Episode 15 Homes Under the Hammer

Hello, welcome to the show.

I have lost count of the number of properties

that we've featured on Homes Under The Hammer over the years.

Yes, there have been thousands,

and we've covered most of the country doing so.

But today is a special day, because we are joined by

our brand-new member on the team, Martel Maxwell.

-Hey!

-Hello!

-Welcome.

-Hi!

-Are you looking forward to getting on with it?

-I can't wait.

Property is a real passion of mine.

So I can't wait to get stuck into some real action at the auctions.

So what are we waiting for? Let's see some homes under the hammer!

Well, Martel, if property is your thing,

you've come to the right place.

And if you like a good deal, as we do,

the auction house is a great place to start.

Yes, but there are no guarantees and, of course,

you have to do your research before you stick your paddle in the air

and do that successful bid.

Well, let's see who did exactly that, and what they bought,

on today's show.

In Gillingham, Kent, I'm wondering,

is it an art installation or a garden?

You've got car seats, toys, trampoline - all sorts.

In north Chingford, London, this house may just cast a spell.

Now, the catalogue does say a few magic words...

In Wolverhampton, this house has a Hammer House of Horror effect...

CREAKING

Spooky.

All of these properties have been sold at auction,

and we'll find out who bought them

and what they paid for them when they went under the hammer.

Sold, 250, well bid.

Sitting on the banks of the River Medway in Kent

is the famous Chatham dockyard, which has transformed into

a commercial port and modern urban living area.

It's also brought money into the area as a film location

for You Only Live Twice and Les Miserables.

But regeneration isn't exclusive to the docks.

Today, I'm a four-minute train ride away in Gillingham,

home of the dock's army base.

My mission? To scout out our filming location.

When it comes to property investment,

location is so important.

And in this case, we're just a ten-minute walk from the hospital,

and a university campus is even closer.

Now, this says to me you've got a ready supply of tenants,

and that's great for potential rental income.

The property I'm here to see is this two-bed Victorian terrace,

with a guide price of £125,000.

Let's see what it's like inside.

Straight into what is a reception room,

and, you know, it's a beautiful, bright day outside,

and suddenly it feels a bit gloomy -

and there is a smell, a real smell of damp.

So, we'll see what's causing that.

It's tired, it's dated, it's a wee bit sad and unloved.

Good news is, you do have central heating,

and also some double glazing.

OK, there's a fireplace there, actually, which you could restore,

add a bit of character.

Upstairs, you've got the textured ceiling,

which you'd probably want to update.

Through to a second living area, and through to your kitchen as well,

you've got woodchip on the walls, which is never great,

it's a nightmare to come off.

And also, often, there's damage underneath to the plasterwork,

so that could be a big plastering job for a buyer.

And, ah...

This is where our damp smell is coming from.

The ceiling in the kitchen isn't just damp.

That's not just damp, that looks like it's rotted through.

Now, that could be an extension and possibly a flat roof,

which always has a shelf life.

Past the kitchen, you have your bathroom,

which absolutely looks like it needs to come out, but more than that,

it's not ideal having it down here.

If you can put it beside the bedroom area, much better,

depending on if there's room to do that.

I guess there's only one way to find out.

So, as I venture upstairs to see what delights await me,

you can have a better look around the downstairs,

and enjoy some Chris Rea.

MUSIC: Crack That Mould by Chris Rea

A lot of work and clearing to be done here,

but one job would be top of my list.

# Crack that mould... #

Precisely, Chris!

And your tip for that bathroom?

# Crack that mould... #

My sentiments exactly!

Ugh.

Upstairs to our bedrooms, you've got the textured ceiling,

which we'd probably want to update, and the whole place looks tired,

in need of modernisation, but the big question is,

is there room for that bathroom?

MUSIC: I Still Haven't Found What I'm Looking For by U2

# But I still haven't found what I'm looking for... #

Now, looking in both bedrooms, yes,

it would be ideal to have a bathroom up here,

but you'd really be compromising the space of not-very-big bedrooms.

I think it's a very big job, and maybe not worth it.

Now to the outside space.

There's not much to speak of out at the front -

just enough space to keep your wheelie bins.

The back door needs to be replaced.

But I feel curiously drawn to the back garden...

I wonder why?

# Come into the garden

# Its magical tree... #

It's kind of how I imagine a Tracey Emin garden would look

at the Chelsea Flower Show!

You've got car seats, toys, trampolines - all sorts.

You would absolutely need to get the skips in and clear it out.

But I love the size and potential of the garden.

Here, well, you've got a shelter

that was probably meant to shelter you from the rain.

These days, it wouldn't offer you much solace.

But all in all, I love the possibilities of this garden.

We asked a local property expert along to see who,

other than student renters, would find this property appealing.

I think when the property has been totally renovated,

it will appeal to young first-time buyers.

That's interesting. So, this could be a first home

or a good investment for resale.

What could potential resale be,

given its current guide of £125,000?

As far as the sales value's concerned,

I would recommend an asking price of £185,000.

And as far as the rental value is concerned,

I would suggest a figure of £750 per calendar month.

There's no doubt about it, this terraced house needs plenty of work,

starting with that roof over the bathroom and kitchen.

But it's got plenty of possibilities,

and could make a great investment property -

once you've done those renovations, of course.

Let's find out who saw the potential when it went to auction.

Lot 31 we go to now. Sweet little house again.

