Episode 61 Homes Under the Hammer


Episode 61

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Transcript


LineFromTo

Hello. There are many different ways to go about property developing.

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There isn't a one size fits all approach.

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Yeah. In the end, though, it's up to you, but if you do it right,

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you could do very well out of it.

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Yes, and you might find a bargain down at your local property auction.

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Yes, how about buying your next home under the hammer?

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Well, the variety of choices can be overwhelming

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in the world of property development.

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Yes, sometimes it's decisions, decisions, decisions,

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and the stakes are high.

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Yes, but did today's buyers choose wisely?

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Let's find out.

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I'm in Worcestershire to see a charming cottage

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with some unwanted guests.

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Listen.

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HE CHOMPS

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There are more strange noises at this house in Croydon.

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Have a little look over there.

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That's the railway line.

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And I can hear the sound of a wallpaper stripper in this four-storey house

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in Birmingham.

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It's everywhere. There's woodchip wallpaper everywhere.

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All these properties have been sold at auction,

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and we'll find out who bought them and what they paid when they went under the hammer.

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Yours, sir.

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This is the hamlet of Holy Cross Green in Worcestershire,

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and isn't it lovely?

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It's one of the five hamlets that make up the village of Clent.

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There are two churches of note in the parish - St Leonard's,

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where there has been a church since 1199 in the centre of the village,

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and St Wulstan and the Oswald's,

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which was a former malthouse before being offered to the Catholic Church

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in 1926.

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Well, commuter distance from Birmingham,

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with easy access to the motorway network,

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is this really charming little village, and a property that I think, mm, yep,

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you're going to love. It is a two-bedroomed mid-terraced.

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Let's call it a cottage.

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£110,000 was the guide price.

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Let's have a look.

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HE CHUCKLES

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So, straight off the road and the pavement into your front room.

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So you would definitely want, like they've got here,

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a nice thick curtain to keep out the noise and the cold.

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But you step into this room and the first thing you notice is that.

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Wow!

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That is amazing.

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What a feature that fireplace is.

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Truly outstanding.

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It sort of sets the scene, though, for a house that, even at first glance,

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is a bit of a time warp, isn't it?

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Look at the wooden bits and pieces around the place,

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look at the carpets, look at the walls and the painting,

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and yeah, wow!

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Step through here, you've got stairs up to the bedrooms, into the rear

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part of the house, where the kitchen is.

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And again,

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yeah, a Belfast sink - you could have predicted that.

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Wow!

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Another fireplace, not in as nice a condition as the one in there, but...

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what a lovely feature, again.

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The problem is going to be how to retain the charm of this place while

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bringing in stuff that you really need in a modern house,

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such as...damp-proof course, such as modern electrics, such as...

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..central heating.

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It's going to be a challenge. You know what?

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It's going to be worth it. It's a charming little house.

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It's going to need some thought, though.

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My first thought is,

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you'll need to dig out and refloor with a full damp-proof course here,

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as it's been tiled straight on top of the earth,

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which is typical of Victorian homes, especially in the kitchen and pantry.

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So, upstairs, and to the front of the property,

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a really nice-sized double bedroom.

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Towards the back of the property, a bit of a compromise.

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You've got a bathroom and loo, which is great.

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It's upstairs, which is definitely good news, but it's been created,

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I think, from a room which would've been the same size as the one at the

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front, so the second bedroom, actually, is quite small.

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When I say "quite small", it's really small.

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You could just about get a single bed in here, so a child's bedroom,

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perhaps. Intrinsically, you could probably live with that.

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What's more serious...

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..is that.

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Look very carefully, or more importantly, listen.

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HE CHOMPS

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That is the sound of chomping.

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These floorboards...

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..have got woodworm. That's the telltale signs, all those little holes.

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So, that definitely needs to be sorted out

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cos they are hungry little devils.

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You could easily get full up with all the problems in this house,

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so whoever bought this would really need to make sure they don't bite off

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more than they can chew.

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# Get your teeth round this, open wide

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# Eyes bigger than your belly tonight

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# So put 'em up, put 'em up, take a bite... #

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Let's hope the outside will be a little easier to stomach.

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It doesn't look too bad, but it does appear to be shared access,

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and that's something worth checking out.

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Charming though this house is, it's not without its issues,

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and even at that guide price of 110,000,

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it could quickly become a money pit.

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What does a local estate agent think,

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and how does she think it could do on the local market?

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The market is very good at the moment.

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The supply is down, demand is high.

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So therefore, any property that's coming onto the local market

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should be, you know, getting a good price, especially in this location.

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If I was buying this property,

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I would try and find somehow to keep that original stove.

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I think that is fascinating,

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but if they want a more modern, contemporary look,

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then you could actually put sort of nice wall radiators,

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make more of the space,

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and putting in fitted wardrobes, again,

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gains you more space upstairs.

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Assuming this work is carried out,

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the agent thinks this could net a rental figure of between

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£695 and £725

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per calendar month, but what about the resale value?

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I think an owner could expect to receive between £185,000 and £195,000

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in this current market.

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One of the great things you occasionally find when you're looking round

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houses is some artefacts from years gone by.

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And interestingly enough, the whole of the front page is largely about

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things for sale by auction.

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Some things never change, eh?

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It's a charming house.

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I'm sure somebody would have fallen in love with it

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when it went under the hammer.

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Two bids on the internet. That'll be fun. Lot 75 in Clent.

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Start me at 90. An opening bid of 90, please.

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A nice looking house. Pardon?

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Well, we've got 110 straight on the phone.

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Thank you, Stewart. 112 and a half, anyone?

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110 I'm bid. 12 and a half.

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The lady's bid here on my left. 115 anywhere?

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After some initial bidding in the room, on the phone, and the internet,

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we rejoin at 145,000.

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I have 145 on the internet.

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146, madam.

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146. Right, I have.

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Now 147, please.

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No? OK, I'm going to call it.

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The first time at 146.

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Are you all done? The lady's bid, in the room.

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Yours, madam. Well done. Thank you very much.

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'Pleased-looking purchasers Anna and husband Tim got the property for

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'146,000.

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'Anna, who works for the Careers Service,

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'met me back at their acquisition to tell me what their plans were.'

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-Anna, lovely to meet you.

-Nice to meet you.

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-Congratulations!

-Thank you.

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A charming little place, actually. Tell me why you wanted to buy it.

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We are looking for something for our retirement, really.

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So, do you currently have a house?

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We had a house.

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We sold it to the government, because of HS2.

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-Oh, did you?

-Oh, yes.

-Compulsory purchase of the land?

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It wasn't compulsory but it was purchased by the government, yes.

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Oh, wow! That must have been a bit traumatic.

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-Or did they give you loads of money so you don't care?

-Oh, no, we lost loads.

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-Did you?

-Yes. Yeah, it took us five and a half years.

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Ultimately, we took the money,

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and we decided to recoup by doing a couple of cottages here.

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Kind of a bit of a shock.

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Projects like HS2, or Crossrail, can benefit commuters and the economy,

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but of course, we should never forget that there is a downside for some.

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Being uprooted is costly emotionally as well as financially,

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but Tim and Anna are regrouping.

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We're thinking about moving to France.

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-OK.

-And we wanted to buy somewhere here.

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And we saw the house next door.

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-Oh.

-We've offered on it and it's going through.

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Then we saw this was coming up at auction, so we thought, "Well,

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"if we're going to have two cottages and keep them as lets for most of

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"the time, they might as well be beside each other."

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-How funny.

-Yeah. So that was that.

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Wow! Had you seen it?

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-I hadn't seen it. He had.

-Oh, right, OK.

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SHE LAUGHS

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-So how did that feel?

-I got a bit of a shock. I thought there was one fireplace, but there's two.

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-I know. Well, that's a good shock, isn't it?

-Er...

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-it could be. Bit more difficult...

-Why?

-I want to take them down.

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-You want to what?

-I want to get rid of the chimneybreast.

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No, you don't, what?

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-Why not?

-Why, just to open it up downstairs?

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Yes, huge difference.

