Episode 10 Homes Under the Hammer

Hello, and welcome to the show.

Many people like the thought

of having a nice large property portfolio -

but it doesn't have to be as grand as it sounds.

No, for a relatively small amount of money you can get started

and get that all-important foot on the property development ladder,

and one good place to get yourself a bargain

is down at your local property auction.

Because of the variety of property available,

the auction house can be the ideal place

if you are looking to get value for money -

that's if you're trying to make a living out of it, that is.

Yes. But if you get your finances sorted and do your research,

then there is no reason why it can't be a success.

So here's what inspired the buyers on today's show.

We return to a plot of land in the Welsh countryside

I first saw in 2014 which had a slight problem -

it doesn't have any planning permission.

While at this house in the West Midlands,

I'm finding planning permission

to be as easy as...

One, two, three.

I don't think Lucy will find planning is quite as straightforward

at this former takeaway in Kent, because...

This property is Grade II listed.

With you the first time.

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.

Back in 2014, I was in the Welsh valley of Ebbw Vale

where I saw a plot that had a lot of potential

and could teach you a few lessons along the way,

even if you knew your ABCs when it came to property.

Well, the auction lot I am here to see is very interesting indeed

and yet it doesn't have a single brick.

Well, that's not strictly true -

I suppose it has the wall around it,

but apart from that, what we're looking at is this.

It's the site of a former primary school which has since relocated.

Let's go and see. So, school was out and a potential development was in,

on an acre site with a guide price of 45 grand,

which means a square metre of this plot would cost -

come on class, how much?

That's right. Around 11 quid.

Top marks! The plot had a lot going for it -

flat site, stunning views of the Welsh valleys -

in other words, a developer's playground.

Apart from...the fact that currently,

it doesn't have any planning permission.

So, right now, it could just be this.

# If this is it

# All we have

# I'll know I've done all I can... #

It wasn't as bad as it sounds.

Plans for land that has been built on previously

are generally looked at favourably -

so there was a decent chance that plans in one form or another

would be granted permission.

But that permission came with a sting in its tail.

It's definitely in an area that can be developed for housing,

so that is good news.

There is a demand for the right kind of housing in this area.

So again, that's good news.

You'd probably get support from the local council and planners,

and that is also good news. It's all looking pretty good,

all pretty positive - but as usual, there is a bit of a "but".

The "but" is that, in the contract, the exchange of contracts,

the legal pack, it talks about an overage clause.

What that means is that any uplift in the value of the land

and as a result of getting planning permission,

well, the vendor, in this case, the council, gets money back.

The overage clause in this case is 50%.

So 50% of any uplift in the value of land.

Definitely something to factor into your calculations.

# It's 50-50

# I'm 50-50... #

Say, hypothetically, you bought the land for 50,000

and you were able to get planning permission granted

which raised the value of the plot to 150 grand,

that is an uplift of 100,000,

of which you would need to repay the council 50%, in this case, 50 grand.

Then again, a plot of this size could easily accommodate

10 to 15 new-build houses, so the question was,

would the numbers add up when it went under the hammer?

That then brings us on to lot number 15.

Previously had a guide of £25,000 plus.

Now that's been increased.

We're suggesting a guide of 45 plus on that now.

Start me somewhere, anywhere you like,

you can either start me at 45,000 or the old guide of 25.

25, I'm looking for.

Make it 20 if you want, just to get it going.

Thank you very much, I've got you at 20. At 20,000 there.

At 20 standing, at 20,000.

Now 21, can I see?

After some reluctance,

bids exceed the original and revised guide prices to where we rejoin

with the auctioneer looking for a £65,000 bid.

65, 66, 67,

68, 69 and 70.

71, 72? 72, no.

At £71,000.

With you at 71. 72, new bidder.

72, 73, 74, 74 standing.

75, 76, no.

At £75,000, then, with you for the first time.

Second time. Shout if I can't see you.

Third and last time at £75,000.

Yours, number 25, thank you very much.

We'll have somebody down with you shortly.

So, the former school plot went for 75 grand to Darren,

who is the MD of a building company.

I wanted to find out what he had planned

for this plot with no planning permission.

Why did you want to buy it?

The purpose of purchasing the land

was to develop it into social housing.

-Oh, right.

-We are a construction company,

so we want to do the build

and then sell the lot on to a social landlord.

Why straight into social housing? Why not other types of housing?

It is to do more with the location, the affordability.

Properties in this area will only sustain a certain value -

and from our point of view, in terms of risk profile,

while we have the risk of purchasing the land at auction,

it gives us a surety of our outcome.

So tell me exactly how it works, then.

You have approached somebody already

and said, "Look, this is the land we've got now."

Tell me about the process.

It's to do with the intelligence of the area.

We're a local contractor,

so we approach the various bodies in the area

and ask what sort of properties they're looking for,

numbers of properties, areas.

So we've done quite a lot of research in the background.

So then we took that to one or two housing associations,

got an expression of interest - so the risk still stays with us,

but when we went to auction we were bidding

with a degree of confidence

that we knew we had an interested party at the end.

The plans that had them interested were for 14 two- and three-bedroom

semidetached properties,

surrounded by the old retaining school wall to create a secure,

almost gated development.

And although it did not have huge profit potential,

it was invaluable to the local area.

A typical four-person, three-bedroom house is about 120,000 in this area.

The money is not huge in terms of the investment for the land

or, indeed, the build costs.

