Episode 24 Homes Under the Hammer

Hello, and welcome to the show.

Now, property auctions attract all sorts of people,

from dedicated developers to fearless first-timers.

Yes, but no matter how much experience you've got,

there will always be those little things that catch you out.

Yes, prepare as much as you can, do your research,

hopefully that will help you out,

and we'll try to do the same as well.

Just in a few hours you can witness all types of properties

being bought and sold at an auction.

Yes, whether it's a two-up two-down, tenement, town house,

there's something for everyone.

So, what have we got for you on today's show?

Where can you still find value for money in London?

This two-bed flat in Walworth may be the answer.

This is brick, it's traditional, I like it.

But getting a decent return on this plot of land in Derbyshire

will require a lot of imagination.

Do you think that could be the site of my new dream home?

And in South Wales,

is this trio of flats a ready-made investment opportunity?

It's more or less finished, I've got to say.

New carpets - that's basically it.

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, 225.

Home to the Old Kent Road, made famous by a certain board game,

Walworth may not be the most sought after area of south London,

but that could be about to change, as neighbouring Elephant and Castle

has been undergoing a huge regeneration.

So, time to pass go and have a look at today's property.

# And little Frank

# He's not even got a house on the Old Kent Road. #

This area's dominated by purpose-built blocks,

so it's no surprise I'm here to see a two-bedroom flat in one of them.

In fact, it's this one here.

It had a guide price of £205,000 when it went to auction.

It's on the third floor.

It looks like there's no lift. Who needs the gym?

# One step at a time

# That's all it's really gonna take. #

I made it up the three flights. Wasn't too bad.

OK, you've got good height ceilings, you have a toilet,

but just a toilet.

Because... Ah, here you have your bath and sink. Not ideal,

and actually you can't really put them together because the layout

isn't conducive, because you've got your hall in between.

A good sized first bedroom, I like that,

and then you have a smaller second bedroom.

You might not accept it everywhere, but we're in London, and you know,

you could actually get a double bed in there. It's OK.

Through to your living area. Ah. Now, it is a two-bedroom flat,

but I'm thinking it was originally a one bed,

because this living area is far too small to house a kitchen in it.

You know, where are you going to put your cooker?

Are you going to extend round here?

And if so, you're going to be sitting in your kitchen area.

My feeling is that the other bedroom next door, the smaller one,

was a kitchen at one point, because this looks and feels too solid.

It's not a stud wall. It's not just been put up,

it's not been an open-plan kitchen and living area.

Nice fireplace surround.

The place isn't completely devoid of character.

To be a block of flats, that's quite unusual.

The good news - they do have central heating,

the windows look in good order, it's bright,

it feels more solid than out the window,

I can see the more modern concrete blocks.

This is brick, it's traditional - I like it.

You know, some people will sniff at purpose-built blocks like this,

but it's a former local authority flat,

which tells me it's been looked after and reliably built.

It could be a great investment.

You've just got to have a think about that second bedroom.

The decision you have to make is - do you keep this as a two-bed?

If you did, you would have to be pretty happy watching the TV

in your kitchen, because it's tiny through there,

or do you put it back to being a one-bed, more spacious, flat?

That's the decision you have to make.

# Baby, it's up to you

# What are you gonna do? #

Of course, it depends on what you want do with it. Having two bedrooms

would make more sense if you're renting, but if you're selling,

a one-bed apartment might be the better option.

Now, what excites me about here is the view. Yes, it's urban here,

but if you take a few steps along,

and kind of squint through these two buildings, you see the Shard.

That's beautiful.

And it's exciting me that you can get for a little over £200,000

- yes, it's a lot of money, but it's London -

for that it's quite low, and you're so central,

you get that amazing view.

This is not a run down area, it's gritty and urban, and I like it.

Yes, this block with a view could be a cracking investment,

with a guide price of £205,000.

What can a local estate agent tell us about the area

that the property's in?

In terms of the regeneration in Elephant and Castle,

that is slowly spreading to Walworth.

It's certainly getting on the radar in terms of developers and investors

alike, as well as first-time buyers looking to get onto the ladder.

There's talk of potentially opening a Tube station just up the road on

the Old Kent Road. It's more a case of, I think, when as opposed to if,

which will bring massive regeneration to the area.

Wow, that could be great news for whoever gets the flat at auction,

but what does the agent think they should do with it?

In terms of the layout, if at all possible,

I would keep it as a two-bedroom.

Certainly, in terms of resaleability and also from a yield perspective,

by way of renting, that's where your premiums are going to be.

OK, that's interesting, so if it is kept as a two-bed,

what kind of numbers are we looking at, once the property is improved?

In terms of a two-bedroom,

this property you would be looking to sell for £300,000-325,000,

and in terms of rentals,

you would be looking at around about £1,300 per calendar month.

What about if it becomes a one-bed property?

As a one bedroom in this property you would be looking to sell for

between £250,000 and £275,000.

And in terms of rentals you would be looking at around about

£1,000 per calendar month.

This flat's in need of modernisation and there are layout decisions

to make. But once you've resolved them, well,

it's in a brilliant area, up and coming, plenty of demand here.

Let's find out who agreed when it went to auction.

Who's here for this lot? 200, anywhere?

We're going to go beyond that. We're going to hit 250, I'm sure.

200 anywhere? 200 I'll take.

205. 205. 210.

215, sir. 215. 220. 220.

225. 225. 230.

Back of the room. No? 225 with the gentleman, he's only made two bids.

He's got a lot more money to go.

