Episode 80 Homes Under the Hammer

Hello and welcome to the show.

Now, some people say that the glory days of property are over.

But I'm not sure I buy into that.

If you buy at the right price, there is still money to be made.

Yes, if you do your research,

there's a lot of value out there and a lot of property to choose from.

But where do you go and find it?

Well, Dion, I'm glad you asked.

Because I reckon you should head down to your local property auction.

I love hearing stories about

a property that has been bought at auction.

Where they bought and what they bought

and what they're doing with it now.

Yeah. And in our job, you don't have to look very far for those stories.

So here are the three properties we're featuring on today's show.

At a former fish shop in Hampshire,

I think some doors are better left unopened.

Should I open the fridge? No.

Definitely not!

In Netherton, near Dudley, I would happily open the front door,

if I could find it. ..With no front door.

So that's today's property finished.

And Lucy gets quite a surprise

at a small studio flat in south-east London.

Well, I'm quite taken aback, actually,

by the state of this place.

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.

All done?

Sold - 440.

Back in 2013, I was in the market town of Fareham, in Hampshire,

where I saw a property that had the potential to be a real catch

if you reeled it in close to the £120,000 guide price.

Apparently, it was formerly a fishmongers.

So let's take a look inside, just for the halibut.

MUSIC: Fisherman's Blues by The Waterboys

So, what's the place like?

Wow!

Thank your lucky stars it's not smelly vision,

because it smells like a fish shop.

Wow! But that's exactly what we've got.

One main, sort of, commercial area here.

All the old units.

You can imagine the ice and all the fish displayed nicely here.

I mean, it looks to me like it hasn't had

a lot of renovation work done on it in a long time.

Shall I open the fridge? Should I open the fridge?

No! Definitely not.

But talking about fridges,

one thing you have got here is this massive industrial fridge.

Or freezer, perhaps.

Now, if you were to buy that,

it would probably cost you quite a lot of money,

so somebody taking this on and running it as some kind of food-preparation

type place, that's a real bonus.

Because you've got the front area there, into the back here,

which I imagine is the area where all the fish was prepared.

You've got the toilet at the back there and then through out into the

rear yard, which is where I think I'll go pretty quickly!

I can still smell it.

But what it also reeked of was potential.

Because you didn't just get the shop,

you also got a two-bedroom flat above.

But the access to it would be easier if you could leap like a salmon.

I can't see anyway of getting up there...

..other than that.

That can't be, can it?

I think it is, you know.

There really was only one word to describe access to this flat.

Bizarre!

MUSIC: How Bizarre by OMC

# How bizarre...

# How bizarre... #

Haven't got a clue what I'm going to find up here.

But...wow.

How amazing! It's actually a really nice flat.

And it looks like it hasn't been lived in for a very long time.

But look at the floorboards, imagine those stripped back.

A nice sort of space there.

Through to this little middle area there,

with some kind of swirly stairs

going up to another floor there.

Then through to, I guess, well, the front of the property,

and we're now actually above the main shop unit here.

A really nice-sized space.

It's got double glazing,

so it's obviously had some kind of renovation work done in the not too distant past.

And I can't see any indication of where a staircase

or anything...was.

So a bit of a mystery.

But what a lovely space!

Upstairs, there were two loft bedrooms that would need plenty of

work in order to comply with current building regs.

There really wasn't much headroom.

However, there was plenty of space outside.

And then something which is described in the auction catalogue

as a store room,

which could be anything from a little shed to a...

you know, a whatever.

But no, it's this place!

Absolutely fantastic space.

So straightaway, I'm thinking this

is a little project in its own right.

It could well be a development, a house perhaps.

It's all going to come down to access.

There's a little passageway from the courtyard.

You might be able to use that.

You'd definitely have to have that checked out on the plans, first,

though. Maybe there's somewhere you could put your car that end or whatever.

It needs a bit of investigation.

But if you could get that planning permission and get a building plot here, wow!

So, with the commercial unit, flat and potential building plot,

even the smell of the former fish shop shouldn't have had potential

bidders turning their noses up at this lot

when it went under the hammer.

And our next lot this morning is Lot 28.

It's the town centre shop and upper parts in Fareham.

Someone start me middle of the guide, 110 to start me?

110, I should think so.

110 I have and 12 I'm looking for.

110 I have and 12, may I say?

12, thank you. And 14?

14 and 16, sir?

16. 18?

Make it 20, sir?

20. And a fresh place from you, madam. Thank you.

Two at the back? 120 I have and two I'm looking for.

And two I've got. And four, madam?

And four. And six?

And eight? And eight.

And 130? 130.

And two? And two?

And four? Split the difference with you.

133? 133.

And four, madam? And four.

And five? 134, I have.

The lady stood at the back of the aisle, it's with you, madam, at 134,000.

If you're all done then, ladies and gentlemen at 134,

I'll be selling at 134 for the first time if you are all out?

134 for the second time.

134 third and final time.

It's your bid, madam. Your number, please.

The successful bid came from Amanda.

She knew it was the right place for her and paid £134,000 at auction.

She was a professional singer who had hoped to move into

property development. So,

I met up with Amanda to see if her plans were hitting the right note.

So why did you want to buy this place?

If you look around, you see the potential, really, of the whole building.

There's obviously a commercial unit.

Which I've already got a tenant for at the moment.

-You have?

-Yes, already.

-Oh, wow.

-So that's sort of quite good to get the tenant.

And the flat upstairs, obviously, is going to be refurbed.

There's nothing in there at the moment,

because it hasn't been used for over 30 years.