It is about £1 million all in.

And what's the end value?

The end build-out value will be closer to 1.6 million.

-OK.

-Obviously that will be retained by the housing association,

they will sell some on privately and hold some,

but effectively, they are putting the cash in

for the build, so that's their benefit.

We get a modest construction profit,

we get a small profit on the land sale to cover our fees

and the time that we invest in the land development appraisals,

and then they get the retained value long-term.

Right. It sounds like a win-win all round.

It is a good formula but you need to have the wherewithal and knowledge

and experience to do it, really.

And it will also generate some good employment opportunities,

which is part of the deal you would strike up

with the housing association, that we employ locally,

and obviously get some apprentices training on the site, as well.

Fantastic. So are you looking forward to doing this?

Yes, it's a really exciting project and it's really needed in the area.

Wherewithal, knowledge and experience

would only get you so far -

but before they could get started, Darren and his company

would have to get that all-important planning consent.

We returned almost two years later to see if they had.

# So please say you'll meet me

# Meet me halfway... #

A year after Darren had hoped to have finished building,

the housing project was still a work in progress.

One reason being, planning took a year to come through,

and when it did, Darren had to address the overage clause.

We had the land valued by an independent estate agent

and they valued the site at about 100,000.

When the local authority valued it,

it came back as double, so they used the district valuer,

who works for the Welsh Government.

That gave us a problem of £100,000

where the local authority were saying

the land was worth 200,000,

and both ours and our respectful client were saying 100.

We have had to take that to the RICS,

the Royal Institute of Chartered Surveyors.

They are now determining who is correct.

We're still awaiting that decision,

but what we had to do to get the scheme to progress

was we had to pay the money to the local authority

so they would remove the covenant on the land.

So, currently there is a significant sum

deposited with the local authority.

If we win the argument,

the money will come back to us as the contractor.

If the authority win the argument, the money stays with them.

It is a very punitive clause within the contract.

For other potential would-be developers

looking at this type of deal,

it is something they really need to take very seriously

and take a lot of advice on.

With £100,000 of the budget in limbo,

there were further costly complications.

We had assumed that the wall foundation was a lot lower

than it actually was, so when we did the reduced level dig

to get to the foundations for the flats,

we realised there was a problem with the retaining structure

which, if it was a small wall,

wouldn't be such an issue but it's retaining a mountain!

So we had to underpin the wall and we put just shy of 3,000 blocks,

concrete blocks, into the wall to stabilise it

and allow us to build the flats.

That was a bit of an unknown,

it has cost about £15,000 to deal with that problem,

but thankfully it's an engineering solution

that has resolved the problem

and we've managed to move on with the rest of the scheme.

When we last saw Darren, he was £1 million

into his £1.7 million contract with the client,

and the housing scheme now contained a total of 15 units

which was made up of an adapted bungalow

and a mixture of one-bedroom flats and two and three-bedroom semis.

Since the project was now running smoothly,

Darren had ideas about a change of career.

At the entrance to the site, we have to move a telegraph pole,

with one telephone line on it.

We're only moving the pole about

six metres up the road and reinstating it.

Within our costings, we'd allowed about £1,000 to do that,

but it has to be done by the company that own the pole.

We've now been presented with a bill for £14,500,

so I'm thinking of moving out of house-building

and becoming a full-time telegraph pole mover!

A change of career must have been very tempting.

What a site for throwing up unexpected

and very expensive issues.

Find out later in the programme if there were any more surprises

for Darren when we come back five months on.

The West Midlands, now, and the town of Bloxwich.

Bloxwich's neighbouring town is Walsall.

Traditionally, there has been a rivalry between them

dating back to the English Civil War.

Bloxwich was Royalist, Walsall, Parliamentarian.

The modern day has seen some investment in the town centre,

and it has good transport links to Birmingham.

So, I'm about a mile away from the town centre,

and the lot I'm here to see has got...

off-street parking.

Yes, it's not huge, it's not in great condition,

but it's off-street parking, which is always a bonus.

The house itself is also set back off the road quite a distance, too,

and you've got a shared drive.

Right, the house is semidetached,

it's got three bedrooms and a guide price of £75,000 plus.

I'm excited about this one. Let's hope the inside doesn't let me down.

Let's take a look.

-# Don't let me down

-Don't let me down

# Don't let me down now

# Don't let me down Don't let me down now

# Don't let me down... #

OK.

OK, on the odd occasion, when you come into a property,

it's not what you see that hits you first, it's what you smell.

And I can smell damp, I can smell... mildew and mould,

that's the first thing that hits you.

Anyway, there are the stairs going up to the bedrooms,

you've got a decent-sized hallway.

Across the hallway, into the first reception room,

and I can see there's a radiator here

so there's obviously some central heating in here.

An old-fashioned fireplace. That, if you like a fireplace,

you might want to tidy it up and keep it.

For me, I'd get rid of it.

But there's loads more signs over in the bay window

of the mould and the damp.

It just feels like this place has had no airflow for some time.

With so much mould, it needs a specialist to sort it out.

# I can't get rid of you... #

You really don't want this stuff in your house.

Mould infiltrates and damages the fabric of the building

and it can also be responsible

for sinus, skin and breathing conditions.

# I don't even know who is growing on who

# Yeah, yeah... #

And it's not just at the front of the house.

# Cos everywhere I go you're there... #

It's in the back reception and small kitchen,

which needs a complete overhaul.

