Episode 62 Homes Under the Hammer

Hello, and welcome to the show.

The housing stock across the UK has such variety,

from Victorian villas to brand-new bungalows.

Yet the trouble is, there's so much to choose from.

I mean, that is the problem, where do you start?

Well, whatever you're looking for,

you could find it waiting for you under the hammer.

Bidding at auction is quite nerve-racking,

but I've got to admit, I absolutely love it.

Oh, me too, it's really exciting.

But you do need to keep a cool head and not get too carried away.

Yes. Did that happen to any of the buyers on today's show?

Let's find out.

This grand four-bedroom terraced house

in London proves a firm favourite.

SHE GASPS

It's taken my breath away a bit. I just love houses like this.

And without planning permission,

I weigh up the odds for this plot in north Birmingham.

Probability of you getting that planning permission,

I'd say...eight out of ten.

And will the buyer of this three-bed in Newcastle-under-Lyme

end up losing out?

They both said the best you're going to be able to get out of it is 110.

-Yeah.

-I'm going to be at a loss at that point.

All these properties have been sold at auction,

and we'll find out who bought them

and what they paid when they went under the hammer.

You've bought it, madam, well done.

Lucy's auction lot this time is in Eltham,

a suburb in the south-east of London.

It's located between Bromley and Catford,

and not far from the bustling town centre

and mainline train station and bus stations,

you find tree-lined roads with good-sized family properties.

Well, this is a lovely residential street with lots of

grand Edwardian houses. So far, I really am impressed,

but will that continue?

Well, the property I am here to see is a four-bedroom end of terrace,

and it had a guide price of £420,000.

And it's this.

Little bit eerie from the outside, but lovely.

But before I head inside, the first thing I've noticed -

no off-street parking,

so that is something you can think about doing before you even walk

through the front door.

And there's certainly room to create parking

for at least one car,

though it would be nice to keep some of that front garden space.

Not too spooky on the inside.

In fact, it's absolutely fantastic!

I would love to get my hands on a house like this!

Ooh! It's everything I love, a big double-fronted Edwardian house,

you've got a reception room either side, lovely traditional panelling.

Everywhere I'm looking I can see cornicing, lovely ceiling height,

just fantastic. So this is another reception room.

Usually with a double-fronted house, if they're wide,

they're not usually deep,

but I'm glad to see that this one

has rooms that go right the way back.

Very spacious, and the big fireplace, well, an almighty crack.

I'd probably get somebody structural to have a look at that.

Hopefully, that's just because this house has stood for a period of time

and nothing to worry about, but I'd get that double-checked anyway.

But a great space here,

beautiful French doors that lead out to the garden.

SHE GASPS

It's taken my breath away a bit.

I just love houses like this. Brilliant!

Usually about now I would make a joke

about Lucy's rose-tinted glasses,

but not in this case.

OK, there is a lot of work to do, but what a project.

It's just a bit like walking into a film set, this house,

but I am loving it.

The doors are all lovely and chunky,

you've got beautiful sash windows everywhere, and out there, well,

the garden is fantastic, it even goes beyond where the eye can see.

I know just behind those bushes you've got a bit more space.

And because of this L-shape,

I just don't think the kitchen's big enough,

so you could easily extend out there

and even right the way across

to make this a really good family-sized kitchen.

But, my, it's incredible to look at a space like this.

And down here you've got an old oil-fired sort of burner/stove -

absolutely amazing.

But something the new owner WILL have to take into account,

they're going to going to have to save their pennies,

because I think you might need a new boiler. Have a look.

Blimey, that is a bit of a museum piece as well.

As much I love original features, these might be past it.

But there are some worth saving.

Otherwise, this is a back-to-brick renovation.

But what a shell to work with.

There is even a downstairs cellar, where most, in fact, cellars are.

While upstairs, on the half-landing, is the bathroom.

And then there are four bedrooms, all good sizes,

but all showing signs of damp and decay.

But underneath all of this you can definitely see that this was once

a grand and very special house.

Now, I've been speaking to some of the neighbours,

and apparently the properties along this road are Corbett houses,

which means they were designed by architect Archibald Cameron Corbett.

Now, Archibald, he wanted to promote

healthy living and thriving communities,

hence plenty of local facilities, large front and back gardens,

and apparently he even insisted on an embargo on alcohol at the time.

Luckily, that last point no longer applies, thankfully,

but these gorgeous houses are part of his legacy.

Well, most of them are anyway,

and the one we're looking at hopefully will be too,

once the renovation works are complete.

MUSIC: You're A Wonderful One by Marvin Gaye

And in fact, this Corbett house was built around the 1900s

and is thought to be one of the first built on the road.

Which means it's the oldest building, but also the largest.

It was originally sold for £800,

which was a lot of money in those days!

What does a local estate agent make

of this grand old and unique four-bedroom property?

Properties like this are very unusual to come up nowadays

within London boroughs, only because people have bought them

and converted them so much into flats,

so to see something like this is absolutely amazing

and I love it. I love the fact that hopefully someone will buy it as

a house and live in it, that would be the best thing for the house.

Yes, relatively large untouched houses

like this in London are becoming rare beasts.

But if keeping it as a house is the best thing to do,

how would it be best to enhance it for modern living?

The house has got a very good-sized garden and it's quite a wide plot,

and the way the layout is at the back, the footprint,

you could extend quite easily right across the back,

extending the kitchen.

The off-street parking option, I think, should be done.

