Episode 6 Homes Under the Hammer

Hello and welcome to the show.

Buying a property at auction can be full of thrills and spills.

Yeah, when the hammer goes down and you are the successful bidder,

it is a fantastic feeling.

And that is when the real work begins,

so why not buy your home under the hammer?

It's all go at an average property auction and, I tell you what,

the bidding can sometimes go at quite a frantic pace.

Yes, you have to keep on your toes to keep up

but make sure you don't let things run away with you.

Let's hope today's buyers took that advice on board.

How did they get on? Let's find out.

I want to see a different decor

at this three-bed semi in Walsall, the West Midlands.

Floral wallpaper, floral carpet, floral lino.

And I want to see something more radical

at this flat in Ilford, Essex.

I want to see a different layout straightaway.

What is going on here?

And I'm desperate to see the finished development

in East Horsley, Surrey, from 2012, an eight-house development.

We bought the site

and then we managed to acquire the site next door.

All these properties were bought at auction.

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

-when these homes went under the hammer.

-It's yours, sir.

MUSIC: Side Saddle by Russ Conway

Walsall in the West Midlands

was once the leather capital of the world

and was home to nearly a third of Britain's saddle-makers.

Nowadays, Walsall offers affordable house prices

and good connections to Birmingham and Wolverhampton.

The property I'm here to see

is just a ten-minute drive away from Walsall town centre

and just a stone's throw from the noisy M6 which is just there.

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

with a guide price of £68,000 and this is it.

Looks pretty cool from the outside. Let's take a closer look.

I do like this '50s-style build,

but is there something more modern behind the door?

OK, we're straight into the hallway.

We've got the stairs right in front of me going up to the bedrooms.

In here, you've got a nice big lounge with a fireplace

and a lovely big bay window.

Down the hallway, you've got some hanging space here,

under the stairs. Very much a '50s feeling.

As you come into the kitchen, very old-fashioned.

People would call it retro nowadays,

but I think you'd have to start again,

take all this out and you've got the dining room here.

OK, you can keep it as two separate rooms

but if you're going to change the whole of your kitchen,

you might as well change the whole of the feel.

I'd be inclined to take this whole wall out,

create a nice kitchen-dining area.

I would also be inclined to change the windows,

which are single-glazed

and very much of the era the house was built in.

There's no central heating either

and the electrics are about 15 years older than I am,

if you can believe it. They would definitely need a rewire.

Suddenly '50s chic is making me blue.

# Do you know what?

# But this is 1950

# And I won't be your dog no more... #

But there is something to cheer me up.

Through the kitchen, there is a lean-to area

with cupboard space and a loo.

It is a good space for your washing machine and dryer

or you could even use it to extend the kitchen.

So, upstairs to the three bedrooms.

To my left, you've got a small bathroom just there,

box bedroom there and quite a decent size bedroom there.

And the third bedroom is here.

There's a bit of a running theme through the whole of this house -

floral wallpaper, floral carpet

and there's even a piece of floral lino next door.

Ah.

Flowers everywhere on the inside and on the outside.

The garden is well-kept and a good size.

This is a solidly-built house,

guided at £68,000, but what does an agent

from the auction house who sold it think needs doing to it?

It's a good sound, solid property.

1950s-built, three-bedroom semidetached.

It would make a really good family home.

The property does require modernisation.

It needs new windows throughout, a central heating system fitting,

it needs rewiring, a new kitchen and bathroom fitting

and full decor and carpets all the way throughout.

There's a nice green area to the front of the property

which gives a nice outlook, however, that does hinder

the possibility of putting off-road car standing there.

Some people might think that that is a disadvantage,

but a green space with no-one looking into your house

is a bit of a bonus.

Does the agent agree with me that the outbuildings could be used

to extend that kitchen?

The outbuildings to the side are quite commonly converted

or extended, demolished and extended over the top of,

to give further space to the kitchen areas.

In my opinion, we'd knock the kitchen into the dining room,

we'd take out the dividing wall

and make one big, open family dining-kitchen.

The agent and I are on the same page here.

So, once all the work is done,

what kind of money could this house, guided at £68,000, make?

Once renovated,

I would expect the property to achieve in the region of £125,000.

So, keep your costs low and there could be some good profit in this.

How about rentals?

Once fully renovated, I'd expect, if the property were to be rented out,

to achieve somewhere in the region of £500 to £550 per calendar month.

This is a great little property. What's not to like?

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

Lot number 8. There are two telephone bidders on this.

Who will start me off on the guide at £68,000?

Looking for a start. Let's get this under way.

Start me where you will. £65,000.

Who will start? 65? £65,000 is bid, thank you.

66 I'm bid. 67. 68.

69? 69 is bid.

And 70? 70 is bid.

1? £70,000 is bid. And 1? And 1?

71 I have.

Take the half at 71.5.

72 is bid. In the room, stood at the back of the room.

72 is bid. 72.5, I'll treat you the same.

72 is bid. Treat you the same.

If not, for the first time at £72,000...

I've got two of you at the back of the room, so 72.5. 73, sir?

73 is bid. And a half.

74 is bid with you, down the centre.

74.5, sir? 74.5. 75?

In the centre, 75 is bid. And a half, sir?

And a half. 76?

