Episode 27 Homes Under the Hammer

Hello, and welcome to the show. Now, for many first time

property investors, it can be a nerve-racking, intimidating process.

Yes, but by doing your research and getting up-to-date

with the housing market can make it a little less daunting.

Yes, and one place you can find out exactly what's going on is at your

local property auction.

The variety of properties at auction is huge.

Yes, but it's really important to do your research,

and then stick to your budget and your plans.

Even when the bidding commences.

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

I visit this two-bed bungalow in Cornwall,

and there's a mystery to be solved.

You're thinking, what is this house made of?

But it doesn't take Sherlock Holmes to work out what's amiss with this

three-bed semi in the West Midlands.

Clear as day.

Everything's out.

And in this two-bedroom house in Watford,

it's a puzzling layout that has me scratching my head.

You have to walk through a bedroom to access your bathroom.

All these properties have been sold at auction, and we'll find out who

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

It's always a delight to travel to the south-west of England.

And this is the pretty village of Callington in Cornwall,

where, in August 2014,

I visited this two-bed bungalow, for sale at auction

with a guide price of £100,000 plus.

Well, you're left in no doubt before you even step inside the house

that it's kind of quirky.

But let's see exactly what we've got.

The entrance area there, and through into this really nice

double-fronted lounge. Beams.

Wouldn't have expected that, but there you go!

Off there, first of the bedrooms and a half decent sized bathroom.

Slightly unusual feature there,

with this kind of glassy, conservatory, greenhouse

kind of thing going on.

I don't know how else to describe it!

But your second bedroom there,

and then through into your kitchen.

It's all pretty together.

It's clean. It's relatively tidy. It might not be to everyone's taste,

but you could pretty much live in it straightaway as it is.

And it's quirky. I mean, I like that.

I like the quirkiness. It doesn't get any more quirky than out here,

where you step into what was presumably a little courtyard area.

It's been covered over, encompassing your shed.

Wow!

A shed and a lean-to, that was a new one for me.

However, it was outside that had my attention.

Just look at the exterior of the building,

and immediately you're thinking, "What is this house made of?"

It is, in fact, a wooden frame construction.

And this is just cladding on the outside.

So, probably a concrete base and then this has been built on the top.

1920s, 1930s.

What's wrong with that? Well, you might like it.

I might like it, but generally mortgage companies don't.

Now, while there are companies that specialise

in mortgaging non-standard constructions,

I reckon this one might be a quirk too far for most.

However, the really interesting thing about this lot

was the plot of land the bungalow stood on.

Step out here to the front of the property, and another potential

opportunity presents itself,

because you've got a very, very large garden.

0.2 acres in total.

So, what am I thinking?

Building plot, perhaps?

Knock that whole thing down, divide this up, maybe one large house,

with an amazing garden, maybe two properties.

It would all come down to planning, of course,

and all come down to how much you get for those properties

when they were built, but as a potential...

..I think it's definitely an option. Sad though it is, to say it.

On auction day the guide price for this lot was raised from 100

to £125,000 plus.

125 anywhere in the room?

125?

-115?

-110.

-110.

Thank you, sir. Great bid. 110, go with that.

115 somewhere.

Looking for 112.

113. 112, then.

You've got a riposte at 112. 114.

Yeah?

114. 116.

116.

118.

We're moving. It's a slow train, but we're moving.

118.

A slow train that was gathering pace,

because despite that guide price change,

neither of the two bidders seemed to be running out of steam.

We're back on track at 131,000.

131 here. 132. It's against both of you.

131 and a half.

132.

132 on the wall here. 132 and a half.

Or has he worn you down? I think he might have worn you down.

It's £132,000 here on the wall against both of you.

At £132,000.

Started at 110. We're at 132.

First time with you, sir, on the wall, at 132.

Second time.

Third and last time.

At 132 for a bungalow chalet.

132.

Paying £132,000 for the lot was Andrew and his son, Mark.

Both electrical contractors.