But this, this is the thing that got me.

-This?

-This.

-Why this?

-Because I could see the potential in planning something for

this place. It's an empty store.

But it's a very large empty store.

And I'm hoping to get planning to actually build on the property here

-as well.

-Oh, wow.

When it came to choosing a builder for the two-bed apartment,

there was no need to "mullet" over as her partner Richard, a builder,

was on board.

The apartment was step three, though.

Amanda's first priority was to carry out a basic renovation for her

lined-up tenant, and then step two was to get to work on the flat.

That's going to be converted into a two-bed apartment, a two-bed flat.

There are two loft rooms which are fairly small.

And restricted headroom.

Obviously, with building regulations, you've got to have it fire approved and...

Really, it's, you know, it's going to be lovely up there.

There's nothing up there at the moment, no bathroom, no kitchen.

I've got to get the electric up there,

got to get the water up there. So that's the next step.

Step was the appropriate word here because first you had to create

separate access up to the flat.

And when we returned four months later, that's just what they did.

# You'd better know

# That it's time to make your move

# Just step on up now... #

Inside was a huge step up too,

as with no kitchen or bathroom to speak of,

it looked just like a shell, with no plumbing or electrics,

which makes this kitchen all the more impressive.

Next door, the other room had been made into a lounge.

A toilet and new shower room had even been squeezed in here,

making great use of the space.

Up the freshly decorated stairs were the two bedrooms.

The flat was snapped up by the first tenant that came to see it,

which meant that all of Amanda's hard work had paid off.

I was there on my tummy, on the floorboards,

helping lay the cables for the electrician.

I had the pneumatic drill, I was breaking up concrete in the garden.

I was painting, stripping walls,

so I was definitely hands-on, I would say.

The new tenants of the shop couldn't wait to get their hands on it.

So they could get to work as soon as possible,

Amanda did a quick refurb.

We've done, obviously, the things that need to be done,

which are the electrics.

We've had the ceiling redone and plastered and fireproofed and

-soundproofed.

-After a slight overspend on her 18-grand budget,

she had expected the figures would come in at around 24 grand.

The plan was coming together with the shop renovated to modern standards

and new tenants settled in and selling fish and farm produce.

Both step one and two will bring in

rental income and a yield of around 10%.

Amanda isn't putting all her eggs in one basket, as the real golden goose

could lie in the undeveloped store at the rear of the property.

This is going to be the next project.

We're planning to build a two-bed house here.

We've put in the full plans now and just crossing our fingers and hoping

that we will get what we want.

Well, you know what they say about the best-laid plans and counting your chickens.

Join us later in the show to see how Amanda's plans are

progressing three and a half years after she netted this property.

Dudley is a large town in the West Midlands, which sits between

Wolverhampton and Birmingham.

Dudley was the hometown of the late great Duncan Edwards,

who played for the England football team and was sadly one of the

Busby Babes who died as a result of the Munich Air Disaster,

though not before a courageous fight for survival.

He is commemorated in the town in several ways, and rightly so.

This statue being one homage.

So I'm less than a ten-minute drive away from the centre of Dudley

and the property I'm here to see is a terraced house.

It's got three bedrooms and a guide price of £35,000.

It's a lovely shade of mustard yellow and chocolate brown.

With no front door.

So, that's today's property finished.

Thank you very much.

Only kidding! It's down here.

Because of the shared passageway,

this property has what is called a flying freehold.

This can scare some potential buyers.

But what I would advise is taking out an indemnity insurance policy,

which would safeguard against any future issues.

OK... Now that's not a great design.

Behind that door is the front room.

I'd like to show you it, but the design has spoilt it.

However, when it's closed, it makes a bit more sense.

A good-sized room, though, right at the front of the property.

A bit of a smell of damp as well, a slight smell of damp.

And a feeling of this, kind of, a kind of derelict feeling, as well.

The rooms are a good size, nice high ceilings.

The stairs are over there, going up to the bedrooms.

A bit further on you've got this good-sized galley kitchen.

It's in white. It's very, very dated.

It would need to be changed completely in here.

And maybe that is where that smell of damp has come from.

That is a big hole, as well.

You would have to get that checked out ASAP.

And right at the end, there is a toilet, sink and a shower.

A bit of a wet room there. That does feel like a bit of an afterthought

that's been bolted on later on in the life of this property.

It's a good size, there's lots of room to play with.

But there's a fair amount to be done.

I'd be inclined to reduce the wet room in size,

perhaps just having a WC on the ground floor.

You could then extend the kitchen

or have a utility room in this back part of the house.

Now, they are some seriously steep stairs,

not very good for my old footballing knees.

Right, what have we got? We've got three bedrooms up here.

Two good-sized bedrooms either side of the staircase,

definitely double bedrooms.

And then you've got more of a box bedroom just down there at the end

of the corridor. And here we've got the family bathroom.

Now, it's dated.

It's tired, you'd have to rip everything out of here and start again.

And I think you'd actually get a bath in here as well.

It just needs modernising, it needs bringing up-to-date.

It just needs freshening up.

Decoration like this is very much a feature from the '80s.

Very dark and very dated.

# But please make sure, baby

# You've got some colours in there... #

This house does need some colour to make it feel bigger, but what does

this property offer outdoors?

So I'm in the back garden,

they have got a small sort of paved slabbed area.

And a little bit further down the garden, you've got a bit more space.

But it's a little bit overgrown at the moment and you can't see where

the boundaries are at all.

I think it goes back about 25 foot.

I reckon I can get this sorted out in a weekend.