225. I'm selling it, 225.

Who's bidding? 225 for the first.

225 for the second.

225 for the third and final time.

Sold, 225.

The lot came towards the end of the auction day, and sold quickly

for £225,000, to Stiva.

Stiva is a landlord and has property development experience.

He has bought and sold in the area for some time.

I met up with him on the third floor to find out the plans.

Stiva. Congratulations.

-Thank you.

-So it's Steve with an "A" on the end?

-That's right, yes.

-How come?

Well, it's actually a Russian name,

so my mum named me after the brother of Anna Karenina.

Wow! So is there Russian blood in the family?

Yes, a long way back there is, yes.

Lovely. From Russia to Walworth.

-To Walworth, that's correct.

-Yes!

So talk me through why you chose this property.

Yes, this particular property we're interested in primarily because

of the location. This is an area that we're familiar with.

We've had some properties here before,

that we've either sold or we rent out, and also the price point.

It was low enough, the price, we felt it was worth bidding

-on this one, yes.

-You say we, "We wanted". Who is we?

It's really myself, but I guess, like, my wife,

and my family are always involved in some way,

they've helped me to finance a lot of properties,

so I always involve them to some extent.

The reality is it probably falls on me, actually.

How did you get into the property business?

My dad bought me a council flat at auction, which he redid,

back in 2009, and we ended up buying another council flat as well.

And we actually sold both of those a few years later,

but it gave me a feel, really, for, you know, for property, really,

and the idea that you can make a profit from buying and selling it.

And also got me into the sort of auction, you know,

the sort of rhythm of the auctions a little bit as well.

After becoming a dad for the first time to baby son, Reuben,

Stiva took some time out from developing properties.

Now he's back to the day job, and raring to go.

I'm not sure exactly what the history is with this one, but

it doesn't seem like it's properly been converted to a two-bed.

And I also think it's a bit of a red herring.

I don't think the space actually works as a two-bed.

For that reason, we're going to convert it back to a one-bed,

and we actually feel it will be more saleable as an asset,

if that's what we choose to do, and also it will allow us to rent

it out as two rooms, and we'd have a communal eating area in the kitchen,

so that falls within a model that we know and that we understand.

When you say, "Rent it out as two rooms," what do you mean?

So, one person renting in this room, which will be...

Which would be the living room, if you like,

one person renting in the bedroom,

and then the kitchen area will be a communal area,

but that would also have an eating area,

so we'll design that into the kitchen.

It minimises the risk to us,

it minimises the amount of time to do the job,

and it keeps it within the model that we know.

Stiva likes ex-local authority properties, and his renovation model

gives him maximum flexibility.

If he wants to rent, converting the open-plan living-kitchen

back to a self-contained room makes sense. It gives him two rooms

that can be rented separately, but it also means that if he sells,

the buyer could have the same set-up or use it as a one-bed flat with

a decent reception and a separate dining-kitchen.

Stiva has plenty to keep him occupied, and he is planning

to completely rewire, and replace the central heating system.

He hopes it is done within four to six weeks,

but what about that budget?

I think realistically, we are looking at 15,000 to 20,000.

I'd like it to be as close to 15 as possible,

but there are decisions that we will need to make along the way.

For example, if we are going to redo the kitchen, do we spend 1,000 or

1,500 more and actually have really nice, quality units?

That could actually increase its resale value quite considerably.

Decisions like that will determine how much, but I would imagine

it will be not less than 15.

And I imagine it would be not more than 20.

-Good luck.

-Thank you.

-I can't wait to see the results.

-Thank you.

-Four to six weeks - not that long either.

Hopefully so. Thank you.

Stiva's a man who knows his own mind, he knows the market,

and he's sticking to the kind of property he knows best.

I'm intrigued to know whether he rents it as a two-bed or as

a spacious one-bed and sells it.

You can find out what he does later in the show.

This is the market town of Chesterfield in Derbyshire.

It's home to the famous crooked spire,

which towers above the Church of Saint Mary and All Saints.

This spire is believed to have twisted due to the wrong timber

being used during construction,

which began to buckle under the weight of the lead tiles.

And while today's lot might not be as grand,

it's definitely something a lot of people a-SPIRE to.

I think it's fair to say that it's a dream for a lot of people

to build their own home.

Well, your starting point has to be finding a plot of land

that might be suitable. And surprisingly, you might not have

to look as far afield as you think, because in most neighbourhoods

like this one, really close to the town centre, there are little plots

of land left like this one has been, probably for years, derelict.

Well, look at this. What do you think? Wasteland,

or do you think that could be the site of my new dream home?

Hm!

And if you were thinking that, then you might be interested to know that

this plot had a guide price of £45,000 plus and planning consent

for two three-bedroom semidetached houses.

Now, at first glance,

you might think that access to the site is a bit problematic, because

you've got this road here, and the site is, what?

10, 15 feet down this steep bank.

You've got pedestrian access at the back, which is good news.

But how do you get over this?

Well, this is where a good architect will step in, and actually,

I've had a glance at the plans for this, and if you were looking at

an auction at a lot like this, you could access plans.

It's all available from the local authority, who passed them online.

You can see what the actual plans were.

The idea they've come up with is make the most of the fact you've got

this bit of land which is a lot lower, and actually build up the

property from down there, and have the access to it via a door here.

You then have a basement, basically.

You come in on the middle floor and you'd have your bedrooms above.

So actually, the fact that you've got that huge great hole there,

and it's down that way, in this instance, is a real bonus.

So, access issue? I don't think so.

And just down this path from street level is the pedestrian access

to the rear of the plot.