So maybe it's a good idea to take out that wall and open it

out into the second reception room,

checking if it's a weight-bearing wall, of course.

# I want to touch you but I'm afraid of the consequences

# I want to banish you from whence you came

# But you're part of me now

# And I've only got myself to blame. #

Upstairs, that moisture has affected the walls and the ceilings,

in the bathroom and the bedrooms, too.

OK, in this bedroom...

Now, I'd like to tell you something different,

but it's the same as most of the rooms in this house.

There's cobwebs everywhere, it needs redecorating.

It's got a fireplace, as well, which you'd want to take out.

There's no flooring in, either.

But there is one thing I'd like to show you.

Now, take a look at that ceiling.

Now, that's a shade you won't find on any colour chart.

It's certainly not pure, brilliant white,

but I'm not waving the white flag at this property just yet.

I'm heading outside for a bit of fresh air and a fresh perspective.

So, out into the back garden.

Now, there's a bit of mess out here.

Before I talk about what I've got in here,

look at the size of this back garden.

It goes back some distance.

Yes, it's on split levels, but you've got loads of space out here.

You've got an outbuilding, as well.

But the interesting thing is...

all this space here.

You can come out three metres within permitted development

without planning permission.

You can also go a further one, two, three metres to six metres

within permitted development.

But you would have to undergo neighbourhood consultation

before that happens. What I'm trying to say is - it's huge out here.

There's loads of potential.

# Do you see what I see? #

Well, let's see if an agent from the auction house

who marketed this property

agrees with my plans for a large extension here.

Once one starts to extend,

if you're not careful,

you can push the potential value up

beyond the ceiling for the area.

If you're going to extend it here,

I would probably be inclined just to sort of take it out

at six to eight feet out the back, to make a larger kitchen.

And a larger sort of rear reception room.

I think any further than that,

you're starting to become expensive, and not what people really want,

because they end up living in a tunnel.

You could offset that feeling of a tunnel

by including skylight windows,

but that would add thousands to the build cost.

Despite the sheer amount of work needed here,

is there light at the end of the tunnel

regarding resale value for this house guided at £75,000 plus?

I would imagine that your price would realise, currently,

in the region of £175,000 to £180,000.

Right.

This is a good-sized property, but it needs an awful lot of work doing.

The kitchen's a bit on the small side, you need a new bathroom.

Basically, you've got to start again and modernise this place up.

But potentially it could be a lovely family home.

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

A three-bedroom freehold semidetached house.

Guide's increased to 75.

We will go past that.

Shall we start there?

For 75,000, and thank you.

75,000, my bid is at 80 now.

80, thank you. 85?

85 from you, sir.

Thank you, 85. And 90?

90, is it, sir?

It may have been towards the end of the day,

but there was still a few interested bidders for this lot.

We rejoin at 130 grand.

130. 135? 140.

No. You've been a great bidder, sir, but it's now with you.

Can I just see that number?

Number 446.

Make no mistake.

Are we all done?

One, two, three.

446, that property is now yours, sir.

Actually, the house doesn't belong to the bidder.

It was bought by son, Pinder, for 135 grand.

Pinder is a business analyst, and he's taken his first steps

into the property developing world - with help from his dad, of course.

Rather than meet inside the mouldy house,

we headed outside for some fresh air

and some sunshine in the back garden,

to have a chat about his plans for this property.

-Pinder.

-Dion, nice to meet you.

-Nice to meet you too, young man.

-Nice to see you.

-Congratulations.

-Thank you.

-What was it about this particular house

that sucked you into buying it?

This house is in such a good location -

and also, the school, as well.

I mean, that would be a pull for a lot of families and stuff, so...

that's why we thought this could be quite a lucrative adventure for us.

Do you know this area? Are you from this area?

-We're actually from Coventry.

-Are you really?

Massive fans of yours, Dion. Always have been...

Listen, I knew I had one somewhere.

Yeah, well... I think there's quite a few of us.

-More than you'd expect.

-Oh, good.

# Reaching into the deepest shade of sky blue... #

As a Sky Blues fan from Coventry...

# Sky blue... #

..Pinder will have about an hour's commute there and back

when he's working on the house - but he won't be doing it alone.

# So many miles away from home. #

His dad Ragbir will be project-managing,

and together, they've got big plans.

We're looking to do a rear extension, five metres,

-and really...

-Wow.

-..make a big, like kitchen-diner sort of effect.

-Yeah, yeah...

-Yeah.

The plan's granted that we're able to also...

The brick garage here,

we're looking to make that into, into a flat, there,

-so a self-contained...

-Really?

-..kitchen and en suite, as well.

-Wow.

-And furthermore, within the house we're also looking to do

a loft conversion, as well. So it would be a four-bedroom...

-Wow.

-..with a large extension...

Extension, as well.

Kitchen-diner and the flat, as well.

Which is currently the brick garage.

We're looking to maximise profit here, really.

But what about the ceiling price in the area?

-Have you checked that?

-Yeah, we spoke to some local estate agents,

and we've got some figures back on the plans that we want.

But I'm a pretty optimistic guy, to be honest with you, Dion.

Yeah, I mean, these are plans that we've got in place.

-Yeah.

-We've probably got B plans and C plans, as well.

-OK, that's good.

-If they don't come to fruition

or if we want to change it, like you said,

you talked about ceiling prices, as well,

so they're all something that we had to take in to consider,

but we probably will go ahead with plan A.