Can we start at 130 on this one, to start me?

Give me 125, then, start me where you will.

Anyone who lost the last house might...

125 I've got, 128 now, do I see?

128 do I see? 128 on the back wall, 130, Steve?

130, and two...

Steve, just out of shot, is one of the auctioneer's colleagues,

and he's acting as a proxy bidder

for someone who's not at the auction.

We rejoin the bidding at £140,000.

Anybody in the room coming at 142?

If not, for the first time, 140,000.

I'm looking for 142.

Second time at 140,000.

Third and final time, at £140,000.

142, gosh, that was a late one.

At 142,000 I have.

144 I'm looking for. 144 I've got.

146 now, if you like.

146. 146, 148 now.

At £146,000, sitting down in the middle on the right.

146,000 for the second time.

If I don't get 148...

Third and final time, at £146,000,

are you sure you're all done at 146...?

Yours in the green and black top.

And the number is...

The successful purchaser, paying £146,000, was Kitty,

who's just out of view, at the auction with husband Rajesh.

Kitty is from Hungary, and she met software developer Rajesh,

who is originally from Bangalore, when they worked together.

They have a young son called Oliver.

Apart from their own home,

this will be their first refurbishment property.

-Kitty, Rajesh.

-Hi.

-Hello and congratulations.

-Thank you very much.

-Thank you.

Did you come to look at the property before, did you see inside?

Yes, yes, we had one visit, quite short, I think, but...

And regarding the legal parts, not really, to be honest.

-Ah.

-Because it was just so...

So, so...so many pages, and I felt like I don't have time for that!

It is a bit boring, but...

-there can be some nasty surprises if you don't go through it.

-Yes.

-Did you find any?

-Yes.

-We had to pay a certain admin fee

and stuff, which seller has paid, and we had to pay them off.

So it was in that legal pack, which we didn't really look at properly!

Oh, dear!

I think this could be my very first Homes Under The Hammer scolding!

We all know the drill - read the legal pack!

Yep, it's boring, but really, it's better to be bored than broke -

and there's a lot at stake.

In this case, a further five grand AND additional cost,

not to mention that they were caught out with new rules

on second-home stamp duty. But this is all a learning curve.

Kitty has changed from the software industry

to work on property full time,

and she's been inspired by previous experiences.

We did a valuation of our home, and, er, I managed almost everything,

with my son. And that's why I know this is something what I can do.

So, finally, I resigned and just started focusing only on properties.

Great. It's a brave move.

And it gives you an incentive to do it quickly, I guess.

-Yes, yeah.

-So that you can be a mum again, full-time...

-Yeah!

-And get another project.

-Yeah.

-Great. And what do you plan to do with it,

-to rent this property out?

-Yeah. Yeah, actually,

that is the big difference between this renovation and our renovation.

Because here, we are trying to keep, you know,

the expenses as low as possible, which is actually a big challenge.

Well, if it's a business, you have to make money.

-Yeah!

-That's the aim.

When it comes to saving money, their aim is true,

as the couple have quickly got an exemption from council tax

for a whole year because of the uninhabitable state of the property.

That should help ease their pain

after paying 24,000 over the guide price.

So, the guide price was £125,000.

-Yeah.

-You might have gone a little bit over.

-Yes, yeah.

-Does that affect your budget?

What's your budget for this place?

Er, we don't know how much we need to spend,

but I would be very, very happy if it's...

somehow we manage from 20k.

So, not more than that.

I think it can go...30k.

-You think it might go up to 30?

-Yeah.

And what do you think the main parts of the budget will go on, Rajesh?

Er, we have to do a whole new kitchen, including the ceilings,

a lot of damp, damp has to be corrected, the flooring, plastering,

new plastering, we are putting new plumbing, new rewiring,

so we can have proper certificates and everything done.

That roof's a real problem, isn't it?

The flat roof? It's damp and it's rotten through.

-Yes.

-Have you looked into

how much work and money that will cost to fix it?

We don't know how much money it will cost,

but we know it's going to cost. We didn't realise

that there is asbestos as well, so we need to sort that out.

I have spoken to the builders,

and we need to arrange clearing this house,

so there is special companies who comes and clears this out.

Kitty will project-manage

and purchase all fittings, fixtures, flooring and so on,

but they will employ contractors for the works.

Rajesh, tell me a little bit more about what you do.

Er, I work as a software developer in finance, in one...

That's good, finance -

you'll be able to keep the purse strings in order!

-Yeah, I can...

-Is that how it works?

Er, not really.

She's doing everything, I just sometimes just take a look,

what is she doing, if she needs some help, which I can help in weekends.

But other than that, she is managing everything, start to end.

Both our money is invested,

so I sometimes do keep an eye to see where we are going,

what is she taking decisions, that's all.

What's your timescale?

-So, we want to finish everything in two months. Yep.

-Two months?

-Yep.

-Are you confident you can do it?

-Erm...

-Fairly confident.

Yeah. Yeah. I think yes.

And having given up your job, this is your full-time job.

-Yes, exactly.

-You can put everything into it.

I can't wait to see what you do with the place. Congratulations again.

-Thank you very much.

-Thanks, Rajesh. Thanks, Kitty.

-Thank you very much.

These are really exciting times for Kitty

and her new property development business,

and it's great she's got the support of husband Rajesh.

But there's an awful lot to be done in that two-month period

they plan to turn the property around.