But I'm not going to. Good luck to you.

There's plenty of flora.

And even a bit of fauna.

But let's put my inner David Attenborough aside.

We are here to see if it's worth getting the lawnmower out for this

property. We've asked along a local estate agent to tell us about the

-area and its potential.

-The street itself appeals mainly to investors,

so people tend to rent the properties out within the area.

Young families and also people with children at the secondary school,

because that's literally at the end of the road.

And ideal for people that have dogs,

because you are on the edge of Saltwells Nature Reserve as well.

So, yes, I would say it appeals to young families and investors.

Having a look around the property has shown me that the property does

need complete renovation.

I do feel that it would need complete bathroom, kitchen,

bathroom on the ground floor, to be renovated.

Redecoration throughout and the windows, too.

And once renovated, what might this three-bed terrace sell for?

This property, after renovation,

I would recommend marketing between £95,000-£100,000.

And rental?

I would estimate that the rental value on this property would be

between £550 and £600 per calendar months.

It's fair to say that there's a lot of work that needs to be done

in this house, and outside this house as well.

But I think it's a good project to take on.

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

Freehold three-bedroom mid-terrace

in the heart of the Black Country

in Netherton. Where shall we start?

Start me if you will. 40,000?

35, if we must.

What a buy this will be.

At 35,000, I'm bid, and thank you.

At 35, I have standing.

Potential buyers were a little hesitant with this lot,

but the auctioneer

managed to entice some bids out the crowd and we rejoin with the price

at £40,000.

A new bid at 40.

41. 42. 43.

No? 43, a new bid.

At 43 on my left.

44 is it, now?

44. 45? 46...

at the back? 46.

47? 47, it is.

48 at the back?

48. 49? No.

At £48,000.

I am on sale at £48,000.

Are we all done?

One, two, three.

Well done.

Visible only by his bidding panel was Kash, who splashed out 48 grand

on behalf of his dad's property development company.

Kash has recently joined the family firm and we met him back at the

house to find out what his plans were.

Kash, nice to meet you.

-Nice to meet you, too.

-Congratulations, pal.

-Thank you.

-What was it about this house that made you want to buy it, then?

Do know what, we went to the auction and obviously we went to

look for a bargain, really.

We knew what we had in mind and then, really,

we went for a couple properties, to see what they went for.

And this one, there wasn't that much interest.

OK. So was that the main attraction, was it, the price?

Yeah. Like, we usually look for

-residential properties for under about 60,000.

-OK.

And obviously this was about 48, so we got it at a good price.

So did you see inside the property before you bought it?

We didn't actually see inside.

We'd done some research online, so we knew the area.

We knew what the return would be.

So we knew a little bit about the area,

but we didn't actually come and view it, so it was kind of a blind buy.

Obviously, because of the price,

that's the reason we just went for it.

And now we've got it, I don't have any regrets at all.

-None at all.

-So have you got lucky?

We could say that. You could say that, yeah.

# Lucky, lucky me

# Lucky, lucky me... #

Indeed, it could have been much worse.

But as it stands, I think Kash and his dad have got themselves a bit of

a bargain. But with time equalling money in this business,

they are not hanging around.

They plan to renovate this property and have it ready in six weeks,

and are looking to spend 8-10 grand.

We are looking to go, to do it to a nice spec.

So we're looking to do a new bathroom, a new kitchen.

reskim everything.

New carpets.

We're getting all the windows changed around the whole property.

-Oh, good man.

-With the heating, the guys have been round already.

I think they're going to keep the same boiler.

But we're going to get all new radiators on.

To modernise it all.

And then get it all painted, new carpets and that's about it really.

-And that's us done.

-So will you get involved yourself with that side of

things? Will you project manage this with your dad?

I'll be coming here every morning,

getting the builders anything they need

and making sure they know what they're doing.

And my dad will be coming over probably in the middle of the day,

making sure they're here and probably until the end of the day.

-Just keeping an eye on things?

-Yeah, yeah.

Just keeping an eye on things

and making sure everyone is doing the right

thing and everyone is working on what they should be.

It's a strange configuration, isn't it?

Yeah, yeah, it is.

Usually, like, the bathrooms will be downstairs.

-But obviously the bathroom is already upstairs, so that helps us as well.

-Gotcha.

I don't think we need to have both in the property.

So we'll just keep the one upstairs.

Downstairs, we'll probably make it into another room.

We haven't really thought about what we're going to do here.

But we'll probably make it into more space.

Tell me about that hole in the kitchen ceiling.

To be honest with you, I don't really see that as a big deal.

Because we're renovating the whole property anyway,

so we're literally gutting it all out.

It's all going to be replastered anyway.

So when the boys are on it,

we'll just get them to work on that as well and get that sorted.

OK. What about those steep stairs.

Even I found it difficult with my dodgy knees, getting up those stairs.

Do you know what, I thought the same thing when I was going up them.

We'll have to obviously get them checked out, see if can do anything.

See if we can make them a little bit...

Maybe space them out a little bit more to make them a bit...

Less steep, I don't blame you.

And when you are coming through the door, it's got to catch the eye,

-hasn't it?

-Obviously if the house is at a good spec,

the target tenants are professionals.

So that's what we're trying to target.

Finding good long-term tenants is not always straightforward,

but neither is finding a good landlord.

I'm pleased to hear that Kash is not going to be cutting any corners.

The way we do it is, we'd rather,

instead of cutting corners at the beginning,

we'd rather do it right once and not to cut any corners.

That's how we work.

Good on you, I like the way that your ethics are good.

Kash, I hope it works out for you.