How much is in the budget for plan A?

What are you going to spend?

We'd like to spend around 40,000.

Hopefully we could get all the work done within that.

-OK.

-I know my dad's used tradespeople before...

-OK.

-..and he normally gets a good price with them, so...

That's a great thing.

Pinder's dad Ragbir,

who is going to be project-managing,

has a lot of experience in building and has lots of useful contacts.

We may bring some people from Coventry.

He also knows people in Birmingham as well, which is close to Walsall,

-which is pretty handy, as well.

-Yeah. So he is well connected?

Yeah, he's a pretty connected, clued-up guy, my dad...

How long is all the work going to take?

We're looking in the region of six months.

Maybe a bit less. That's probably a bit of a conservative one, so yes,

six months to do all the work,

and hopefully we can get it back on the market

and maybe look for a resale, or rental.

There's nothing about this for a first venture that's worrying you?

I know you've got your dad by your side, haven't you?

-Yeah.

-Which is handy, isn't it?

Yeah. At the moment, nothing's worrying me.

But we'll see, a couple of months down the line.

-Could all change!

-I might be ringing you, Dion.

What do I do with this? What do I do with that?

Exactly! So, is this the start of your property developing life?

We'll see how this venture goes.

Take one step at a time -

but I would like to get into property,

and it could be a career for me if I'm successful at it.

-I wish you all the best.

-Thank you very much, Dion.

-Good luck.

-Nice to meet you.

-Thank you.

I think this is a pretty big house to take on as a first project,

but Pinder's got big ideas.

Extension out the back here, self-contained building here.

All I can say is, it's a good job he's got his experienced dad there

by his side just to help him along.

But has he taken on too much?

Well, you can find on how he gets on later in the programme.

Coming up, Lucy visits a former takeaway in Kent,

but I don't think she can stomach the interior.

I wouldn't fancy ordering my food here as it is at the moment.

And find out if Pinder still has the hunger for property

after his first renovation.

Hopefully I'll be able to take on this experience

and take it to another project.

But first, back to a site I first visited in 2014.

This plot of land in Ebbw Vale had once been home to a school.

It had a rather nice retaining wall,

and, at an acre in size,

the 45-grand guide price was very appealing.

Apart from the fact...

currently, it doesn't have any planning permission.

So right now... Well, it could just be this.

There were definitely some pros and cons with this lot.

As there had been a building here previously,

getting planning permission was arguably quite likely -

but the overage clause in the contract

meant that if and when the planning permission was granted,

50% of any increase in the value of the land

would need to be repaid to the seller,

which was, in this case, the local council.

Weighing up the options was successful bidder Darren,

who was a local building contractor and paid £75,000 for the site.

Why did you want to buy it?

The purpose of purchasing the land was to develop into social housing.

-Oh, right.

-We are a construction company,

so we want to do the build

and then sell the lot on to a social landlord.

And we'll also generate some good employment opportunities,

which is part of the deal that you would strike up

with the housing association -

that we employ locally, and we'll obviously get some apprentices

-training on the site, as well.

-Oh, fantastic.

Darren and his company had plans to build 14 two- and three-bed semis -

and when we returned almost two years later, work was well underway.

But it was a delay in the planning process

that had seen work unable to start until a year into the project.

Once the planning was granted, the overage clause had to be addressed.

We had the land valued by an independent estate agent

and they valued the site at about 100,000.

When the local authority valued it, it came back as double.

So they used the district valuer, works for the Welsh Government,

that gave us a problem of 100,000

where the local authority was saying the land was worth 200,000

and both ours and our respectful client was saying 100.

In order to get on with the work,

Darren and his company lodged the money for the overage costs,

with the final decision resting in the hands

of the Royal Institute of Chartered Surveyors.

The shells of the buildings were up,

and Darren and his team were on track

to complete the project in the next few months.

So when we returned five months on, did they manage it?

It's a far cry from the empty lot that was here to start.

There's a fantastic little cul-de-sac

nestling in the rolling hills of the Welsh Valleys.

There are now 15 dwellings in total.

For starters, there's four one-bedroom flats,

ten semidetached two- and three-bedroom properties,

each with a bathroom and shower room,

making them ideal for family living.

All the houses are designed to Welsh Government requirements.

The rooms all feel nice and spacious.

Going outside, there's even some private garden space at the rear.

They've also been built to sustainable homes standards

and have rainwater harvesting systems installed.

And finally, property 15 is a bungalow

designed with disabled access.

The ceilings are structurally reinforced to support hoists

and the large kitchen-diner has rise-and-fall units

for wheelchair access.

The bathroom has also been specially adapted,

with hoists and a rise-and-fall bath.

Darren and his team have created some cracking homes,

built in 41 weeks after the planning permission was sorted -

and now it's time for Darren to hand the reins over to his son, Cole,

who will be responsible for the aftercare phase of the project.

He'll be working closely with the housing association.

We met up with both of them

to find out what has been the biggest challenge on this project.

The biggest challenge has been the weather.

We're quite high up in the Welsh Valleys,

so temperatures do get extremely low in this area,

so working through the winter

and finishing a project in the winter is not ideal.

You wouldn't normally plan it that way.

It was dictated to us from when we had planning permission

to when we could start the sites.

The construction, by and large, has gone quite well,

so there's been no real issues there -

but, at the end of the project,

it's all the little things that you have to do,

getting the various approvals, getting the sign-offs,

getting the quality right, to get the project over the line.