75.5, away at the back of the room.

At 75.5 for the first time,

for the second time at £75,500.

For the third and final time, if we're all done with it.

It's yours, sir, at 75.5.

Lee was the successful bidder at £75,500.

He has recently made the move into being a full-time property developer

and came along with his eight-year-old daughter, Lucy,

to meet me.

Sorry, Lucy, I just need to borrow your dad just for a moment,

to find out what his plans are for this property.

# So, little Lucy

# Little Lucy, don't you cry

# So, little Lucy, say goodbye. #

-Lee, nice to meet you.

-Nice to meet you, Dion.

-Congratulations.

-Thank you.

-What made you go into property?

Um, just as an investment, basically.

Just wanted an income, something to support my family, basically.

Is it a big difference to what you were doing?

-What were you doing before?

-I was a car salesman.

-OK.

But before that I was an estate agent.

Before that I was an electrical and gas engineer,

so I've had various different careers, as it were.

So you've had your hand in lots of stuff.

Learnt lots of skills, so hopefully, I can bring those over to this now.

Lee has two other buy-to-let properties that he bought

with tenants in situ, so this is his first renovation job

and it didn't get off to the best start.

I didn't view on the inside.

It's a Hammer rule, you know that, don't you?

I know it's the golden rule. I knew I'd get slapped for that.

But I went through all the legal pack,

I checked as much information as I could on the area

and on the property and everything like that,

had a look round the outside and the area.

Are you happy with what you've seen now you've seen it?

Now I've seen it I've wiped the sweat off the brow, I am happy.

It seems like a good, solid house.

It does need a fair bit doing to it

but I knew that it didn't have central heating, for example,

I knew that the windows and doors needed doing,

so I had an expectation and it's hit that expectation,

so I'm happy, from that point of view.

I wanted something that would keep me a bit busy,

so something that I could put some input into,

rather than buying a property that had a tenant already sat in it,

that I couldn't actually do anything with the house.

So, this one is for us to come in and see what I can do, basically.

I've got lots of skills from previous experience, and everything.

I want to see how they translate, practically,

into a project like this,

and then this will then go on the rental market.

Tell us what you're going to do. Start from downstairs.

What are you going to change downstairs?

-I'm going to change... The carpets need updating.

-Yes.

My wife's going to come in, we're going to strip all the wallpaper.

All the rooms need wallpaper stripping and everything.

There's a lot of colourful wood decoration throughout this house,

so that will all be sanded and painted.

Ceilings aren't too bad,

so probably a lick of paint for most of those.

The back of the house is going to have more doing to it.

There's going to be a cupboard in the kitchen taken out.

My daughter, all she wants to do is knock a wall down.

So, the wall between the kitchen and the dining room at the back there

-is probably coming out.

-That's hers!

-That's hers.

-That is HER wall.

-It's got her name on it.

I've got a hammer ready for her

-and she's going to be knocking it through.

-Good on you, Lucy.

-I might come round and give her a hand.

-Please do.

She might need the extra muscle, actually.

I reckon that what Lucy will lack in muscle power

she makes up in enthusiasm but, seriously,

Lee will have the help of his wife, Sarah,

and his teenage daughter, Hannah.

Upstairs, he plans to fit a new boiler and redecorate.

But what are his plans for that lean-to area?

Probably leave the front half of it kind of as it is,

a utility area, washing machine, tumble dryer space and everything,

maybe open up the cupboard and the loo at the back there

and just redo the loo and fit a sink out there as well.

-It's a nice extra additional space to the property.

-It is.

And if you wanted to do something else with it,

you could use that space and incorporate it into the house.

There's always that possibility.

I think it would be over budget to do that sort of thing right now.

But there's always the possibility of that later on, which is great.

Taking Lucy's hammer out the budget,

how much have you got to spend on this?

I'm looking at budgeting about 15. Could...

There's money there to go more if I need to,

but I would hope to be somewhere between 10 and 15.

I'm going to try and do everything myself,

so stripping everything is going to be done just by me and the family.

-This is a learning experience for me.

-Yeah.

So, I'm sort of throwing myself in at the deep end

-and hopefully, I'll swim.

-So you've given me a £15,000 budget.

How long is it going to take to turn it round?

Well, I'm setting myself a deadline of about three months.

-OK.

-We've got a holiday booked.

Is that within the three months or afterwards?

That's going to be at the end of the three months,

so I want to get this completely done

so I can then just hand the property over to my agent

and he can get it tenanted while I go off sunning myself.

-That's perfect!

-It's a great way to do it.

-That would be a nice celebration, wouldn't it?

-It will.

I don't want to let myself down.

-If you don't, it feels like a failure, doesn't it?

-Exactly.

The sooner we've got someone living in here,

the house is better protected and the money starts coming in.

Having not viewed the property - you did everything else, I know -

you didn't view the property, I think you fell on your feet.

-I think I was very lucky.

-Good luck. Hope it works out.

Cheers, thank you.

Considering Lee didn't view this property,

I think he's fallen on his feet.

There's hardly anything that needs to be done.

A bit of modernisation and drag it into the 21st century.

He's got the whole of his family behind him

but will he get it done before his holidays?

You can find out later on in the programme.