Most of the houses down here have it,

and there is sort of permit parking on the road as well,

so, if it was me, I would definitely put off-street parking in.

This house was guided at 420,000, but it's going to take -

at the very least - 100,000 to get it up to standard,

so could this one be worth investing in?

If it was to be renovated,

have the extension put on the back for a larger kitchen/dining area,

giving more foot space to the ground floor level and off-street parking

was put in, I'd place the value at £700,000.

And the agent reckoned that if this property found its way

into the rental market, a monthly rent of £1,600 per month

might be possible.

Yep, you get a whole lot of property with this end-of-terrace house,

and I love it.

But you also get a whole lot of work, too.

But once it's brought back to its former glory...

I think this could make a gorgeous home for someone.

I just hope whoever bought this has plenty of renovation experience

under their belt. Let's find out who that buyer was

when we went to auction.

Lot 40, end-of-terrace double-fronted house.

Who would like to kick off on this,

nice, big double-fronted house, Eltham?

How much, 480? 480 down here, 480.

485. 500?

That's what I'd do, 500.

505? 510. 510 with you, madam?

515. 520.

Well, after a tentative start, things really hotted up,

and we rejoin the bidding at 595,000.

595, 596, 597.

598? 598.

599? Nearly. 600.

601? 602?

601 first time, second time, third and last time...

Sold, 601.

So, for a whacking £181,000 above the guide price,

and for £601,000,

the grand old Eltham house was sold to Damon and his wife Penny.

Damon is a paramedic leader,

while Penny works in the retail sector as a senior merchandiser,

and they have two children, Joshua and Ella.

I'm delighted to say the house is going to be their new family home.

Lucy caught up with Penny to tell us more.

-Penny, it's lovely to meet you today.

-You too, Lucy.

I love this house! Full of character.

Is it the character that inspired you to want to buy this?

Totally, really, yes.

It's a beautiful period property and there's so much potential.

I've lived in Eltham for about 18 years,

and I've always wanted to live in this road,

and I walk past it quite frequently when I take my children

to and from school. And, yeah,

I'm really excited to have the opportunity to live here.

So what happened, did you see the auction sign go up, did you think,

-"I'd love to live there!"

-Yes. Actually, the next-door neighbour

came round to tell me, cos we'd walked by it

and I'd wondered for a while

what was going to happen to this house and thought,

"Oh, wouldn't it be great if we could live there?"

And he actually came round and said, "It's going up for auction."

It's a bit like, "Oh, my word!"

And very, very quickly, obviously, you have to move.

So when the hammer went down on auction day, tell me how you felt?

Really emotional.

At the viewings, there were so many developers in here,

so many people in here, and I thought we hadn't got a chance,

but we went along, thought, "Nothing to lose,

"we know our budget, let's just go and see",

and as you're going along

you're suddenly starting to think,

"Actually, we might actually get this."

And then when it went down, I was just really, really emotional.

So you had already fallen in love with the property?

Yeah, but I was trying not to!

You know when you think, "I'm not going to get it"?

so I was trying to be reserved,

but, yeah, I had fallen in love with it.

Having recently sold their own house,

they are currently living with Penny's parents,

but with both children going to nearby schools,

you can see whyy Penny was so keen to get this house,

though it is far from ready to move into.

It's a full refurbishment, so everything will have to...

You know, it's the wiring, the heating, the floors, the internals.

It's a bare brick job, isn't it?

There's no kitchen! There's an Aga and a butler's sink, and that's it!

I think you'll be keeping that butler's sink!

-Yeah.

-You'll be keeping everything!

We want to try and retain as much of it as we can,

because there's so much that it needs to be refurbished,

but I'm really keen it's restored

and it's restored to how it should be,

rather than just being modernised.

-What about an extension?

-Yes.

-Are you planning on going out?

Yeah. I like the proportions downstairs,

and I don't really like walls to be knocked through,

because I think that it was built

with such beautiful proportions, I want to retain that,

but what we would like to do

is have an open living family space also,

so our plan is to go all the way across the back

with, like, a big kitchen diner,

so we've got a family room for everyone to congregate in,

but then also everyone can have their own space.

How much do you think you're going to need to spend here

to really get it how you want it?

Yeah. Well, at the moment, our budget is 150K.

Along with that proposed £150,000 budget,

they hope to get planning permission for the extension

and for their builders to complete the work in 6-9 months.

So taking into account the vast amount of work that needs

-to be done here...

-Yeah.

-..have you done much DIY yourself before?

Nothing on this scale, no.

So you really will be leaning on your builder and taking his lead?

Totally, yeah.

Totally trust him and, yeah,

he's renovated houses like this in the past, in fact,

he lives in one quite similar, so, yeah, we trust him.

Penny, I'm so excited to see what you do,

I know it's going to be amazing, and it's a project from the heart.

-Congratulations.

-Thank you, Lucy.

Well, Penny may have paid way over the guide price for this house,

but it's going to be her family home,

and I am sure there will be plenty of priceless memories made

once they are living here. But before that happens...

there's a lot of work to do, and Penny and her family

haven't tackled anything this big before.

Hmm! Join me later in the programme

and you can find out if this family

are going to live happily ever after in their new Eltham pad.

I am just north of Birmingham,

near one of the city's most famous landmarks.

Is it the Bullring? Nope.

Is it their marvellous canal system? No, no, no.

It's the football ground of West Bromwich Albion,

the team known as "the Baggies".

They are currently playing Premiership football.

The question is, what league will the property be in today,

and will I BAGGIE myself a bargain?