# When you're bowling down the lane... #

Well, clearly, one of the things...

In fact, the main thing that makes this plot of land so interesting is

the fact that it's got that planning permission for the creation of

two houses. As it happens, two three-bedroom semis.

Without that planning permission,

this would literally be a scrap of land with a value of,

I don't know, £2,000, £3,000. Perhaps.

However, having that planning permission doesn't necessarily mean

you have to stick with it. You could put in new planning permission

for something else. Maybe you could build one house here.

But, of course, all that takes time and money. So my guess is

that whoever bought this would want to stick with what is originally

in place, in terms of what's been passed, in terms of planning.

However, that's not the end of it,

because all you've got currently is the outline planning that

something could be built here, and what that will look like.

You've still got to have building regulations approved and all that

kind of stuff, so it's not the end of the road,

but you are a long way down the line.

To obtain full planning permission, you would have to submit details,

such as how the building fits in with the locality,

building materials, drainage, and sewerage, parking,

and vehicular access. The building regulations take care of the safety

and suitability of the construction itself.

Let's see what a local estate agent thought of the plot,

guided at £45,000 plus,

and the plans that are currently granted for this site.

It is unusual to find a plot like this. You would have expected

it to be snapped up and built on some years ago.

But it's got very good potential for, you know, the current owner.

If I were building on this plot, I would stick to

the original three-bedroom semidetached properties,

simply because there is a good market for those in the area,

and I could imagine they would be built quickly and they would

-sell quickly.

-Good news for potential investors.

But what could a three-bedroom semidetached house be worth on the

sales and rental market?

A three-bedroom semidetached house in this area would sell for around

£150,000 to £160,000.

And rental would be around £700 to £750 per calendar month.

Well, plots of land like this don't come up at the auctions that often,

so I'm sure it would have been a very popular lot

when it went under the hammer.

A development site up in Chesterfield,

we have registered bidders online.

Who will start me off on the guide at 45?

Start at 45?

42? 40?

Bid me. 40 is bid in the room. Thank you, sir.

Starter's bid at 40. 41 elsewhere?

40? 41 is bid, thank you.

41. And 42.

42 is bid. And 43.

43. And 44.

44. 45. 46.

46 is bid. It's against you. 47.

Take the half? 46,500. 47. 47 is bid.

And a half. No? At £47,000...

47,500 to stay with it. If not, it goes at £47,000.

It's in the room, ladies and gentlemen. At £47,000.

For the first time...

the second time... It's yours at 47,000, third and final time.

The hammer is up. Fair warning, Internet.

It goes. Sold at 47,000, in the room. Thank you.

Getting the plot for 47 grand was Brian. Brian currently works as

a security officer, and I met him and his son, Jordan,

back at the site to see what he had planned for his new acquisition.

Brian, Jordan, great to meet you both.

-Great to meet you, too.

-Congratulations.

-Thank you.

-So, tell me why you wanted to buy this plot of land.

I just see it as a good investment really.

Got planning permission. I'm a local guy, I know the area a lot.

So, yeah, just made good sense to buy it.

Have you done anything like this before?

Years and years ago, I did...

Where I come from, Clay Cross, I did a bit of a wreck up there.

Took me a good while to do that.

But, yeah, I've never done a self-build before.

OK. Now, why a new-build?

You say you haven't done it for a little while.

It's a fair old step, isn't it, to go slamming into building things?

What about doing a bit of renovation first?

Well, I have actually got another one on the go.

-Oh, have you? Oh, right.

-At the minute. It's what I bought

-from an agent.

-Right.

So that's going to keep me a little bit occupied, but you know,

I can get a builder doing the majority, and when he needs me,

I can drop that and get back on here.

Right. So, Jordan, are you going to be involved in this project or what?

Yeah. I'll be doing mostly the side of plumbing.

-Oh, right.

-Because that is what I'm currently studying at college, so...

-Oh, brilliant.

-My lecturer,

he's coming to oversee what I'm doing and that, so...

So it's going to be real great hands-on training for you.

-Yes. Some experience.

-Brilliant.

Was that in your thought process,

a chance for Jordan to do a bit of on-site training?

Yeah, definitely, yeah. I mean, he'll be qualified.

This is his second year at college.

And hopefully, if this carries on, which I'm hoping it will,

there'll be more work for him on a lot of things, really.

-Yeah.

-Not just plumbing, different side of things.

Great. And, Jordan, how many days do you think you will be here?

Will you be here on a weekly basis?

If I'm still at college then it'll probably be when I can fit it in.

But I'll try and come down and help most... When I can, basically.

Because, you know, experience is what I need.

Yeah. How old are you, if you don't mind me asking?

-17.

-17, fantastic.

So really starting young and getting in there.

-Yeah.

-Is it something that you'd like to sort of take on,

maybe a joint venture with your dad?

Yeah, of course, really. It's a good trade to get into.

A lot of money behind it, it's interesting, yeah,

something that I'd really like to do.

This could well be the start of a father-son property empire.

Problem is, there isn't actually a property here,

so they'll need to get that rectified.

So, obviously, we've got plans in place.

-Are you going to stick to those?

-Yeah, definitely, yeah.

I can't see anything wrong with them, really.

I think... They're all right.

-They look all right.

-So obviously a key element of this is going to be

-your builder.

-Yeah.

-Have you got somebody lined up?

Yeah, there's a builder at the side of me.

Lives about three doors away from me.

He's built his own bungalow.

I'm hoping that he's going to do one for me.

And me help him along...

Just labour for him or something like that.