The town of Ilford in Essex is great commuter territory,

with easy access to the North Circular

and Charing Cross under 40 minutes away.

And things can only get better,

with the much-anticipated completion of Crossrail due in 2019.

Five minutes' walk from the centre of Ilford

is the property I'm here to see -

one-bedroom, ground-floor leasehold flat,

guide price £135,000.

Plus points - off-street parking

and the property has 97 years left on the lease.

Negative marks -

being leasehold means you will need the freeholder's permission

for any significant changes,

but does it need lots of alterations inside?

So, down the communal hallway and a little bit shabby,

not the best of first impressions.

But you'd want to spend a little bit of money, I think,

sorting that out as well.

But then, into the flat and straightaway, bleurgh,

what is going on? It's not the best, is it?

Toilet and bathroom there,

a small bedroom here and then - it's not a massive flat anyway -

but I want to see a different layout straightaway.

What is going on here? We've got the kitchen,

which has been built into this kind of cubicle thing

and you just have to ask yourself why?

Make it open-plan, make this a lovely open-plan kitchen,

breakfast bar, living space.

This is actually not bad, and by doing that, straightaway,

you would make this...flat,

which is full of rubbish, a whole lot better.

# Take, take, take out the trash

# Take out the trash, take... #

Skip hire will be a necessary outlay here,

especially if you junk the extraneous glass partition.

What this small space needs, to use a trendy parlance, is zoning -

a big open-plan room

with kitchen, dining and sitting area clearly defined.

I have a funny feeling

that an order for skip number two might be coming up.

So, the one bedroom at the rear of the property here,

full of rubbish again. But it's not a bad size.

However, not ideally located.

I can't think of where else you'd put it but to have, basically,

the access to the garden from this room doesn't really work.

But before you decide that this flat is just plain rubbish,

potential outside might make small and scruffy into big and lovely.

There's currently a bit of a mess that needs tidying up,

but the good news is you've got a half-decent garden

and that is obviously one of the big pluses of a ground-floor flat.

Often they come with garden space

and, in London especially, that is a massive premium.

But the other good thing I notice out here

is some of the neighbours, they've built extensions on the back,

so again, a bonus of a ground-floor flat

is that you might have the opportunity

to do exactly that, to extend,

which would be so much harder if you were on one of the upper floors.

So, I think an extension on there would be fantastic.

It would enable you to move that kitchen, perhaps,

and give all-important extra space.

# One, two, three, four... #

So, you could turn what looks like a landfill into filled land.

This being a flat, you can't extend under permitted development rules.

You'd need planning permission

and, of course, it would also be subject

to getting permission from the freeholder.

Before going down that road though, it is worth establishing

if extending this flat, with a guide price of £135,000,

would make sense financially,

something a local property expert can tell us.

First of all, what is the local market like?

The area surrounding this property in Ilford is very cosmopolitan.

There's a lot of community spirit here.

The street you're in at the moment is very first-time buyer.

It's a good-size property.

It's for first-time buyers who want to commute on a daily basis.

There'll be a lot of buy-to-let investors buying this as well.

There's a very strong rental market around here.

So, potential in the market for resale and rental.

But what about the extension idea for this property?

I would do a flat-roof rear extension

cos the kitchen's a bit small and it's right into the lounge space.

If you moved it from the front to the back of the property,

it would be much more beneficial for things like summer parties.

Kitchen straight out to the garden

is what first-time buyers are looking for.

Now, that is the best solution by far.

By turning this flat around

and putting the living space at the back,

and turning the bay-windowed room into the bedroom,

that would make much more sense.

With this property guided at £135,000,

the agent thinks a basic refurb might set you back 12 grand

and, renovated with an extension, could cost you up to £30,000.

Would it give you a profit on the resale market?

On the resale market,

the property after refurbishment would be £175,000 to £185,000.

On the open market, if you'd done a rear extension on this property,

you would achieve £195,000.

So, getting it at the guide price and extending

could see a potential pre-tax profit of around £30,000.

How about rentals? Could an extended property with a second bedroom

produce a better yield?

Rental for this property is about £750 to £850 per calendar month.

If we completed the property to a two-bedroom flat,

it would be on the market for £950 per calendar month.

Quite a lot of work required to bring this one up to scratch

but, intrinsically, a good little flat

and certainly well-located in terms of transport links.

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

Lot 205, in Ilford. Start me at £120,000.

Straightaway on my left, by the camera. 120.

22.5?

120. 122.5. 125.

27.5.

130.

32.5.

35? No.

132.5 with you. 135 anywhere else? Against you, standing.

135 anywhere else?

Fresh place - 35. 37.5. 40?

40? Give me 40, sir?

OK. 137.5 I have. First time at 137.5.

Second time at 137.5.

140, front row. 42.5.

It's against two of you now. Your bid at 140.

First time. Second time.

Third and final time, gentleman's bid, front row, 140.

-Going to sell. We're done.

-HE BANGS GAVEL

Sold at £140,000.

The pleased-looking bidder at £140,000 was Shazad,

accompanied by his son, Hamza.

Shazad paid £140,000 for the flat,

while also showing Hamza the ropes,

should he want to follow in dad and mum Milan's footsteps

with their construction company.

How was he planning to build on a successful auction?

-Shazad, lovely to meet you.