So, I think, probably the biggest challenge for us

has been working through the winter and the wet and the cold months.

If the Welsh weather has been the biggest issue,

does that mean that the overage case was resolved?

Well, the final chapter on the overage clause,

it's been favourable on our behalf.

The valuation that we sold the site for to our client has been verified

by an independent surveyor,

so it's actually set a bit of a benchmark case now.

So, for us, the money that we had to deposit with the local authority

to allow us to start the site will come back.

'Between both parties now, we both think we've reached a fair deal.

'It's in line with our costings,

'which was the most important thing for us

'as a commercial organisation.'

Probably a bit disappointing for the local authority,

but we'll all live and learn from it.

Going forward, we all know the starting point

for future developments.

They got all the work done

for just under the agreed contract value,

with a client of 1.7 million, so they must be happy, too.

I think the client's pretty pleased with the project...

Cole now gets the problem, so, as the residents move in,

we'll find out the truth.

-I don't know what you think about that.

-I think, ultimately,

having had meetings with them recently to agree going forward

the next 12 months of after-sales,

they've definitely been impressed with our performance as a contractor

and they've been extremely complimentary,

and I guess ultimately the biggest marker

that we can use to see if they're happy

is the fact that they're looking at more projects with us in the future.

With the client happy and residents due to move in shortly,

let's see what two local estate agents thought of the new street,

which cost just under £1.7 million to build,

starting with the agent who saw this when it was just a plot.

I'm impressed. What a difference.

Absolutely fantastic.

From when I came here first and just saw the yard.

First impressions of the site

is that it's produced to a very high standard.

Unfortunately, it isn't the best of days,

but the views from here are outstanding.

If these properties were coming to the market with ourselves,

which I just wish they were,

I genuinely believe I would have a buyer on this very, very quickly.

The conditions of the market haven't changed so much.

And this is what they're looking for.

This is exactly what they're looking for.

Unfortunately for the agents these great houses won't be for sale,

as they are owned by a local housing association,

who'll be renting them out to people who need them most,

at an affordable rate set by the Welsh Government.

However, the agents did value the properties

and thought in total they would be worth

somewhere around the 1.5 and £1.6 million mark.

So what do Darren and his son Cole think of the figures?

I think the slightly higher value is more appropriate.

It's more in line with what we are seeing locally,

but equally, I think developments like this will help lift the values

in the area. So progressively,

as other people do similar work in the area now,

it will help lift that band.

The new housing scheme will have a positive impact on the area,

but has there been a positive impact on the business?

The positive things...

It is our first turnkey development, from start.

We bought the land, we led the design,

we found our client and we built it out.

So, to do a full, what we class as a turnkey development,

that's a real positive aspect.

And that's the way we want to go in the future.

Off to Kent now, and Lucy is visiting a Sittingbourne suburb

with a nice historical vibe.

Less than a mile from the centre of Sittingbourne

is the historic suburb of Milton Regis.

Now, it has more of a villagey feel,

but it still has plenty of local amenities.

It's got a post office, a pub, a public library -

and the property I'm here to see is right in the heart of Milton Regis.

It was previously a takeaway on the ground floor,

with living accommodation on the two upper floors.

Here it is!

Well, it's not just this one here.

Oh, no! It's this one, as well.

And all for a guide price of 85 to 90,000.

I'm going to peek in.

Inside you can tell straightaway

this floor here was used as a hot food takeaway.

Right here was the servery.

And through here, I think this may have been the restaurant area.

Wouldn't fancy ordering my food here as it is at the moment.

Little bit tatty, and needs everything doing.

Through here, you've got the kitchen area.

That's quite a big space,

and I'm sure some of that equipment still might work,

but as a hot food takeaway, this floor has A5 business classing,

which gives you more flexibility

than if it had previously been used as a shop, for example.

Now, that is because under current regulations

you're allowed to convert it into a shop,

a restaurant, or a cafe,

without applying for change of use from the local authority.

There are plenty of other commercial businesses all along this street,

so I would advise doing your research

and finding out what sort of business

really would work best here.

There's a lot on the menu with this auction lot.

For starters, directly above the commercial unit

is living accommodation that you could convert into flats.

There are three rooms to the front of the building.

One with no window connects the two at the other end.

Through this room is a hall, which leads to a back bedroom,

followed by a bathroom and finally, a larger room at the end.

You could potentially do the same with the floor above,

which has four rooms,

although with no kitchen or bathroom.

So, quite a bit of plumbing work would be required here.

And on top of all that, you'd have to create separate access to them,

because the only way to get up to the first and second floors

is through the commercial unit.

# There's no other way...

# There's no other way

# There's no other way... #

There might be another way to look at this property,

because out the back is not quite so charming.

Apart from a mixed use of flats and commercial,

what other option on the menu could we choose for this property?

If you want to take this development further,

what about taking this whole property

and turning it into residential?

How about a couple of houses?

However, there is something I haven't told you yet

that could affect planning permission here.

This property is Grade II listed.

Now, don't get too excited,

because that means there'll be extra restrictions

on any changes you want to make on the inside, as well as the outside.

Restoring this building will be expensive

and require many consultations with the local conservation officer,

who has to make sure all work is sympathetic to the original design.

# You can to try to please me

# But it won't be easy

# And you don't stand an outside chance

# Don't stand an outside chance

# You don't stand an outside chance but you can try. #

Would it be worth the time and effort, though?