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You're looking at, really, five feet.

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You're looking at a lot of space upstairs and you get two double bedrooms.

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Well, as much as I'd be sad to see the period features go,

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Anna has got a point.

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By removing the chimneybreasts on both floors,

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she and Tim would gain extra living space downstairs, and also upstairs,

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as they plan to create a Jack and Jill bathroom with separate access

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from what would be two double bedrooms.

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This will be very costly, though,

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and they've had estimates that would bring the total budget to around

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30,000, but as they are renting out,

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this wouldn't necessarily equate to more income,

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so I was wondering if it's worth the bother.

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But long term it might be worth more.

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Long term, in terms of sale, I think it's probably worth doing, yeah.

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Right, OK. And what's the timescale for all this?

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-Three months.

-Right, and the same timescale for next door?

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Next door will be longer because we haven't exchanged yet next door.

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Oh, OK. Because, presumably, it would be a lot cheaper

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-to get somebody doing both.

-In to do both, quite.

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And we can use certain things there that we can then put into here,

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like the kitchen, we can move about a bit.

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-All very exciting.

-Oh, it is. Yes, it is, actually.

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-And it's exciting because my husband's from this area originally.

-OK.

-I'm not.

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And it's a lovely area, a very nice area.

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-Which you're going to leave and go to France.

-Yeah.

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THEY LAUGH

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Quite. Of course.

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What kind of life are you going to live in France?

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Is it the idyllic rural retired life in France life?

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-I don't know, do something else.

-Well, it's all change, then.

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Yeah, and we've got hobbies, odd...

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-Like?

-I stuff animals.

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You stuff animals?

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Oh, that will make friends with loads of people watching, yeah!

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-Yeah.

-You stuff them when they're dead, presumably.

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Oh, preferably, and not ones that are past their sell-by date!

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What kind of animals do you stuff?

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Squirrels mostly, and things like that, at present.

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You stuff squirrels?

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Well, I'm just a beginner, you see.

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Wow, I wasn't expecting that one, OK.

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-I bet you weren't!

-Gosh, right, OK.

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So, are we going to leave a few stuffed things around,

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-just to give it a homely feel?

-Oh, yes, I like that, yes,

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I like them to be somewhere where they shouldn't be.

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-Right.

-I don't know, along a skirting or something,

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-or the top of a curtain.

-Right... A stuffed squirrel?

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-Yeah, looking down.

-Oh.

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Well, listen, congratulations and good luck with it, and also your time in France.

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-Thank you very much.

-Look forward to seeing how you get on.

-THEY LAUGH

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# So if it's up to me

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# Gonna keep you forever... #

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Well, I can't formalde-hide my surprise at the interior decor choices,

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but I've got a feeling not much is going to be preserved here.

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So, will the chimney be here when we return?

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I guess it's all going to come down to the economics.

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You can find out what happens later in the show.

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We're off south now to South Croydon,

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which is one of the areas really benefiting from regeneration.

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It's very popular with first-time buyers and renters.

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The property Lucy is looking at is in a good location near all the

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amenities you could want.

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This area is definitely on the up, and so are the prices.

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Well, if you want to be in the catchment area of your local school,

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well, this is a great location, as the school is literally right there,

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and directly opposite is the property I'm here to see.

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Now, it's a two bedroom mid-terrace

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and it had a guide price of £230,000 plus.

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I wonder if I'll be giving it top marks.

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So, straight into the lounge and oops, straight into the old fuse box there.

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That needs to go.

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It's in a rather awkward position.

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Not a bad space, and actually, for an auction property,

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it doesn't look like it's in really bad condition at all,

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although you would need to replace these windows, I think,

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and maybe just freshen the place up.

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And it is awash with magnolia.

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Now, I'm not down on magnolia because I know lots of people like magnolia,

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but I just think there are so many other tones of paint on the market

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at the moment that may just make the property feel a lot more contemporary.

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So you've got a second reception room. Again, it's a great space,

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it just needs modernising and freshening up.

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You've got a galley kitchen, but that will need to be replaced, too,

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but a lovely bright window, reflecting loads of light in there.

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And as I suspected with this property, downstairs bathroom,

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although it looks to be in quite good condition.

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So, quite a few things to contend with with this property,

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but I'm going to check out the garden.

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Now, out the back you've got your garden.

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Always a bonus, I like to say, but it will need a big old tidy up,

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as you can see. But that is not what I'm out here to show you.

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Come around here a little bit more.

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Have a little look over there.

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That's the railway line.

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It's good, though. The train station's close by,

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which means you can walk there in less than ten minutes,

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but these trains rattling past regularly, well,

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I don't think it's going to be the most peaceful garden to relax in, do you?

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And that was a slow train trundling by.

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They can get a lot quicker than that.

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# Runaway train

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# Running right... #

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With the thick canopy of trees,

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the noise from the trains is slightly deadened,

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but the price to pay is a dark and gloomy garden.

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It's also worth noting that the back area, where the bathroom is,

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needs quite a bit of work.

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Now, back inside...

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So upstairs in this house you've got two really nice size bedrooms,

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which is fantastic.

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And then being up here now, you can see

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there probably would be just enough room to

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bring the bathroom upstairs.

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But now something I'm going to tell you next is because I've had so much

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experience of doing properties like this on Homes Under The Hammer.

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In order to do that,

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you've got to turn these stairs around to create a corridor area,

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so it means reducing the size of the bedroom and it's also quite a costly

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exercise. So I think, first of all,

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speak to your local agents in the area and see what they advise,

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and also it might be worth chatting to the neighbours

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to see if any of them have done that.

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On that note,

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it seemed like a good time to invite along a local estate agent to ask

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his opinion on the subject.

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It's a good-sized property.

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These properties are typical,

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where you have the bathroom at the back of the kitchen.

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There's not really much that can be done with the layout there,

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I don't think, without losing half of the bedroom.

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Keeping that the same, the properties are what they are and they are very good.

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Compared to some auction properties we've seen,

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this isn't actually that bad.

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Money needs to be spent in the right areas, but, in general,

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I think it's a good purchase.

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This house is guided at £230,000 plus,

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but given the required refurbishment,

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how much could be worth?

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This property would sell for approximately £335,000.

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And if it was placed on the rental market?

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This property would rent for approximately

0:17:330:17:35

£1,300 per calendar month.

0:17:350:17:36

No, it's not the quietest spot,

0:17:380:17:39

but it's great for commuter links

0:17:390:17:41

and it shouldn't take too much work to turn this terrace around.

0:17:410:17:44

So who wanted to take it on?

0:17:440:17:45

Let's head to auction and find out.

0:17:450:17:47

Right, two bedroom house in Croydon.

0:17:500:17:52

Who would like to kick off, 240?

0:17:520:17:54

Thank you, 240, standing up, 240.

0:17:550:17:57

245 anywhere?

0:17:570:18:00

After a hesitant start at the auction,

0:18:000:18:03

we return to the bidding at £269,000.

0:18:030:18:05

269.

0:18:070:18:09

271.

0:18:090:18:11

273.

0:18:110:18:13

275.

0:18:130:18:15

275 elsewhere?

0:18:150:18:17

If not, 273, first time,

0:18:170:18:21

second time,

0:18:210:18:23

third and last time. If you're all done...?

0:18:230:18:25

Sold, 273.

0:18:270:18:28

It was Raff and Julie who made that bid on this,

0:18:310:18:34

their first auction property purchase.

0:18:340:18:36

This is a new business venture for them,

0:18:360:18:38

as the couple and their daughters, Alicia and Chloe,

0:18:380:18:42

recently returned to the UK after living in Spain for two years.

0:18:420:18:48

# Goodbye, Barcelona

0:18:480:18:49

# So glad I've been shown ya... #

0:18:490:18:51

Guys, congratulations, I'm so happy for you.

0:18:510:18:54

-Thank you.

-Did you expect to win the bid on auction day?

0:18:540:18:57

Not really, no, no.

0:18:570:18:58

-We've been going to auctions for... fourth auction...

-Yes.