-Nice to meet you.

Tell me why you wanted to buy this place.

Basically, the plans are to buy, do it up and sell it.

-You obviously think there's profits to be made.

-Yeah, I still think so.

Good. Talk me through your due diligence

and what you've found out about the area and prices and things.

Well, I didn't even view the property before I bought it,

-just checked the legal pack slightly and...

-What do you mean "slightly"?

Well, I spent about five minutes on it, basically.

MARTIN TUTS

Right, so you glanced at the legal pack.

What other sort of research did you do

to make you think this was a good one to buy?

Er, I think I went on my gut feeling,

knowing the local area, and I knew the flat would need a renovation

and, to be honest, no surprises.

Talk me through the numbers that you've discovered.

How much do flats like this go for when they're done up?

Well, done up should be around 190, 195,

and I think it's probably going to cost me about £15,000

to bring it to that state, so hoping to be £25,000 to £30,000 margin.

Profit, so that's worth doing. Is this something you do a lot of?

-This is my first project, as such.

-Oh.

I am in the construction industry for the last 12 years,

so I know the ins and outs of it, but this is the first time.

Right, and why has it taken you 12 years to do it for yourself?

Just been tied up with other things and now I've seen the opportunity

to start on this side, so new adventure.

# Well, I've been down but I'll get up again

# Everyone makes mistakes You're not down

# Everyone make mistakes... #

Not viewing a purchase beforehand

and only skimming the legal pack are big no-noes,

as far as we on the Homes Under The Hammer team are concerned.

However, hopefully, Shazad's experience in the building trade

will win through on this new adventure.

So, what are you planning to do to sort it out?

-We already put in an application for an extension.

-OK.

There's going to be reconfiguration of all the areas inside.

Tell me about the extension. What's that going to be like?

It's a 3.8-metre extension

and hopefully convert that into a bigger sitting area.

The extension would cost about £8,000 to £10,000

and I think it will add about £15,000 to £20,000 to the value.

It will create another 25%, 30% of space.

-Where will the kitchen go then?

-We are double-minded at the moment.

It might stay where it is.

It would still be an open-plan kitchen

or we might move it to where the toilet is and move the toilet here.

OK, wow.

Tell me about the internal walls.

What are you planning to do with the internal layout?

I think I'll probably keep it as it is, only make it bigger.

Keep this as a bedroom

and the back room as a reception-dining room area

and, yeah, that's it really.

By doing most of the work himself,

Shazad's budget, including the extension, is just £15,000.

But he will need to get the council and the freeholder nods

before he can put cement on the hods.

We've already done that.

We need their permission and I don't think there will be a problem

because the previous owner or the leaseholder did apply for it

abut ten years ago and he got the permission,

so we basically asked for the same permission

and I don't think we'll have a problem.

-It's owned by the local council, Redbridge council.

-OK.

-Yeah.

-And then quick in, quick out, get it done and sorted.

-That's it.

Timescales for the work?

-About six to eight weeks after the planning is approved.

-OK.

So, that could take up to about six to eight weeks from now,

-so we're looking at about 16 weeks altogether.

-16 weeks in total.

And then, for you, onto the next project?

Yeah, cash this one and go back to auction again.

So, having waited 12 years before you started,

-now you're keen to get on with it.

-Yeah.

-Hopefully, buy one as soon as I sell this and move on.

-Great.

-Congratulations.

-Brilliant.

-Good luck with it. Nice to meet you.

Nice to meet you. Thank you.

Well, Shazad breaking a few rules there -

not visiting the property

and not checking out the legal pack properly. Tut, tut.

But it does seem like he's got some good ideas here,

especially that extension, and he's going about it the right way,

applying for planning permission, of course.

And he's done the numbers. It makes financial sense.

So, how will he get on? You can find out later in the show.

Coming up, this East Horsley, Surrey, development

took three years, but it's well worth the wait.

I think we did pretty well with our first auction purchase really.

And in Ilford, Essex, it's taken Shazad a year

to complete his blind-bought flat.

I would buy blind again, but I wouldn't recommend.

MUSIC: I Was A Part Of The '50s by Paul Evans

Earlier in the show, Walsall in the West Midlands

was where I saw this three-bed, '50s-style semi, guided at £68,000.

# I was a part of the '50s

# That was a time

# But now it's gone... #

And it needed to go.

The house required a good modernisation

and, in my opinion, a layout change too.

I'd be inclined to take this whole wall out,

create a nice kitchen-dining area.

Something Lee agreed with when he paid £75,500 for it.

He aimed to add it to his rental portfolio

but his daughter, Lucy, had her hammer at the ready.

All she wants to do is knock a wall down,

so the wall between the kitchen and the dining room

at the back there is probably coming out.

-That's hers.

-That's hers.

-That is HER wall.

That's got her name on it. We've got a hammer ready for her

-and she's going to be knocking it through.

-Good on you, Lucy.

-I might come round and give her a hand.

-Please do.

She might need the extra muscle actually.

Although this wasn't Lee's first property,

it was his first full renovation

and he was keen to use it as a test of his skills

from several past careers.

So, nine months on, I wonder if he's been tested to the limit.

# Light

# Is all over us... #

Light is all over here for sure, with brand-new windows

and a bright, neutral palette.

