and add additional ones.
Best to do the job properly and have no problems in the future.
All in all, then, Harbinder has spent £200,000
and decided to sell, rather than rent. But is this a wise decision?
We asked two local estate agents for their opinions,
starting with the agent who saw it originally.
The property has had a huge improvement
from before. It was a fairly derelict property before, so now,
yeah, it is completely up to scratch.
I know there is a little bit to finish, but you can see the finishes
have been done very well.
After looking around the property, you can see that it's done
to a nice quality.
Obviously, there are a few bits which need to be finished,
but downstairs, the bathroom and kitchen look really nice
and you can see that it is done to a very high standard.
If we were going to put this on to the rental market, I would hope
to achieve in the region of £1,150 to £1,200
per calendar month.
I believe that this property could achieve £1,100 per calendar month
on the current rental market.
The top rental of £1,200 per calendar month would bring in
a healthy yield of just over 7%,
but remember, Harbinder has decided to sell, not rent.
I believe that the owner could achieve up to £250,000
on the open market.
So, if this property was to go on the open sales market,
I would be looking to achieve in the region of £250,000.
Excellent. That is exactly... That is what I have in mind.
If I can achieve that, I will be happy.
That valuation of £250,000 would mean a pre-tax profit
of £50,000, making Harbinder's auction purchase a great success.
And he has got some advice for those looking to visit
their own local auction house.
Auctions - it is exciting.
You know, it is a bit of an adrenaline rush, I must say,
when you go out to buy at auction. You have to be careful.
You can get caught up in the moment. I would buy at auction again.
I have done so in the past, more than once, and I will continue to,
Well, if you are FELINE like becoming a property developer,
we hope we've given you the inspiration you need.
Yes, have we inspired you to head down to your local auction room?
Or maybe you are more of an armchair enthusiast?
That is OK, because here on Homes Under The Hammer,
-we've got loads more stories. See you next time.