And who will be right when it comes to budget?

Will it be 20? Will it be 30? You can find out later in the show.

Chingford, historically a rural Essex parish,

is now a busy district in the London borough of Waltham Forest,

and a train could have you in London Liverpool Street

in under 30 minutes.

Well, ten minutes' walk from Chingford train station

is the property I'm here to see. So, commuting-wise, that's great news.

The property itself, three-bed semi, guide price £325,000.

Well, it's pebble-dash city on the outside - let's take a look inside!

So, what have we got?

Through the front door,

shower room and toilet, that's quite useful,

into a sort of little area here with the stairs up to your bedrooms.

The front living room area there

currently being used as a little bedroom,

which does throw up the whole possibility of using this

as some kind of house of shared occupation, or HMO.

Another bedroom kind of thing there, bit of a mess.

The first thing to know is, actually, it's full of stuff,

so we'll try and see through that.

Through here into the kitchen at the back of the property,

currently being used as a bit of a lounge as well.

You know, it needs... Well, a bit of investigation.

If you come into a house like this,

the first thing you want to know is, is there somebody living here?

It looks like there is.

So your solicitor definitely needs to check out the legal pack

to check you've got what's known as vacant possession,

because if you haven't, that throws up a whole load of issues.

# Well, there ain't no room

# Well, it makes no sense

# Hey, there ain't no room

# God, it makes you tense... #

Now, broadly speaking, vacant possession means that

the property should be free of chattels -

that's stuff, to you and me - and free of people as well.

It could be tenancy with contractual rights,

so you really need to go through the legal pack

before bidding at the auction.

So, upstairs, can't get into that room so we'll move swiftly on.

Two bedrooms, a smallish one towards the back,

in fact both of these towards the back.

Bathroom, half-decent size, obviously needs a bit of tidying up.

That sort of sums up the whole house, really.

It's got loads of potential, it just needs that...

..bit of work.

But potentially, could be brilliant.

Sometimes you have to look beyond the clutter

to see the true value of the property,

and sometimes you just have to pop outside.

Now, the catalogue does say a few magic words,

and those are "potential for an extension".

And, yes, I can absolutely see that,

both at the side and the back of the property.

Now, that would massively increase the value of this house.

That's the good news. The bad news is, looking around,

I don't see any of the neighbours doing an extension, which means

there might not have been a planning permission precedent set

as yet, but if you could get it, make this a really big house,

or even flats, well, then we're talking serious numbers.

# So if there's something you'd like to try

# If there's something you'd like to try

# Ask me, I won't say no How could I? #

OK, so it's not as easy as just asking,

but if you do get planning permission,

this could potentially be a very good investment.

We asked along a local estate agent for his opinion on this property,

guided at £335,000.

The property's of good size. I would change the layout

in terms of where the kitchen's located.

Another benefit to the property is

that it's got a downstairs toilet/ shower room,

a very good-sized garden which, possibly with planning permission,

you could probably extend out to the rear as well

to increase the size of the property.

To change the layout of the property and bring it up to a modern spec,

I would estimate a cost of around £15,000 to £20,000.

To put an extension onto the rear of the property and bring it up to

a modern spec, I would estimate a cost of around £40,000.

For the property with a hefty guide price of 335,000,

you'd need to decide if further expenditure on the extensions

would suit your needs and be cost-effective.

So what kind of rental does the agent think this property

could command once renovation is done here, without the extensions?

Once renovated, I believe this property could achieve

£1,500 per calendar month on the rental market.

OK, so what about the resale value of the property,

with an improved internal layout?

Once renovated and brought up to a modern spec,

I believe this property could achieve

anywhere between £400,000 to £425,000.

Well, it's a good location and there is potential to extend,

two very big boxes ticked.

It all comes down to the price that was paid at the auction.

Let's find out what that was when it went under the hammer.

Three-bed semidetached house,

you've got some garden off-street parking.

I don't know, 280, go upwards from there?

Seems low for Chingford.

Sitting down 280, 285 standing up,

285, 290,

295, 300,

305, 310.

315.

The bids steadily rose, and we rejoin at 320,000.

321, 320...

325. 326.

327, 328, 329...

330. 331.

Have a think. 330 with you.

331 elsewhere?

If not, 330 down here, first time...

second time...

Third and last time, if you're all done?

Sold, 330.

So, for £5,000 over the guide price,

it was bought for £330,000 by Phil.

However, it's not Phil who is here today,

it's his friend and employee Clive,

who will be filling me in on the plans.

Clive, nice to meet you.

-And you.

-Congratulations. Tell me the story behind this house.

Well, we look at properties because we develop properties,

we look in the auctions.

So you say "we", what's we?

I work for a company and we've done four of these properties before,

so this was a natural progression.

We do grounds maintenance and landscaping as well

for local authorities, housing associations,

so we work from that, and also building and technical services

in the local authority,

we have contracts with them for building works, etc.

Right, so in terms of these kind of new projects you're involved in,

-what's your role?

-Really to look after the site once it gets going.

-Right.

-I also do all the ordering of materials, get everything together,

so basically project managing.

What was it about this house that particularly appealed?

Probably where it was, being in north Chingford,

it's an up-and-coming area, and the size of it,

and the potential that we saw there.

Obviously there's someone living here.

-Yes, there is.

-What do you know about that?

The lady that owned it previously was renting this out as bedsits.

