Episode 8 Homes Under the Hammer

Hello. Investing in property can sometimes be intimidating,

especially if it's your first time.

Yeah, so do your homework, get the right advice,

and things might be a little less scary.

Yes, and one place to find some great property opportunities

is at your local property auction.

Auctions are full of all kinds of different properties.

But it's really important not to be overwhelmed by the options,

and make sure you can see the wood for the trees.

So let's find out what choices today's buyers made.

Fancy a property with added extras?

These derelict Lincolnshire cottages could be for you.

Indoor swimming pool.

And if you think that's surprising,

wait till you find out what's round the back of this Crewe bungalow.

What you've got here is a lot of space.

And in Dover, it's a bit damp, a bit draughty,

and a bit dangerous in this three-bed terrace house.

This is probably the steepest staircase I've ever had to climb up.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them

when they went under the hammer.

Your lot, sir. Well done.

First stop today is Lincolnshire,

and the rich, fertile grounds of the Fens,

where, hopefully, our next property will provide rich pickings.

I'm near Crowland, northeast of Peterborough.

Under one lot, we've got two semidetached cottages.

Now, if you do like to be out in the countryside,

this could be the place for you.

But you would have to take into consideration a very noisy

and fast road.

It's got a guide price of £100,000 to £120,000. There's two to look at.

And I'm going to start this way.

With little protection in this exposed landscape,

these former labourers' cottages look a little weather-beaten.

# Against the wind

# A little something against the wind... #

And perhaps escaping from the wind is the reason why

the front doors are actually on the side of the building.

This place is in... It's a bit of a mess.

It's been left for some time, obviously.

Both of these places are pretty much a mirror image of each other.

There's three bedrooms upstairs,

and downstairs, you get two reception rooms, a kitchen,

which is in need of a kitchen,

a bathroom, and you also get a toilet, all downstairs.

And both of these properties, as well, have an annexe,

which is small, but usable.

There's no denying this place is looking pretty neglected

so, obviously, a top-to-bottom renovation job is required here.

With the living room being the only decent-sized room,

a bit of a rejigging with the layout may be required

to improve this living space.

It's the same upstairs,

where the three bedrooms are not exactly great sizes.

But let's not forget

the layout of the semi next door mirrors the first house

and, unfortunately, so does its condition.

# Two of a kind

# For your information We're two of a kind

# Two of a kind

# It's my observation We're two of a kind... #

I've been having a bit of a walk around, a bit of a ponder,

looking at these two properties,

and beyond the obvious, which is new windows, new doors,

new kitchens, new bathrooms, practically new everything.

If you were willing to knock a few walls down

and make these two semis into one big detached, would it work?

The advantage of turning this into a big, spacious country home

is that the potential buyer might be seeking splendid isolation,

preferring not to live attached to a neighbour.

This place could easily have four or five bedrooms,

and imagine what you could do to that ground floor

if you knocked a few walls through.

How about a beautiful farmhouse kitchen with a range,

or does an indoor swimming pool sound a bit far-fetched?

Follow me. I've been walking round this property

and I've found a Billy Bonus.

Have a look in there.

Indoor swimming pool.

Fancy a dip?

After you, then.

-# We're twisting by the pool

-Twisting by the pool

# Twisting by the pool... #

One thing that will be splashing here is the cash.

Time to find out what a local estate agent makes

of these two semidetached properties deep in rural Lincolnshire,

that came guided at in-between £100,000 and £120,000.

Is this a good area to invest in?

As you come out to Crowland,

you get slightly more value for money.

So it's a family-orientated area,

lots of good schools.

So it's family homes, mainly.

Two-, three- and small four-bed properties are most popular.

So this could be a good area to invest your money.

How does the property rate?

Well, I've had a good look round.

Some of the floors are uneven, but I feel, structurally, they are sound.

So it's just major renovation. A lot of it's cosmetic.

But it's a bit of a challenge.

No doubt about that.

What would be the best way forward for this house?

Stick with two semis, or convert into one large property?

I personally feel the properties would be better left as two.

I feel there'd be much higher demand

for two three-bed rural properties than for one larger property.

So, with a guide price of £100,000 to £120,000,

what could the two semis sell for once renovated?

If the properties were to remain as two three-bed properties,

I would expect them to achieve in the region of £170,000 each.

And the rentals?

If they were to remain as three-bed properties and they were rented,

I would expect to achieve around £700 per calendar month.

And how much could a single dwelling sell for?

If the property was to be converted

into one large four- or five-bed property,

I would expect it to achieve around £300,000.

I've been stood here for a while now, traffic-watching.

And because this road is flat and straight,

the traffic is very fast and incredibly noisy.

Just something for the potential buyer to consider.

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

Fascinating lot, this, ladies and gentlemen. Lot of interest.

£100,000. Nice round number for us. 100,000?

85, then. 85. Two hands at 85.

86. And 7.

88. 89. 90.

And 1. 92. 93.

There was certainly a lot of interest in these properties,

and we pick it up when the bidding has reached £113,000.

113. 114 against you. 115.

No? At 114. 5 to move it on.

114,500. 115,000 for you.

115. Another half on it? No?

All finished with it, then,

sitting here at 115,000, for the first time on it.

Second time.