Well, the lot I'm here to see is in an area called Handsworth,

literally just round the corner from the football ground.

It's known as a transitional area, lots of people coming and going,

but it's a good place to get your foot on the property ladder.

Although it will be a while before you can inhabit the lot I'm here

to see, because it is in fact a plot of land.

Guide price was 40,000 quid, and it's behind this fence.

HE GRUNTS

Well, no problem with access, then,

we're right on a reasonably busy road with houses left and right.

It's a promising start.

So what lurks behind the gate?

-Well...

-HE LAUGHS

A big plot of land, that's what lurks behind the gate.

It stretches all the way down to that fence in the distance.

God, a fairly long way, that is.

A good size in terms of width.

At the moment, it doesn't have planning permission.

If it did, it would be a lot more expensive.

So what are the options here?

Well, you could buy it and just get that planning permission,

there are people who specialise in doing that,

because you can dramatically increase the land's value

when you do. Or you could buy it, get the planning permission

and then build whatever you're thinking about.

Certainly, in terms of getting planning permission,

I think a fairly good chance of getting residential use on here,

maybe for a block of flats, maybe for a pair of semis or whatever,

it really depends on what the local planning authority's policy

is at the moment. But in terms of where it is,

residential on that side,

residential on that side, local amenities...

In terms of the probability of you getting that planning permission,

I'd say, ooh, eight out of ten.

You can never be 100% certain when it comes to land

and planning permission, but in an area like this,

with this land serving no real purpose,

it's unlikely that any reasonable residential plan would be refused.

There's plenty of room, the land is almost flat

and you only have one tree to contend with.

On a sunny day like today, it's actually very pleasant.

But does that mean your development will come up smelling of roses,

or will this site end up soaking up all the profits?

MUSIC: Soak Up The Sun by Sheryl Crow

So let's say you apply for planning permission, you get it for, say,

a couple of semidetached properties.

Hurray! But what then? Well, unfortunately,

the resale market around here is very depressed at the moment,

so it's unlikely you're going to be able to sell whatever you build,

so it's going to really be a buy-to-let investor who does this,

because the rental market, on the other hand,

around here is extremely good, £550 a month on average for a semi.

So, build them, but really concentrate

on keeping the costs of build down,

and you could still be on the money.

Hitting the right market for new builds is no easy task.

The whole process can take time,

during which build costs and market prices

can be constantly changing, so to be in the money,

be prepared for the long haul.

But what does an agent from the auction house

that sold the site think should be built here?

I think it's almost inevitable it's going to be houses.

You wouldn't build an apartment in the current market,

and you're likely to build... You might just squeeze in three,

but I think you're more likely

to get two in, onto the site.

And what might two three-bed houses achieve on the current sales market?

If you got a planning permission for, say, two semidetached houses,

three bedrooms, you're probably looking at

about £100,000 per dwelling.

So, potentially £200,000 in total,

and with rentals in the area running at around £500 per month,

this is definitely a case where you've got to be careful not to

overdevelop the site, as you simply won't get the return.

Well, the plot may look cheap,

but it's an area that isn't scoring too many goals

on the resale front,

so whoever bought it needs to play the long game,

and maybe turn build-to-let investor,

and strike it rich on the rental market while that's hot.

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

Lot seven. It's a vacant freehold development.

Where shall we start, folks?

Start me, if you will. 40,000 anywhere?

35? 30?

25,000 then?

At 25,000, what a buy this is going to be.

-Where am I?

-MUFFLED REPLY

Thank you. And have you got a banker's draft, sir?

At 25,000 I'm bid, thank you.

26 is that, sir?

26. 27, sir? 28?

After chopping 15 grand off the initial guide price,

the bids finally started rolling in.

We rejoin with the price at 42,000.

I've got 42 at the front.

Is it 43 at the back?

No, I'm not going to do halves, sir, I can't,

we've got so much to go. 43, thank you.

43. Is it 44? 44. 45?

45, thank you. Is it 46?

Yep? With a smile.

46. 47?

No. At £46,000, then, on my right, are we all done?

One, two, three...

GAVEL BANGS

Congratulations.

So, for £6,000 over the guide price,

the new owners of the Handsworth site

are friends and business partners Gurmit,

on the right, and Hamej.

I met them back at the site to find out the all-important issue -

what's it going to be?

-Congratulations.

-Same to you.

-Thank you.

Tell me why you wanted to buy the plot?

We buy the plot to build a house.

-Right.

-Going to build at least two houses, three-bedroom houses.

But if we can get more small houses, for letting it,

it would be good for us.

So the maximum number of houses you could get on here?

Maximum three, but minimum two.

Semidetached, terraced, detached, or what?

If it's semidetached, it would be two, one pair of semi.

If it's a terrace, probably three.

And then tell me the build costs?

Well, we thought about this, build cost.

If it's two, I'd think 140 for both to be complete.

If it's three, it's... 170, 180.

Adding the £140,000 build costs

to the £46,000 purchase backs up what I said earlier.

If you build houses here,

it's the rental return that will make this development work.

# Work, work, work, to make it work... #

So tell me about you two.

What's the relationship, and how do you work together?

The relationship, good friend.

Very good friend.

We know each other for the last five, six years.

And we've got another piece of land

which has been building eight houses.

-Oh, right!

-So, together.

So the partnership works well?

-Yeah.

-Yes, of course, partnership's working very, very well.

I do say, I love to do this sort of work.

Are you actually going to get involved in the build,

do you have a team of builders? Do you actually get your hands dirty?