They weren't much taken by the chalet bungalow's quirky charms.

It's somewhere to live for the time being.

The overall idea of it is to knock it down,

-and hopefully to build two houses.

-You're going to live here, then?

-I'm going to live here, yeah.

-Oh, great, OK.

-Girlfriend's not very happy about it.

-Oh, right, why not?

Well, as I say, from what I'm living in now to living in this is a little

-bit different, really.

-I think this place is charming.

-Has she not bought into that yet?

-It's first impressions, let's say.

-Is it?

-I think when she moves in, eventually she'll like it.

It's a short-term place to live in. Cheap living, so...

Mark was clearly well prepared for some cheap and cheerful lodgings,

but girlfriend Tamsin obviously might have needed

some persuading, and reluctant girlfriend might

have been the least of their problems.

Have you had any preliminary discussions with the planners at all

-about what about you might do?

-Not yet, no.

-No.

What will you approach them with, do you think?

We want to look at two individual properties.

-Three bedroom.

-Wow!

That's it. We're looking at possibly taking the main entrance

out the side, rather than the front. Because of the traffic lights.

-Yeah.

-But again it's down to what we can get on the site,

how it works, basically.

Well, theoretically two detached properties?

That's what we're after, yeah.

Andrew and Mark figured that two dormer bungalows

would fit nicely into the local area,

and the plan was to build one house first,

demolish the existing bungalow and build the second one.

Let's assume we're going to build a dormer bungalow, two dormer bungalows,

-what, three bedrooms each?

-Yeah.

-Roughly what would they cost?

Well, I'm sort of saying they'd sell for 100,000 each.

-That's...?

-Well, I've built one down the road and it cost me about

-£80,000, so...

-OK.

-That's only for a two-bed.

So, bearing in mind what you paid for this place, there's still quite

-a profit margin there.

-Hopefully.

-We've got to help the taxman somewhere.

-Yes, of course!

So, what about the idea of working together as father and son?

Well, I've got two sons in the business,

so I do it seven days a week, really.

So hopefully we will get on. We have our moments, as everybody.

But I think, you know, the strengths sort of outweigh the disadvantages,

-really.

-And the timescale for the whole project?

-Two years.

-Yeah, something like that.

-Two years to completely finish the whole project?

-Yeah.

So, when we returned almost two years later,

the guys hadn't managed to finish as they'd hoped,

but things were definitely progressing.

But there had been several changes to their original plan.

We originally thought we were going to build the one at the front first,

Mark would live in that one.

And then we would demolish that and build this one.

That didn't work out quite as we planned, really.

The first time it rained it was apparent that we're never,

ever going to move into the place. It was leaking everywhere, really.

So it was bye-bye, quirky bungalow.

When we actually started demolishing the place, we found out we had

asbestos and bits and bobs.

We had professionals in to sort that out for us, which was great.

Once that was all gone,

a lot of the actual building left was a timber frame.

So most of that, I took down with a chainsaw.

And there was also a change to the plans Andrew and Mark submitted

for planning approval.

Instead of the two- to three-bed dormer bungalows,

they went for a three-bed and four-bed house,

and to their delight, the plans were approved.

We didn't think we were going to get planning on these two houses,

but six weeks it had come through.

And we actually put the digger bucket in,

12 months to the day we actually bought the place.

Of the two builds, the four-bed house was more advanced,

with the upstairs rooms clearly laid out.

But Andrew was on hand to tell us more about the downstairs layout.

We're in the kitchen at the moment. We plan to put an L-shape kitchen.

Under the window, sink there. Units are back there.

Here is the downstairs toilet,

leading to the hall and the lounge over there.

Really like the layout down here.

Really looking forward to seeing it finished.

I think it should be fantastic.

Andrew was excited about the layout, but what was all this going to cost?

Well, back in 2014, the original budget had been £200,000.

But that was for building bungalows, not houses.

We've obviously got a long way to go yet, but the original budget,

because of planning, we never knew where we were going to be to begin

with anyway, so it's a big difference.