Third and very last chance on it for all of you at 115,000.

You're sure. You're all done with it.

That's yours, sir.

And the successful bidder getting the lot for £115,000 was Emil.

Emil is originally from Bulgaria, and has lived in the UK since 2001,

and has slowly built up a portfolio of seven buy-to-let properties.

I met him back at the house

to find out if his plans were the same for this one.

-Emil, nice to meet you. And congratulations.

-Thank you.

How did you find this place?

I went fishing with my father,

and we came around here because we did another property in the area,

so I was quite familiar with the fishing in the area,

so that's why we came here, and we found...

We saw the sign outside.

It was Sunday, and the auction was on Wednesday,

so we had to be very quick.

So you were just driving by and you've seen it?

Off to fishing, and you've just seen this one just by chance?

Yes. Literally, yes.

We were passing by.

I was really excited when I saw the sign that it was for sale.

Emil lives in London, but being a keen angler,

likes this part of the country.

In fact, his travels up here

have regularly taken him past these properties,

and he's always kept his eyes peeled for their availability.

Like any keen fisherman, patience has finally paid off.

So, now you've got this property, I'm wondering now,

what are you thinking?

One of the ideas I have is to create one four- or five-bedroom property.

Because the land around, it's quarter of an acre,

so it's a good-sized plot for a good-sized property.

The other one, it's better it stays at it is - semidetached.

We're not sure yet.

We still need to consult a couple of estate agents in the area,

familiar with the area,

and then we're going to decide what we're going to do.

Emil is experienced in the property game

and knows the benefits of checking the local market conditions.

He's also given some thought to the budget and decided that, regardless

of the eventual configuration, he's prepared to spend around £45,000.

Does it worry you that you might find things here

that may take the budget up?

-If worst comes to worst, we'll knock it down.

-DION LAUGHS

-Option three! Option three.

-Yeah, yeah!

-OK.

Let's hope it doesn't come to that.

Emil's favoured option is to turn these into one large house

and has a clear plan in his head about how things should look.

The first thing, we'll put in the door at the front.

We just need to offset the windows

so it becomes symmetric to the other three.

Then we're going to probably put the staircase

just in front of the entrance door.

Upstairs, we're going to create a bathroom, with four double bedrooms.

At the back, we're going to remove the dividing wall,

and it's going to become a kitchen,

and something like a granny flat at the back, because there will be

a bathroom and toilet, there'll be a small bedroom for elderly people.

If we decide to go for one property, we don't have to have planning.

I've spoken to the guys in South Holland District Council

on the way to the auction, and they said that, apparently,

because of the location,

if I decided to make it one property, I can just go ahead.

Sorted.

Emil intends to get this confirmed in writing, and only having to deal

with building regulations means a huge saving in time.

With the plan being to get this place renovated

and back on the market in six months,

Emil and his team of builders will need to get cracking.

Last question, most important question.

Are you going to keep the swimming pool?

Well... I don't think I will!

Well, then, if you're not going to keep it, I'm going to wish you good luck. OK?

-Thank you.

-I hope it works out. Whatever you choose, good luck.

Thank you.

So there you have it.

Emil is thinking about knocking these two semis

into one single detached property, so expect some radical changes.

And you people have only got till the end of the show

to find out how it looks.

Railways have played an important part in the prosperity

of the Cheshire town of Crewe.

In fact, the town owes its very existence

to the founding of a locomotive works here in the late 1830s.

As a major interchange on today's West Coast Main Line, Crewe retains

an important strategic position in the UK's transport infrastructure.

Well, just three-quarters of a mile

from the town centre and Crewe railway station

is the property I'm here to see.

A three-bedroomed bungalow, had a guide price of £90,000.

Let's take a look.

Whoof!

Right, a little porch area there,

and then through into this central area,

off which all the rooms spread.

So, the classic bungalow layout. Good-sized cupboard there.

And then the first bedroom at the front there.

Lots of signs of damp, which isn't too brilliant.

That could just be that the house hasn't been lived in.

Because, overall, it doesn't seem to be in too bad condition.

This is obviously your lounge, judging by the fireplace.

Lots of light coming in through the window. The ceiling height could be a bit higher.

And it looks like, judging by the storage radiator,

no central heating.

So that's something to factor in to the costs of renovation.

Two more bedrooms there. A bathroom, then through to the kitchen.

Uh, OK. Slightly disappointing.

Dominated by this very large chimney breast, which,

although quite attractive in its own way -

I suppose the idea of having a fire in the kitchen, an open fire -

it's taking up so much space.

And being a bungalow,

it wouldn't be as much of an issue to take it out as if it was a house.

But the space in here's quite good.

Again, lots of light, lots of windows,

although they'll obviously need to be replaced,

those old metal ones there.

And you are going to have to invest in some new units.

But you've got a lot to play with here, and I like that.

SIXTIES JAZZ PLAYS

There was once a time when this would have been all very groovy.

But let's be honest - these days, there's nothing in here

that you would really want to keep.

Love the music.

It's all very dated and needs a complete strip-down,

but the flexibility of a bungalow allows you to reshape

the interior space as you see fit.

I'm off to see if the outside space is as flexible.