Yes, yes. Oh, yes, of course I do.

Well, I'm professionally a plumber.

-Oh, great.

-Right.

-And ongoing, what will your involvement be?

I do the buying and organise...

-The material.

-..the material side,

and he's the supervisor on the sites.

Gurmit used to work in the clothing business,

but became interested in building around ten years ago,

while Hamej has been a plumber and heating engineer for 30 years

and previously worked for the local council.

They teamed up a few years ago,

and at present are busy building on another site.

-So what's the timescale?

-Timescale...

It's up to, uh...

8, 9 to 10 months, 12 months.

Same time, we're going to work these, the other one.

-Oh, right, you bought the plot of land opposite as well?

-That's right.

Well, that's a turn up.

In fact, the plot opposite was their main target at the auction,

and this £46,000 buy was actually a bonus.

Came to buy the plot opposite, expecting to pay 100,000.

-We bought it for 64.

-64.

-Right, so it's almost like you got this plot for free.

-Two-for-one.

-MARTIN LAUGHS

-Buy one, one free.

Result! Well, listen, congratulations, good luck with it.

-Thank you very much.

-I look forward to seeing how you get on.

-Thanks very much.

-Thank you.

So, two plots for 100 grand and two plots without planning permission.

It's a gamble, and with their other building commitments,

this is going to be a busy period for the pair.

# It's gonna be, it's gonna be... #

Well, Hamej and Gurmit haven't just bought themselves

two plots of land here, they've got themselves a rental portfolio.

They're going to have to keep a tight rein on the build budget,

but I'm delighted they've gone down the build-to-rent route.

I think it's the only way to go.

Find out how they get on turning this grassland into a housing estate

later in the show.

Still to come, I find a fan in Newcastle-under-Lyme.

I've been watching your show, as many people say.

-You've inspired me.

-Get in there!

-It's true, you have so inspired me.

-Thank you.

And Gurmit has sound advice for would-be developers.

I'd tell them to get out of bed and get on with it!

Back now to the leafy streets of Eltham in south-east London,

where Lucy fell in love with a magnificent

double-fronted Edwardian house

which was guided at an intriguing £420,000 plus,

and it has some interesting original features, outside and in.

And while we do love an original detail,

sometimes things just have to go.

There was no getting away from it, this was a back to brick renovation,

but Lucy had already fallen for this house, hook, line and sinker.

Everywhere I'm looking I can see cornicing, lovely ceiling height.

SHE GASPS

It's taken my breath away a bit.

I just love houses like this. Oh, brilliant!

Lucy was enchanted by this place.

The potential to create a magical family home was tantalising.

And when it came to auction, it was husband and wife Damon and Penny

who were successful with a bid of £601,000.

Third and last time...

Sold, 601.

And for Penny, this was the realisation of a lifelong dream.

I've lived in Eltham for about 18 years

and I have always wanted to live in this road.

# But if I had one chance to freeze time

# And stand still and soak in everything... #

Yeah, I think we'd all have a jam, wouldn't you?

# I'd choose right now... #

Before it could be Penny's dream family home,

there was a lot of work to do,

but Penny was keen to retain the feel of the original building.

I don't really like walls to be knocked through,

because I think it was built with such beautiful proportions,

I want to retain that,

but what we would like to do is have an open living family space also,

so our plan is to go all the way across the back

with, like, a big kitchen diner,

so we've got a family room for everyone to congregate in,

but then also everyone can have their own space.

So, with a full refurb and rear extension planned,

Penny and family had a budget of 150,000

and a timescale of 6-9 months.

We returned 20 months later,

and I can see that the facade of the house has been restored.

Lucy thought that there was room for off-street parking here,

and that's exactly what they've done.

But how does it look inside?

# Ah, home, let me go home

# Home is where I'm with you... #

It's almost unrecognisable.

The lounge is bright and stylish,

while still retaining some of the period features and wooden flooring.

The modern but sympathetic decor has been used to great effect

in the family library. What a lovely thing to have.

# La-la-la-la, take me home

# Mama, I'm coming home... #

Penny's dream was to have a fabulous family living area

and kitchen at the back.

They've built a lovely extension to the house,

a bright and airy kitchen diner and, like the rest of the property,

it has been finished to an exceptional standard.

So, how did they approach this massive project?

So, we wanted to retain as much of the character of the original house

as we could, but wanted to create something that was good

for a modern family. So we've kept, out the front,

the original living room, and also we've converted

one of the smaller rooms in the front to a library.

And then we've added a downstairs bathroom, and also a utility room,

and made a big family room at the back

which extends round to a big kitchen diner.

Well, the new layout has certainly taken advantage

of all that outside space.

And the good work continues upstairs, to the half-landing -

that ancient bathroom, which has yet again had a modern makeover.

The four previously dark and dingy bedrooms are now all

in pristine condition. You can really see

Penny's attention to detail with the use of

reclaimed fireplaces in each room,

and the refurbished original flooring,

which now looks good as new.

We've completely refurbished the whole house,

so that involves taking the ceilings out, the walls out,

rebuilding them, plastering them, new floors throughout.

Penny and Damon engaged a builder

who has renovated these types of houses previously,

and when it came to dealing with those horrible cracks,

he knew exactly what to do.

So, luckily, we had a great builder

who is a really good engineer as well,

so he's knitted the bricks together,

so there's no structural problems any more.

# I should be so lucky... #

Joshua and Ella are also lucky.

They have pretty cool bedrooms to show off to their schoolmates.