Obviously when we took this over,

knowing that we were going to be putting in a planning application

for works in the future, we decided to keep the rooms going.

There was a lady staying here originally

who really didn't have anywhere else to go,

so we said to her that she could stay on a short-term tenancy...

-Right.

-..and we then also put some of our guys in here.

-Right.

-Basically using it while it's not doing anything.

And what's the planning you're applying for?

We're applying to get a rear and side extension,

-and turn this into four flats.

-Oh, wow, four flats?

Four flats, one-bedroom flats.

Have you spoken to the planners at all?

We haven't as of yet, we're just getting drawings sorted out, etc,

then we're going to have a chat with the planners,

see where we go with that.

# What's the big idea?

# I would like to know... #

Big changes afoot, then,

but there's no guarantee that planning will go through.

As well as sorting through the red tape,

a little sweet-talking may be necessary.

Planning permission will definitely

require the support of the neighbours and things,

how are you going to appease them?

We certainly need to talk to the neighbours,

as soon as we've had our plans drawn up we'll make arrangements to speak

to the neighbours, just to let them know where we want to go with

the property, see if they have any issues. If they have issues,

then maybe we can sort the issues out before we go anywhere.

Talk me through, roughly, the plans, then,

how it would work to get four flats into this property?

Plans are going to be, with the rear extension, side extension,

we're using basically where the front door is

as the main entrance into it,

then it will be split into flats -

two on the ground floor and two upstairs.

Right, and will the plan then be to do them,

build them and sell them, or rent them?

We'd look to probably sell three and keep one.

-OK.

-That would be the plan.

And what do one-bedroom flats around here go for?

Between 170 and 210, that sort of area.

OK, and the build cost is going to be?

We reckon it's going to be about 100 to 110.

£110,000 added to the purchase price of 330,000, that's £440,000.

And if they sold all four flats at 170,000,

that would mean a potential pre-tax profit of £240,000.

So what's the timescale for what you're going to do?

-I would say four to five months.

-Right.

-From start to finish.

And then next is another project like this, perhaps?

-Oh, yes. Yeah, yeah, definitely.

-That's on the cards.

Who finds them at the auction?

Well, Phil is my boss, he's always on the auction sites,

and we do sit in the office sometimes

for hours on end just scanning the auction sites!

MARTIN CHUCKLES

Great, well, congratulations, and good luck with it.

-Thank you.

-I look forward to seeing how you get on.

Well, there's clearly money to be made on this one,

but it does require the approval of the planners and the support

of the neighbours. How will Clive and his boss get on

sorting this place out? You can find out later in the show.

Coming up in Wolverhampton - no-one is safe from Ray's plans.

That's everybody working their socks off, I'm afraid.

Anyone I can drag in here, yeah!

-Good man, rope everybody in.

-Exactly.

And in Chingford, London, Clive has learnt some lessons

he'll take into his next project.

Nothing with major planning permission at the moment.

Now we're back to Gillingham, one of the Medway towns in Kent,

where earlier I looked around this two-bedroom terrace.

It was bought for £146,000 by Kitty,

as her first development project.

Hungarian Kitty met Rajesh, who was from Bangalore,

when they worked together in the software industry.

She was on her own this time,

as Rajesh planned to act as an adviser.

Kitty certainly had her work cut out, and not just on the inside.

Here, well, you've got a shelter that was probably

meant to shelter you from the rain.

These days, it wouldn't offer you much solace.

But by far the worst feature was just behind the plastic canopy,

in the form of a flat roof over the bathroom and kitchen.

Have you looked into how much work and money that will cost to fix it?

We don't know how much money it will cost,

but we know it's going to cost.

We didn't realise it had asbestos as well.

So we need to sort that out.

Asbestos removal can be a slow job,

but Kitty was confident she could

turn the property around in two months.

We're back just over two months later for a Hungarian dance

in Kitty's new rooms.

The kitchen now has a contemporary feel, with lots of light.

What was a back door is now a unique floor-to-ceiling window.

Back in the front room, there's been a key change -

this is now a bedroom that has been created

by adding a partition corridor.

But instead of me going on about new floorings,

electrics and planning,

why don't we have a listen to a bit of beautiful Brahms, darling?

CLASSICAL MUSIC

Brahms was a German composer,

but this is Hungarian Dance No. 5.

Don't say we're not cultured on Hammer!

There's also been a further progression in the garden.

Although not exactly manicured,

it's certainly better for having a tidy

and a few skip-lots of stuff removed.

And that flat roof, well, that's also been sorted.

And just in case you're wondering where the back door's gone...

Here it is!

We didn't think the original bathroom was peachy,

but now it is - in a good way!

Downstairs is done. Let's head for the top floor.

The whole place looks smart, contemporary and easily maintained.

Has Kitty WALTZED through this renovation?

Actually, after we bought it,

I asked the auction to show us again,

just to do some measurements.

And I was a bit shocked - "Oh, my God, what did we buy?"

Because it was just so disgusting, the whole thing.

And extremely dark everywhere.

So the work was actually more than we were hoping for.

Yeah.

Upon lifting the carpets, they found very poor flooring underneath.

They chose to replace it with oriented strand board, or OSB.

We had to put OSB everywhere.

The whole house, before you put the laminate.

So now it's become very stable, nothing moves.

It's very stable and firm.

Yeah, it was kind of moving, not flat.

It's more than 12mm OSB, which makes it very stable.