Well, at the back of the property, a little lean-to,

a fairly nice conservatory area there, and then just a boring old,

common old bit of grass that you'd expect behind any bungalow.

MUSIC: Walk On The Wild Side by Lou Reed

Not quite.

Oh, yes, there's much more to this property

than first meets the eye.

Beyond the back garden lies an L-shaped plot of land

big enough to house...

Wait for it.

..18 garages.

And the odd shipping container.

Some are empty, others are filled with an assortment of junk.

But looking at their age and condition, it's safe to assume

that there was a lot of asbestos used in their construction.

That's fine as long as it remains undisturbed, but clearing this site

would mean obtaining the services of a specialist contractor.

So, all in all, very, very surprising.

But if you can see beyond the garages,

what you've got here is a lot of space.

What does that mean?

Well, combine it with a separate access,

because the bungalow has two,

could this be a plot of land ripe for development?

Ooh! That's interesting.

Of course,

it all depends on getting planning permission from the local council.

I suspect that, given the derelict nature of the site, the council

would be only too pleased to see it being converted to residential use.

What does a Crewe property expert think?

We invited an agent from the auction house who sold the bungalow

to come along and give us the benefit of his local knowledge.

Built around about the mid-1950s.

Quite a spacious true bungalow with lots of potential

and a good amount of land.

I think, definitely, the purchaser

would look to gain planning permission for the land

and look at building some properties,

possibly three bungalows, or six semidetached bungalows.

Six semidetached bungalows would turn this eyesore

into a little pot of gold for some enterprising individual.

But how would the values pan out?

Let's start with the refurbished bungalow.

I would imagine the bungalow would achieve

in the region of £110,000 to £115,000.

I would say the semidetached bungalows would achieve

in the region of £90,000 to £95,000 per unit.

Well, this has to be one of the more unusual properties

that we've featured on Homes Under The Hammer -

not necessarily the bungalow, but certainly the back garden.

However, for a shrewd property developer who's willing to take

a bit of a gamble, possibly there's money to be made here.

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

It's a detached three-bedroom bungalow.

Potential development subject to planning.

The bungalow does require modernising.

So what shall we say for lot 68?

70 to start me here?

65, then.

Can we get it going at 65?

Plenty of potential.

65 bid, thank you. That's £65,000.

68, can I say now? At £65,000...

It took a while, but once the first bid came in,

the price rose steadily.

We rejoin the auction with the bid standing at 91,000.

91.

91,500.

92.

92,500.

93.

93,500.

94. No?

At 94. Still on the back row at £94,000.

Another 500 anywhere else?

If not, £94,000 for the first time.

£94,000 for the second time.

Third and final time at £94,000.

Your lot, sir. Well done.

And making that successful bid of 94,000 was Joel,

an electrical contractor from Walsall.

We met up to chat about what his dreams are for this bungalow.

-Joel, good to meet you.

-And you.

-Congratulations.

-Thank you.

-Well, bit of a project, then.

-Just a bit, yeah.

Tell me why you wanted to buy the bungalow.

Well, it was a bit of a spur-of-the-moment thing, really.

When you say "spur-of-the-moment", what do you mean?

We were going for a piece of land not too far from where I live,

and it went over our guide...

It went well over the guide.

We did some costings, it wasn't going to happen, so we left that.

Didn't really want to leave there empty-handed, so this was about the next best thing.

I opened the next page and that was it. I thought, "Right, we'll have that, then."

Hang on a minute. Please tell me you didn't just buy it

on what you saw in the auction catalogue.

Of course, yeah. I broke the golden rule.

-You've broken lots of golden rules. So you hadn't seen it?

-No.

-You hadn't even looked through the window? You didn't know where it was?

-No.

-You hadn't read the legal pack.

-No. Nothing.

So, what influenced your decision in the auction, then? The picture?

-The picture, yeah, and the land.

-Right.

So, I think it's got a lot of potential with the garages.

There's obviously a lot of wide space out there.

-And, potentially, it lends itself to property.

-Right.

And then, obviously, this place needs a full regeneration.

So you paid 94,000 for something you hadn't seen

-and didn't know where it was!

-Yeah.

So when you told people afterwards, what did they say?

They just laughed and said, "Haven't you watched the programme before?"

I said "Yeah, every morning before work."

-But you decided to completely ignore our advice.

-Yeah.

-Uhh!

So what did you think when you came...for the first time?

First time I saw it was the evening of the auction - pitch-black.

-I was stumbling round outside with my phone...torch.

-Oh, no!

And then I kind of got the keys the other week,

had a quick mooch around, and impressed with it, really,

for what we got for the money.

# But a shot in the dark

# One step away from you... #

Joel has stumbled around in the dark with this property quite literally,

but it would appear that, in the clear light of day,

he has landed on his feet with this one.

He lacks the finance to develop this plot all in one go,

so he's broken it into smaller steps, starting with the bungalow.

We're going to do a full strip-out.

New kitchen, bathroom, rewire, central heating.

Needs a full plaster. And then sell this.

Upon the sale of this, we're obviously going to split the land.

Planning permission's just going in at the moment

-for two pairs of three-bed semis.

-Two pairs?

-Yeah.

So we should get four houses, hopefully, on the back.

They'll be...