Well, we asked a local estate agent along to give us an idea

if local planning might consider

a change of use on this listed building.

# I know you think you'll get me... #

Well, the conservation officer who would oversee this area

is looking to retain the character

and protect the integrity of the buildings that are here,

but that doesn't mean to say that they're not going to be averse

to a change of use

and different uses out of the buildings that are here.

I'd like to think that the planners would be quite amenable

to a conversion back into residential accommodation,

because that's originally what the building would've been.

So, um, if they took an historic view,

then it may very well be welcomed.

The agent thinks a pair of four or five-bedroom houses

would be a good option and would be likely to get approval.

But there's a lot of work to do.

Could the eventual sales figures stack up,

even if you got it for around that £85-90,000 guide price?

Well, I think these two houses would be really quite substantial units

and could offer an awful lot of character,

and I think, in that respect,

and the potential values for these could be somewhere in the region

of 230 to £250,000 for each unit.

Well, there's certainly a lot of work to be done

and there's plenty of space to play with, which is a bonus -

and a number of options to consider, as well.

So if you want to make the most of this internal space,

you'll need to get the planners onside.

Let's see who wanted to take away this property

when we went to the auction.

Another takeaway premises.

But a big three-storey commercial residential,

and well worth the refurb that's needed.

Start me where you will on that one.

Really attractive guide price, I thought.

Give me 80, then. Got to start somewhere.

80,000. 80,000, I'm obliged.

At 82. 85.

85. 87.

I've got 85,000 and I'm looking for 87.

You can't believe that it's going to be sold for that, but it will be.

Now, we'll sell it for the first time.

I will... 87, thank you.

87.

At 90. 92.

92, 95. 95, 97?

97. 97.

And 100.

102.

102. And five. And seven.

107.

107. If you don't buy it, what are you going to do with those men

that are booked to go in there Monday? 107, can I say?

Well, if completed by Monday, of course. 107.

110. 110.

No? 108, then. Because you've been with it all this time.

108. Put in a white swing instead of a coloured one,

that'll save a grand. 108. 109.

109. You could buy it for that.

109. 110.

Just £1,000 now.

It's not a big gap. The first time then, at £109,000.

Second time at £109,000.

Third and final time.

Yours at 109, G280. Thank you.

The successful bidder paying £109,000 for this was Paul.

Paul is an experienced builder who normally works in London.

He met Lucy to discuss what he had planned

for this Grade II listed building.

Great to meet you today. Congratulations.

-Thank you.

-Now, I want to know why you wanted to buy this.

Erm... I looked at it before the auction and...

I didn't bother to investigate inside,

or look into any of the details of it,

but I turned up at the auction and the bidding was going so slowly

that I bought it on impulse.

-You just bought it for 109,000?

-Yeah.

Do you think you've got this sort of steal at £109,000?

Is that what you wanted to buy it?

Yeah, it's a lot of property for such small money.

Have you bought anything else locally?

-The shop next door.

-You've bought the shop next door?

-Yeah.

Buying without viewing properly is something we always advise against,

but Paul also paid 130 grand for the lot next door,

which includes the barn at the back.

-So when you came away on auction day...

-Mm-hm?

You'd spent all that money!

-Yeah.

-Were you a bit shocked and surprised?

Yeah, I was a bit,

because I hadn't gone there intending to buy it at all.

So I'd just spent 200...

You know, over a quarter of a million pounds.

-Just on impulse.

-So you've got quite a big plot

if you add these two together.

So come on, then. Tell me, what are your plans?

Subject to planning, this will turn into two houses.

The shop that I bought next door

will turn into two three-bedroom houses,

and hopefully the barn will turn into a pair of semis.

How are you going to do that?

And how are you going to do that without tampering too much?

Because it is listed.

It will actually improve it,

because it was always two properties -

and they took the spine wall out to make it into one.

So, we'll put that back

and that will improve the stability of the building.

-So, not flats.

-No, we originally thought about flats,

but the council's policy is to turn shops into houses.

Because it's listed,

I'm sure you'll have a lot of involvement with the planners.

Yeah. Yeah, the conservation officer...

They'll be involved from the beginning,

and we will get a lot of delays, you know,

talking to them about what they will allow and what they won't allow.

So you've also got to put in your mind and think about this,

-it is on a busy high street.

-Mm-hm.

Obviously it's not that busy,

-but you still get lots of passing traffic.

-Yeah.

You've got to think about the noise implications and the type of buyer.

Who is going to want to buy this?

Well... Because we're only five minutes' walk from the station,

it's going to appeal to a lot of people that are commuting.

People in London put a higher value on the interior.

They don't mind traffic

and they don't mind, you know - because they're used to it.

Paul is allowing a budget of £80,000 per unit.

And assuming planning permission is sorted,

he hopes the work will take six months.

It's a big project, but he's got history.

My previous home was a scheduled monument when I took it on.

And we renovated it into a very high standard,

copied a lot of the period details,

and that was under the control of English Heritage.

So you really are interested in history?

I mean, this is something that really excites you, isn't it?

Yeah, you know...and most of the London properties

are either Victorian or Georgian, so there's some history to it,

so we're used to working on period properties.

You are the man for the job.

Good luck with this. Really lovely talking to you today, Paul.

-OK.

-Even though it was a crazy buy on impulse!

-I think you've got a good one here.

-I hope so, yeah.