But stability wasn't the watchword when it came to their choice

-of contractors.

-We hire the guys individually,

and it was actually extremely difficult to manage them.

It was very, very stressful. Much more stressful than I expected.

Unfortunately, their chosen plumber was taken ill,

which meant some additional delay.

We had to look...

for a new plumber, who can start immediately.

Which was extremely stressful.

I was just calling these guys from morning until evening,

and maybe 20 or 30 guys came here to take a look.

And...yeah.

Having removed the woodchip and, in some cases,

the plaster underneath it, they decided not to replaster,

and Kitty came up with an alternative design solution.

During the entire renovation, we didn't have heating at all.

And for the plastering, you need heating,

and it was cold, and we didn't want to lose time,

because it just takes forever for the plastering to get dry.

That's why we decided just not to plaster,

just to paint the bricks.

As well as being cheaper than replastering,

I think the painted bricks add character.

Kitty saved further money by

sourcing some second-hand fixtures and fittings

from an online auction site.

She did all the designing and everything.

She figured out which stuff to put in,

from where to get it and everything.

It was a lot of work, and she did it well. So well done.

The refurbishment budget was set up between £20,000 and £30,000.

So how did Kitty fare with her, eh, kitty?

We spent around £24,000.

-At the end.

-And what's Rajesh's take on the results?

I don't think I would have done so much creative way of designing.

I think I'm probably not good at that.

So she executed it well.

By creating a third bedroom downstairs

and a large, open-plan living area,

they've maximised the potential if they rented this property out.

So, what did two local estate agents make of the changes?

First, the agent who saw it previously.

It's much brighter, lighter, and it's habitable now.

When I was first here, it was a real mess.

I think the standard of finish is very good.

It's all white and grey, that's very modern at the moment.

Buyers and potential tenants are very interested

in those type of properties.

OK, the estate agents seem impressed.

So what rental valuation would they suggest?

I believe it can achieve between £825 per calendar month

and £850 per calendar month.

I think the rental value for this property is

approximately £900 per calendar month.

In total, they've spent £170,000, excluding fees and expenses,

so the average rental forecast equates to just over a 6% yield.

But Kitty has another option she's looking at.

We are planning to rent it out per room.

That's why, actually, we are hoping to get more than that.

Kitty's currently negotiating renting each room out separately,

and is hoping for a total of £1,000 per month.

But she will cover utility bills, broadband and common area cleaning,

costing roughly £100 to £350 per month.

As always, you need to comply with council regulations on house shares,

or HMOs, if that's your plan.

Kitty has installed fire and smoke alarms as required.

So, will they be moving onto their next development?

We have different feelings about this.

Well, I for one hope that they do.

And who knows, we might see them at the auction room again.

In 1927, the UK's first automatic traffic lights

were installed in Wolverhampton.

Nowadays, there is easy access to several motorways,

and it's where glam rockers Slade came from.

MUSIC: Take Me Back 'Ome by Slade

It's the hottest day of the year,

and the city centre is only two miles away.

Which, normally, I would walk no problem.

But on a day like today, I think I'll give it a miss.

But this place is in a great location.

It's got three bedrooms, it's a semidetached house

and has a guide price of £75,000.

Let's get in and see what you get for your money.

DOOR CREAKS LOUDLY

Spooky. Now, I'm guessing - just guessing -

these hinges might need a little bit of oil on.

But look what I've spotted as soon as I came through the door.

There is a stairlift.

They must have known I was coming.

This is the XPF1 model - ex-professional footballers' model -

we've all got them. We need them for our dodgy knees,

but I have upgraded to the XPF2.

Want to keep up with the Joneses - get the same as me.

Right, into the first reception room,

which isn't a bad size at all.

It does look a little bit dated, the carpets need changing.

The fireplace, gas fireplace, you'd want to get rid of that.

So, yes, get the wallpaper off in there.

Into the second reception room. Now...this is a little bit strange.

You've got your kitchen cupboard over here,

you've got a freestanding cooker over there and sink.

Very old-fashioned layout.

Now, there's got to be a way of using this space better.

I, personally, would make a big kitchen/diner in here.

And it's got a downstairs toilet as well, which is always a bonus.

And I can see that the electrics are very old sockets as well.

I can't see any central heating either.

Structurally, it feels OK.

But it's very, very old-fashioned.

And one look at the three bedrooms proves my point, I think.

# I'm just an old-fashioned girl with an old-fashioned mind

# Not sophisticated, I'm the plain and simple kind

# I want an old-fashioned house with an old-fashioned fence

# And an old-fashioned millionaire... #

Old-fashioned fences and walls

may have been the grand way to do it back in the day,

but I think modern needs are a must these days.

Almost every other house on this street has got off-street parking.

But, unfortunately... ours doesn't.

Now, it might seem an easy job - you knock down the wall,

you chip away at the kerb and you're sorted.

Not that simple - there's a process that you've got to go through.

You've got to get in touch with your local council,

then they'll put you in touch with some approved contractors

that can drop the kerb for you.

They'll come out, they'll do that - sorted.

It will cost you around about £500.

Providing there aren't any complications,

like lampposts and telephone poles in the way,

and there is no cable TV under the pavement.

Some councils restrict the type of hardstanding driveway material.

In areas that flood,

you might need to use impermeable membrane rather than tarmac.

Just check with your council.

I wanted to come out the back garden to see how big it was.