Sell this and that will fund the build of those,

if we get planning.

That's the golden key.

-Wow. That would be amazing if you did.

-Very much so.

-That's the plan, anyway.

-And the idea for access would be, what?

-Down the two drives?

-Via the right drive of the bungalow.

-OK.

So we're going to widen the drive up, move the border back,

and probably splay the drive at the front, and then...

We've had a wagon down there with a skip, dropped it down.

So if we can get a lorry down there, we'll get cars easily.

Right. Have you done anything like this before?

I've been involved with one build with my father-in-law in Cannock.

We did a new-build bungalow - bought a piece of land, put a bungalow on.

-But my background's electrician, so...

-Right!

-Nothing of this scale.

Joel is hoping that his electrical contracting business

will evolve into constructing,

and this project is ideal as the first rung on the ladder.

He's set aside a budget of £15,000 to renovate the bungalow

in a timescale of six to eight weeks.

Obviously, your big profits in this are going to be if you can build.

-If we can build, yeah, definitely.

-What would the budget be for the build?

The build, we're looking about 80,000 to build the pair.

-So, for the pair, build costs about 160.

-Yeah.

-How much do you think those will be worth?

-110, hopefully.

-So, 160 cost and 440 potential resale value.

-Yeah.

So, 200 grand.

Plus quarter of a million quid's worth of profit there, perhaps.

-Hopefully.

-Ha!

-Hopefully, yeah.

-All from a spur-of-the-moment and turning-over-the-paper decision!

-Yeah.

Where it could go wrong - we don't get planning

and I'm stuck with this place and I get my money back.

Worst case, I get my money back.

-Well, the worst case is you get your money back, isn't it?

-Mm. You can't lose on it.

You might be spur-of-the-moment, but you're a man of vision, aren't you?

You've got to be.

-Well, listen, congratulations. Good luck with it.

-Thank you.

-I admire your spirit.

-Thank you very much.

I look forward to seeing how you get on.

Well, Joel breaking all the rules in a most spectacular fashion.

However, it would seem that he could be on -

"could" being the important word - for a spectacular profit.

You can find out what happens later in the show.

Still to come - the buyers of this Dover house

contemplate a worst-case scenario.

We might have to remove the whole concrete flooring

and tank it with DPC and insulation.

And back in Crewe, Joel gets a welcome boost to his budget.

My wife managed to get the fireplace complete for 99 pence,

which is our best buy.

But first, it's time to return to the village of Crowland,

just north of Peterborough,

where, earlier, I'd picked my way carefully through these two

rather neglected semidetached cottages

sitting at the side of a busy main road.

The building wasn't exactly falling apart, but it was going to take

more than a lick of paint to put this place right.

New windows, new doors. New kitchens, new bathrooms.

Practically new everything.

It was bought by builder

and property developer Emil for £115,000.

London-based Emil stumbled upon this rural development opportunity

completely by chance.

I was quite familiar with the fishing in the area,

so that's why we came here, and we saw the sign outside.

It was Sunday, and the auction was on Wednesday.

So we had to be very quick.

So how was this keen fisherman planning to tackle this project?

Keep the existing two-cottage configuration,

or knock it into one large family home?

We're not sure yet.

We still need to consult a couple of estate agents in the area,

familiar with the area.

And then we're going to decide what we're going to do.

With two possible options open to him,

we left Emil to do his research on the local property market.

Eight months later, we're back. One house or two cottages?

Let's find out.

Well, two entrance gates tell their own story.

Emil has decided to keep the building as two separate houses.

They look great from the outside, but let's look inside.

This rural renovation has turned out a treat.

But what made Emil decide on keeping this as two cottages?

We consulted a couple of local guys with knowledge of the market,

and they suggested that two properties would be easier to sell,

and with bigger margin than if it's only one property.

The layout and standard of the finish is identical in both houses.

Emil created an upstairs bathroom by partitioning the larger bedroom.

But despite this, the rooms are still of a good size.

So far, pretty straightforward for any experienced builder like Emil.

But he did encounter some unexpected problems outside the house.

When we purchased the property,

we weren't aware that there's a shared septic tank

and shared water supply.

So we had to create another septic tank for one property

and then get a new water supply for the second property.

Also, we had shared access,

which we didn't think that it's a good idea,

so we extended the access

so we can have the two properties with separate access points.

Easier said than done.

Being fenland,

the terrain is crisscrossed by drainage channels or dykes,

and extending the access meant having to install 18 metres of pipe

so Emil could fill in one of those channels.

With the dyke system being integral to farming in this area,

enlisting the support of a next-door neighbour was crucial.

# Me and the farmer Like brother, like sister

# Getting on like hand and blister

# Me and the farmer... #

The farmer and his family have been very supportive,

and it saved us a lot of problems.

Otherwise, if they weren't happy with piping the dyke,

it was going to be a major issue for separating the two accesses.

As Emil is based in London,

a daily commute to Lincolnshire was out of the question.

He considered using a caravan,

but in the end found a much simpler solution.

With my dad, we came here,

and the first week, we did one of the properties to be liveable.

We installed an instant shower and we closed some of the rooms,

and we just created a space where we stayed.

With money saved on accommodation,

was Emil's budget of 45 grand enough to complete the project?