0:18:580:19:01

..and we've never been successful on anything.

0:19:010:19:05

So I think we were just shocked to win a bid.

0:19:050:19:07

When you were there, what happened when you actually got it

0:19:070:19:10

-and the hammer went down?

-Well, I wasn't paying attention.

0:19:100:19:12

I was looking actually down at the catalogue and Raff said to me,

0:19:120:19:15

"Come on, that's us, we've got it." I went, "Oooh!"

0:19:150:19:18

So I was a bit shocked, to be fair.

0:19:180:19:19

You've obviously not been in a desperate hurry to get anything

0:19:190:19:22

if you've just been going along to the odd auction.

0:19:220:19:25

What's the big plan of yours

0:19:250:19:26

and why did you decide now was the right time?

0:19:260:19:29

We've been away for a while, with work,

0:19:290:19:31

we were in Singapore for a while and then in Spain for a while.

0:19:310:19:33

We came back to the UK at the end of last year,

0:19:330:19:36

and neither of us are working at the moment,

0:19:360:19:39

so the plan was to keep busy with something in the property space.

0:19:390:19:45

So, we've been doing our research

0:19:450:19:47

and we're looking for this to be the first of many projects, hopefully.

0:19:470:19:50

So, what were you doing in Spain?

0:19:500:19:52

Not a lot really. Enjoying ourselves.

0:19:520:19:54

Just relaxing, taking two years out.

0:19:540:19:56

-Yeah.

-Yeah.

-Our daughter was in school there as well.

0:19:560:19:58

So we just kind of chilled out while she was finishing her education.

0:19:580:20:02

So you chilled out for two years?

0:20:020:20:04

-We did.

-We did.

-How fabulous is that?

0:20:040:20:06

So what were you doing prior to that?

0:20:060:20:08

I was working, well, we were all in Singapore.

0:20:080:20:11

My job took me to Singapore. I was in investment banking.

0:20:110:20:13

So quite a stressful job, I can imagine.

0:20:130:20:16

-Yeah. Glad to be out of it.

-Really?

-Yeah.

0:20:160:20:18

And is it really nice for you now just to catch your breath

0:20:180:20:21

and do something completely different?

0:20:210:20:23

Yeah, we've taken our time, haven't we?

0:20:230:20:25

As Raff said, we've been to four auctions now

0:20:250:20:28

and we did bid on quite a few properties. This is our first buy.

0:20:280:20:32

It has been nice to have the time, you know, to find something

0:20:320:20:36

that we were really interested in and really wanted to pursue.

0:20:360:20:39

-We wanted to do it right.

-Yeah.

-You know, we don't have to rush.

0:20:390:20:43

So we've been patient, looking for the right thing, not overbidding,

0:20:430:20:46

just waiting for the right opportunity,

0:20:460:20:48

and I think we may have got it.

0:20:480:20:49

So, after years of globetrotting thanks to Raff's work,

0:20:580:21:01

the family are now putting down roots in England.

0:21:010:21:04

But there is a good reason why Croydon has been selected

0:21:040:21:07

as the location for their first property venture.

0:21:070:21:10

We used to live just across the road.

0:21:100:21:12

-Really?

-Across the main road, yeah. Our first property, a little flat.

0:21:120:21:16

So that's perfect. And I always say to people,

0:21:160:21:18

if you know the market round here, you're certainly ahead of the game.

0:21:180:21:21

Although we've been away for a number of years,

0:21:210:21:24

I was born in Croydon, always lived more or less in the area,

0:21:240:21:27

-so we know it pretty well.

-Yeah.

-Yeah.

0:21:270:21:29

So, what's your plan for this house?

0:21:290:21:32

Good question. We're looking to completely refurbish the property -

0:21:320:21:36

new kitchen, new bathroom, new flooring,

0:21:360:21:39

new windows and just freshen the whole place up.

0:21:390:21:43

-And the exterior as well needs some love and care.

-Yeah, yeah.

0:21:430:21:46

Now, one of the first questions I need to ask you about that,

0:21:460:21:50

how you're going to add value to this property,

0:21:500:21:52

-would be the bathroom being downstairs.

-Mm-hm.

0:21:520:21:55

Is there any chance you might think about moving it upstairs?

0:21:550:21:58

And, of course, that does mean turning the stairs

0:21:580:22:00

and making some big alterations to the property.

0:22:000:22:03

We don't think so. We've noticed that,

0:22:030:22:05

particularly if you go out in the garden,

0:22:050:22:07

you can see that along the row of the houses,

0:22:070:22:08

most of the bathrooms are in the same position as this one

0:22:080:22:12

so it doesn't really make economical sense to move it upstairs

0:22:120:22:15

and start playing around with stairs, etc.

0:22:150:22:17

So we'll probably leave it where it is.

0:22:170:22:19

But we might have to take it down and rebuild it.

0:22:190:22:22

Now, you've got a train track, right at the end of your garden.

0:22:220:22:25

Is that going to put potential buyers off?

0:22:250:22:27

It's not too noisy, but you can definitely hear it.

0:22:270:22:31

We noticed, along this road in particular,

0:22:310:22:33

and on this side of the road,

0:22:330:22:35

that there's been quite a few houses sold.

0:22:350:22:37

So we don't think that that's a problem.

0:22:370:22:39

To me it just shows there's a train station nearby.

0:22:390:22:41

-Yes.

-Because it's a great commuter...

-I like the spin on it.

0:22:410:22:44

Yes, there might be a train track there,

0:22:440:22:46

-but it's because there's a station nearby!

-But you can get to work!

-Yeah, exactly.

0:22:460:22:50

Good work, Raff.

0:22:500:22:52

A positive spin goes a long way in this game.

0:22:520:22:54

And if everything goes to plan, the couple aim to sell on this property.

0:22:540:22:58

So it's £273,000 already committed to this project.

0:22:580:23:03

How much more do they plan to spend?

0:23:030:23:05

Well, erm...

0:23:070:23:09

Original budget was around 17,000-20,000.

0:23:090:23:16

Having re-inspected the bathroom space,

0:23:160:23:18

we probably need to do some more meaningful work there.

0:23:180:23:22

So I guess we're looking at a revised budget of around 25,000.

0:23:220:23:26

OK. And what's your timescale?

0:23:260:23:28

Probably four to five months, ideally,

0:23:280:23:32

depending on the builder we elect to work on the project

0:23:320:23:36

and their availability as well. But I guess four to five months.

0:23:360:23:39

Also, because it's winter, a lot of exterior work needs to be done

0:23:390:23:42

so we have to factor in the weather.

0:23:420:23:44

What do the kids think of Mum and Dad becoming property developers?

0:23:440:23:47

You know, once upon a time, stressed-out banker,

0:23:470:23:49

and now here you are, choosing wallpaper and paint.

0:23:490:23:52

Probably a lot more stressed out in a few weeks' time.

0:23:520:23:55

-I'm not sure...

-Yes!

0:23:550:23:56

It's definitely not an easier option, let me tell you that.

0:23:560:23:59

No, exactly. Yeah, they're curious to see what's going on.

0:23:590:24:02

We brought the eldest. She was visiting the other day.

0:24:020:24:04

We brought her to the house. She had all sorts of plans for it as well.

0:24:040:24:07

-So, yeah, they're curious.

-Yeah.

0:24:070:24:08

Guys, congratulations.

0:24:080:24:10

I'm really excited for you, good luck with the refurb.

0:24:100:24:12

-Can't wait to see it.

-Thank you very much.

0:24:120:24:14

-Thank you. Lovely to meet you both.

-Thank you.

-Thank you.

0:24:140:24:17

From Spain to the UK, and now it's time for Raff and Julie to embark on

0:24:180:24:22

their new property-developing career.

0:24:220:24:24

Now, it might not be such good weather here in South Croydon,

0:24:240:24:28

but will the sun be shining on their debut project?

0:24:280:24:31

Still to come, I've got some reservations about the additions

0:24:320:24:35

to this property in Birmingham.

0:24:350:24:37

I've seen some extensions,

0:24:370:24:39

and that's not one.