The house is wonderful, a great mix of modern and character,

but was that healthy 150 grand budget enough?

We did go over, we went about £10,000 over.

However, we did do more things

during the project than we had initially

intended to, so examples of that might be boarding the loft,

adding low-level lighting.

We also added the patio out the back and we overspent on the kitchen,

but intentionally.

Well, I reckon it was worth it.

And £10,000 over budget on a project this size isn't bad at all.

But did they stick to their schedule?

So, the bulk of the work at the house took about a year.

We moved in, and then there were some small parts

of works going on around us.

So, all in all, from start to finish, it's been about 18 months.

So, a fair bit over the estimate of six to nine months,

but all in all they have achieved their goal of a dream family home.

What do two local estate agents think of this project?

Let's start with the agent who saw it originally.

Well, since I was here last time, I must say, the changes are amazing.

It's transformed the house.

I mean, you wouldn't think it was the same house.

They may as well have knocked it down and rebuilt it!

It looks absolutely fantastic.

The standard of finish is very good on the property.

I think they've done it very, very well.

I like the flooring throughout.

The high ceilings were obviously really good.

It's decorated really well.

Yeah, I think it's done very nicely.

The extension at the back, that has really opened the house up

in depth, and size-wise, to make such a good feel.

They've kept some of the original features

and feeling of the house, but modernised around it.

So it looks really good.

Well, the agents seem impressed.

So with a total spend here of £761,000,

what did they think the house could now be worth?

If this property came onto the open market for sale purposes today,

I would put the property on the market at £900,000 to £950,000.

I believe the house would achieve between £850,000 and £900,000.

Well, Penny always wanted to live on this street,

so it seems unlikely she'd give up her dream home,

even for £189,000 pre-tax profit, based on the highest figure.

Your thoughts, Penny?

It's nice to get a return on your investment.

It's not hugely relevant to us,

because we hope that we will never move,

and we hope this is our home forever.

But, yeah, it's nice to hear.

We're in Newcastle-under-Lyme for our next property.

It's a town sandwiched between the city of Stoke-on-Trent

and the ever-expanding campus of Keele University.

Founded in 1962,

Keele has come out top on a national student satisfaction survey

for the last three years running.

Top marks! The presence of students means a ready supply

of potential rentals, so property developers

could keep an eye on Newcastle-under-Lyme.

It could be worth it.

The property I'm here to see is not far from the town centre,

has great links to Nantwich and Crewe, and here it is.

It's a three-bed property, has a guide price of £85,000,

and it's an end terrace as well.

I'm not hanging about out here, I'm getting in there.

Not a nice day today.

OK, into a porchway here with your stairs going up to the bedrooms.

But you come straight into a good-sized lounge area

with double glazing as well. And central heating.

It looks like somebody may have started the decorating already,

taking some wallpaper off.

But it's a nice, good-sized lounge area,

and the floor, as well, looks in good condition.

And it links you straight into the kitchen.

Which is, again, a nice-sized kitchen.

The units look in good condition.

There's a few tiles missing from the walls,

but that's not a problem to sort out.

And you've got a downstairs toilet as well, and a bit of storage space.

From what I've seen so far, I am liking. Good stuff.

Of course, if you're willing to sacrifice the downstairs loo

and storage cupboard, there would be enough scope

to use this space to open up the kitchen

and maybe get a table and chairs in.

Right, up to the three bedrooms.

And here we are. OK, as soon as you come upstairs,

you've got the family bathroom to your right.

It's a good-sized family bathroom, lots of floor space in there.

Looks in half decent condition.

Huge first bedroom to the front of the house,

right there, with fitted wardrobes.

Two further bedrooms, one in there.

You'd get a double bed in there no problems.

And in here you've got a single bed in the box room.

You've got a wardrobe and desk as well,

so there's a bit of space up here, which is good.

I'm thinking Keele University is about half a mile away.

I know there's other student accommodation in the area as well.

So, why not think about creating another bedroom downstairs

with that lounge? Get some students in here

and, hopefully, you can maximise your money. It's just an option.

When the sun comes out,

what student wouldn't love a back garden to study in?

Well, this one's a bit on the small side,

but it would only take a weekend to sort out.

-# Students of life

-Students of

-# Students of life

-Students of

# Students of life, students of love... #

Since coal mining was a major industry

around Newcastle-under-Lyme,

the chances are high there may be

historic mining workings in the area.

Any movement to the foundations can

cause damage to the houses built above

or close to the old mines.

This one seems to be OK,

but if you are thinking of buying a house

that you know was an old mining area,

check the legal pack, see if there is a mining report in there.

If there isn't, get one done.

Because a lot of lenders are quite dubious to lend people money

to buy houses in areas like this.

What I would suggest is, just do your research.

And, please, read the legal pack.

I've got a good feeling about this property,

but we've invited along a representative

from the auction house who sold it to give us his thoughts.

First impressions are it's a very well proportioned

three-bedroom property. Could do with some off-road parking

to the front and a nice rear garden at the back,

so...ideally suit families within the area.

How much does he think would need to be spent on this refurbishment?

The works involved would be somewhere within the region

of £5,000 to complete.

Refurbished to a reasonable standard,

what could the house resell for on the current market?

Sale for a three-bed house in the area,

somewhere within the region of £105,000.

And if placed on the rental market?

For a three-bedroom house,

we would recommend the rental to be somewhere within the region of

£495 per calendar month.

And if the house was converted into student accommodation,

how much could each room let for?