It goes back a long way, it is a bit overgrown,

but that could get sorted no problem.

What I'm thinking is, could you add a bit of inside space?

Now, you can come out, with permitted development, three metres.

I think that would be more than enough to create a bit more space.

You'd have lots of garden left,

and it would be something that I would definitely consider

if I was on this project.

We called in a local estate agent

to see what his considerations are about this property

and its potential values.

What work is necessary here and what would it cost?

You're looking at dropping the kerb, doing the driveway,

which you're going to be looking around £2,500,

I would have thought, for that.

You've got the windows, internally, that need doing.

New kitchen, new bathroom. Garden needs attention at the back.

So, all in all, there's probably £20,000 worth of work,

I would have thought.

If it went for the £65,000 guide price,

a token investment then of 85 grand. What would it be worth?

I'd put the property on the market at an asking price of £125,000.

Room for profit, then.

However, the agent doesn't feel an extension would warrant the cost

of building it. He would prefer a conservatory

costing around £10,000. So what value would that add?

I would put the property on the market at £139,000.

There's a fair bit of work to be done -

kitchens, bathrooms, plumbing, electrics.

All that would have to be stripped back and you'd have to

start again. That said, I do think it's a good project to take on.

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

Lot 29. Start me at 70, somebody?

£60,000?

Or 50 then, I don't mind.

50, where are we? Thank you.

Right in the middle, at £50,000.

Do I hear 60 now?

Thank you, sir. 573 at 60.

62,500, sir? 62,500.

Fresh bidder. 65. 7,500, sir?

70, sir.

Having finally passed the guide price, the bidding continues,

where we rejoin, pausing at 86 grand.

Are you all done? £86,000...

You're out at the front, sir? One, two, three, the bid is £86,000.

To 106, are you all done?

Another one, sir? 87.

You're almost there, sir. 88.

89? 89. 90, sir.

We should have started here. At 90, sir?

90,000 I'm bid. 91.

Are you sure, sir? This time I shall be quicker.

£90,000... One, two, three.

I'll come back to you for the future.

106, for 90,000, sir, thank you.

Paying 25 grand over the guide price with his £90,000 bid was Ray.

He has taken to property developing with his daughter, Robyn,

since they both lost their jobs

when Ray's road sign company folded in the recession.

While I chatted to Ray,

Robyn and daughter Millie enjoyed the sunshine.

-Ray, nice to meet you.

-Nice to meet you.

-Congratulations.

-Many thanks.

So, why this house then, in particular?

Right, OK. We looked at a number of houses,

and we felt this was the best one to generate some added value.

And also, it was the one that potentially had not as much work

to be done to it as others that we saw.

-And who gets involved in that? Do you get involved?

-Right, yeah!

It all starts with you, doesn't it?

It all starts... I do the majority of the work,

the humping work. My nephew's an electrician,

lives fairly locally to here.

-Perfect.

-But in the main, I, together with Robyn,

will do the majority of the work.

We have a group of people that we've used before,

that we're constantly adding to.

And we're looking to sort of do further and further houses.

I think we need to spend about 12,000 to bring it up to scratch.

-OK.

-And I'm looking for about 140, around that number.

But we may rent it if it doesn't all pan out.

It's all about capital.

-Yes, yes.

-Capital to purchase the houses at auction,

because you need the capital there,

although I am selling another house as well,

my own house, to generate further capital,

to generate further projects like this.

-In order to keep moving forward.

-Yeah.

The long-term plan is to build up a portfolio of ten,

a dozen houses, to act as a bit of a pension...

A further pension for me,

and something for the future for Robyn and the family.

-And the grandkids, yeah.

-Mm-hm.

-Nice little touch, I like that.

You've got a 12 grand budget, how long will the work take?

18, 20 weeks.

-OK.

-And we'll be able to then put it on the market and see what happens.

OK, and that's you working your socks off,

weekends and in the week?

Well, that's everybody working their socks off.

-Anybody I can drag in, yeah!

-Good man, rope everybody in.

-Exactly.

Just give us a bit of an insight, what are you going to do,

-let's say down here first?

-Well, it's a complete redecoration.

Remove all these things, like these horrible tiles and so forth.

The plan is to split up this room over there,

and to generate what was the original kitchen into a utility...

-toilet and utility room.

-OK.

To put some patio or French windows into that wall there.

-Yeah, OK.

-Which will lead out into, probably a conservatory.

-That's cool.

-And then, generally, sort of new bathroom, new kitchen.

The kitchen will be around here.

So, this room will be the kitchen.

-Is it a kitchen/diner or just...

-Yeah, kitchen/diner.

Kitchen/ diner here. And front room stays as it is?

Front room generally stays as it is, yeah.

Take out the gas fires and so forth and put in central heating.

And cut down half the wall

to give off-road parking as well.

-OK.

-And build supporting...

-And there you go.

-No rest for you, you've got a busy few weeks coming!

Well, yeah! I now have to work hard for a living.

Hey, we all do. This is work for me as well.

-Look at me, eh?

-Well...

I'm not quite good enough to be a footballer, I'm afraid.

-Some said that about me as well, but we won't go into that.

-Yeah, yeah.

So, in... Did you say 18-20 weeks?

-That's right, yes.

-What will we come back to?

What kind of finish are we expecting?

Well, everything will change.

It will be fairly sort of low-key and...

-Modern?