0:24:390:24:40

And back in Croydon, Julie has a familiar tale of woe.

0:24:420:24:47

We actually went over the budget.

0:24:470:24:49

Back now to the lovely hamlet of Holy Cross Green in Worcestershire,

0:24:550:24:59

where I looked around this charming two-bed cottage

0:24:590:25:03

that was guided at 110,000.

0:25:030:25:04

It may have been charming, but inside had its fair share of issues.

0:25:050:25:09

There were signs of damp, woodworm and no central heating.

0:25:140:25:18

But there was still plenty to like about this period property.

0:25:180:25:21

The first thing you notice is that.

0:25:220:25:25

Wow!

0:25:250:25:26

That is amazing.

0:25:260:25:28

What a feature that fireplace is.

0:25:280:25:30

Truly outstanding. Erm...

0:25:300:25:33

It sort of sets the scene, though, for a house that,

0:25:330:25:36

even at first glance, is a bit of a time warp, isn't it?

0:25:360:25:40

You know me, I do love an original feature or two,

0:25:410:25:44

but this place was in desperate need of updating.

0:25:440:25:46

But, come on, that fireplace!

0:25:500:25:53

No? OK...

0:25:530:25:54

And the lot had certainly lit a fire under the bidders on auction day.

0:25:540:25:59

Tim and Anna got it for 146,000, but...

0:26:010:26:04

Oh, yes, there it is, that "but" word again.

0:26:040:26:07

-I hadn't seen it, he had.

-Oh, right. OK.

0:26:110:26:13

-So how did that feel?

-A little bit of a shock.

0:26:150:26:17

I thought there was one fireplace, but there's two.

0:26:170:26:20

-I know. Well, that's a good shock, isn't it?

-Well, I want to take them down.

0:26:200:26:23

-What?!

-I want to get rid of the chimneybreast.

0:26:230:26:25

-No, you don't.

-You're looking at, really, five feet.

0:26:250:26:29

You're looking at a lot of space upstairs

0:26:290:26:31

and you get two double bedrooms.

0:26:310:26:33

# Rip it up and start again

0:26:330:26:36

# Rip it up and start again... #

0:26:370:26:42

It would be a big job to make this quirky cottage bigger,

0:26:420:26:45

but with a budget of £30,000 and a timescale of two to three months,

0:26:450:26:49

they hoped to be sorted and ready to rent

0:26:490:26:51

before their planned move to France.

0:26:510:26:53

Well, six months later,

0:26:550:26:56

the exterior of the cottage has been smartened up

0:26:560:26:59

with a new door and canopy. Looking good.

0:26:590:27:02

So, has the inside been knocked into shape?

0:27:020:27:05

Yes...but the lovely old fireplace has gone.

0:27:110:27:15

However, this room is now spacious and modern.

0:27:150:27:17

The cupboard in the corner of the living room

0:27:190:27:21

has now been knocked through to create an entrance into the kitchen

0:27:210:27:25

and what was dilapidated and damp is now...

0:27:250:27:29

..wow!

0:27:310:27:32

Removing the pantry has created more space

0:27:320:27:34

in this previously cramped kitchen,

0:27:340:27:36

and I love the stable door, which adds a nice bit of character.

0:27:360:27:39

The chimneybreast in the kitchen is still there, though.

0:27:410:27:44

So why did that escape Anna's demolition plans?

0:27:440:27:47

We kept the fireplace in the kitchen,

0:27:500:27:52

took the old metal bit out,

0:27:520:27:54

but left it there and put a wood beam in.

0:27:540:27:56

We had to maintain the chimney stack because of conservation, and that

0:27:560:28:00

caused us not to even consider removing the two chimneybreasts.

0:28:000:28:04

We just kept the one to hold up the chimney stack.

0:28:040:28:08

Well, I think they've got a nice mixture of modern and original here.

0:28:090:28:14

But has the removal of the chimneybreasts

0:28:140:28:16

opened up the bedrooms?

0:28:160:28:17

Well, that second bedroom is now much larger

0:28:230:28:25

and has direct access to the fresh and modern bathroom.

0:28:250:28:29

We wanted two double bedrooms, so we moved the bedroom out,

0:28:290:28:33

the second bedroom out, and Jack-and-Jilled the bathroom.

0:28:330:28:36

Jack-and-Jill arrangements allow two rooms to access

0:28:370:28:41

the same bathroom, and it's a great solution for small spaces.

0:28:410:28:44

On the other side of the Jack-and-Jill bathroom,

0:28:480:28:51

the very pink bedroom has had a makeover,

0:28:510:28:54

with a feature, exposed-brick wall.

0:28:540:28:57

But what about the less-charming aspects,

0:28:570:28:59

like the lack of damp course downstairs

0:28:590:29:01

and that pesky woodworm problem?

0:29:010:29:03

The floors in this house didn't have a damp-proof course,

0:29:050:29:08

it was just earth, it was carpet onto earth.

0:29:080:29:11

So they had to be dug out, a damp-proof course put in,

0:29:110:29:14

then a floating floor put in.

0:29:140:29:16

That was a huge amount of work, which we did know about.

0:29:160:29:19

What we didn't know about was the damp and also the woodworm,

0:29:190:29:24

which was pretty bad.

0:29:240:29:27

So we had a lot of joists had to be redone.

0:29:270:29:29

So, how has the additional work affected their £30,000 budget?

0:29:300:29:35

I think it's probably nearly £40,000,

0:29:370:29:40

but we still think we've got value for money,

0:29:400:29:43

we still think the builder's done a good job,

0:29:430:29:46

and we're not unhappy with the price.

0:29:460:29:48

And we think we've got a good result.

0:29:480:29:51

I think they have every right to be pleased,

0:29:510:29:53

and given the work undertaken,

0:29:530:29:55

it's not surprising they have overrun their original timescale,

0:29:550:29:59

taking six months instead of three.

0:29:590:30:01

So, with a total investment of £108,000,

0:30:040:30:07

has it all been worthwhile?

0:30:070:30:09

We asked two local estate agents for their opinions,

0:30:090:30:12

starting with the agent who saw it originally.

0:30:120:30:14

What I think works here is the overall feeling of space.

0:30:150:30:20

The fact that you walk through the door,

0:30:210:30:23

you're not encumbered by a staircase right in front of you.

0:30:230:30:27

They've made the best of the property's accommodation.

0:30:270:30:32

The Jack and Jill configuration works extremely well,

0:30:320:30:35

as does the exposed brickwork to the front master bedroom,

0:30:350:30:37

which retains that rustic cottage appeal.

0:30:370:30:40

From a sale and rental perspective,

0:30:400:30:41

I think we'll have a lot of interest once it's placed on the open market.

0:30:410:30:45

So, what kind of figures could this translate to?

0:30:460:30:48

Could they make a profit on their £186,000 investment?

0:30:480:30:52

If this property was coming on the open market for sale,

0:30:560:30:59

I would put a value of between £195,000-£215,000.

0:30:590:31:07

We'd recommend in offering this property at an asking price between

0:31:070:31:10

£215,000-£225,000.

0:31:100:31:13

Taking that top sales figure of 225,000,

0:31:130:31:17

Tim and Anna could make a potential profit of £39,000 before taxes and

0:31:170:31:22

fees are deducted, but what about the rental figures?

0:31:220:31:26

I believe we could achieve between

0:31:280:31:32

£850 per calendar month to £950 per calendar month.

0:31:320:31:37

We would suggest an asking rental of £825 per calendar month.

0:31:370:31:41

So a range of rental figures there,

0:31:410:31:43

but if Tim and Anna were to achieve the top figure of £950,

0:31:430:31:47

that would give them just over a 6% yield.

0:31:470:31:50

So what do they make of those figures?

0:31:500:31:52

I think it was probably what we expected,

0:31:550:31:57

because, at the end of the day,

0:31:570:31:59

we're not too worried about the value,

0:31:590:32:02

because we're going to let them.

0:32:020:32:04

So, is it still off to France for Tim and Anna?