If the property was converted into a student let,

we would recommend an asking price of £70 per week, per room.

I think this is a good, solid house.

It's in a good location,

and you've got the university less than a mile away.

Loads of potential with this project.

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

Three-bedroom end townhouse,

gas central heating, UPVC double glazing.

And we'll say 70,000, start me on this.

70 on the front row, thank you.

At £70,000.

-I'm going once.

-The bidding soon got past the guide price of £85,000,

but bidders slowed things down with £500 increases.

We rejoin at 93 and a half grand.

93 and a half.

94. Half.

95, sir?

No? 94 and a half, then.

On the front row, not going to linger. 95 anywhere else?

If not, £94,500 once, £94,500 twice...

Third and final time, £94,500.

You bought it, madam. Well done.

# It's a long, long way from home... #

The successful bidder was Nancy.

Former electrical engineer Nancy is American,

but now lives in France with her husband

and daughters Piper and Naomi.

I met with Nancy and the girls to find out what their plans were.

-Nancy.

-Hi.

-Nice to meet you.

-Nice to meet you.

-And girls.

Naomi, nice to meet you, too. Piper, good to meet you.

You brought the weather with you, thank you.

Tell me first, why did you buy this house?

Um, I just liked the way that it was, um,

positioned, it was high up, like, on a hill.

This street is really nice, it's tree-lined.

And I think just the location.

And also, it's close to the university.

-Close to Keele.

-Yeah, exactly.

-Oh, and it's close to the university.

-Yes.

-Yeah.

-Exactly, which helps.

-Yes.

If that's in your plans, but we'll get to that in a minute.

What made you get into property?

Have you always wanted to get into property?

The weird thing is, my parents never owned a house, ever.

I actually didn't own a property

until I was married with children in my 30s.

And it just sort of hit me.

I mean, you hear of people getting the property bug.

From that point on, I just started liking property,

and then I've been watching your show.

As many people say. You have so inspired me.

-Get in there.

-It's true, you have so inspired me.

-Thank you, thank you, we try.

-It's so interesting.

-Good.

And over the years, I've just felt more and more confident,

so, yeah.

This is only Nancy's second auction purchase,

and although she might be a relative newcomer to the world

of property investment, she does have a keen eye for detail.

For example, did you spot something unusual with the brickwork?

The brickwork is newer, if you noticed,

-than the brickwork next door.

-Yes.

And I asked the person that was showing, from the auction,

"Why's the brickwork newer?"

And she said that it was at one time a mid-terrace.

They took off the other house,

and I think just to be able to make the brickwork uniform,

they just redid it on...

I don't know exactly how, but they did the brickwork, that's new.

OK. So it didn't put you off at all, you're happy?

-Yeah, it's fine. Got new brickwork!

-You've got new brickwork.

# Everbody's happy nowadays... #

Top marks for observation,

and she's also found out there's a flying freehold above

this communal entrance. But again,

it's not something she's worried about.

Actually, my solicitor said that

if you have an indemnity policy in place -

which is not a very expensive thing to purchase -

then that will cover that extra portion

of the home that doesn't belong to you.

It will cover that if somebody else wants to buy it

and needs a mortgage and the mortgage company says,

-"You know, hold on..."

-Yes, yes.

"..you've got to own all of the property",

-it's not an issue.

-Tell me what you're going to do to the property.

Originally, what I wanted to do was buy this, do it up,

extend it out the back.

-Yes.

-Make it big, open-plan.

-Yes.

-Even possibly go up into the loft and do a four-bedroom.

But I got some estate agents in,

and they both said the best that you're going to be able to

-get out of it is 110.

-OK.

And I thought, "That's just not..."

-That's... Yeah.

-I'm going to be at a loss at that point.

They said it's better as a student let.

Nancy had originally set her budget at 40 grand to do this work,

and that would have taken her total investment to nearly £135,000.

But since the maths didn't stack up, she's changed her plans.

What we're thinking of doing is creating the lounge into a bedroom,

a fourth bedroom. I don't think, because we have a big kitchen diner,

that they need yet another reception area.

So this, hopefully, can be turned into a bedroom.

To do that, we need to block the current entrance

from the lounge into the kitchen diner,

open up from what would be created, a new hallway or corridor,

open up an entryway into the kitchen diner.

-OK, got you.

-There is a little utility cupboard, a WC and so forth.

The problem is that a lot of that's structural,

and I just had a builder in yesterday.

Anything that is beyond a three-metre RSJ,

you have to get planning permission in,

and that can take who knows how long.

-Yes.

-And I don't have that much time.

-And that's time, isn't it?

-Because I only have two months.

So, over the summer, for the children's sake,

I'm going to have to return to France and back to school.

So we decided not to go that route, and those lovely little, you know,

areas back there will have to stay.

-We may be able to open up the pantry.

-Yes.

Another entryway, so that, essentially,

you'll have a corridor starting from the front...

-All the way to the back.

-..going down to the rear back.

-OK.

-So at least there'll be a little bit more freedom.

-Yes.

And flow as well. And flow as well.

-Exactly, exactly.

-So, in regards your budget,

to do all that work that you've told me,

-what is your budget?

-I'm thinking, realistically, maybe about 20,000.

-OK.

-Give or take.

-Listen, good luck.

All of you, good luck.

Naomi, good luck. Nancy, I wish you all the best.

Thank you. And, Piper, you can be the boss, OK?

SHE LAUGHS Good on you.

So Nancy has done her research,

and she's going to go down the student let route,

which I think is spot-on for two very good reasons.