And I hope you get some great tenants.

Good luck. Good luck.

So, Kash and his team are going to finish this house to a high-spec,

which is the correct way to go.

What isn't the correct way to go is not viewing the property.

Naughty, naughty, Kash.

And don't make it a habit.

But how high will the spec be to the finish of this house?

You can find out later in the programme.

Coming up, Lucy sees a studio flat that's a bit like the Mary Celeste.

It's almost like somebody's been in here doing the work and gone.

And I hope Kash didn't abandon ship on this redevelopment,

no matter how hard it's been.

Eight weeks of madness, every day.

Early mornings.

We are heading back to Fareham,

where I saw a former fishmonger's, which, well, got up my nose a bit.

Wow!

Thank your lucky stars it's not smelly vision,

because it smells like a fish shop.

Wow! But that's exactly what we've got.

One main sort of commercial area here, all the old units.

You can imagine the ice and all the fish displayed nicely here.

The shop did offer a crisp and golden opportunity, though.

Not only for some terrible fish puns,

but also as a serviceable commercial unit once more, with a little

renovation, of course.

However, there were other fish to fry with this lot.

Out the back and above the shop was a flat which had been empty for decades.

That might have had something to do with its not having any access.

I can't see any indication of where a staircase or anything...

was.

So a bit of a mystery.

But the pearl in the oyster was the store room,

which offered even more potential.

This was the auction lot that kept on giving

and professional singer Amanda agreed.

Already with some property development experience behind her,

she bought the lot for £134,000, and this was a woman with a plan.

There's obviously a commercial unit.

Which I've already got a tenant for at the moment.

-You have?

-Yes, already.

-Oh, wow.

-So that's sort of quite good.

And the flat upstairs, obviously, is going to be refurbed.

There's nothing in there at the moment, because it hasn't been used

for over 30 years.

And renovate Amanda did.

Just four months later, the flat was complete and she did a very

nice job on it, too.

There was more good news downstairs in the shop, which was quickly

refitted for use as a fishmonger's and farm shop,

which meant that both units were successfully tenanted

and bringing in an income. But that wasn't the conclusion

of singer Amanda's development plans here.

She had plenty in store for that store room.

Well, this is going to be the next project.

We're planning to build a two-bed house here.

We've put in the full plans now and just crossing our fingers and hoping

that we will get what we want.

Now, we're heading back three years later.

Has Amanda finally got that house?

# Don't tell me no

# Don't tell me...no... #

Sadly, no was exactly what the planning department said to her

application to build a house here.

And there was also more bad news, as a year ago,

the tenant of the shop had to leave, leaving Amanda in a bit of a pickle.

But Amanda took this opportunity to do something different,

as sometimes in property developing, when things don't go your way,

you have to wake up and smell the coffee.

Amanda renovated the whole unit

and turned it into a coffee shop that she runs.

It must've been a real grind turning this around.

It's not just the property that's been transformed.

Amanda hopes this project will also transform people's lives.

We actually have an aim in the coffee shop,

by employing people with learning difficulties,

they come on a training scheme,

which I'm going to set up, and this will help people with

learning difficulties train in sort of catering and hospitality,

customer service, and also build their confidence,

because a lot of people with learning difficulties

find it very difficult to communicate with other people.

And this coffee shop, hopefully, will help them achieve their goals.

The passion that I had for this was due, really, to my children.

I've got a daughter with learning difficulties and I've got another

son that's disabled. And they've really inspired me to do this.

So... And I saw the struggles that they had, really,

with finding work and employment,

and it frustrated me and they were frustrated.

And they used to get very sort of upset and, you know, felt worthless.

Which... I didn't want my children to feel like that,

and I realised that other people with learning difficulties felt the same.

So, when this opportunity came up to refurbish the shop,

I grabbed it and, you know, it's here!

SHE CHUCKLES

Amanda has turned what could have been a financial burden to an

intern opportunity, not just for herself but her daughter, Taylor,

who has started working at the shop.

This is my first job.

Because of my disability,

I feel like people won't take me because of it.

In the cafe, I do the washing up,

preparing the cakes and clearing the tables.

Mum, she thought of the idea.

I'm just proud of my mum

and it helped me get a job and work with my mum.

Well, my daughter in particular, I mean,

she's come on leaps and bounds.

She's been good on the till, which really surprised me,

because money was one of her problems, but she's been really, really good,

with help, obviously. But she's progressed really well.

She's been getting up really early in the morning.

I've been getting up at 5:30, she's been getting up as well, so,

for her to get up and go to work and want to go to work,

this is the whole point.

This is admirable work

but it hasn't come cheap.

Overall, it has cost over £30,000.

I didn't get any funding for the project,

so I had to fund it myself, and in the process, I had to remortgage

another property to do that.

The vision I had originally when I did this, is how it is.

I look at it and I think, yes, that's how I wanted it.

And it's turned out really well

and it was just a struggle with finances and time, really,

because time was of the essence to get this finished, and to get people

in the coffee shop buying coffee and cake.

Well, I'm sure coffee and cake will only be part of the reason that

two local property experts have come along to give us their thoughts on

this commercial unit.

First, let's hear from the auctioneer who sold it.

The big selling point of this one

is the fact it's so centrally placed, it's ideally placed.

You've got the middle of the town centre here, lots of shoppers,

lots of footfall and lots of activity

and people passing by all the time.

So, big selling points for me would be the location and the space,

definitely. And how modern and fresh and clean that it is.

So, it's in a good spot

and hopefully that means Amanda's new project will be a success.