0:32:040:32:07

We're moving absolutely everything we own, lock, stock and barrel

0:32:070:32:10

at the end of next week.

0:32:100:32:12

I'm driving 600 miles in a day, all my own,

0:32:120:32:14

with two cats in the back, squawking.

0:32:140:32:18

So, you can see, we're just taking a measured, gradual,

0:32:180:32:21

sensible approach to this.

0:32:210:32:22

Edgbaston is a popular suburb of central Birmingham

0:32:250:32:29

and is world-renowned, thanks to its famous cricket ground.

0:32:290:32:32

As well as county matches,

0:32:350:32:36

England's one-day internationals and Test matches are also played here.

0:32:360:32:40

And what a lovely day for cricket it is too.

0:32:430:32:45

Not only are we close to the cricket ground,

0:32:450:32:47

we're only two miles away from the centre of Birmingham.

0:32:470:32:51

And on this leafy street is where we find our property, and here it is.

0:32:510:32:55

It's a terraced house,

0:32:550:32:57

it's got four bedrooms and attic space

0:32:570:33:00

and a guide price of £50,000-plus.

0:33:000:33:03

But will I be bowled over?

0:33:030:33:05

Let's find out.

0:33:050:33:06

It's everywhere! There's woodchip wallpaper everywhere.

0:33:130:33:18

There's even textured wallpaper on the ceiling as well.

0:33:180:33:21

Not a massive fan, I've got to say.

0:33:210:33:23

We've got a positive down here, there is central heating.

0:33:230:33:26

A bit further down the hallway,

0:33:260:33:28

we've got the stairs going up to the bedrooms,

0:33:280:33:30

and then into the main part of the downstairs area,

0:33:300:33:33

you've got two good-size reception rooms, nice high ceilings.

0:33:330:33:39

There's a bit of skirting board missing on the back walls there.

0:33:400:33:43

Central heating as well.

0:33:430:33:45

So not too bad so far.

0:33:450:33:48

A bit further down the hallway,

0:33:480:33:50

we have got the kitchen,

0:33:500:33:51

and at the end of the kitchen, we've got the bathroom at the end.

0:33:510:33:55

Now, this part of the house isn't in good condition at all.

0:33:550:33:58

You would have to rip all of this out and start again.

0:33:580:34:03

And...

0:34:030:34:04

..polystyrene tiles, huge fire hazard.

0:34:070:34:10

They would definitely have to come down.

0:34:100:34:12

And outside, well...

0:34:120:34:15

What I thought was outside,

0:34:150:34:17

we've got a bit of a makeshift lean-to,

0:34:170:34:21

but I'll come back to that.

0:34:210:34:23

This part of the house, not very happy with.

0:34:230:34:25

That - not too bad.

0:34:250:34:27

There is plenty of work to do down here.

0:34:280:34:30

Having a bathroom downstairs is not usually desirable,

0:34:300:34:33

and the bathroom itself, it's not good.

0:34:330:34:36

You'd certainly want to move it upstairs,

0:34:360:34:39

but will that be an option?

0:34:390:34:40

So the auction catalogue describes this as a four-bed with attic room,

0:34:420:34:46

but you would be on a sticky wicket

0:34:460:34:48

if you were trying to describe this as a bedroom,

0:34:480:34:52

because there's a few telltale signs that say it was a bathroom.

0:34:520:34:57

Also, the auction catalogue suggested

0:34:570:34:59

this could be converted into a HMO, that would be the route I'd take,

0:34:590:35:04

however there's lots of rules and regulations before you do that -

0:35:040:35:08

planning permission, safety regulations and change of use, but,

0:35:080:35:13

if you want a good return on your money,

0:35:130:35:16

that's definitely the route I would take.

0:35:160:35:18

# That's the thing to do

0:35:180:35:21

# That's the thing to do... #

0:35:230:35:27

A HMO, regular viewers will know,

0:35:270:35:29

stands for house of multiple occupancy,

0:35:290:35:32

and this property is certainly a candidate.

0:35:320:35:35

There's three other decent rooms on this floor,

0:35:350:35:38

plus you've got stairs leading up to an attic room.

0:35:380:35:41

It's in a very poor state, including a nasty bit of damp,

0:35:410:35:45

but once that's fixed up, it could be ideal.

0:35:450:35:48

So that's five bedrooms up here,

0:35:500:35:51

and perhaps you could even convert one or both

0:35:510:35:54

of the reception rooms downstairs into bedrooms.

0:35:540:35:58

The potential yield here could be very good indeed.

0:35:580:36:01

So, I just wanted to pop out the back,

0:36:040:36:06

just to see what we've got in the garden.

0:36:060:36:08

And it's not a bad size.

0:36:080:36:10

It has been left for quite a bit of time, we've got weeds everywhere,

0:36:100:36:15

but it wouldn't take much to get this back to its best.

0:36:150:36:18

You know, a bit of elbow grease, a new fence on both sides,

0:36:180:36:22

just tidy things up out the back.

0:36:220:36:23

You've got a bit of a patio area as well, and on days like today,

0:36:230:36:28

it's a bit of a suntrap.

0:36:280:36:30

I also wanted to look back if I could see where that damp or water

0:36:300:36:35

was coming in that was in the loft.

0:36:350:36:37

There was a bit of a damp area up in the loft.

0:36:370:36:40

I can see there's a little bit of concrete

0:36:400:36:43

just loose on the tiles there,

0:36:430:36:44

so however that water's getting in, get that sorted as soon as possible.

0:36:440:36:48

Now, I've seen some extensions,

0:36:490:36:53

and that's not one.

0:36:530:36:54

That's a lean-to that has just been thrown up, doesn't look very nice,

0:36:540:36:58

and I don't think it does a very good job either.

0:36:580:37:01

So, for me, I'd want to get rid of that.

0:37:010:37:04

Just basically tidy up out the back area

0:37:040:37:07

and I think you'd have a decent back garden.

0:37:070:37:10

There is plenty of work needed here, inside and out,

0:37:100:37:15

but if you get it for anywhere near the guide price of £50,000-plus,

0:37:150:37:19

it could be a great investment.

0:37:190:37:21

We've asked along a local estate agent for his opinion.

0:37:210:37:24

You could certainly turn this into a seven-bedroom letting property.

0:37:260:37:29

To turn this into a seven-bedroom HMO unit,

0:37:290:37:33

you would need to put a new bathroom in it.

0:37:330:37:35

Again, new kitchen, new decorations.

0:37:350:37:37

You'd need to put fire doors in, emergency lighting, smoke alarms.

0:37:370:37:42

You'd probably spend more like £25,000-30,000.

0:37:420:37:46

Well, this is a big outlay

0:37:460:37:47

and there's lots of red tape to contend with,

0:37:470:37:50

so will it be worth it?

0:37:500:37:51

What kind of rental could you expect for a seven-bed HMO?

0:37:510:37:55

A seven-bedroom HMO property

0:37:560:37:58

could generate somewhere in the region of £2,000 per month.

0:37:580:38:01

£2,000 a month is a good income,

0:38:040:38:07

especially if you were to get that property

0:38:070:38:09

for anything near the guide price of £50,000.

0:38:090:38:13

Based on that, and the estate agent's renovation estimate,

0:38:130:38:16

you could be talking about a massive 28% yield,

0:38:160:38:21

but it all hinges on what happens at the auction.

0:38:210:38:24

To turn this into a normal four-bedroom property,

0:38:250:38:27

there would be good demand both for sale and to let,

0:38:270:38:31

but I do think converted into an HMO,

0:38:310:38:33

there would be much stronger demand.

0:38:330:38:35

So, this sounds like a great investment opportunity,

0:38:370:38:40

and was very popular on auction day.

0:38:400:38:43

But unfortunately our cameras missed the action for this particular lot.

0:38:430:38:47

However, I can tell you the £50,000-plus

0:38:470:38:50

guide price was exceeded, and then some,

0:38:500:38:53

with the hammer going down at £155,000.