I'm always a bit optimistic about budget.

And also, creating the access cost probably around £10,000, £12,000.

We've spent...

probably around £70,000.

That's 25 grand over budget.

But Emil fared better when it came to timescale,

overrunning his six-month target by only four weeks.

It's time to find out if that extra money has been well spent.

We invited two local property experts along

to find out what they think of Emil's renovation project.

It's my first visit to the property. I'm very impressed.

I like the way that character has been retained,

but it's been refreshed throughout, so it's ready to move into.

The standard of finish of the properties is very good,

done to a very high standard.

You can see he's put a lot of time and effort into the properties.

Emil's total spend here has been £185,000,

but how would the agents value the cottages

on the current sales market?

The properties should achieve, in my opinion, on the resale market,

£180,000 each.

In my opinion, each property is worth somewhere in the region

of £170,000 and £175,000, with an initial asking price of £180,000.

Emil has put both cottages up for sale,

and if they each sold for 180 grand,

he would achieve a pre-tax profit of £175,000,

which would be an amazing result.

But netting big profits

hasn't been the only thing occupying this keen fisherman's thoughts

while he's been living in Lincolnshire.

We managed to fit in some good fishing trips,

and I even managed to catch my biggest pike ever.

You won't catch any pike in the English Channel,

but if you've ever caught a ferry to Europe,

chances are you may have passed through the town of Dover.

# I am sailing

# I am sailing... #

Famous for its white cliffs and its castle,

Dover is also home to the busiest ferry port in Europe,

and particularly in the summer, the town can feel a lot busier

than its official population of just over 30,000.

Well, this road is on the outskirts of Dover town centre.

It won't be for everyone, as it is pretty busy,

and if you want to park outside your home, well,

those double yellow lines are going to put a stop to that.

Still, if you like fish and chips,

there's a shop right across the road,

but I'm here to see a three-bedroom terrace,

and it had a guide price of £90,000 to 94,000, and here it is.

So, in off that rather busy road to a...

quite a calm, serene space.

And freshly painted, which I always like to see.

Downstairs reception room, double-glazed units,

which is good, because it is really noisy out there.

Into the second reception room.

Now, again, you can see this has all been freshly painted,

but I don't care, because over there, look...

It's a great big area that's wet to the touch, and it's damp.

So don't be fooled. When you see freshly painted rooms,

it doesn't always mean that there are not problems lurking beneath.

I think whoever buys this should rip up the lino,

because there's likely to be little areas of damp underneath,

because you can really smell it in here.

Through into the kitchen, which is right at the back of the property.

Now, this is a really nice sunny space,

and I think you could even probably salvage some of these units,

because they're not that bad.

Bit of elbow grease.

Big negative - look.

You've got a bathroom downstairs,

just off the kitchen, with the loo there.

There's not even a shower space,

so there are loads and loads of things you could try and do

to upgrade this property.

But if you go through your list and tick them all off,

well, you could have quite a nice house,

but I am intrigued to see what it's like upstairs.

It's not all plain sailing up here, either.

The main bedroom sits at the front of the house,

with a central window looking into the street.

It's spacious enough, but there are signs of sagging in here,

gaps in the skirting and uneven floorboards.

Could there be a structural issue to address?

To the back of the house, there are two smaller rooms,

one which houses the boiler, and you know what I'm going to say -

always get boilers checked out by qualified professionals,

especially when they're in a bedroom.

Just when you thought that was it,

there's a surprise in store on the landing - a mystery staircase.

So, what is up here?

Oh!

That's why I love this programme.

You never know what you're going to find,

and I think this is probably the steepest staircase

I've ever had to climb up.

My goodness, look, there's no head height, the stairs are so shallow.

Can I have a hand to get up, please? It's a bit tricky. Here we go.

Oh, my goodness, look. Wow, it's another room.

Now, the reason this isn't called bedroom number four

is because it just doesn't comply with building regs.

You'd actually need to think about a dormer extension

if you wanted to legally apply for planning permission

and call this bedroom number four.

But at the moment, look, it's got floorboards up,

it's in a bit of a state, there's carpet up.

This place would just be good for storage at the moment,

but it is something you could think about for the future.

I'm not looking forward to going back down again. Mm.

There's a lot to think about with this property.

Obvious signs of damp, wonky floorboards,

gaps in the skirting, and no upstairs bathroom.

# I feel it in my fingers

# I feel it in my toes... #

Well, it's not an easy one to fall in love with,

but will a local property expert feel differently about it?

We invited one along to take a look around.

It's a good-size property. It does need quite a bit of work in places.

There is a damp problem, and floorboards.

However, structurally, it seems OK.

I think if someone was looking to sell the property,

it would be best to move the bathroom onto the first floor,

and take away one of the bedrooms.

If someone was looking to rent,

leave the bathroom where it is and use three bedrooms.

The agent feels that, although losing a bedroom

would knock around five grand off the selling price,

the property would be easier to sell with an upstairs bathroom.

But what about values if kept as a three-bedroom house?

This property, as a three-bedroom, renovated,

I believe would have a current market value of around £135,000.

It could rent in the region of £700 to £725 per calendar month.

Well, this terrace is not without its issues.

You've got the damp, you've got that busy road, to name just a few.