But if she decides to rent it out in the future, both agents

thought that she'd get around £1,000 per calendar month for it,

which is £400 more than it was last valued, so,

the renovation has certainly added value.

The flat above has been rented out by the same people who first saw it

and although Amanda plans to keep

hold of both properties and further develop the land in the future,

it will be good to know what her total of £188,000 investment

is worth three and a half years down the line.

If we were to offer the freehold, to include the commercial space

and the flat in one of our upcoming auctions,

I would anticipate achieving a sale price

somewhere between £280,000 and £300,000.

So, looking at the whole unit, I'd recommend a guide price of £300,000,

especially with the outside space.

So, that would be a potential profit of £112,000,

before you take off taxes and fees, of course.

But is that enough to tempt Amanda into an espresso sale?

Obviously, with nothing actually

being built at the back at the moment,

erm, the value, obviously, I feel

is about right, but with the prospect of planning going through,

then I think it would be worth far more.

You won't be surprised to hear that

having had refusal from the planning department, guess what?

That's right, Amanda has another plan brewing.

I'm hoping that there is going to be two offices there and they're going

to be for some small businesses, so, you know, again,

hopefully try and put money back

into the community and small businesses

and hopefully they grow and prosper.

SHE CHUCKLES

Lucy is in South Norwood in the south-east of London.

And it has a very important selling feature for anyone that lives in the

capital, and that is a train station,

with services into Central London as fast as 12 minutes at peak times.

So, you've probably guessed that this is a popular spot for commuters

who work in the city or in nearby Croydon.

And as an area that's said to be on the up, well,

I think it just might be a great place to invest in some property.

The trick with property developing is trying to guess which area might

be the next big thing.

So, could South Norwood be it?

So, this road is a few minutes' walk from Norwood Junction station,

which is great and it seems like a fairly pleasant residential street

and actually, I'm quite excited by the guide price of this property I'm

here to see, £80,000.

For London? That is virtually unheard of.

To find anything to buy at that kind of price.

Admittedly, it is just a studio flat.

But you can't have everything.

# Be satisfied with the little you may get

# You can't have everything... #

Too right, you can't have everything!

In fact, with this flat, there's not much.

So, if that's the bathroom and this is the studio flat, well,

I'm quite taken aback, actually, by the state of this place.

I mean, no plaster on the walls, there's building materials everywhere,

there's saws, someone's wellies,

it's almost like somebody has been in here doing the work and gone.

This worries me a little.

It's like this is the chimney breast.

It's been taken away.

Has it been supported?

I would certainly get somebody in to take a look at that.

Erm, yeah.

So, this is going to be your lounge, it's going to be your bedroom.

You've got to fit a kitchen in here...

Yeah, quite small!

# Shock, shock, horror, horror

# Shock, shock, horror... #

Lucy is in shock.

And I don't blame her.

It's in a desperate state and the work that's been done, well,

it's going to have to be checked.

But all is not lost, there are some features remaining.

A rose amongst the thorns, you could say.

And then, there's this...

Well, from studio flat to possible one-bed flat.

Now, somebody has obviously started building an extension out here,

which hasn't been finished.

Now, looking at the size,

I think this could be the separate bedroom or kitchen/diner the flat is

crying out for.

However, before the buyer continues with these works,

they need to get building control to come round pronto and check this has

all been done legally and complies with their regulations.

These foundations need to be checked.

Are they deep enough?

Is a damp-proof course in place?

Do they comply with building regulations?

And then has the freeholder or freeholders given permission?

If an extension is allowed,

then it could make a real difference to this flat.

Well, it's not all daisies, butterflies and luscious green grass

out here, is it? Hmm,

it's going to need a lot of clearing before you can even visualise what

this could look like.

Currently, it's more of a dumping ground but the good news is there's

only access, currently, to this garden, from this ground-floor flat.

So, that is really in this little flat's favour.

# Oh, I'm a mess right now

# Inside out

# Searching for a sweet surrender

# But this is not the end... #

A mess sums up this whole auction lot, and not just the flat itself.

Apparently, the building was split into different flats

but not all are finished,

so there could be a lot of dust and noise. And then there's that garden.

Is there a right to build an extension on it?

Hmm, this flat raises a lot of questions.

But that guide price of £80,000 in London, well,

it's going to be tempting to find out the answers.

What does a local estate agent make

of this small and definitely not perfectly formed

studio cum one-bedroom flat?

The flat currently is, well, it's my favourite type of flat, really,

because it's ripe just to be ripped out and everything redone,

which is really, really good. Returning it to a studio now,

doesn't seem like a really good idea,

just for the simple fact that somebody's already started to try and extend it,

albeit not very well, so, if it was myself, I would take that down,

redo it, really look at the plans and see if I want to make any more space,

extend the property,

turn it into a one-bedroom flat and get the uprise in the actual value.

OK, well, issues with the current extension notwithstanding,

what difference would adding an extra room make on a property that

was guided at £80,000?

If it was retained as a studio flat and done up,

you'd be looking at £140,000.

If it was done up as a one-bedroom and done very, very nicely,

I believe it would achieve £175,000.

And rental values?

Looking at the flat as a studio flat, if it was done up,

the rental would be around £650 per month to £700 a month.

If the property was rented out as a one-bedroom,

I believe would achieve £750 per month to £800 per month.

Well, the flat might be small, but there's still a lot of work to do

to turn this around and make it a lovely, cosy liveable space.

Still, with the low guide price

and the potential to make this into a one-bed flat,

well, I think this could be a great project for somebody.

Let's find out who that was when this place went under the hammer.