It makes the house feel fresh and spacious.

In the bathroom upstairs, Lee has taken it back to brick

and expanded into the airing cupboard for more space

and he's fitted a whole suite and tiled himself.

No more flowery decor in the bedrooms

and a replaster throughout the whole of the house

gives it a nice, clean finish.

But what about that wall that Lucy wanted to knock down?

Well, her dad went halfway with her,

having a builder knock down most of it,

but a few bits were knocked out by Lucy herself.

You certainly couldn't say

that this kitchen-diner has been done by halves.

# Tell me, tell me you'll meet me

# Will you meet me more than halfway...? #

This is obviously the new kitchen-diner that we've created.

There was, originally, a wall just going across the room just here.

Once the wall was gone,

we realised that the two floor levels were at different levels,

so I levelled the floor off before then laying the tiles.

There was no heating in the property at all,

so we had an instant combi boiler fitted in the corner there.

We then had a fitter come and help install the kitchen.

He was brilliant and allowed me to stick with him

for the two days and learnt a lot about installing kitchens from him.

He was fantastic.

And we're really happy with the result.

I think it finishes off the kitchen really nicely.

I couldn't agree more, Lee. It feels like the heart of the house now.

But has he got the renovation education

that he wanted from this project?

I've learnt that - like I didn't know already -

I am a bit of a perfectionist.

What I've done, personally, with the property is everything

that you can see that hasn't involved a specialist skill.

I had quite a few skills coming in

but I think I've added quite a bit to those.

It's been a bit of a learning experience there, definitely.

And he's not the only one learning on this job.

Lucy's been very helpful.

She's a fantastic labourer

and she's also been wanting to get involved

and learning a lot of new skills as well,

so she could probably tell you, just as well as I could,

how to tile and mix grout and floor leveller and stuff like that.

But Lucy and her dad couldn't do everything themselves

and a contractor handling the plastering

took longer than expected. Factor in the family holiday

and Lee's timescale has doubled to seven months.

His original budget was £10,000 to £15,000,

but he did have a contingency.

So how much did he spend in the end?

So, we ended up spending £23,500.

That's mostly due to the fact that we went over on the timescale

and also we weren't originally expecting

to have to replaster the whole house.

The plan for the property now would be, ideally, rent the property,

but if somebody came along and offered me enough,

I'd happily sell it as well.

So, Lee and Lucy have learnt a lot but has it paid off?

Time to call in two local estate agents,

including the agent who saw it before Lee's handiwork.

There's a lot of changes been done to the property.

It's had a full makeover completely.

Last time we were here, it was in quite a poor state.

They've replaced the windows, new central heating,

nice good-quality kitchen, replaced the bathroom

and a full makeover of decor and carpets,

so it's looking really good.

I think the property's very well laid-out.

I think it's a nice property.

They've obviously took time and care to fit it out correctly

and I think it will appeal to a lot of potential buyers.

With a total spend of £99,000, Lee will be keen to know

if he's best to stick with renting or look for a sale.

I would hope to achieve £125,000 for this property

and should it be rented, we would anticipate £595 per calendar month.

If the property was going to be sold on the open market,

I'd expect it to achieve around £125,000.

If it was going to be rented,

I'd expect it to achieve in the region of £600 per calendar month.

So, from those figures, Lee could achieve

either a pre-tax profit of £26,000 or just over a 7% yield.

What does he think of those figures?

The resale of £125,000 is probably the sort of value

that I was expecting.

The rental values feel a little bit low.

We have got the property actually up.

It's been up for a week or so now at £650

and we have had a few enquiries on that,

so just waiting for the viewings and stuff, now it's finished.

Lee will stick to renting, but he has learned a lot on this project,

opening up possibilities for future renovations.

Really happy with the finished product.

I could have made a little bit more, if things had gone the right way,

but we're happy with the finish and eager to get onto the next one.

And, in fact, since filming,

Lee has let the house out for £625 per calendar month,

more than the agents' valuations. Well done, Lee.

MUSIC: Love Me Again by John Newman

In 2012, I visited the Surrey village of East Horsley

and only the year before,

it had been named Britain's richest village.

With great rail links to London,

it was easy to see why City-type commuters had settled

in this part of the affluenza belt, as it was nicknamed.

So I was pretty excited about the intriguing lot I was here to see.

A two-bedroom detached cottage on a 0.39-acre site.

Now, the guide price, £500,000 plus.

Now, that seems like a lot of money for a two-bed cottage,

but this is an affluent and expensive area

and the value here is in the plot not the property.

Look, it is ripe for redevelopment.

Now, it already looks like a building site.

You've got metal fencing here and the neighbouring house,

well, it's already been knocked down.

But, before we dismiss this cottage completely as a demolition job,

let's take a look around inside.

# In this lonesome old house... #

It's not quite what I was expecting inside

but you can see some of the work has started.

Look at all this wiring hanging out

and somebody's already started to do the plastering on the walls.

But by looking at the damp, look,

I think this property has been derelict for quite a while.

Now, I know there's no kitchen down here

and the bathroom has not been plumbed in,

so I would say it's unmortgageable as it stands at the moment,

but on a positive note, look, you've got pretty windows,

a little doorway and a porch through here.