Still, it is a good size, and you could even convert that attic

if you really wanted bedroom number four.

So, who saw past the problems?

Let's head to auction and find out.

Onto lot 68, which is the last lot of the day,

I'm sure you'll be pleased.

It's a three-bedroom house for investment.

Where are we starting on this one? Do I see £90,000?

Got to be worth that sort of money. £90,000 to get me on the way.

No? Give me 80, then. Give me 80.

Give me 80 to start it. 80, can I say?

80 I have. And 83 now. And 83...

Not many people hung around for the final lot of the day,

and only two bids were made on this house,

neither of which reached the reserve price.

It's not quite enough. You are very, very close.

Come and have a chat with us now.

That concludes the auction. Thank you very much.

And that's exactly what happened.

After a brief negotiation with the vendor,

it was Naresh, here in the green jumper,

and Anand, who agreed a price of 85,000.

This house is the first auction purchase

for what they hope will become

a successful property development partnership.

I met up with the boys back at the house to find out their plans.

# Just the two of us

# We can make it if we try

# Just the two of us

# Just the two of us... #

-Well, congratulations, guys. Anand.

-Thank you.

-Naresh.

-Thank you.

Well done. So, whose idea was it to bid for this one at auction?

We kind of decided to bid on a different property,

but we couldn't get that one,

and suddenly we realised that this property was not sold on auction.

We didn't consider this.

Although we looked at the property, this was out of our budget.

So, once it was not sold, we decided we're going to go and approach,

and get it on the same day.

And did you guys want to come away with something on the day?

Had you set your minds to going to auction and buying something?

Absolutely. We just didn't want to walk out of the event empty-handed.

-No matter what.

-Yes.

There could have been a million things wrong with this place.

But we had quite a look around,

because we had viewed a couple of properties down the lane,

and this property was one of them.

Yeah, we had viewed the problems,

but we thought that we can just get away with it.

I think that's a side...

which is a bit riskier with auction properties,

but if you look at the property

and if you have made sure that, within a certain limit,

you can take risks, then I think that's what we'll have to do.

Walking around this property,

you do feel there is a certain element of risk.

What worries you about this property, would you say?

The first thing, the moment we walked into the property

the first time, was the floor.

From the outside, you see it's carpeted and it looks nice,

but the moment you remove the carpet, you can see a lot of water.

I think we anticipated that there might be a problem

with the damp-proofing below the concrete slab,

and we might have to do some work.

We're still planning to do some treatment on top of the concrete,

but it's not as bad as we expected.

What about when you stand upstairs,

and the floors literally come away from the skirting board?

I mean, I stood there and thought, "Ooh, is it subsidence?"

-But you don't think so?

-No, I think we looked under the floorboards.

Floor joists are all looking OK.

I think it's because it's a very old property.

It has settled, but there are no cracks anywhere in the walls,

which kind of gives us a bit of confidence

that it's not very dangerous or expensive.

So, the guys seem pretty confident

that these issues can be sorted out without too much expense.

Their aim is to put the house back on the sales market,

but before that comes the renovation.

We're going to put in a new kitchen

and we're going to upgrade the bathroom.

We're going to do some repair works in the loft room,

just repairing the flooring so that it becomes even and stable,

and we need to do some decoration in there.

We'll do some work in the garden so that it's up to the standard,

and some paved area outside the kitchen.

-And also the entire flooring.

-Yeah.

I think the biggest item will be flooring

where we need to spend some money on damp-proofing and floor finishes.

What about the fact that you've got the bathroom downstairs?

Would you like to try and relocate that?

Initially, we had thought about moving the entire bathroom upstairs,

but there is not quite a space.

We will compromise on the space, but in addition,

we thought we might put in a shower,

but that will also compromise the space in the master bedroom.

So, if you're going to appeal to a family,

I think a bath makes more of a relevance to the family.

Naresh and Anand have set aside three months,

and quite a modest budget for the work they plan to do -

£10,000 to £12,000.

But to save money, they're going to do as much of it as they can,

despite also having full-time jobs.

Anand works in the travel industry,

but Naresh's occupation is perhaps more useful

for this kind of project.

I have some experience in design and construction.

-I've been designing buildings for 15 years.

-Wow!

So I have some technical knowledge of damp-proofing

and construction techniques.

OK, so now I know you know what you're talking about.

So, obviously, your background does reflect in the fact that,

-when you see something, you know how bad it is.

-Yes, yeah.

I've looked at the worst-case scenario,

where we might have to remove the whole concrete flooring

and tank it with DPC and insulation,

but we might be able to use a slightly different solution,

which is damp-proofing from the top of the concrete slabs,

which will be an easier and cheaper way.

I'm really excited to see the outcome.

-Congratulations with this property. Good luck.

-Thank you.

-Thank you.

-You're going to need it.

-Thank you.

So, friends for a couple of years, and now Naresh and Anand, well,

they are venturing into the world of property development together

for the first time.

I'm a little worried, though, about the budget.

It sounds pretty tight for the amount of work they intend to do,

especially with that damp to contend with.

How will they get on?

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

Now, there are so many reasons

why properties can go over in time and budget.

Yes, even the most seemingly simple projects can have unexpected issues.