Who'd like to get me started on this?

80,000, OK... 81 anywhere?

Yeah, 81, 82, 83, 84,

85, 86...

It was towards the end of a long auction day that this lot had two

interested bidders. We rejoin at 100,000.

100,000, 101...

One more... 101, 102,

103, 104, 105,

106, 107...

It's with you, sir, £106,000. Anybody else?

If not, 106, for the first... 107, nearly, 108.

108, 109, 110, 111...

110 for the first, 110 for the second,

110 for the third and final time...

-Sold, 110.

-The successful bidder

getting the flat for £110,000 was Nazeem.

He runs a property services company,

so already has a team of tradesmen on hand.

No bad thing for this project.

This is his second renovation project with his business partner,

Neil, who couldn't come along,

but he might just look a little bit familiar

to any regular viewers of the show.

Neil is an estate agent

who often comes along to have a look at our featured properties.

Nazeem and Neil might have the property expertise but still,

they'll have their work cut out.

Nazeem, congratulations!

-Thank you very much.

-Why did you want to buy this at auction?

And this would have frightened most of the people out of the auction room!

It is frightening, when you first walk in, I was frightened myself.

But when you look around,

I know what needs to be done to the property and I'm hoping that it will

not be difficult to do it,

apart from the extension we've got outside.

An extension! Is that what you like to call it?

-Yes.

-So, let's call it an extension.

I mean, does something like that have building regulations?

That's what we're going to find out first.

OK, probably not.

Probably from tomorrow I will find out. But if we haven't got anything,

then we will knock it down and build it up again.

Nazeem's also planning to have the area where the chimney breast was removed

checked by a building inspector,

and he is clearly determined to make this into a one-bedroom flat.

And despite only doing one previous renovation project,

he seems to have it all in hand.

So, talk me through how this place is going to look.

Front door here, you're going to walk in, how is the space going to work?

You've got the bathroom on the other side of this wall.

-Yeah.

-Create a corridor and keep this room as a bedroom...

and the extension will be kitchen/diner living space.

Which will be fantastic, out into the garden.

It will be, walking into the garden.

So, I'm seeing a very neat, chic, contemporary open-space here?

It will be, yes.

Nice kitchen, nice bathroom, ready to sell on, hopefully.

What sort of money do you think you're going to need to spend

to get this place shipshape?

I'm guessing, if we take the extension down

and need to build it up again,

the budget will be around £20,000.

So, that's fairly tight, really.

20 grand to get this place...

-Yes.

-Your walls, your plastering, your kitchen in here, bathroom...

New electrics, new plumbing...

-New bathroom, new kitchen...

-A new, you know,

space you need to create outside.

It's very tight but I've got a team

that can turn the whole thing around within hopefully, I'm hoping, six weeks.

That six weeks, of course, is dependent on the extension.

If a rebuild is necessary, then that may change things.

With his building team lined up tomorrow,

he's certainly not hanging about with this one.

So, Nazeem, you are looking at this with developer's eyes,

obviously this is what you're doing a lot of now,

buying and selling properties,

but you've not always done this, have you?

No. I'm a teacher myself,

but I went into different businesses

before I ended up in property businesses.

And I think it's the best thing I've done.

I'm a plumber and Gas Safe engineer myself.

-Really?

-We formed the company seven months ago

and we did our first project, which was absolutely fantastic, erm,

and then this is our second project.

With the money we gained from the first property,

we could afford to buy two flats and have extra money to renovate them.

-Wow! So, you did really well on your first project, I mean...

-Yes.

how much profit did you end up with?

Erm, we brought the property for £165,000.

-Yeah?

-Spent around £40,000...

-Yeah?

-And we sold it for £330,000.

Woohoo! So, there you go,

so has that enabled you to move forward and buy this?

Yes. It gave us about £125,000.

That's been a great springboard for you.

-It is, yes.

-Well, good luck with this project and I'm looking forward to seeing how you make

this into a one-bed flat.

-Well done.

-Thank you very much.

-Thank you.

-Thank you.

Well, Nazeem is certainly off to a good property developing start,

with £125,000 profit on his first renovation project.

But will this success continue with project number two?

This one?

Now, there's a lot of work to do here and will it really only cost

him 20 grand?

Join me later in the programme and you can find out how he gets on.

Well, time waits for no-one and here on Homes Under The Hammer,

we like to get a move on, too, if we can.

Yeah, so, have our two remaining buyers lived up to their promises?

Let's go back and find out.

Time to head back to the Netherton area of Dudley in the West Midlands,

where I saw this three-bed mid-terrace.

It didn't have a standard front door.

Instead, it had this passageway,

and then two good-sized reception rooms.

But my nose could detect signs that

not everything was straightforward in the kitchen.

Erm, maybe that's where that smell of damp is coming from.

That is a big hole. You'd have to get that checked out ASAP.

And right at the end, a bit of a wet room there.

That does feel like a bit of an afterthought that's been bolted on.

That's because up some steep stairs

was a decent-sized shower room and, of course, the three bedrooms.

Although he didn't view the property prior to auction,

warning number one,

Kash bought this on behalf of his dad's company for 48 grand.

Buying blind might have been a risk, but since seeing it,

Kash didn't seem too worried about the work needed to be done here.

Usually, like, the bathrooms will be downstairs but obviously

the bathroom's already upstairs, so that helps.

I don't think we need to have both in the property.

-OK.

-So, we'll just keep the one upstairs.

Downstairs, we'll probably make into another room.

We haven't really thought about what we're going to do with it yet.