-Yeah.

-Keep the costs down a bit.

-Yeah. He's a good builder as well.

-Brilliant.

-And he hasn't got a lot on at the minute,

-so if I catch him right...

-Right.

-..it'll be brilliant.

-Yeah.

-So, it all depends on when we can get these architect plans

-at the minute.

-Right, so the issue you've got at the moment is what?

The original architect - he's semi-retired,

and he didn't really want to take on anything this big.

So the plans you've got are actually just the planning permission for the

construction. They aren't the detailed stuff that a builder

-needs to build the place.

-No, I've got to get those drawn up

via an architect. As soon as I can get that sorted

then, you know, get the services in, and get cracking.

Brian is hoping to build both houses for around 150 grand.

And with the estate agent's valuation of 150-160,000 per semi,

this could make him a handsome return.

He's hoping to have the houses complete in nine months.

So, what issue is the biggest challenge?

Clearly, the topography is a bit strange,

with the road being up there and this big bank.

But that seems to be compensated for by the design that has been

-come up with.

-Yeah. As they've done the plans for the two buildings,

you've got a basement which the first floor then comes off the

street level, and you've got your bedrooms above.

-It's perfect, really.

-Yeah.

You get a bit of extra storage space, really.

In lots of ways, the way the ground is shaped benefits you

in terms of the square footage of the building.

Yeah, it looks worse than it actually is.

-Yeah, I think it's going to be all right.

-Good.

-Well, listen, congratulations. Good luck to you both.

-Thank you.

Looking forward to seeing how you get on. Nice to meet you.

Thank you. Nice to meet you.

Well, that's one way of doing it, isn't it? If you need

a tradesperson, you have children, and get them to learn that trade.

Well, I'm sure that wasn't the original plan,

but it's turned out really nicely, and really nicely for Jordan, too.

How fantastic to be able to go to college and do the practical

experience here on your dad's first major new-build development project.

How will they get on with this interesting plot?

You can find out later in the show.

Still to come in South Wales - I visit a mouthwatering prospect.

It's very rare to actually come into an auction property

which is more or less finished for you.

But in Chesterfield, has Brian bitten off more than he can chew?

I do wish that I'd come and viewed the land.

Back now to Walworth in South London.

I scaled three flights of stairs to look around this two-bed flat

that had a very attractive guide price of £205,000.

Inside, there were major drawbacks to the layout.

This living area is far too small to house a kitchen in it.

You know, where are you going to put your cooker?

Are you going to extend round here?

And if so, you're going to be sitting in your kitchen area.

My feeling is that the other bedroom next door, the smaller one,

was a kitchen at one point.

I wasn't convinced that the kitchen which had been turned into

a second bedroom was the right solution,

but two rooms for rent always means more income.

Do you put it back to being a one-bed, more spacious flat?

That's the decision you have to make.

# And soon you will find that there comes a time

# For making your mind up. #

With the property just a stone's throw from Central London,

and the prospect of a Tube stop being created for the area

in the near future, this looked like a sound investment.

And the man who agreed to the tune of £225,000 at auction

was experienced landlord and property developer, Stiva.

Sold, 225.

Stiva has a penchant for ex-local authority properties,

and he also had a formula for redeveloping flats like these

to get the most flexibility in terms of rental or sales.

I don't think that the space actually works as a two-bed,

so for that reason, we are going to convert it back to a one-bed.

And we actually feel that it will be more saleable as an asset,

if that's what we choose to do.

And also it will allow us to rent it out as two rooms, and we'd have

a communal eating area in the kitchen. So that sort of

falls within a model that we know and that we understand.

So, Stiva had a Plan A and a Plan B.

Move the kitchen into the current small bedroom, then creating

two good-sized bedrooms which will be rented separately - Plan A.

Plan B - sell the property as a one-bedroom property,

meaning the second bedroom would be a living room.

Both pretty good plans, I thought.

However, you know what they say about the best laid plans.

We've returned six weeks later to find out how it's gone.

The kitchen has indeed been moved into what was the small bedroom.

It's a compact, modern kitchen, with a handy breakfast bar.

Next door, and this room can either work as a living room

or a second bedroom.

The property has been re-floored, rewired, and redecorated,

plus they've installed new central heating.

The new bathroom suite, like the rest of the property,

has been neutrally decorated.

The toilet has also had a small sink added.

The existing bedroom now looks fresh and inviting,

which is a theme that runs through the whole flat.

This was the first property Stiva has tackled

since baby Reuben's arrival, so how was it?

So, it was interesting to be doing this kind of work again.

There's quite a lot that I can take from this project.

I think I probably need a little bit more time,

so it's harder to do things to the same kind of tight schedules

that I have done in the past.

And I think it would probably help to get some childcare as well.

The builders needed me here quite a lot of the time

in order to get things done,

because I was going to get supplies and clearing things.

But I take the son for two days a week,

so that was definitely one of the challenges in this project, yeah.

# What about it, daddy cool? #

Ah, yes. The old work-life balance can shift somewhat

when kids become involved. Still, he's managed to get the work done

in the four to six weeks he set himself, but what about his budget?

The budget that we had was between 15,000 and 20,000, and I haven't

done the final costings yet, but I think it will sit

almost exactly between those two figures, so around 17,500.

Maybe 18, when we've put in some of the fixtures.

Scope of the work was quite well defined before we did it,

so I think it would have been possible to have done it

for slightly less, and also I think it would have been possible

to go further with some of the finishing, but we think

we've got it balanced around about, you know, the right sort of level.