Yes, have our two remaining buyers

stuck to their budgets and deadlines? Let's find out.

It may be a popular destination for trainspotters,

but we're back in the Cheshire town of Crewe

to catch up with this property,

on the face of it, quite a simple-looking bungalow.

But appearances can be deceptive.

Inside, it was, indeed, fairly ordinary,

but what lay beyond the back garden

was the thing that got me really interested.

What you've got here is a lot of space.

Could this be a plot of land ripe for development?

Despite knowing nothing about the property he was bidding on,

it was Joel who forked out £94,000 for this place.

A bit of a gamble, perhaps, but Joel was quick to realise its potential.

Planning permission just going in at the moment

for two pairs of three-bed semis.

Quarter of a million quid's worth of profit there, perhaps.

-Hopefully.

-Ha!

# Hey, you, the Rock Steady Crew

# Show what you do Make a break, make a move... #

In this town synonymous with railways,

did Joel manage to keep his development on track,

or was there a derailment along the way?

Well, two years have passed since our first visit, and that,

perhaps, hints that there have been alterations to Joel's timetable.

Well, from the outside,

the bungalow is looking a lot more presentable, but what about inside?

Joel's done a lovely job throughout the house,

but taking pride of place in this project must be the kitchen.

OK, so in the kitchen area,

there used to be a chimney breast there, which we've removed,

which then has obviously given the kitchen a much larger feel.

Then over here, there was a concrete slab.

We've removed that, so therefore, a dining table can be installed.

All in all, it's a much larger kitchen

that's usable for the next person that buys it.

Joel has dealt with all the electrical work,

but brought in specialist trades for the fitting of the bathroom,

the kitchen, and the carpets,

plus all the plumbing and tiling that was required.

If all that sounds quite expensive, well,

there were some bargains picked up along the way.

My wife managed to get the fireplace,

complete surround fire, for 99 pence, which is our best buy.

That absolute steal helped reduce Joel's spend to 13,000,

£2,000 under budget.

And impressive as the bungalow has turned out,

it's only a small part of the story.

Joel was hoping to get planning permission

for four semidetached bungalows

on the plot attached to the back garden,

but looking at the site now, it's clear things haven't gone to plan.

OK, these are the second lot of plans that got submitted.

The first planning application that we put in

was originally for four semidetached properties.

That took around six months, and that got refused.

So then we went back in again with a complete rejig of the site,

and it went in for four detached bungalows.

That was nearly 12 months from start to finish,

getting the application through.

So this is going to be the site layout across here.

You access this via the right-hand side of the bungalow,

the driveway, and then across the area across the back,

you've got four plots there,

each with own driveway and parking facilities.

They're all two-bedroom, they've got kitchen, lounge, bathroom.

They're perfect, really, for the retired person.

# Let's make some plans

# Cos they can go wrong... #

Joel is the first to admit

that he underestimated how long the planning process would take,

but it gave him plenty of time for the job of clearing the land.

We got a specialist company in to remove the asbestos roofs,

then it was safe for the demolition guys to come in.

There was about 20-odd skips

to clear the amount of rubbish that was there.

There was all sorts of things there. We found a few organs.

The previous owner used to like playing the organ, apparently,

so we found three or four of those, but they ended up getting skipped.

I know there'll be a few organists out there who have just fainted.

Sorry about that.

MUSIC: Organ Toccata by Johann Sebastian Bach

From the outset, Joel knew this venture could be a gamble,

but he was confident that, in the worst-case scenario,

he would get his money back.

There's one way to find out how likely that will be,

and that's to ask two local property experts to see what they think

of Joel's refurbished bungalow and the plot of land behind it.

The property is very good. It's been finished to a nice high standard.

Typical of what buyers are looking for in the area -

it's clean and modern, and it's low-maintenance.

It's a really nice bungalow.

It's been done to a very high standard.

It's got a really nice kitchen and bathroom.

The agents both agree this bungalow could achieve a sale

of around 125,000.

And, given that Joel has spent a total of £107,000 on the purchase

and renovation, he will be left with a pre-tax profit of 18,000.

But what about the building plot?

With planning permission granted for four bungalows,

how much would each of these properties be worth

on the sales market?

A new-build two-bed bungalow in this area

would be worth between £110,000 and £120,000.

The new-build bungalows, when finished,

would be £115,000 per bungalow.

A sale at £115,000 each for these new-builds

would make a grand total of 460,000.

Minus build costs and planning costs,

Joel could possibly earn a pre-tax profit of over £200,000.

But two years into the project, and without a brick laid,

Joel decided to head back to the auction room, but this time to sell.

We did want to construct the properties,

but due to the timeframe, I think it's taken too long, and, really,

we just want to hand the project over to somebody else now,

and then maybe buy something closer to home

and maybe do a project there.

And the great news is that both the bungalow

and the plot have been sold, for a total of £210,000.

Taking away Joel's purchase, renovation,

planning and site preparation costs,

which total £137,000,

means that he walks away with a profit

of £73,000 before tax and sales fees.

So, will Joel be heading straight back to the auction?

At the moment, we're going to relax for probably six months.

Well-earned relax.

But you never know - you might see me in an auction room

just randomly buying houses that I don't look at again!