The first one being, she's going to be using half

of her original budget,

and she's going to be getting a better return on her money.

Now, for someone with Nancy's background, it's not rocket science.

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

Well, we've seen how developer number one got on.

What about number two and three?

Yes, will they be teacher's pets or sent to the headmaster's office?

Ha-ha. Let's find out.

It's time to return to north Birmingham,

where, earlier in the show,

I took a trip back to nature on this vacant plot in Handsworth.

# The birds and the bees are flying in the trees... #

The birds and the bees would have to vacate this corner of Birmingham,

because at first glance, with a guide price of £40,000,

this appeared to be an ideal opportunity for a developer.

But buyer beware.

This land was for sale minus the all-important planning permission.

And there were local market conditions to consider, too.

Well, unfortunately,

the resale market around here is very depressed at the moment.

So it's unlikely you're going to be able to sell whatever you build.

So it's going to really be a buy-to-let investor who does this.

So, whoever took this on would have to take real care in planning

the right development, at the right cost, aimed at the right market.

And it was business partners Gurmit and Hamej

who paid £46,000 for this site.

They were on a bit of a buying spree,

as they purchased the land across the road at the very same auction.

Came to buy a plot opposite, expecting to pay 100,000.

-We bought it for 64.

-64.

Buy one, one free.

ALL LAUGH

Their plans were a bit sketchy for this side of the street,

but one thing was for sure...

We're going to build at least two houses.

But if we can get more small houses, for letting it,

it would be good for us.

That was over five years ago.

Have their plans come to fruition,

or have Gurmit and Hamej allowed the grass to grow under their feet?

We're back to find out.

# You ain't seen nothing yet

# B-b-b-baby, you just ain't seen nothing yet

# You need educatin'! #

Well, no houses to speak of, but there are signs that, finally,

things have started to happen.

Planning permission has been granted for three three-bedroom houses,

a three-bed detached to the front of the site

and two three-bed semidetached at the back.

Better than we thought. We thought we might only get two houses,

but we got three instead of two.

This is the ground floor, lounge,

kitchen diner and toilet at the back.

And garden is at the rear.

Upstairs, three bedrooms, one with en suite.

Nice, big three bedrooms.

The plans look good on paper, and work has started

on the semidetached houses, but one thing is missing from this set-up.

Gurmit and Hamej have parted ways.

# Breaking up is hard to do... #

That was my other partner, Hamej.

We're still friends, but he has nothing more to do with this plot.

With Hamej bowing out of the project,

Gurmit has recruited his son Inderjit

to help with this property development business.

I can't go on forever.

I have to bring my grandson and Inderjit into it

to make it a bit more interesting,

and hopefully I carry on with my other portfolio.

That's all for the future, but what about the here and now?

How much longer will Gurmit need to complete this built?

Hopefully, about six months should be enough.

But tomorrow, we've got the contractors coming in.

They will finish it, bring it up to damp course,

and then we get on with the drainage.

And after drainage, order some block and beams.

And put the floor in.

And, hopefully, within two to three weeks, we'll start the next stage.

And what state are the finances in?

Five years ago, Gurmit was planning to spend

between £140,000 and £180,000 on developing this site.

Up to now, will we've spent approximately 20,000

from...the start to this level.

We're hoping to get them finished within 250 to 300,000.

That is a huge leap in costs, but Gurmit will have three houses,

one of them detached.

From the outset, this development required

careful planning and careful spending.

Will it pay off for Gurmit?

We asked two local property experts to have a look around

and give us their verdict.

Obviously, modern new-build properties in this location

is going to be more attractive

because it's normally an area of

traditional Victorian or Edwardian

two and three-bedroom terraced houses.

With regards to the spec and the look and the finish,

I'd assume that he should keep it traditional

and in keeping with the rest of the area,

as regards the outside of the property.

The inside needs to be as high spec as possible.

Gurmit has squeezed an extra unit

onto this modest-sized plot - any concerns?

If I was going to do something different,

I would have probably put two decent-sized houses.

From what we can see from the plans,

I would have probably recommended a bit more open-plan living

to meet modern requirements,

and I certainly would have put French doors into the rear garden.

And so to valuations.

With Gurmit's costs set to rise to as much as 300,000,

he'll be looking for some good news here.

First, resale values.

The three-bedroom semi at the back, I'd value at around 135,000

depending on the spec that he finished it to.

The property at the front, I'd value at around 135 to £140,000

if it was a detached property.

The three-bedroom semis I would actually value

between £130,000 and £135,000.

And for the three-bedroom detached, between £140,000 and £145,000.

Based on the higher figures,

Gurmit could sell these houses for a total of 415,000,

giving him a pre-tax profit of around 115,000.

Bit down. Don't think much of that, but I reckon they should be

a bit more to 175, 180.

Gurmit's not impressed with those sales valuations.

But what about rental values?

For a three-bedroom semi,

I would estimate a rental of between £600 and £650 per calendar month.

And for a three-bedroom detached,

between £650 and £700 per calendar month.

For the two three-bedroom semis at the back,

you're looking around 650 to 700 per calendar month.

And for the three-bedroom detached at the front,

you're looking 700 to 750 per calendar month.

The top figure would give a combined rental of £2,150 per calendar month,

which equates to a return on a £300,000 investment of 8.6%.

That's about right. We're quite happy with that.

Gurmit plans to add these houses to his rental portfolio once

they're completed. So after five years - and counting -

does Gurmit have any advice for the viewer watching?