I think the most likely outcome is that we'll rent it as two rooms.

We would be interested in selling it, but we just don't think

the market is stable enough at the moment,

so we'd prefer not to take a risk, renting it as two rooms,

and then wait until a better time to sell.

Overall, I am pleased that we bought it.

I've had a look since we bought this, and there's been nothing else

at this sort of price in this sort of area, so in that sense,

I think it was an opportunity, and that was the reason we went forward.

But I do think it's been quite stressful,

and I'll be pleased to focus on other things as well.

So it's been a tough return to property developing for Stiva,

but will his investment of around £243,000 into this property

make sense to two local estate agents?

Firstly, the agent who saw it originally.

I think in terms of the changes made, they're very good,

they look to be of a very high standard,

they're nice and modern, and also contemporary as well.

It's got a great amount of space.

The kitchen is done very beautifully,

the bathroom's very stylish as well,

even if they are a little small, but still fantastic.

Personally, I would suggest looking at the rental market in the

first instance. I still think in terms of sales,

this area's got some distance to go,

especially with the talk of Tube stations in the immediate area.

OK, then, let's have a listen to what kind of return

Stiva could expect from both sales and rental.

If the current owner was looking to sell the property,

they'd be looking to achieve between £275,000 and £300,000,

and from a rentals perspective,

you'd be looking at around about £1,100 per calendar month.

I would suggest renting the property at £1,100 per calendar month,

and a sales value of £285,000.

It probably wouldn't be worth it for us to rent it as one property,

but we do think it's quite well suited to renting as two rooms.

Stiva's not going to go for the potential 57 grand profit.

Instead, his research tells him he can rent the two rooms separately

for a total of 1,500 per calendar month,

which would mean a yield of 7.4%,

as opposed to the 5.4% yield he'd get if he rented it out as a whole

for 1,100 per calendar month.

So, Stiva's juggling job of nappies and builders has been a success,

albeit a stressful one.

South Wales, and a half hour drive north of Cardiff.

We are in a village famous for its 216 metre tall viaduct.

Once used for transporting coal from valleys by train,

but these days rail tracks have been replaced by tyre tracks,

and now it makes up part of the Celtic Trail cycle paths.

Hopefully, the next property will be WHEELY good.

I'm in - now I've got to get this correct -

I'm in Hengoed on this really well-kept cul-de-sac.

Now, on the left-hand side, if you have a look,

you'll see that style of house.

And on the other side of the road,

you've got a completely different style of house here.

Both very nice, though, I've got to say.

But I'm not here to see a house, I'm here to see a block of flats

- two two-beds and one one-bed -

with a guide price, if you can believe it, of £125,000.

And the new owner of this building has got the freehold.

Well done.

Owning the freehold means whoever bought this lot will be responsible

for the maintenance for the building,

plus all the communal areas inside and out.

But they will be able to charge a management fee for the work,

plus an annual amount for ground rent.

And although there are only three flats up for sale on this lot,

there are a total of five flats covered by the freehold.

OK, then.

Let's start on the ground floor. This is the one-bed flat,

and the one bedroom is just there to my right.

It's a double bedroom.

It's got some wardrobes in, but they can quite easily come out,

and a nice big window as well. Hallway's a decent size.

What have we got in these doors? We have got a good-sized bathroom,

bit of storage in there, and then we come into this area.

Now, modern living, for me, this is what I would expect.

Living area, kitchen here, which is all in good condition.

It's very rare to see or to actually come into an auction property

which is more or less finished for you.

If I was being picky, I'd possibly change the carpet,

and stick some paint on the walls.

But there's nothing wrong with this at all.

I've got two more to see. I hope they don't let me down.

# Don't let me down. #

The building is around ten years old, but unfortunately,

the company that owned the block went into liquidation in 2010,

and the flats have been laying empty since then. That's six years.

Recently, two of the flats on this stairwell were sold,

which leaves the three I'm looking at today.

OK, so we are now in one of the two-bedroom flats.

As soon as you come in, the kitchen is on your left-hand side,

and it's a good-sized kitchen as well.

You could quite easily fit a table and chairs in there as well.

You'd get away with keeping all of this kitchen.

You do need a new hob, but that is in good condition, and spacey.

I can see - and I haven't got to go too far - I can see there is

a bedroom off to the left, and the second bedroom is off to the right,

and the bathroom is right in front of me, and a good size as well.

The lounge, if you follow me in here, is spacey as well.

You'd get your sofas in here, your TV, a nice, comfortable area.

Well proportioned two-bed flat.

It's more or less finished, I've got to say.

New carpets, and that's basically it, bit of paint, that's all I'd do,

and you get a bit of a balcony as well.

Which you can't get onto.

Nice feature, but I found a negative - the door's locked.

One more floor to go, and one more flat.

Another two-bed, much the same layout as before,

except this one needs a bit of work on the central heating.

# Looking for some hot stuff, baby, this evening

# I need some hot stuff, baby, tonight. #

I'm not on the ground floor, I'm on the first floor,

and you've got this communal space out here.

It's a little bit messy, but nothing a sweeping brush won't sort out.

It's pretty rare, actually. You might sometimes get a bit of space

on the ground floor, but this is the first floor.

The bins will be downstairs - no smelliness round here.

Lots of space. You've got three levels as well -

you can go all the way to the top here.

And you've got access...

out into the street as well. This is a nice little bonus.

What's not to like about this lot? Three flats in pretty good nick,

plus the freehold for the whole building,

all for a guide price of 125 grand.

Will a local estate agent be as impressed?