The sound of the surf, seagulls and ships

means that we're back in Dover.

This three-bed terrace house was for sale at auction,

with a guide price of £90,000 to £94,000,

and several worrying things cropped up on my tour of the property.

It's a great big area that's wet to the touch, and it's damp.

Signs of rising damp on the ground floor

and, upstairs, wonky floors and gaps at the skirting,

made me wonder if this place

was hiding some potentially nasty surprises for the new owner.

However, the biggest surprise I uncovered

was up this very steep staircase.

Oh, my goodness, look. Wow, it's another room.

Now, the reason this isn't called bedroom number four

is because it just doesn't comply with building regs,

but it is something you could think about for the future.

And the immediate future of this house was in the hands

of first-time property developers Naresh and Anand.

The guys bought this place for £85,000,

and weren't at all fazed

by the problems they would have to overcome.

I think we anticipated that there might be a problem

with the damp-proofing below the concrete slab,

but it's not as bad as we expected.

Juggling work and family commitments

whilst trying to stick to a maximum 12-grand budget

would be a big task for experienced developers,

let alone these two enthusiastic beginners.

Naresh and Anand figured three months would be sufficient time

to complete this project, but I wondered if that was realistic.

Six months later, we're back.

Has enthusiasm swept them over the finish line?

If you're thinking that kitchen looks bigger, you'll be correct.

Naresh and Anand had a rethink over the layout,

and decided they could move the bathroom upstairs

and retain the three bedrooms.

We thought that having a bathroom upstairs

will be useful for people with a young family,

to use it in the night, so they don't have to come down all the way.

That's the reason why we used the main bedroom area,

which was quite big,

so we used some of that area and created a bathroom upstairs.

We had our own problems

in terms of designing how we can move the bathroom,

because we wanted a larger family bath.

We just didn't want to put a small bath into the property,

so we are fairly pleased with what we have achieved.

The bedrooms have been fully redecorated and carpeted,

and the boiler has been boxed off,

which makes things a little neater in here.

Talking of neat, an overlapping stair

makes access to the attic slightly easier,

and although it still can't be classed as a bedroom,

it would make an ideal home office.

And it looks like the dodgy floorboards

have all been sorted out, too.

This building is one of the oldest in the area, and over the years,

there has been historical changes with the building

and the structure, so we have completely levelled the floors,

put in the self-levelling.

And, also, we have strengthened the joists

and added different joists to it.

And, also, the floor panels are completely straight now.

But the joists weren't my main concern in here.

Rising damp was an issue on the ground floor,

so I'm wondering how much work was required to put that right.

I think there were lots of different problems.

Lack of maintenance, and some leaking pipes,

and not cleaning the area below the joists.

So we've done all that work, we've got the pipes repaired,

and we've done some tanking work,

even on the walls, so that damp issues can be resolved.

When we first came here,

you couldn't really call this space a garden.

But Naresh and Anand have been busy with a spade and wheelbarrow

to transform this into an area

that would really appeal to a family with young children.

Despite their hard work, the original estimate of three months

proved only to be half the time that they needed,

and even after six months, there's still a few things to finish off

before the guys get this place on the market.

How much did they end up spending on this project?

Our budget was 10,000 to 12,000 at the beginning,

but we didn't stick to that.

We spent a lot more than that.

We've ended up, I think, almost spending 21,000.

What we wanted to achieve in the property

was a quality design and decor, and the complete outlay of the property,

so we had to spend extra, for example,

moving the bathroom upstairs.

Bit of a challenge that we had to work around with it,

but most of the works, like the floorings,

and even building a stud wall in the bathroom,

we have managed to do ourselves.

With six months of toil completed,

the boys are probably looking forward

to some well-deserved rest and relaxation.

But not before we've heard from two local property experts.

Do they reckon the standard of the finish is up to the mark?

I think the finish is fantastic.

I think the idea of bringing the bathroom upstairs

is a really good idea,

because it really does lend itself to families living here.

The layout here works reasonably well.

You've got two decent-size reception rooms downstairs,

and a fair-size kitchen.

Upstairs, it has been adapted a little bit

to make the bedroom smaller, but you have got a nice bathroom.

Onto valuations now.

Naresh and Anand have spent a total of £106,000 on this project.

So what price could they achieve on the current sales market?

If this house was sold now in the current market,

I think it would achieve somewhere circa £150,000.

I would expect to achieve in the region of £150,000.

I think that's what we were kind of expecting.

That's in the same region, so we're quite happy with that.

And with a potential pre-tax profit of £44,000,

I'm not surprised they're happy, but what about rental values?

I'd expect this property to be rented out

around the £750 per calendar month.

I think the rental value here for it, unfurnished,

is going to be around £700 per calendar month.

Rental was never an option for us,

especially because it's too far for us to maintain it, anyway.

-So, yeah, definitely, we'd like to sell the house.

-Sell it.

So this house is going straight onto the sales market,

but what have Naresh and Anand got planned for the future?

Immediately, we'll start looking at auction catalogues

and try and find the best one.

Have these stories inspired you?

Could you take the plunge on a project of your own?

Well, we'll have more Homes Under The Hammer for you next time,

and you never know, it could be you.

-Goodbye.

-Goodbye.

-Bye.