0:38:530:38:58

The property was bought by childhood friends

0:39:000:39:02

and business partners Jonathan, here on the right, and Harpreet.

0:39:020:39:06

Interestingly, Jonathan appeared on this show way back in 2006,

0:39:080:39:12

not as a buyer, but as an estate agent.

0:39:120:39:14

He now works in finance, but has been part of this

0:39:160:39:19

property-developing team with Harpreet for some time now.

0:39:190:39:23

Until recently, they'd been focusing on London,

0:39:230:39:26

which is where they're from.

0:39:260:39:27

This is their first venture into the Birmingham market.

0:39:270:39:30

-Jonathan, nice to meet you.

-Very nice to meet you.

0:39:300:39:32

-Harpreet, nice to meet you too.

-Nice to meet you too.

0:39:320:39:34

-Congratulations, chaps.

-Thank you.

0:39:340:39:36

Who found this house, then?

0:39:360:39:38

It's a combination of both of us, wasn't it?

0:39:380:39:40

We were looking through the catalogue,

0:39:400:39:42

and we sort of narrowed it down to about three or four...?

0:39:420:39:44

Three or four properties, yeah.

0:39:440:39:46

In the end, this is the one we had the best gut feeling about,

0:39:460:39:49

and then we just kind of went all the way on it.

0:39:490:39:51

It looked like a good choice.

0:39:510:39:52

I mean, we didn't actually see it inside,

0:39:520:39:54

we just kind of came up on a Saturday, saw it from outside,

0:39:540:39:57

got a good feeling about the area,

0:39:570:39:59

had a word with one of the neighbours

0:39:590:40:01

and saw a couple after this and just happened to get lucky

0:40:010:40:04

with this one at the auction.

0:40:040:40:05

What is it about this property that made you think,

0:40:050:40:08

"We can make money from it"?

0:40:080:40:09

Because that's basically what you need to do.

0:40:090:40:11

I think it was in the catalogue, it said seven bedrooms.

0:40:110:40:15

-Seven bedrooms, yeah.

-What we've seen is that some...

0:40:150:40:18

We know the price we paid for as a stand-alone house wasn't going to be

0:40:180:40:21

anything special, but I think what we saw in the auction room

0:40:210:40:24

was a lot of people competing for it,

0:40:240:40:26

because obviously the yield's fantastic.

0:40:260:40:28

If you compare it to London,

0:40:280:40:30

if we were to do the work, we worked out it will be 15-16% return.

0:40:300:40:34

-OK.

-Whereas in London, 5-6% is hard to do.

-It's good, yeah.

0:40:340:40:39

Now, you went slightly over the guide price.

0:40:390:40:43

-When I say slightly, you went a lot over the guide price.

-Yeah.

0:40:430:40:46

Why was that and why did you stick it out and pay

0:40:460:40:49

what I consider to be quite a lot of money?

0:40:490:40:52

I don't think the guide prices were realistic for any of the lots.

0:40:520:40:55

-OK.

-I don't think anything went for the guide price.

0:40:550:40:57

Most things were going three times the guide price, from what we could see.

0:40:570:41:00

-That's funny, because you two paid three times.

-Yeah, we did.

0:41:000:41:05

We had a figure in our head for about 145, didn't we?

0:41:050:41:08

We were always going to go a little bit up that.

0:41:080:41:11

The thing is, coming to Birmingham is a learning curve for us,

0:41:110:41:13

so if we've made something, fine, if we haven't,

0:41:130:41:17

obviously the return is great, so, you know,

0:41:170:41:18

you've got get out of jail free cards with property, it seems.

0:41:180:41:22

# Don't count your chickens before they hatch... #

0:41:220:41:27

These two are confident lads,

0:41:270:41:28

but they didn't view the property before buying and, of course,

0:41:280:41:31

it went for three times over the guide price.

0:41:310:41:34

Alarm bells are ringing for me already.

0:41:340:41:37

Hopefully their plans for the property will ease my fears.

0:41:370:41:41

Tell us what you're going to do with it.

0:41:410:41:43

We're going to turn it into a six-bedroom HMO.

0:41:430:41:46

It's already laid out as it is.

0:41:460:41:48

The reception behind us is going to be opened out into a communal area,

0:41:480:41:52

and we're going to replace the kitchen and bathroom, rewire,

0:41:520:41:56

new radiators, do everything to whatever the regulations stipulate

0:41:560:41:59

and see what we can get for it, in terms of on the open market,

0:41:590:42:04

see what someone will pay for it.

0:42:040:42:05

If we get that, great, if we get what we're looking for, great,

0:42:050:42:08

if we don't, then obviously we'll just rent it.

0:42:080:42:10

How much is that going to cost you, what's your budget?

0:42:100:42:12

-I think we've said, what, around 15,000?

-Yeah, about 15, yeah.

0:42:130:42:17

To get everything you'd want done in this house,

0:42:170:42:20

-finished, ready to go?

-We've got it priced up, yeah.

0:42:200:42:23

So I know it sounds cheap to a lot of people,

0:42:230:42:25

but we've done so many before with the same guys,

0:42:250:42:28

they do look after us.

0:42:280:42:29

-How long's it going to take, what's your timescale on this turnaround?

-Four weeks.

0:42:290:42:33

Four weeks? Is that cracking on, cracking on?

0:42:330:42:36

There's going to be three or four guys in here.

0:42:360:42:38

What we find is you can either drag it out and it takes longer,

0:42:380:42:42

but if you get it done sooner,

0:42:420:42:44

you can move onto the next project quicker.

0:42:440:42:46

So it's what you pay a bit extra for now,

0:42:460:42:48

you kind of make up because you can do more in the same amount of time.

0:42:480:42:51

How are you going to make the difference,

0:42:510:42:53

are you guys going to get your hands dirty and get stuck in,

0:42:530:42:55

-or have you got other people working for you?

-No chance!

0:42:550:42:58

You wouldn't want to dirty that shirt.

0:42:580:42:59

-I had to bring the shirt up, by the way.

-Yeah, nice one.

0:42:590:43:02

We've got our guys ready to do it,

0:43:020:43:05

so they're going to start literally after today.

0:43:050:43:08

They've got the skip booked.

0:43:080:43:09

It's going to be strip out, probably three or four days strip out,

0:43:090:43:12

then it's probably... The main thing's the electrics,

0:43:120:43:14

the electrician and the wiring,

0:43:140:43:17

but I can't see it being more than three or four weeks.

0:43:170:43:19

-Back to you soon, I think.

-Brilliant.

0:43:190:43:21

-Thank you very much.

-Good luck, good luck.

-Thanks, mate.

-Good luck.

-Cheers.

0:43:210:43:24

OK, they didn't view the property

0:43:260:43:28

and they paid three times over the guide price.

0:43:280:43:31

However, if they do make this into a HMO,

0:43:310:43:34

I think they could salvage what could have been a bad situation.

0:43:340:43:38

15 grand budget?

0:43:380:43:40

I'm not sure about that. They might have to double that,

0:43:400:43:43

but you can find out how they get on later in the programme.

0:43:430:43:46

I'd always advise taking the careful approach

0:43:500:43:52

-when it comes to getting into property.

-That's true, Dion,

0:43:520:43:55

but you sometimes you need to be a bit brave,

0:43:550:43:57

because people can suffer from being too cautious.

0:43:570:44:01

It's about making the right decisions at the right time.

0:44:010:44:05

So, how did our purchasers get on?

0:44:050:44:07

Time to head back to South Croydon now.

0:44:110:44:14

It was in this trendy hotspot

0:44:160:44:18

that Lucy first had a look around this two-bed mid-terrace

0:44:180:44:22

that had a guide price of £230,000 plus.

0:44:220:44:25

Inside, the property was in pretty good shape,

0:44:270:44:29

but in the overgrown back garden,

0:44:290:44:31

the first potential problem signalled its arrival.

0:44:310:44:34

That's the railway line.

0:44:350:44:37

It's good, though. The train station's close by,

0:44:370:44:39

which means you can walk there in less than ten minutes.