OK, tell me about that hole in the kitchen ceiling.

To be honest with you, I don't really see that as a big deal.

It's all going to be replastered anyway, so when the boys are on it,

we'll just get them to work on that as well and get that sorted.

Kash was keen to get his team in

and turn this entire property around in six weeks,

ready for the rental market,

so let's see if he's managed to freshen this place up,

just over three months later.

# Ain't nobody dope as me I'm just so fresh, so clean

# So fresh and so clean, clean... #

He has, and instead of losing the wet room, it's been made...

# So fresh and so clean, clean... #

There is still plenty of space through in the kitchen,

so it didn't really make sense to get rid of that extra shower room.

The rest of the rooms have also had the same refresh.

They are freshly plastered, painted and new flooring has been laid.

The modernisation inside is complete,

with new central heating and electrics.

It really is looking much improved.

Plus, my old footballing knees would find it easier getting upstairs,

thanks to the changes to the staircase.

With the stairs, there was two options, really.

We could either knock them all down and rebuild them all again

but we decided that was going to be a bit too much of a big job,

so what we decided to do was extend each step,

so now there's more width on each step,

so it makes it slightly safer.

At the top of the stairs is a new...

# So fresh and so clean, clean... #

..shower room. So the house still lacks a bath.

It does offer three neutrally decorated bedrooms.

And from the outside, it looks much more appealing,

with a new paint job and new windows.

Finally, do remember that overgrown back garden?

I reckon I could get this sorted out in a weekend!

But I'm not going to. Good luck to you.

Nice one. I can see all the way to the back now.

Kash's dad, Amjid, and his team,

got stuck into this property and did a lot of the grafting themselves.

They were busy on another project, but once that was done,

they set themselves a goal of eight weeks to get all the work done here,

which, now we see the finished article,

doesn't seem like that much time.

Eight weeks of madness every day, early mornings,

late nights, just because, obviously,

we had to do the electrics and gas and...

the plastering and, painting,

and there was a lot of work gone into it,

so it was quite challenging to get it done in that timescale,

but we did manage to get it done and it's been successful.

Kash was project manager on this.

So has he managed to keep within that budget of eight to ten grand?

Altogether, erm, we spent just under 10,000,

about 95, 9,600.

The windows were the most expensive.

Obviously, because we had to redo all the electrics and the boiler

and obviously everything, the door, we had to literally

redo everything in the house, that's why we've come over budget.

We could have maybe cut a few corners

and got the budget slightly less.

However, we didn't think it's the right way to do it,

it's best just to do it all once properly and get it all out the way.

Kash is aiming for long-term tenants here,

so they've done the right thing by making sure all the big jobs,

like damp, windows, electrics and heating have all been sorted.

So any future maintenance should be minimal for some time at least.

Everything you need is in here - cooker, bathroom, kitchen,

everything's working, everything's brand-new

and I believe we'll be able to find some good tenants

to live in the property, because,

obviously, they'll like how the house is.

Well, it's time to find out if two local estate agents agree

and think this house is ready for the rental market.

First, let's hear from the agent who saw it last.

Since I last came to the property,

I've found that it's improved greatly.

I think the standard that it's presented is really good,

very modern and very clean.

I think the best selling point of this property is the fact he has two

reception rooms downstairs, which is always useful.

Plus, there's a bathroom downstairs and upstairs.

So, you know, it gives the flexibility for a family.

That's positive from both agents.

Kash is looking to rent this house out long-term

but he's not put it on the market yet.

So what kind of figures could it achieve?

On the rental market, I would expect to achieve

£525-£550 per calendar month.

I feel in the rental market at the moment,

the property would be very demanded and would achieve

between £550 and £575 per calendar month.

That's bang on. Like, I was thinking around about the £550 figure.

But obviously, depending on the current state of the market,

it depends what sort of money we'll get, so we'll have to see.

£550 per calendar month would give Kash and his father

a healthy yield of over 11%,

but could the sales figure be even more tempting

if the profit on the spend was big enough?

I feel the property in today's market

would achieve between £90,000-£95,000.

On the sales market, I would expect to achieve

somewhere between £95,000 to £100,000 for this property.

Including legal fees and council tax,

this house has cost Kash and his dad 62 grand,

so the top figure does give them a rather tempting

38 grand potential profit.

And that's just in three months.

Maybe we'll try and put it on the market at 100.

If not, we're in no rush to rent it.

The only reason we'd look to sell it is obviously

to sell this one and reinvest and get something else.

So, they bought blind and it's taken them longer than they thought,

but in the end, it looks like they're onto a winner.

That's not too bad, is it, Kash?

It isn't...it wasn't a bad buy, I guess, it wasn't a bad buy.

We're heading back to South Norwood,

where Lucy saw a studio flat that had been stripped back to a shell.

There wasn't much to see, as it had a bathroom

and then the studio room where you would need to fit in living space,

a bed and a kitchen, which would be quite a puzzle.

But there was another important extra piece outside.

Well, from studio flat to possible one-bed flat.

Now, somebody has obviously started building an extension out here,

which hasn't been finished. Now, looking at the size,

I think this could be a separate bedroom

or kitchen diner the flat is crying out for.

However, before the buyer continues with these works,

they need to get building control to come round pronto

and check this has all been done legally

and complies with their regulations.

If building control were not happy with it, it might well be torn down.

Along with the other works required, this was going to be a challenge.

Facing that challenge were business partners Nazeem and Neil.

Nazeem was a property manager and former heating engineer,

while Neil is an estate agent.

They bought the studio with its dodgy extension for 110,000.