You've got a good space, it's got character.

It does have the makings of a nice little house.

That really was me just being an old romantic.

The proportions of one cottage and the plot were not going to work,

so the first thing to do was tear it down and start again.

If you buy this as an investment,

well, that's just not the way to maximise profit.

If you want to make some cash, you need to pummel this property

to the ground and build not one, but several, properties in its place.

Now, there's no planning permission, as yet, to do that

but, because there's a house already here, getting permission

to build something else, well, it shouldn't be an issue.

The question is, what will the local council let you build here

and how many properties will they let you squeeze in here?

You've got to think about all of that

before even bidding for this at auction.

Now, the plot amounted to 0.9 acres,

so there are a few options, planning permitting.

With a guide price of £500,000 in an affluent area,

my guess was that this was going to be sought-after

by developers at the auction.

450 to the phone. 465.

480 on the phone.

500 in the room.

515. 530? 530.

As I thought, this was a very popular lot.

We rejoin the bidding at £640,000.

640.

645. 650.

655.

660.

665.

670.

675.

680?

680.

685?

680, first time.

Second time.

Third and last time, if you're all done.

-HE BANGS GAVEL

-Sold 680. Well done.

So, £680,000 was enough to see off the competition

for Dennis, on the right, and his business partner Brian.

The latter came along to meet me and tell me

what the pair's burgeoning property development business

had in store for this site.

You've got a little cottage sitting there,

-which is all very nice and pretty.

-Very sweet.

But what are you going to do?

We're going to try and work the local authority on planning.

Hopefully, we will achieve four townhouses on three storeys

and, possibly, a unit into the rear, which will be good.

-That'll be a bonus for us.

-So, is that coming down?

It will come down eventually, yes.

We're also in some negotiations with surrounding bits of land,

so it might grow into something like eight units in the end.

Wow, this really was an ambitious plan.

By adding other parcels of land around, they were hoping

to make this an even bigger development site.

MUSIC: Time And Money by John Farnham

But initially, for phase one,

they would build the four townhouses,

and then a separate house

to create five high-end properties suitable for this market.

And getting the plans approved was going to take two things.

# Time, time, time

# Time and money... #

How much do you think you're going to need to build?

If we achieve the five units,

we'd be looking at about 1.2 million build costs,

-something around that sort of money, really.

-Wow.

How long do you think that will take you for the four units, initially?

The four units will probably take us about 14 months

from start to finish.

Will you be up against it with the planners or not?

Do you think this will be a straightforward build?

It's never, ever straightforward with planning.

It's an absolute can of worms, really.

You just have to try and bring everybody into it,

get the planners onside to start with

and see what they would accept in here as well.

But it's got to be achieved through planning,

otherwise we're sitting on a tiny house with a great big garden.

Luckily, Brian and Dennis had their architect, Marek,

to help them through the planning process

and he took the time to show me the plans for the site.

How exciting! What is your vision for this site?

Well, we have a set of plans here which we've sort of put together.

We're hoping to keep the townhouses

the same height as that block there.

-So you get a nice swoop round.

-Yeah.

So, we're going to work hard to try and make it fit in there.

And what is the look of the property?

We will incorporate some of the clay features

and some of the brickwork details

that we have on the existing building.

Now, obviously, this is the most important aspect,

-the fact that you get the four townhouses.

-Yes.

But you have got quite a large site with a big plot of land

at the back there, which is ideal for a house.

How many problems are you going to have to overcome with this

because where is the access going to be? Will you come along here?

It will have, right at the front, a gated entrance

into a nice little courtyard of its own.

So, will it be five units or an expansion to eight?

When we returned two years later,

they still hadn't finished the four three-storey townhouses,

nevermind built eight.

It had been delayed mainly by - yes, you guessed it -

planning permission, which took a year

and some changes to their original plan.

Quite a difficult process.

Had to go back in two or three times and use planning consultants.

We had a couple of objections from the local parish council,

which we overcame with a couple of meetings with them.

The project had also been disrupted

by Dennis and Brian having to buy a covenant from a railway company

that pertains the land that they were going to build on.

But their spending onsite wasn't done yet.

As you know, we bought the site at the auction

and then we managed to acquire the site next door,

which already had planning for three small houses.

# You're always searching for a bigger prize

# You're always searching for a bigger prize... #

The plot hadn't just got bigger, the plans had changed too.

Gone were the four townhouses and now, where the cottage once stood,

were shells of two pairs of semis

and on their newly-purchased plot, they had a terrace of three houses

and the detached house on the triangular plot

was still on the back burner.

So, the total permissions were still for eight properties.

But they weren't finished yet.

# Hey... #

We've got a gentleman next door and he wants to sell us his house,

obviously for more than it's worth,

because we're going for planning permission

for a bungalow in the back garden.

That would take them up to ten properties.

With an ever-increasing number of houses

came an ever-increasing budget.

We think the total overall build cost will be around 1.8 million

and that should see us out and, hopefully, everything finished

but that doesn't include the new bungalow, if we get planning.

At this point, two agents valued the properties,

without the bungalow, at a total of over £5.7 million.

But this wasn't just about money for Brian and Dennis.

We like building new houses

because we're creating something and it's somebody's dream,.