0:44:390:44:42

But these trains rattling past regularly, well,

0:44:420:44:45

I don't think it's going to be the most peaceful garden to relax in, do you?

0:44:450:44:50

# Runaway train, never going back... #

0:44:500:44:54

Unless you're an avid trainspotter, this could be a negative.

0:44:540:44:57

But, of course, lots of people live near railway lines

0:44:570:45:00

and get used to the noise.

0:45:000:45:02

Another negative was the downstairs bathroom,

0:45:020:45:05

one of Lucy's pet peeves.

0:45:050:45:07

However, unless you were flush with cash,

0:45:070:45:09

moving it wasn't really a viable option.

0:45:090:45:12

The buyers weren't going to miss the train on this one, though,

0:45:140:45:17

and the auction day was busy, with the property selling for 273,000.

0:45:170:45:23

Sold, 273.

0:45:230:45:25

The successful bidders were married couple

0:45:280:45:31

and first-time property renovators Raff and Julie.

0:45:310:45:34

Having spent the past few years living in Spain,

0:45:340:45:37

they recently moved back to the UK with their two daughters

0:45:370:45:40

and they hoped this property investment

0:45:400:45:42

would be the first of many.

0:45:420:45:44

But before that, they had to sort out the here and now.

0:45:440:45:47

So, what's your plan for this house?

0:45:490:45:51

Good question. We're looking to completely refurbish the property.

0:45:510:45:56

New kitchen, new bathroom, new flooring, new windows,

0:45:560:46:01

and just freshen the whole place up.

0:46:010:46:02

-And the exterior as well needs some love and care.

-Yeah, yeah.

-Yeah.

0:46:020:46:06

They planned to get in tradespeople to do the work

0:46:060:46:08

and wanted to sell it on once completed.

0:46:080:46:11

They hoped this would not take more than four to five months,

0:46:110:46:14

and under a budget of 25,000.

0:46:140:46:17

Here we are, nearly nine months later,

0:46:180:46:20

and the outside is looking much better

0:46:200:46:23

with new render and a lovely paint job.

0:46:230:46:25

Let's hope the good work continues inside.

0:46:250:46:28

My goodness, what a change to the back of the property.

0:46:380:46:42

The new floors in the rear reception are beautifully finished

0:46:420:46:45

and the neutral decoration is ideal for sales and rental markets.

0:46:450:46:50

As for the kitchen, perhaps Julie can explain

0:46:500:46:53

exactly what they've done.

0:46:530:46:54

We completely refurbed the kitchen.

0:46:570:47:00

We took down the suspended ceiling that we had

0:47:000:47:02

and it really opened it up and made it a lot more bright and airy.

0:47:020:47:06

The bathroom extension is completely new.

0:47:060:47:10

We did a new layout and just retiled everything,

0:47:100:47:12

replastered everything.

0:47:120:47:14

And, yeah, took the door off here, which opened the whole area out

0:47:140:47:18

and made it a lot more spacious and airy.

0:47:180:47:20

It may still be downstairs, but they've really made the most of it,

0:47:240:47:27

creating a lovely bright and fresh bathroom.

0:47:270:47:30

Moving into the front reception room, it's also been refloored,

0:47:350:47:38

replastered and redecorated to a high spec.

0:47:380:47:41

The window's been replaced, as they all have throughout the property.

0:47:410:47:45

Upstairs, the two bedrooms are looking much more appealing,

0:47:480:47:51

again, with a lovely finish.

0:47:510:47:53

Outside, the trains might still be rumbling by, but the garden has been

0:47:560:48:00

given a really good tidy-up and they have had the back of the house

0:48:000:48:04

re-rendered and repainted to match the front.

0:48:040:48:07

Overall, this house is as good as new

0:48:080:48:10

and it's a triumph for their first renovation project.

0:48:100:48:13

The works that we carried out on the property

0:48:150:48:17

were basically from top to bottom.

0:48:170:48:20

So, everything was completely redone -

0:48:200:48:22

plastering, new flooring, new radiators,

0:48:220:48:25

new boiler, kitchen, bathroom, even to the outside,

0:48:250:48:28

where we did the complete re-render of the front of the house.

0:48:280:48:32

At the rear, the garden before was a bit of a jungle,

0:48:320:48:35

and that's been tidied up and new paving stones,

0:48:350:48:39

some new lawn's been laid and some new gravel, a patio space,

0:48:390:48:42

and a little bit of fencing, just to tidy up the whole garden.

0:48:420:48:45

We've also taken down what was a pretty meaty tree

0:48:450:48:48

that was blocking off a lot of sunlight.

0:48:480:48:50

It's a big improvement but there have been numerous

0:48:500:48:54

unforeseen setbacks, including a change of builders doing the work.

0:48:540:48:58

Their original budget was 25,000, so how is it looking now?

0:48:580:49:02

We actually went over the budget and went up to 40,000.

0:49:040:49:07

The delays meant that their timescale changed

0:49:070:49:10

from four to five months to almost nine.

0:49:100:49:13

But despite things not being straightforward,

0:49:130:49:15

I think they now have a smashing house.

0:49:150:49:17

In total then, Raff and Julie have invested £313,000

0:49:190:49:23

on their first project, and with them keen to sell,

0:49:230:49:27

it seems an opportune time to hear the thoughts

0:49:270:49:30

of two local estate agents.

0:49:300:49:32

This property looks absolutely fantastic.

0:49:340:49:36

I remember seeing it the first time round

0:49:360:49:38

and definitely there's massive changes here. It's a really modern,

0:49:380:49:42

really bright and I think it's exactly what a buyer would want.

0:49:420:49:45

They've done really well. They will sell, hopefully,

0:49:450:49:47

to City workers, and they do expect a high-spec finish.

0:49:470:49:51

So the wood flooring, the decor's neutral

0:49:510:49:52

and the bathroom and kitchen are all good facilities.

0:49:520:49:56

The main selling points of this property

0:49:560:49:58

are definitely the kitchen

0:49:580:49:59

and also the garden looks really, really lovely.

0:49:590:50:01

Very nice rooms, great decoration.

0:50:010:50:04

The agents are impressed with the work here,

0:50:040:50:06

but will that translate into profit?

0:50:060:50:08

Let's hear the rental first.

0:50:080:50:10

I would value this property at £1,250 per calendar month.

0:50:100:50:14

This property for rental would achieve approximately

0:50:140:50:17

£1,350 per calendar month.

0:50:170:50:18

If we make an average of £1,300 per calendar month,

0:50:180:50:21

that would mean a yield of just under 5%.

0:50:210:50:25

But it's the sales market Raff and Julie are most interested in.

0:50:250:50:28

I would value this property at £360,000.

0:50:300:50:33

On the sales market, this property would achieve

0:50:330:50:36

approximately £370,000.

0:50:360:50:38

I think they're pretty much in the range of what we thought.

0:50:380:50:42

We didn't expect much higher than that, and, to be honest,

0:50:420:50:44

we didn't expect to go much lower than that,

0:50:440:50:46

so, yeah, pretty much what we thought.

0:50:460:50:48

Yeah, I think that sounds pretty realistic.

0:50:480:50:50

That top valuation would mean a pre-tax profit of 57,000,

0:50:500:50:54

which is pretty good if you ask me.

0:50:540:50:57

But would Raff and Julie be happy to work again together?

0:50:570:51:00

Definitely. Well, I would, anyway.

0:51:020:51:04

I had fun. Great learning experience,

0:51:040:51:07

high learning curve, but definitely work together again.

0:51:070:51:11

Yeah, it can be stressful at times,

0:51:110:51:12

but I think that was due to external factors

0:51:120:51:14

as opposed to working together.

0:51:140:51:15

So, yeah, it will be something that we'll look to do again.

0:51:150:51:18

Back now to Edgbaston,

0:51:220:51:24

a suburb of central Birmingham, not far from the famous cricket ground.

0:51:240:51:28

It was here I saw this four-bed terrace house

0:51:280:51:31

that had a useful-looking attic space.