With their expertise, they were hoping that this,

their second project together,

would be as successful as their first.

We formed the company seven months ago and we did our first project,

which was absolutely fantastic.

So, you did really well on your first project. I mean,

how much profit did you end up with?

Erm, we brought the property for £165,000.

-Yeah?

-Spent around £40,000...

-Yeah?

-And we sold it for £330,000.

Woohoo! So there you go.

So has that enabled you to move forward and buy this?

Yes. It gave us about £125,000.

-That's been a great springboard for you.

-It is, yes.

Nazeem and Neil had their team coiled and ready

to spring into action right away,

to extend out into the back and turn the small studio into a one-bed.

But without knowing if this extension had the correct planning

permissions in place, it was certainly up in the air.

So even though they wanted the work to be done in six weeks,

we're back two years later to see what's happened.

This smart new bathroom is so much better than the grotty green one.

But what about next door? Do we have one room or two?

Well, we have two, but sadly no extension.

The back area has been divided off to create a living sleeping area.

A window in a side wall allows some daylight in.

Access from the front to the back of the flat

has been created with this hallway,

and at the back, there's a small kitchen.

Nazeem was working on another project,

but his business partner, Neil, who is an estate agent, came along.

As we mentioned earlier, Neil often comes along to assess properties

and give his valuation on the show,

so you might think he obeyed

all those golden Homes Under The Hammer rules.

You know, the ones about researching and reading the legal pack?

What really went wrong was we didn't really do our research,

if I'm absolutely honest.

We should have looked at the legal pack

and we found that when we got building regs in

to have a look at the unfinished extension,

which we wanted to complete,

they did their investigations and found that

there was no planning permission for the entire building.

So this whole building has no permission

to be divided up into flats.

They were going to take enforcement action

and ask all the leaseholders maybe to turn this back into one property,

but they felt with different leaseholders

and different mortgage companies, that would not be feasible.

So, they've allowed us to keep it as it is, but because of that,

we weren't able to finish our extension.

Good on you for fessing up, Neil,

but who would have seen that one coming?

This shows that even some experts can get caught out.

No-one gets it right all the time,

and it sounds like Neil and Nazeem are looking on

this second renovation experience philosophically.

So, this one definitely has been a bit of a learning curve.

I think being so successful with our last project and a few others

that we've done, we thought, you know, we could just go in,

buy it, flip it and it would be absolutely fine.

But I think we really needed to look a little bit more at the paperwork

when posting at auction, and so,

that definitely is something that we would do in future.

That's why we always say you should read the legal pack.

The delays with planning have meant it's taken almost two years longer

than they wanted to finish the project.

This property actually cost us a lot more time than it did money.

The original plan was to spend about £20,000-£30,000,

to redesign the flat and build the extension.

We weren't able to do that,

so we actually saved a lot of money by not doing the extension.

So we only spent, I think it was about £12,000 we spent in the end,

just to get the property up to a good standard.

I'm happy with the finish as it is at the moment,

but I'm really disappointed we didn't get that planning permission

to do what we really wanted.

That would've been a lot more profit for us and I think the space

of the flat would've been a lot nicer,

it would have been a lot easier to sell.

I think with this layout, and the space,

I think it does maybe hinder our sales prospects.

So, I'm actually quite looking forward to some other estate agents

coming and looking around and giving their advice on valuation.

I'll be quite interested to see what they say.

Yes, this is where Neil would normally step in

and do some valuations, but this time,

the shoe is on the other foot and we've invited two other agents

to get their thoughts on this flat.

First, the agent who saw it last time.

For me, because it's now a studio flat,

I think that the internal walls,

I would've tried to not have put them up, just have one big space

with a separate bathroom, as a studio,

so people could use the space as they see fit.

It feels a little bit small.

I think the property's layout is a mistake.

The walls are unnecessary. There's so much space in the hallway

and the kitchen that if you combined those

with the really small studio room,

you'd actually have quite a big studio flat

with a nice open plan feel.

OK, so, they are not fans, fair enough.

But maybe open plan isn't for everyone.

-What does Neil think?

-In hindsight, looking back,

I think I definitely would have kept an open plan studio.

I think for an investor, it would have rented much more easily

and I think it may have been more appealing to a buyer as well.

We partitioned it out because we thought we were going to

make it into a one-bed.

But, you know, as long as we make a profit, I'm quite happy.

OK, so, now we're talking about money,

could Neil and Nazeem be looking at a profit here?

They have spent a total of 122,000.

I would place the resale value

between £150,000 and £160,000 for it as it is.

The resale value of this property would be £165,000.

I think the agents have got the values pretty much spot on.

It's exactly what I think I would expect and, yeah,

I think that's about right.

Neil and Nazeem have already agreed to sell the property for £160,000,

so they have made a pre-tax and fees profit of around £38,000,

which isn't bad at all,

especially as things haven't exactly gone to plan on this project.

I think the experience of this

definitely hasn't put me off auction.

It's just really taught me that I need to look a little bit more

carefully at the legal pack, but, you know, I should have known that,

being in the property industry anyway.

So, I can take this one on the chin.

We've got a fair few other projects in the pipeline,

so we're doing quite well with the property development side

and I continue my day job as an estate agent.

So, we might see Neil again on Hammer in the future,

but will it be with a new project or as an estate agent,

valuing somebody else's property?

Only time will tell.

There are lots of different experiences

when buying your property at auction and we've got lots of stories here.

We have, so make sure you join us next time

-for more Homes Under The Hammer.

-Goodbye.

-Goodbye.