-Congratulations.

-Thank you.

-Thank you.

Well, Paul might have a building background,

but before he can get started with his ambitious plans,

he needs to secure the planning permission,

and the listed status of this property

will only make it all the more challenging.

Join me later in the programme and you can find out

whether Paul has been left feeling sweet...

or sour.

So we've seen how one renovation got on. What about the others?

Have their efforts paid off?

Well, only one way to find out -

and that's to head back and have a look.

Time to head back to the town of Bloxwich in the West Midlands,

where I saw a three-bed semidetached house which wasn't to be sniffed at.

OK, on the odd occasion when you come into a property,

it's not what you see that hits you first, it's what you smell -

and I can smell damp, I can smell mildew and mould.

That's the first thing that hits you.

The other thing you could smell here was potential.

Aside from a complete renovation in all rooms,

this house offered the chance to add more space out the back.

The large split-level garden and garage

offered plenty of usable space.

This meant adding an extension to the back here

could have been the best way to add value.

This is just what Pinder thought

when he paid £135,000 for this house.

It may be his first renovation, but with the support of his dad,

who has years of experience in property development,

he was pushing the boat out even further

than an extension on this one.

He'd also planned to convert the garage into a self-contained flat

and go up into the loft, adding a fourth bedroom.

Lofty ambitions indeed,

that would need the support of the local planning department.

I'm a pretty optimistic guy, to be honest with you, Dion.

There's nothing about this for a first venture that's worrying you?

At the moment, nothing's worrying me.

But we'll see a couple of months down the line.

-Ha! Could all change!

-I might be ringing you, Dion.

-What do I do with this? What do I do with that?

-Exactly!

Well, I never did get a call from Pinder -

and to be fair, I think if I gave him a ring before we came back

just five months later, he would've said...

# Wha-wha-what did you say?

# You're breaking up on me

# Sorry I cannot hear you

# I'm kinda busy

# I'm kinda busy

# I'm kinda busy

# Sorry I cannot hear you

# I'm kinda busy... #

He and his dad and been very busy turning this house around

in just five months. The entire downstairs has been transformed.

The new extension leads off to two reception rooms

that have been knocked through to create a large living space.

Next door, the old kitchen is now a study.

And there's now a downstairs toilet under the stairs.

Upstairs, they have managed to maximise every inch

of the old bathroom to fit a bath and a shower in.

By taking the house back to brick to rewire, replaster and re-plumb,

they have removed every trace of mould.

Although they stopped short of a loft conversion,

in fear of overdeveloping the house,

they did go through with the plan of converting the garage.

Now it's a self-contained single room flat with its own bathroom.

So much work has gone into this massive project.

Pinder must have gained so much experience in the last few months.

So, I've been working on weekends, helping my dad out,

who is primarily the project manager here.

My initial role was just labouring when I came over,

just to give a hand to people.

Other than that, my dad was overseeing everyone.

And he's drawn upon his expertise

and his network of workers to complete the project.

That experience has helped them come in one month ahead of schedule

and an impressive five grand under their 40 grand budget for the work.

It almost sounds like it was too easy.

I'd say the biggest challenge would be the commute.

Sometimes we get stuck in traffic,

going from different cities from Coventry to Walsall.

It's not always easy, travelling in the morning,

erm, with workers, as well.

So, that has probably been the main challenge.

If we were looking to do it again,

we'd probably go closer to home and look for a project there.

That hasn't been the only journey Pinder has had to overcome

on this project, as he's also had an uphill climb

learning the ins and outs of property development.

This experience has been a steep learning curve.

I just tried to absorb as much information from my father

as possible and therefore,

hopefully, I'll be able to take on experiences

and take it to another project.

Well, before they think about moving on to the next property,

it's time to see if this one

could provide the capital for future projects.

We've asked along two local estate agents to see what they think.

I think the layout's good.

Originally, I gather it was a two reception room property

that's been knocked into one,

and with the rear extension, as well,

the ground floor accommodation is very, very good.

The standard of the finish is good.

Certainly the bathroom and kitchen,

which are ideal features to any buyer,

are done to a very high standard.

The rest of the property has been done to a good standard,

which will allow for anyone to come in

and put their own mark on the property.

Some good feedback,

but will the sales figures reflect the work they've put in

to their 170 grand investment?

I would look for achieving 200,000,

with a starting value of around 210,000.

If I was to put this property on the market today,

I would put it on the market

at something in the region of 200 to £225,000.

Well, personally, I think them sale values are kind of low,

to be honest with you.

We've also had our own local estate agent come down

and value the property themselves.

And they feel like it should be on the market for 259,000,

to achieve a sale figure of £250,000.

Well, at the end of the day,

a house is worth as much as somebody is willing to pay for it.

There's a potential pre-tax profit of between 30 and 80 grand.

So it's a successful first project by anyone's standards.

But perhaps rental might be the better option.

The property, I believe, would be a better rental property.

It has been set up and designed to attract that type of client.

And I believe this property would achieve

around £850 per calendar month.

Rental figure, somewhere in the region of 850 to £950 per month.

The rental figures are pretty similar

to what we had been expecting -

and to be honest with you, it is a long-term project

and a long-term development and I do see this being in the portfolio.

So, maybe the rental figures is something that we may pursue.

The top rental figure would give a yield of 6%,

and despite the varying sales figures either way,

they have added value to this property,

which was the main objective.