I think the big selling point for the flats would obviously be in the

location. It's a quiet spot, you're surrounded by detached houses,

cul-de-sac location.

I'm also impressed by the size of the flats, to be honest with you.

The bedroom sizes, the kitchen, the living room,

they are all pretty spacious, to be honest with you.

So I'm really impressed by the size.

Demand is quite good, especially from the rental side of things.

You'll always rent the flats. Salewise, yep, pretty good as well.

There's not that many blocks around the area,

so there's quite a decent demand.

If these flats were given a quick makeover and resold,

what could they expect to fetch on the local sales market?

For the one-bed flat, I'm thinking sensibly, would be around £75,000.

For the two two-beds, around the £80,000 mark.

Maybe sort of up to £85,000.

-And what about the rental values?

-On the rental market,

I think the one-bed could achieve around £375 per calendar month.

And the two two-beds - they should be around £400 per calendar month.

I am impressed with this place.

It's more or less been finished for you, and one of the big factors is

you won't need a huge budget to turn it around.

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

What we're selling is the freehold of the entire block.

You've got three vacant flats that need a bit of upgrading.

You've got two flats which have been sold off on a long lease.

Looking for 125, to be in the market, to be able to sell at 125.

115 to start things going?

Three flats.

115, no? 110?

110 is bid, thank you, 110 is bid.

111, I'm looking for.

110 is bid, looking for 111.

Slashing 15 grand off the guide price soon got the bidding started.

We rejoin with the lot sitting at 152 grand.

It's with you at the back at 152.

I'm looking for 153, I'll open it up to the floor.

153, thank you.

154? 154. 155? 155.

156?

No. With you, sir, on the aisle at 155.

With you, sir, at 155.

I'll sell at 155.

I'll sell at 155. Are you sure?

Yeah?

Sold, sir, to you, 155.

It was Paula and Richard who emerged victorious from that auction room,

and although property isn't their main occupation,

it comes pretty close.

They run an audio-visual manufacturing business,

but these guys also have a portfolio of over 70 letting units,

so it's more than just a hobby.

I met up with them to discuss their plans for their latest venture.

-Richard, nice to meet you.

-Thank you. Nice meeting you.

-Paula, nice to meet you too.

-You too.

-Congratulations.

-Thank you.

-You've got yourself a bit of a bargain.

I really like this place.

How much are you prepared to pay for it? That's the first thing!

It's a great question, actually.

It's a bit too far up for me. I'm in the Midlands - too far to travel!

-Shame.

-So, what attracted you to this place?

Well, we were looking for an opportunity for a new project

and this came up at auction. Really liked the look of it, large rooms,

lovely views outside, and in a good location,

close to the hospitals, train station.

We were looking for something that made sense to buy on a return

on capital, and we were looking for something with a bit of work because

we've got two guys who work for us on the books,

and we were looking for something to keep them busy for a while,

and I think this will tick that box.

What's going to keep them busy for a while?

Because I've not spotted too much.

Well, a little work outside, but not too much interior work.

Just making good, really.

Outside, there's a lot of ground work to sort.

The decking at the back is rotten.

The front needs a little bit of work at high level,

so he'll have to get up and do that.

So, not a tremendous amount, but it's a modern structure as well,

which is always very attractive,

because you don't have the major problems.

In regards to the flats themselves, silly question, but what are you

going to do to them, if anything at all?

Changing the windows, re-plumbing upstairs.

Good paint through from the start, probably carpets through most of it.

There's a boiler pinched in one of them, radiators in the bath,

as you probably saw.

I did see that. Not a great place for radiators, to be fair.

No, no, so we'll get them put back on fairly soon.

A hob and cooker to be replaced.

Services tested.

OK, and what about the parking situation?

There's parking across the road for four cars.

We've got three spaces underneath the building and three outside,

so there's plenty of parking.

We'll probably put some garage doors to secure the bottom,

although the planning was just for it being open parking.

So, what parts do you both play, if you are in this together,

-what parts do you play?

-I shall be in charge of buying materials,

looking after the workmen that we have here, making the coffee,

and making sure that the finish is up to my very exacting standards!

That doesn't surprise me at all.

Just cleaning up after them.

The glamorous side of things, yes.

Do the builders get biscuits, by the way?

-Yes. Oh, yeah, I spoil them.

-That's a high standard, I like that.

They don't do work otherwise!

What about yourself?

Overseeing the windows, making sure they are ordered.

Building regs, we've already paid for that,

so they'll come and inspect them afterwards.

Going through the services, scheduling up the guys,

when they're going to be here, what's got to be done, so yes,

there'll be plenty to keep us both busy for a while.

So once everything's done - to your standard, obviously -

the builders have been fed and watered,

-what are you doing with the flats?

-We'll be renting them.

We've already got a prospective tenant for the flat above us,

the second-floor, so if that goes ahead, that's a nice start.

So how much is this going to cost then? Because like you mention,

it is minimal, but you've got the plumbing to do as well, so how much

-is it going to cost?

-Well, the new windows we're going to put in,

is going to be a fairly big cost, so we've got a budget of about 25,

but I would hope to come in below that,

but I always put a lot in for unforeseens,

-because there's usually something comes off.

-Mm.

-So, you've got a 25 grand budget.

-Yeah.

-That's right.

When you get your men in, how long is it going to take you to do it?

Two to three months maximum.

It will depend on whether we call them off to do other jobs.

If they're here all the time, it wouldn't take anything like that.

-All systems go, then, eh?

-Absolutely, yes.

I cannot wait to come back to see what your standards are like!