-Modern.

-Modern finish.

-Modern sort of finish.

-Hopefully, appealing to people.

-Good on you. Listen, good luck.

-Many thanks to you. I'll need it!

-You will!

So, unfortunately, Ray's business went under

during the recent recession.

But he's got a very positive attitude.

He's gone into business with his daughter, Robyn,

and they've got themselves a decent house.

Now, he's not just doing it for himself,

he's doing it for the future of his family,

which I think's a really nice touch.

Five months is just about right.

12 grand, I'm not too sure.

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

Well, earlier we saw how one of our properties turned out,

but we still have to see about the other two.

Yes, we do. How did they get on, are they happy?

And have they stuck at the plan, or have they come unstuck?

Let's find out.

-MARTIN:

-Back to East London now, in Chingford.

It was way back in 2014 that I looked around this property that

had a guide price of 325,000.

The catalogue described it as a three-bed semi,

but it was more like a five-bed semi inside,

with the property being used as an HMO.

It was gutted and cramped, with an inefficient layout.

But it did have some rather exciting potential.

Now, the catalogue does say a few magic words, and those are,

"Potential for an extension."

And, yes, I can absolutely see that.

Both at the side and the back of the property.

Now, that would massively increase the value of this house.

That's the good news. The bad news is, looking around,

I don't see any of the neighbours doing an extension,

which means there might not have been

a planning permission precedent set as yet.

But if you could get it, make this a really big house or even flats -

well, then we're talking serious numbers.

Someone who was prepared to try

to turn that potential into reality was Clive.

Clive was working as a project manager for his friend and boss,

Phil, who bought the property on auction day for 330,000.

This would be the fifth property they've done,

and they were heading straight down to the planning office.

What's the planning you're applying for?

We're applying to get rear and side extension.

-Oh, wow.

-And to turn this into one-bedroom flats.

-Have you spoken to the planners at all?

-We haven't as of yet.

We're just getting drawings sorted out, etc,

and then we'll have a chat with the planners,

see where we go with it.

Big plans, then.

And to get those one-bedroom flats done,

Clive predicted a total budget of £110,000,

and a timescale of just four to five months.

So, over two years later now, and, worryingly,

it looks very similar from the outside.

There doesn't seem to be any side extension either.

No matter, I'm sure there will be a spectacular back extension

that will blow your socks off.

UPBEAT, FUNKY MUSIC

Whoa, whoa, whoa - stop the music.

MUSIC SLOWS DOWN AND STOPS

That is not an extension.

Hmm, something is amiss here.

Maybe inside there's a lovely transformation?

# Don't say nothing's changed with you... #

Or maybe not.

# I can hear it in your sighs

# The way that you can't look me in the eyes

# It's spelling out bad news... #

Yes, I'm afraid this one won't be going into

a Hammer Hall of Fame for transformations.

Time, I think, to catch up with Clive.

Since I last was here,

obviously, we've put in applications for planning.

The first one was rejected.

We appealed against that.

And that was rejected again.

So we got the architect back

to readdress the issues they brought up.

We put another plan of submissions in, that was also rejected.

For different reasons, this time.

And that's where we've been with it so far.

It's two years since we first started our application.

The first one took over a year to get rejected and appealed, etc, etc.

Then, I suppose, there was a couple of months

we were doing the reapplication.

That went in, they lost the application.

They carried on, then we got the rejection on that, again.

Speaking with the architect, it was just like,

there's no point in trying to go further with this.

It's just not going to happen.

Unfortunately, acquiring planning permission can sometimes

be a time-consuming and patience-testing exercise

that doesn't always result in a positive outcome.

Still, Clive and the company he works for

made the best of it by renting out

whilst they were grappling with the planning department.

And once it became obvious

they wouldn't get the permission they needed, they didn't hang about.

After the rejections with the planning applications, etc,

we just discussed and basically went to the estate agents to see

what the values of properties were around here.

On speaking to them, seeing what it was worth as it is,

without spending anything on it,

or doing work on it and then spending it,

the obviously answer to us was just

to put it straight on the market, as it is.

So through the estate agents, we had an open day,

an open viewing. People came in.

We had two offers immediately from two people for the asking price.

So it was just left to them to decide who wanted it, basically.

Wow, well, that changes everything!

# Don't go changing, trying to please me

# You never let me down before, no

# I took the good times, I'll take the bad times

# I'll take you just the way you are... #

They bought this property for 330,000,

and Clive thinks they spent around about £11,000 on fees

and planning applications.

They just have managed to sell it on for £465,000,

making a pre-tax profit of 124,000.

So, after all that planning permission heartbreak,

they've managed to come out with a very healthy profit.

But we still have a few questions to ask.

So we invited two estate agents along to give us their thoughts.

First, what did the agent who saw the property originally

make of the planning refusals?

Well, looking around on this particular road,

it's very residential,

and there aren't any flats on this particular road.

So I do believe that because

it wasn't in keeping with the surrounding area,

planning permission was not granted.

Well, it's all water under the bridge right now anyway.

But it does go to show that a chat with planning before you plunge

into anything could prove invaluable.

Really now, the only question remaining is,

did Phil and Clive get the best possible deal?

In its current condition, even though work is required,

I believe it should achieve in the region of £450,000.

I estimate the resale value of this property in its current state

anywhere between £450,000 to £460,000.

The market value, as it is, as we've just sold it for 465,

so I think they are fair assumptions of the value, really.