It's one of the biggest purchases you ever make in your life

and if people walk in and they look at it,

see the finish that we leave and go, "Wow", then I think we've succeeded.

It would be another year before we returned

to this ever-expanding plot,

a total of three years from the beginning.

Will we be saying, "Wow"?

Join us later in the programme and you can find out.

So, we've seen one finished property but where are we with the other two?

-Will it be home, sweet home or work-in-progess?

-Let's find out.

We head back to Ilford in Essex now

and the London commuter town was the location

of the property I saw earlier -

a one-bed ground-floor flat, guided at £135,000.

Once you looked past the rubbish,

you'd realise that it is the boxy layout that needed to be trashed -

a cramped cubicle kitchen

and a bedroom that had access to the garden. Hmm, odd.

But it was out there that I found a perfect solution.

So, I think an extension on there would be fantastic and enable you

to move that kitchen, perhaps, and give all-important extra space.

And an extension was what builder Shazad planned,

having paid £140,000 for his first personal development project,

although things didn't get off to the best start.

I didn't even view the property before I bought it,

-just checked the legal pack slightly and...

-What do you mean "slightly"?

-Well, I spent about five minutes on it, basically.

-Tut, tut.

But, essentially, this was a flat with a lot of potential.

Shazad had the skills and his own construction firm

to make that small £15,000 budget work.

He had allowed eight weeks for planning to come through

and then another eight weeks for the work.

We are back a year later, longer than anticipated,

but hopefully with a result that made Shazad happy.

# We feel joy

# Nothing really matters We've got everything we need

# Take a big leap We will feel joy... #

Well, the place has been reconfigured, as Shazad promised.

The bay-fronted living room has become the main bedroom.

He's taken the space that was the partitioned-off kitchen

and made it a smart bathroom

and there is more to this reshaping than first planned.

The old bathroom, which had a window in,

is now a small second bedroom and the new extension,

added to the original bedroom, is a living area and kitchen combined.

We removed the wall from here, the old bathroom,

and we put a new bathroom in the centre of the flat.

We extended it towards the garden by four metres,

and put a new kitchen there. We changed the layout completely.

We moved the bathroom where the kitchen was,

made the bathroom bigger and more spacious.

Also, new double glazing and new wiring and plumbing.

Moving the bathroom to the part of the flat with no windows

was a good idea.

The kitchen, too, benefits from lots of light and looks smart,

all due to that new extension.

We put a planning in for an extension for three metres

but, luckily, we got four metres

because the next door was four metres

and it took us three months to get the extension approved.

It was a straightforward process, we didn't have much problems.

But if planning permission didn't hold up the project, then what did?

Why are we back one year on, rather than Shazad's 16-week estimate?

Planning permission did not take long.

It, typically, took about 12 weeks.

But we waited for another project to finish.

The complete project took us eight weeks.

Shazad's clients have to come first, of course,

and his construction team had other work to do.

But while the timescale may have changed,

what about his £15,000 budget?

We spent about £22,000.

We went over budget but not because of what I didn't plan.

It was more that I went for high-spec material

and I think saying "out of budget" is wrong.

I think we knew what we were spending, so...

The budget has changed because they created an extra bedroom

and moved both the kitchen and bathroom,

as well as the quality of finish.

Having taken a year, what is Shazad's plan for the flat?

We already put the property on the market

and we're hoping to achieve £250,000 and we had a good response.

Wow! The year before, the agent thought

that an extended flat would bring in £195,000.

Could it be that buying blind

and spending extra has paid off for Shazad?

# Take a big leap and we will feel joy. #

We need two local property experts to tell us

if he has got the price right and if his plan to sell is the right one.

First, the agent who saw it before the renovation.

The refurb is really good.

They've done a nice finish,

which is above the standard for this location.

I like the layout of the property.

It's completely different to when we saw it before.

It works for the area

and I think that will maximise the price for this.

I think the property is brilliant, better than what I expected.

The property is very nice, it's nicely done, so it's quite good.

The layout has been brilliant in the property

because the front room is good as a bedroom

and the back room extension, you can have a view of the garden

from the kitchen while you are working.

Shazad's total spend is £162,000

and the agents believe it could generate nearly 9% in yield

from a £1,200 per calendar month rental.

What about sales? How has his £162,000-investment fared?

There's a shortage of properties at the moment

of this sort of value in this current area.

The amount of properties on the market are about 22% down,

according to Rightmove stats.

That is an issue, so there should be a good supply

of first-time buyers and investors for it.

I think, currently,

the property is worth about £250,000 on the open market.

This property is worth between £230,000 to £240,000

and it should sell very quickly on that price.

I think they're pretty much where I expected the property to be,

more of the 250 end than 230, so I'm happy with that.

I think that I would be pretty happy with the £250,000 too.

That figure would mean a pre-tax profit of £88,000.

So, despite it unintentionally taking a year,

he has maximised the potential space and profit from this small flat

and made a pretty impressive return, by anyone's standards,

all from a flat bought blind.

And, despite its success, you know I'm still going to nag you

not to do that next time, Shazad!

I would buy blind again,

but I wouldn't recommend anybody else doing it.

Earlier on in the programme,

we were reminding ourselves of the story of this solitary cottage

and land in the affluent area of East Horsley in Surrey,

bought at auction by Dennis, here on the right,

and his business partner Brian.