-Good luck, Paula.

-Thank you.

-Good luck, Richard.

-Thank you.

-Good luck, good luck.

This should be a walk in the park for Paula and Richard.

They're experienced, they know what they're doing,

and they know what they're trying to achieve.

Richard's got that healthy budget,

and Paula's got the keen eye for detail.

Sounds like a winning combination to me.

You can find out if they do win later in the programme.

Well, we know how one of our auction buyers got on,

but what about the other two?

Has it been relatively relaxed or a roller-coaster ride?

Well, I'm keen to find out.

Let's head back to Chesterfield now, and its famous crooked spire,

where earlier this plot of land came up for sale at auction,

with a guide price of £45,000 plus.

Look at this, what do you think? Wasteland, or do you think

that could be the site of my new dream home?

The site didn't come without complications,

but nothing that couldn't be overcome. At first glance,

you might think that access to the site is a bit problematic,

because you've got this road here, and the site is, what?

10, 15 feet down this steep bank.

But how do you get over this?

This is where a good architect would step in.

With outline planning permission already granted for two

three-bedroom semidetached houses, this one seemed like a no-brainer.

Employ a builder, throw up the houses, sell them,

and pocket a tidy profit.

And that was more or less the plan for Brian,

who bought the plot for 47,000.

So, obviously, we've got plans in place.

Are you going to stick to those?

Yeah, definitely. I can't see anything wrong with them, really.

I think they're all right. They look all right.

With a local builder almost signed up, Brian was hoping to complete

the houses in nine months, at a total cost of 150,000.

And he had a secret weapon at his disposal - his son, Jordan,

who was keen to get some real work experience.

I'll be doing mostly the side of plumbing.

-Oh, right.

-Because that's what I'm currently studying at college.

Oh, brilliant.

Well, a year has passed since our first visit,

and it's time to see how Brian and Jordan have got on,

turning this sloping site into suburban semis.

As you can see, Brian's best-laid plans have gone awry.

# There's an empty place beside here. #

But what's gone wrong with what seemed like

an ideal development opportunity?

When I got the detailed plans drawn up for the two three-bedroom semis,

the cost of building is going to be buffed up to the embankment.

That means there will be an egress of water coming down from

the embankment, so basically, the basement's got to be tanked

and waterproofed, which is an expensive thing to do, really.

I've had three quotes from three separate builders.

They said 150 each, for each building, which really, down here,

you'd probably only just get that anyway to sell them on.

Oh, dear. The ceiling price in the area has meant Brian can't

turn a profit on his original plans,

so he's been forced to rethink what he could do with this building plot.

The new plan is we're going to have a bungalow built now,

a two- or three-bedroom bungalow,

so won't be going up to any embankments or anything,

so there'll be no tanking, so basically,

just a nice little bungalow sat down here.

But finding an architect to take on the job proved a major hassle.

There was a few who didn't want the job, because of the situation,

is what it was. Some were too busy. We eventually found one, but,

you know, it took a few months to get the architect in place, really.

Brian is currently awaiting planning approval on his new proposal,

and he's hopeful that consent will be granted soon,

despite some lingering worries.

A slight worry, because we're down in this dip sort of thing.

The waste, we're not quite sure yet,

we may hopefully go and pick some up down here,

down in these gardens, and the neighbours, hopefully.

Failing that, it's going to have to be a cesspit, I think.

His new budget for the bungalow is 100 grand, and once planning

is granted, he hopes the build will be completed in nine months.

So, does he have any regrets about this auction purchase?

Yeah, I do wish that I'd come and viewed the land.

Basically in a hole, it was a bit hard to make things out anyway.

It was really overgrown, but I do wish I'd come and viewed the land.

So, for Brian, quite literally,

it's been a case of back to the drawing board.

We asked two local property experts to visit the site

and get their opinions on Brian's new plan.

I think for this area,

a pair of semidetached houses would have been a much better proposition.

Bungalows - there are very few around this area,

and they tend to sell for higher prices in other areas.

So I think that it is a shame that a pair of semis

couldn't be built on here.

I can understand the reasons behind putting the bungalow in.

My only concerns would be that all the other properties around here are

either traditional terraces or ex-council houses, so it's not

an area that people initially think of as having a bungalow.

Hmm. Neither seems particularly keen on the concept of a bungalow, then,

but financially, it certainly makes a lot of sense for Brian.

His projected build costs and the land purchase mean he's in it

for 147,000, so what could a bungalow sell for?

I think a two bedroom bungalow on this site would sell in the region

-of £170,000.

-A two-bedroom detached bungalow

in this area would sell for between 165 and £170,000.

It's slightly lower, I was hoping for a little bit more than that,

possibly 180, but it's still not a bad figure, really.

And what about a three-bed bungalow?

A three-bedroom detached bungalow in this area would sell

for approximately 185 to £195,000.

I would market a three-bedroom bungalow for £190,000.

Yeah, that's excellent.

If that comes out at that and we can sell them for that,

that would be perfect.

If Brian could build a three-bed bungalow for his £100,000 budget,

he could potentially make a profit of 43 grand, so what's the plan now?

Yeah, I think we'll definitely go for the three-bedroom bungalow.

That sounds like a better option. There's a bigger return on that.

It wouldn't cost a great deal more to do that, anyway.

I think that's the way to go - a three-bedroom bungalow.

But he's got to get planning permission and build it first.

But that hasn't stopped Brian thinking about the future.

Well, sell this bungalow on, and maybe do another one.

It's all down to the missus, really!