Yes, it's all well that ends well.

It may not be the profit they were looking for,

but 124,000 isn't too shabby.

And it's not put them off investing again.

Although there is one proviso...

Nothing with major planning permission at the moment.

We are stopping again in Wolverhampton,

where I saw a three-bed semidetached house

that looked like it hadn't been touched for some time.

Now, this is a little bit strange -

you've got kitchen cupboards over here,

you've got a freestanding cooker over there and sink.

Very old-fashioned layout.

Now, there's got to be a way of using this space better.

This house was crying out for modernisation throughout

and a nice, open-plan kitchen/diner.

I wasn't alone in thinking this,

as Ray and daughter Robyn have paid £90,000 for this at auction.

They planned on doing just that,

trying to gain as much value as possible.

As Ray's traffic sign manufacturing company sadly went out of business

in the recession,

they've since done a U-turn and decided to work together

at property development instead.

While Robyn and daughter Millie played outside,

Ray explained why he would be more keen to sell this property on

than rent it out.

It's all about capital.

-Yes, yes.

-Capital to purchase the houses at auctions,

because you need the capital there.

Although I am selling another house as well,

my own house, to generate further capital,

to generate further projects like this.

-In order to keep moving forward.

-Yeah.

The long-term plan is to build up a portfolio of ten,

a dozen houses, to act as a further pension for me

and something for the future for Robyn and the family.

Ray hoped to keep the costs down by doing most of the work themselves,

and calling in help from family members who work in various trades.

Very handy.

Ideally, he wanted to get the work done in five months.

So we're back, six months later. How's it gone?

Pretty well, it would seem.

The kitchen's new position works much better in this corner.

Previously, it was spread across two sides of the room.

The other side still has some finishing touches to be done.

But the addition of the sink in the downstairs loo is good.

However, the big reveal is yet to come.

The added space the conservatory gives

the back of the downstairs is fantastic.

And it doesn't impact on the huge garden.

It also doesn't impact on Ray's pocket,

because he got it second-hand.

I picked it up from an online auction site.

And it suited the exact sort of extension

that we believed this house would need.

I purchased it, and then got a couple of extra guys in

to do the foundation work for me,

constructed it, and it's turned out really, really well.

I agree, it does look great.

However, a word of caution - you can fall foul of planning here.

Because of energy requirements,

usually building regs require a conservatory to be separated

by an insulated door.

If it's open-plan to the rest of the house,

it needs to be designed

as an extension with the approved insulation and glazing.

Anyway, conservatory aside,

the rest of the renovation didn't come cheap.

Every chimney breast has been taken out to give each room more space.

As you can imagine, this is a very expensive and time-consuming job,

which is why Ray is a month behind his five-month schedule.

The main challenge was taking the chimney breasts out.

A lot of legal things that you had to do -

get approval by the council, structural designs,

and then put a steel girder into the roof space

to support the outside chimney.

It was quite a feat to get it all in.

And with a grunt and a groan from half a dozen men, it went up there.

There are still finishing touches to do,

such as windowsills and skirtings.

But the house is now looking much better.

Out the front, they still

have to add the dropped kerb and remove the wall fully.

But Ray expects to have that completed

before he hopefully sells it on.

All in all, he can be proud of the work he has done here.

I have spent a lot of time here myself,

doing a lot of the work myself.

And I'm half-pleased with it all.

I was going to get my nephew in to do the electrics,

keep it in the family, if you know what I mean.

Unfortunately, he didn't do the work on this occasion.

He'll have to drop his price a bit!

Ray did manage to find an electrician

with prices to his liking,

in the hope of sticking to his 12 grand budget.

However, the addition of the conservatory,

removal of the chimney breasts

and other extras has taken his spend to £20,000.

But Ray thinks it's money well spent.

I feel it has turned out really well,

and I have thought about maybe I could even move in here myself.

We will see if local property experts agree with Ray.

We've asked two along to get their thoughts.

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

It's been refurbished.

So, new kitchen, new bathroom, modernised.

And with that open-plan kitchen/dining area,

that's going to suit a lot of young and growing families.

It's a new kitchen, a new bathroom, a pleasant residential area here,

mostly private properties.

There's very little for sale in this area, and, certainly,

the traditional style with the bay windows at the front

is a little more popular than ones with less character.

A nice, positive response from the agents, then.

Ray has spent a total of 110 grand on purchase and renovations.

But be aware, there are always other costs to include,

like the auction fees,

council tax and estate agents' fees when selling on.

In this case, that brings Ray's total to £118,000.

So what about the values of this house now?

I'd be looking at an asking price in the region of £130,000.

I would expect the property

to achieve in the region of £130,000 to £135,000.

What you're getting for your money, I think it's worth more than that.

Ray and Robyn are hoping to improve on that potential 17 grand profit.

Ray went the whole distance with this property,

so what is his immediate plan?

At the moment, the plan is to sell it and put it at a price we feel

is right for the work that we've done here.

If that doesn't work, I am currently selling my own house,

where I live in Staffordshire,

and maybe I'll come and live here for a wee while

and just see how it goes.

Well, that's your lot

of today's lots. We'll be back with plenty more for you next time.

Yes, don't worry, we'll be back soon

with more tales from the auction room.

Yes, so join us then for more Homes Under The Hammer,

-and we'll see you next time. ALL:

-Goodbye.