Well, that, and for Pinder to get his feet wet in property development

to follow in his father's footsteps.

The experience has been great.

I've had some really good bonding time with my father

and I've learned some really good tricks on the way.

With his first successful project under his belt,

it seems, in this case,

the apple certainly hasn't fallen far from the tree.

It's time now to head back to Milton Regis in Kent,

where Lucy saw a Grade II listed building

that contained living accommodation above a Chinese restaurant.

Right here was the servery.

And through here, I think this may have been the restaurant area.

Wouldn't fancy ordering my food here as it is at the moment.

Little bit tatty, and needs everything doing.

It had a class A5 commercial use,

so regulations meant there were plenty of options on the menu

for what you could do with the ground floor.

It could remain as a restaurant, become a cafe, or even a shop.

However, that's not why experienced builder Paul

decided to pay £109,000 for the property at auction.

He was cooking up something different here

and didn't even look inside pre-auction, a Hammer no-no -

because he had a gut feeling it was full of potential.

-I bought it on impulse.

-You just bought it for 109,000?

Yeah, it's a lot of property for such small money.

So come on, then. Tell me, what are your plans?

Subject to planning, then, erm, this will turn into two houses.

How are you going to do that?

And how are you going to do that without tampering too much?

Because it is listed.

It will actually improve it, because it was always two properties,

and they took the spine wall out to make it into one,

so we'll put that back,

and that will improve the stability of the building.

I'm so excited to see the outcome here.

Initially, Paul thought the planning process would take about eight weeks

and the building work around six months.

So now we're heading back almost three years later.

It must be ready, right?

# Maybe sometime sooner or later

# But I don't think I'm ready yet

# I'm not feeling up to it now

# Just not that steady yet

# And I don't need you telling me how. #

Sadly, nothing about this project has been simple -

and the reason for the delay is, of course,

because the building is a Grade II listed one.

It's been a bit of a roller-coaster.

We kept thinking that we'd reached a point where we could go ahead,

but kept getting rejections.

Normal planning permission only takes eight weeks

and, erm...

This took three years, which kind of set us back a bit.

During this time, we've had problems with security.

We've had three arson attacks,

people have been in and stolen all the cables and pipework.

The fire damage wasn't just restricted to this house.

The other lot he bought next door

had its barn set on fire,

and the main building suffered the same delays in planning.

Back next door, Paul and his team were granted permission

to strip this 15th-century property back to the bare brick,

so they could see the condition of the old timber frame building.

Sadly, hiding underneath the plaster were a few nasty surprises.

We've got the main structural beam running through,

but the valley has given way over the years and rotted this beam out.

So this beam wasn't sitting on anything

and this is the... this is the structure of the beam.

Erm, it's no longer serving its purpose,

and we need to replace this completely

and pick up this beam at the same time.

# I need support... #

Once the beams are sorted,

Paul can get down to fitting out the houses.

The kitchens will actually be to the front of the property,

because of the road noise,

meaning the living space will be towards the back.

The first floor will have two bedrooms

and a family-sized bathroom.

The other two bedrooms will be in the attic.

Now the planning has been passed,

will Paul be able to stick to his original six-month build time?

The timescale should be the same from now,

providing that we don't come up against any problems

with the authorities. We've got a bit of a challenge,

because building regs have different requirements to the planning people,

so we have to try and meet the building regs,

but at the same time not destroy the fabric of the building.

Paul has spent £20,000 on the work so far

and thinks it'll be another 120,000 to complete the two houses.

Time to ask along two local estate agents

to see if they think all the years' work are going to pay off.

The overall size of the property is very good.

The living accommodation is a very good size

and the location is very good to local schools

and within walking distance to Sittingbourne train station.

I think the properties, once completed, will be great,

and we would have buyers for the properties coming from London,

because this area is really up and coming,

from people moving out of London.

Encouraging noises from the agents, then.

It sounds like Paul's impulse buy

was a good decision in terms of location.

Could there be light at the end of a very long development tunnel?

So far, he's invested £129,000 in this project.

The agents think if he sold it right now,

he could get between £400,000 and £450,000 for the two houses.

After three long years, that must be tempting.

I've always been of the opinion that it's better to go the full distance

and end up with owning the property,

but if 450,000 for the two properties is viable,

then it would make more sense to go down that one.

If Paul sold now, that would mean a potential

of £321,000 profit, minus taxes and fees.

So could he make more if he finishes it?

He would, of course, have months more of hassle and hard work

and it would take his costs up to 249,000.

What could the completed houses sell for?

I would recommend a resale figure

of £350,000 to 375,000, per each property.

We would value them at £395,000 each.

Crikey! Those top figures would mean a potential profit of £541,000.

So, a possible 321,000 now, or 541,000 later.

Which will Paul go for?

I need to speak to my financial advisers

to find out what it's going to cost me in tax

to sell the properties on, so I'm very encouraged.

Yeah, it's taken me by surprise.

This project has certainly been taxing,

so maybe it's fitting that the final decision

on whether or not Paul will complete this renovation

will come down to the figures.

Hopefully the extra £220,000 pre-tax profit Paul could make here

when the houses are complete will spur him on,

and we can return again to see this listed building restored fully.

Well, we hope you've enjoyed today's show,

seeing how other people tried it out.

Maybe we've inspired you to give it a go.

Yes, I hope we've been some help to you.

See you next time on Homes Under The Hammer.

-Goodbye.

-Bye-bye.