Hengoed in Wales is where I was earlier in the show,

to see what seemed like a deal of a lifetime.

With a guide price of 125 grand for not one, or two, but three flats,

and the freehold for the building.

# Feels too good

# To be true. #

I certainly thought so. Surely it must have been a disaster inside?

It's very rare to actually come into an auction property

which is more or less finished for you,

but there's nothing wrong with this at all.

I've got two more to see. I hope they don't let me down.

# Never let me down... #

And they didn't. These flats were in excellent condition.

Richard and Paula, who had a side-line business of around

70 properties, couldn't resist, and paid 155 grand at the auction.

They wanted to rent them out, and Richard was pretty quick in trying

to find a tenant, in the shape of yours truly.

You've got yourself a bit of a bargain. I really like this place.

How much are you prepared to pay for it? That's the first thing.

It's a great question, actually.

It's a bit too far for me - I'm in the Midlands.

-Too far to travel!

-Shame.

Not for me, but hopefully after three to four months of hard work,

on a 25 grand budget,

new tenants would be able to call these flats home.

Three months on - let's see what they've done.

Well, there wasn't much needed doing, but Richard, Paula,

and their team have done it well.

On the ground floor, a lick of paint and new carpets finish the job.

The place is much cosier, thanks to new PVC double glazing,

something they've done to all three flats.

Upstairs, at one of the two-bed flats,

there's already a tenant moved in.

The kitchen has been fixed, and in the garden,

that rotten decking has been made safe.

On the top floor, the other two-bed has new central heating

and spruced-up decor.

Richard and Paula had a simple turnaround here,

but they had an aquatic adventure along the way.

Well, it's been a good buy because it was a newish shell

and everything was done to a modern standard, so you didn't have

the usual damp problems that you get with some of the older properties,

so it was fairly straightforward in many ways.

But you always get the unexpected!

The flats had been empty for so many years, the pipes in the wall

had frozen, so we had water everywhere at the start,

water going everywhere when we first turned the supply on, and

having to dig out walls to find out where the pipework was going.

I think that was the only thing that was probably unforeseen.

The rest of it was stuff that we expected when we took it on.

# Un, deux, et trois... #

With this lot, the couple also bought the freehold to the building,

and they've also done good work in the communal areas.

In the communal areas, we've had a fair bit of work.

Underneath the stairs we had to skim out, because it wasn't fireproofed.

Some of the live gas pipes, people were tripping over them,

so we had to raise the flooring and sort that out.

We put a door access system in, a keypad for going under the stairs,

so people don't have to find keys when they get at the meters,

and everything. Generally paint, clean, and sort it all out.

They stuck to the timescale, but what about the budget?

Well, we were thinking of 20,000 to 25,000 as a budget,

but it's always difficult to tell when you start a job.

Luckily, this one hasn't thrown anything really nasty at us,

and I think after contribution from the other flats which are sold on

long-term lease, we're probably going to be about 18,000,

which is fine. It's a nice figure to come in at, really.

We've got a really good team and they've worked really hard

on this project, so we're really grateful to them.

And it works really well, the two of us, doesn't it?

Yeah, we're lucky that the two people who work for us,

we can rely on them to carry on,

if we just make sure we organise and have a plan of where we're going

and it works out nicely all-round, really.

One tenant has already moved in, and the good news is

they have agreed lets on the other two flats.

One-bedroom downstairs is, I think, 470 month.

The middle flat is 475, because he's taken a lease for a few years,

and the top one is 500.

So we do also have another £100 a year income from the lease on the

flats that were sold off, so, yeah, all looking very good.

Having spent 173 grand in total, those rental figures are making them

a healthy 10% yield on the three flats collectively.

But I wonder what they'd be worth on the sales market.

To find out, we asked along two local agents.

First, what do they think of the flats?

They're done to a very high standard.

The flats themselves are a phenomenal size for flats

locally compared, and the fact that parking seems to be good,

and they are immaculately presented.

Fantastic location, where the block is located at the end

of the cul-de-sac. It's a quiet cul-de-sac.

The flats are easily accessible from the main hall,

and all the flats seem to be very modern, light, and airy.

The agents think that Paula and Richard are pretty much on the money

with their rental figures, but what about those sales figures?

The ground floor flat in today's market would fetch between

£60,000 and £65,000. The middle apartment will fetch £80,000.

The top floor apartment is a good, spacious apartment,

and that would fetch between £75,000 and £80,000.

The resale value of the top floor flat,

I estimate between £70,000 to £75,000. The middle floor

two-bedroom flat, I estimate between £75,000 to £80,000. And the lower

ground floor flat, the one-bedroom - between £60,000 to £65,000.

The top figures there could mean a combined resale of £225,000,

and that could net the couple a pre-tax profit of 52 grand.

Thoughts?

Yes, there'd be a profit if we were to look to sell the three,

but we've got a quality building that will last for many years,

which means it will pay for itself in just over ten years,

so no need to look at selling.

I think this has been a great investment for the couple.

Richard and Paula, despite having finished three flats,

have their eye on more.

Yeah, we've got a few more on the go at the moment,

so we'll get working on those very soon.

Yeah, we keep saying we're not going to,

and then we see something of interest.

We are looking more towards commercial because of the stamp duty

that's been added on. That makes a big difference if

you're trying to sell something, but again,

we just look around, and if we think something's right, we go for it.

Property auctions take place everywhere in the UK,

and we've met a load of buyers.

Yes, you never know - next time, we might be in your neighbourhood.

So wherever you are, from Dundee to Derby,

we hope you join us next time on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

-Goodbye.