0:51:310:51:35

Inside, it fell foul of some dated choices

0:51:350:51:38

and I was left stumped by the strange lean-to in the garden.

0:51:380:51:42

But the sheer size of the place had me wondering about

0:51:420:51:45

the rental possibilities.

0:51:450:51:46

The auction catalogue suggested this could be converted into a HMO.

0:51:460:51:51

That would be a route I would take.

0:51:510:51:53

However, there's lots of rules and regulations before you do that -

0:51:530:51:57

planning permission, safety regulations and change of use.

0:51:570:52:02

But if you want a good return on your money,

0:52:020:52:05

that's definitely the route I would take.

0:52:050:52:08

It might take more pen pushing and elbow grease

0:52:080:52:11

to get this property up to its full potential,

0:52:110:52:14

but it was friends and business partners Jonathan and Harpreet

0:52:140:52:18

that were up for the challenge.

0:52:180:52:19

They paid £155,000, which was three times over the guide price.

0:52:190:52:25

But they had plans afoot to recoup that cost.

0:52:250:52:28

We're going to turn it into a six-bedroom HMO.

0:52:290:52:32

It's already laid out as it is.

0:52:320:52:34

The reception behind us is going to be opened out

0:52:340:52:37

into a communal area and we're going to sort of replace

0:52:370:52:40

the kitchen and bathroom, rewire, new radiators,

0:52:400:52:43

do everything to whatever the regulations stipulate.

0:52:430:52:47

The boys have an optimistic budget of 15 grand

0:52:470:52:50

and an even more optimistic timescale of four weeks.

0:52:500:52:53

We're back three months later to find out if it's more OMG than HMO.

0:52:550:53:00

Let's have a look.

0:53:000:53:01

Well, the place is looking bright and fresh.

0:53:040:53:07

That front reception room has been revived with fresh, white walls

0:53:070:53:11

and neutral carpet.

0:53:110:53:13

It's now a generously sized double bedroom.

0:53:130:53:16

The second reception room is now a brilliant communal living space,

0:53:170:53:20

which is looking A-OK thanks to some skirtings and a cracking wood floor.

0:53:200:53:25

And I'm green with envy over the sparkling kitchen

0:53:270:53:31

with snazzy tiles and splashback.

0:53:310:53:34

Time for Jonathan to explain how he did it.

0:53:340:53:37

So, as you can see, compared to before,

0:53:370:53:39

obviously, it was a right state,

0:53:390:53:40

so we've literally stripped everything out.

0:53:400:53:43

We've gone for a neutral finish,

0:53:430:53:45

a little bit of colour with the tiles,

0:53:450:53:47

but everything has been changed.

0:53:470:53:49

So we've had the units changed,

0:53:490:53:51

the boiler has been changed as well,

0:53:510:53:53

everything's been squared off and boxed in.

0:53:530:53:56

We've had a dishwasher added and,

0:53:560:53:57

instead of having a bathroom downstairs,

0:53:570:54:00

we've added a utility area with a washer and dryer.

0:54:000:54:03

By HMO regulations, that downstairs bathroom is now classed as a WC

0:54:070:54:12

as the bath has been removed.

0:54:120:54:14

But the utility room will come in handy when the tenants move in.

0:54:160:54:19

The renovation continues upstairs,

0:54:230:54:25

where there's now three spacious bedrooms,

0:54:250:54:28

all decorated with a tasteful, monochrome colour palette.

0:54:280:54:31

The loft is now looking a lot less damp and a lot more bedroom.

0:54:360:54:41

We've got five double bedrooms spread over three floors.

0:54:430:54:46

What we did with the rear bedroom,

0:54:460:54:48

we effectively lost it and turned it into two bathrooms.

0:54:480:54:51

And I think having more in the way of bathrooms

0:54:510:54:53

will increase its desirability.

0:54:530:54:55

HMO guidelines state that for six or more occupants

0:54:560:54:59

you have to have two bath or shower rooms.

0:54:590:55:03

Jonathan and Harpreet have opted for two shower rooms and three toilets.

0:55:030:55:07

If they wanted that sixth bedroom,

0:55:080:55:10

they would have had to convert the cellar, which seemed a step too far.

0:55:100:55:14

So, we looked at the guidelines, spoke to the council as well.

0:55:180:55:22

So, effectively there were only a few things they were looking for.

0:55:220:55:24

There were sort of like minimum standards with regards to size of

0:55:240:55:27

the shower room, sinks and things like that.

0:55:270:55:29

Obviously, fire doors had to be in place and, you know,

0:55:290:55:32

a fire alarm system.

0:55:320:55:34

So we just effectively looked at the guidelines, you know,

0:55:340:55:37

bought everything to spec, and have done it accordingly.

0:55:370:55:40

So we're just waiting for the licence to come through.

0:55:400:55:42

The HMO guidelines can be tricky,

0:55:440:55:45

but it's important to stick by the book because licences can,

0:55:450:55:49

and often have been, refused.

0:55:490:55:51

But how did it affect the budget?

0:55:510:55:53

We've spent about sort of 21, maybe 22-ish,

0:55:550:55:59

and the only reason being we spent...we had the plastering done.

0:55:590:56:02

I think with the fire alarm system,

0:56:020:56:04

we hadn't budgeted for the full, you know, zoned alarm system.

0:56:040:56:07

But, obviously, that wasn't too much more.

0:56:070:56:09

But, yeah, I think probably five or six grand overspend,

0:56:090:56:12

which isn't the end of the world.

0:56:120:56:14

It's not the end of the world, but it's the end of that dodgy lean-to.

0:56:140:56:18

So let's see if they'll have a lean return

0:56:180:56:20

or they'll make a meaty profit?

0:56:200:56:22

We've asked two local estate agents for their opinions on this property.

0:56:320:56:35

First impressions is condition.

0:56:370:56:40

It's done really well. It's done to a good standard.

0:56:400:56:43

And the main thing is, people can move straight in.

0:56:430:56:46

There's nothing they need to do.

0:56:460:56:48

The standard of finish is right for the area and for this property,

0:56:480:56:50

because the high turnover of tenant you're going to have in here,

0:56:500:56:53

you need to just have something nice and simple you can quickly replace if anything's damaged.

0:56:530:56:57

Maintenance and repair costs always have to be taken into consideration

0:56:570:57:02

with any rental property.

0:57:020:57:04

Wear and tear, as well as mishaps, do occur.

0:57:040:57:07

And while we're on the subject of money,

0:57:070:57:09

what if Jonathan and Harpreet decided to sell this renovated HMO

0:57:090:57:13

as a whole? How would their £177,000 investment fare?

0:57:130:57:17

On the sales market, I would put a price on here

0:57:210:57:24

of anywhere between £180,000-190,000.

0:57:240:57:29

On the sales market,

0:57:290:57:30

this property would achieve around £200,000-220,000.

0:57:300:57:34

That top estimate of £220,000 could give the guys

0:57:340:57:38

a pre-tax profit of 43 grand.

0:57:380:57:41

A top rental value of £400 per month per room

0:57:410:57:44

would mean a yield of 13.5%,

0:57:440:57:48

or an income of £2,000 per month.

0:57:480:57:51

2,000's more than what we expected.

0:57:540:57:56

We've got someone interested at 1,700,

0:57:560:57:58

so, obviously, if we can get more, it's a good result.

0:57:580:58:00

The people we've got interested are considering a five-year lease so,

0:58:000:58:04

yeah, that gives us a bit of security of tenure

0:58:040:58:06

for the interim period and, hopefully, if we decide to offload,

0:58:060:58:09

it's quite attractive for the onward purchaser.

0:58:090:58:12

We do love to hear about your renovation stories.

0:58:150:58:17

Sometimes they can be inspiring.

0:58:170:58:19

I agree, Dion. It's such a privilege to hear about your journeys.

0:58:190:58:23

Well, it may be the end of the show, but it's not the end of the journey.

0:58:230:58:26

Make sure you join us next time for more Homes Under The Hammer.

0:58:260:58:30

-Goodbye.

-Bye-bye.

-Goodbye.

0:58:300:58:31

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