Paying a pricey £680,000 for the plot,

they planned to build eight properties

and battled for a year with planning to get what they wanted.

Two years on from purchase, building was still ongoing,

but the pair were promising something rather special.

We like building new houses

because we're creating something and it's somebody's dream.

It's one of the biggest purchases you ever make in your life

and if people walk in, look at it and see the finish that we leave

and go, "Wow", then I think we succeeded.

So, three and half years on,

we are back to see the finished properties

and I am so excited to see the results.

# I can't control this feeling

# Something's happening inside me

# The chemistry is building

# It's something that we're feeling

# It's gonna get, it's gonna get It's gonna get louder... #

Well, that deserves a "wow",

bigger, bolder and better than I could have imagined.

It's time for a quick look around it all.

We start at the row of three terraced houses,

where the cottage once stood.

Three two-beds and one three-bed at the end.

They might have kept a cottage-style look,

but certainly the original cottage

that Dennis and Brian bought is a distant memory.

# Changes we're making for the better

# We're going through together... #

Over to the smart-looking semidetached houses,

which all have the same layout.

Over three floors, they have three bedrooms

and a nice, airy feel with plenty of space.

Then the jewel in the crown is the detached house,

which is on the triangular bit of the original site.

And what a jewel it is.

A large, lavish five-bedroomed home at the end of a private road,

replete with a huge living room, three bedrooms on the first floor

and then two children's bedrooms with a bathroom in the attic.

There's the additional en suites, another family bathroom

and a basement area, which comprises this very stylish kitchen.

There's also a sunken garden.

Brian and Dennis had to pool together on this project

to tear down the old cottage and working with planning

to achieve their dream of eight great properties.

# It's more than a feeling We're building a dream

# That we've always had clear in our sights

# We're powerfully changing the world, we're reclaiming

# Our unity they can't divide

# They push us around but we're tearing it down

# And we're having the time of our life... #

What a project it has been, but not one without its challenges.

As you know, it was a building site when you got here.

It's a lot, lot nicer now. Everything's virtually finished.

The one large house in the back has still got a little bit to do

on the outside, but everything's virtually done now.

The main problems have really been over some of the private roads,

so getting consent for electrics, gas, water.

We had extra charges, which, like, the residents' association

put onto us, which we didn't really know about before.

We had to comply with code 3,

which has now been abolished by the government,

so that doesn't have to be done any more,

but it does put a lot more cost onto the build.

A code 3 was in place when the guys started building

and it was designed to improve energy ratings,

so they put in solar panels and extra insulation,

some 15% of the build cost.

In the end, they didn't proceed with the other plot

and planned bungalow,

as they couldn't get planning permission for that.

Instead, they focussed on making the eight they had

the best they could.

We've changed a couple of kitchens,

so they are more a traditional in-frame kitchen,

but generally, they are high-spec

and we're looking for more of a modern look nowadays.

As you know, we tried to keep them quite contemporary.

The one at the back has got mullioned windows,

it's got grey slate roof, yellow bricks, so it looks really nice.

It doesn't look sort of brand-new but, obviously, it is.

The two pairs of semis that we've got in the front here,

they have been really designed to be cottagey,

because there was a cottage here that, you may remember,

we demolished, so we wanted to try and keep that feel

and the villagey look.

As you know, any building project always costs more than you think.

Ah, that tees me up, Dennis.

Their original budget, including the auction purchase,

buying additional land and build costs, was £1.3 million.

What is it now?

We've probably spent something like 1.35 on the land, altogether,

plus, obviously, the planning, everything else.

And the build cost has been something like £2.5 million,

maybe a little bit more, but that's roughly what we spent.

The total spend of £3.85 million is way above what they planned,

but you can absolutely see the quality.

But for Dennis, this was about more than just the potential profit.

I was born in Horsley and it's really nice to have left something,

now, which we think will be a nice development for the village.

A nice development, yes, but is it a profitable one?

The business partners plan to sell all the properties

and they have sold all the terraces for a total of £2.06 million,

while the five-bed house at the back is currently under offer.

What do two local estate agents think the total value of the site is

and how does that compare to their £3.85 million spend?

The whole site would value at £6,050,000.

I would value the whole site at around £6 million.

We think that's a bit high

because, as you know, we've already sold three.

I think the whole site is probably somewhere about 5.6, 5.7.

I think the agents are a bit optimistic, to be honest.

I hope they are optimistic and I hope they really do sell them

for the higher prices.

I personally can't see it myself, either,

but, no, they're doing what they think is right in the village

and they're valuing property in the local area.

Well, if they did hit the agents' estimate of £6 million,

it would be a potential profit of £2.15 million

before taxes and expenses - a very healthy return.

But, boy, did Dennis and Brian earn it.

I think it's been a good investment. It's been very stressful at times,

but that's part and parcel of what you do.

But overall, it's been very, very good.

I think we did pretty well with our first auction purchase, really.

We hope you've enjoyed the show

and maybe inspired you to visit your local auction.

We'll be back next time with more tips, properties, buyers and advice.

Join us then on Homes Under The Hammer.

-Goodbye.

-Bye for now.

-Goodbye.