I'd tell them to get out of bed and get on with it!

We return now to the bustling town of Newcastle-under-Lyme,

where earlier I took a look at this three-bed end terrace house

guided at 85 grand.

With Keele University a short distance up the road,

I thought the best option for this property seemed obvious -

convert it into student accommodation.

Why not think about creating another bedroom downstairs?

Get some students in here,

and hopefully you can maximise your money.

It was Nancy who successfully bid 94 and a half grand at auction,

and initially, she had big plans for this place.

Originally, what I wanted to do was buy this, do it up,

-extend it out the back.

-Yes.

-Make it big, open-plan.

-Yes.

-Even possibly go up into the loft and do a four-bedroom.

However, some sobering advice from local estate agents soon

-changed her mind.

-And they both said the best that

you're going to be able to get out of it is 110.

And I thought that that's just not...

-Yeah.

-..I'm going to be at a loss at that point.

So Nancy put her backup plan into operation,

which was to convert the house into student accommodation.

Living in France, the family only had

a two-month window before the kids

had to go back to school,

so it was straight to work and spending that 20 grand budget.

We've come back ten weeks later to see how they got on.

It looks like this has been a pretty successful conversion.

The main task for the builder was to change the lounge into a bedroom.

This has been achieved by blocking off the existing door

to the kitchen and adding a corridor for separate access.

It's a bit of an experiment,

because usually, student lets will have a communal area

and then the kitchen. But because we had a large enough kitchen,

I figured that could be the communal space.

And in my experience, a lot of teenagers live in their room anyway,

at least at my house they do! They never venture into the lounge.

So I thought it might be better to have a nice-sized bedroom

instead of a separate lounge,

and then let the kitchen be that communal space.

Again, it's got the television and a nice size table and chairs.

The main bedroom upstairs is a work in progress,

but the other two are ready to let.

The bathroom has been completely upgraded,

with a bath that's big enough

to accommodate those unexpected last-minute guests.

You know what students are like.

Apart from some painting, the project is almost complete,

and they've managed this all within their ten-week timescale.

But what gave them the biggest headache?

My husband, oh, had the gruelling job

of stripping down the skirting boards.

There was like, I don't know,

maybe a centimetre thick of paint that could stand up on its own.

So he was going through every single room, stripping down the skirting.

But after that, after the first month,

we were really clearing a lot out.

There was a lot of furniture and bits and bobs here.

That was pretty much it.

A lot of it was just finding the tradesmen to do the job.

That's what took the longest time.

In the back garden, everything's been cut back and tidied,

and there's even a lockable shed for items too big to be stored inside.

All that's required now is some barbecue weather.

Nancy has kept to her ten-week timescale,

but what about the budget?

I'd say we're on budget, 20,000.

I haven't tallied up,

because we're still in the midst of the renovation,

but I'd say about 20,000 sounds right.

Ideally, we should be asking a couple of students round

to see what they think of this place.

But, of course, they'll be lying in bed under a duvet,

watching a certain property show, obviously.

Only kidding! We know you're working.

Instead, we've invited two local property experts

along to cast their eye over Nancy's refurbishment.

Erm, it's a really, really lovely job that's been done to it.

It's obviously been prepared for student let.

And they're going to be lucky students.

It's been done very, very well indeed.

I'm very impressed. It's nice to see somebody go to such an effort

when developing a property.

It's geared up for letting out to students.

And there's a lot of space.

Talking of space, do the agents think

that Nancy's open-plan living and kitchen area fits the bill?

I think the kitchen is adequate,

because I do feel that the bedrooms are big enough for the students

to study in, and to a degree, to socialise in.

The kitchen is the only living space.

It is a little on the small side.

We're going to have four students in here.

Inevitably, that probably means a lot more bodies than that

at certain times. It's going to be tight.

Nancy held back on extending this property as a family home.

This is because of the advice she got from the estate agents

about the maximum sales price achievable.

Is that advice borne out in the figures?

The value for this property would be in the region of 110,000.

I would recommend a marketing figure in the region

of £115,000 to £120,000.

That's what we were expecting,

and that is why we didn't do a lot of the renovations

that originally we were going to do with extensions,

because of the area.

So, yeah, that's fine, and we don't intend to sell anyway.

Nancy has invested 114 and a half grand in this project.

And even that top figure would leave her

with just a five and a half grand pre-tax profit.

So was changing her plan to student rental the right decision?

How much rent could she expect to achieve?

If we were to let the property in the student market,

I would anticipate a weekly figure of around £80,

which would equate to approximately £1,300 per calendar month.

You are looking, per room, at this standard,

it's going to be somewhere between £80 and £90 per room.

So you're probably looking at, overall,

somewhere in the region of 1,200 to £1,300 per month.

That's bang-on, that's just what were expecting, exactly.

£1,300 per month is the equivalent of a yield of just over 13.5%.

But that would assume full occupancy over the whole year,

which won't be the case if it's student tenants.

This house is almost ready to start earning some income for Nancy,

so what does she feel she's learned from this project?

You have to be careful with your ceiling price.

We got caught out on this one, but again, thankfully, you know,

we have an alternate route.

But if somebody does not want to get into rentals,

that could have been a real big problem.

So just be mindful of those max values when you're going to auction.

You know, it's always great to see the end result

of a top property renovation. It's really, really satisfying.

I know, but you can never take things for granted, Lucy.

So many things that could go wrong,

and that's what makes it so exciting!

Yes, join us next time for more highlights

and low lights here on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.