I would say we're probably going to be spending

about another £100,000 to finish the project.

Hopefully, we will finish one now within the next three months

and maybe even the other one.

We haven't really decided yet.

Having taken care of the bungalow demolition,

Mark and Andrew were now overseeing the final stage of the build,

and the completion of the electrical fittings would depend on how much work they'll have on.

Mark and I, we come in weekends.

We have a measure up and talk about things, tidy up.

We'll probably get more involved now as we're at the second-fix stage.

-There's more things that we can do.

-We're starting to really push now.

What we're trying to do is,

we're trying to get this one here finished so we can actually get it

on the market for the summer - well, the end of the summer, really.

Because that's when they're telling us is the best time to sell.

I think they will sell.

I'm pretty sure they will.

I'm not... No concerns there, really.

And you know, I'm very pleased with the layouts,

and hopefully we can give it a good finish,

and we should be proud of what we've produced.

Well, I can't wait to see what the finished build looks like.

Join us later in the show, where all will be revealed.

Willenhall is located halfway between Wolverhampton and Walsall.

It's well serviced by both road networks and public transport.

One of the most famous landmarks in the town is the clock,

which is dedicated to Dr Joseph Banks.

He was known as the poor man's doctor for his generosity

and devotion, trying to help the poorer members of society.

I'm in this lovely cul-de-sac in Willenhall.

The M6 is just a few miles away, so the location is good.

Now, I'm here to see a three-bed semidetached house

which has a guide price of £19,000-£24,000.

You heard me right. Now, as I've been walking around this cul-de-sac,

I've been seeing some really nice houses.

Now, I think this is my property for today,

but...is this the one?

Is this...?

£19,000-£24,000!

Let's find out why.

There has to be a reason, right?

OK.

That's me just come through the door, and you can feel it!

You can feel there's a fall towards the door here.

Straight away I'm thinking,

"Ah, that's why it has a guide price of £19,000-£24,000",

because it's got subsidence. Right, right,

I might need a bit of help getting to that end of the house!

Lads, would you mind?

Thank you very much. Right, hold it...

Right, you've got the stairs...

..going up to the bedrooms.

HE PANTS

Radiator.

There's fresh plaster on the ceiling.

Only kidding! I might have gone over the top,

but there's definitely subsidence in this house.

Taking that out the equation, what have we got down here?

Right, we've got a good sized first reception room.

Nice, big bay window. Lots of space in here.

The second reception room is pretty much the same.

You have got double doors going out on to the back garden,

and the kitchen itself's a good size.

It looks like it's had some kind of small extension.

It's now in an L-shape.

So, lots of room to play with.

Very dated, and I say this a lot on Homes Under The Hammer -

strip it back to bare brick and start again.

There's space to play with outside, too.

This semi is blessed with a large plot and a garage.

The subsidence is also evident here,

from the cracks and repairs that have been done

to the exterior walls.

# As these four wall collide

# As your whole world subsides... #

Well, let me show you just how much this house has moved.

If you look at this, those floors are definitely out.

Now, if your floors are out, your walls are going to be out as well.

Clear as day.

And...your door frame's going to be out, too.

Basically, everything's out.

OK, upstairs we've got the bedrooms.

And we've also got a few cracks on the landing as well.

Apart from all that, you've got three bedrooms.

Two really good sized bedrooms just either side of that wall.

One facing out the front of the house, one facing the back.

But good double size rooms.

More of a box bedroom just there, and the bathroom is there,

which is a good sized bathroom as well.

There's loads of space to play with downstairs as well.

You would have to get these floors levelled out, most definitely.

If you don't mind getting your hands dirty and getting stuck in,

this could be a project for you.

We called in an agent from the auction house that sold the property

to see if he could cast some light on the issue of subsidence

in the area.

Apparently, the mining legacy and issues of the subsoil have caused

problems in the past.

One of the problems is not necessarily the subsoils,

because people will build probably better foundations

that were done here,

but mine shafts do tend to sort of

crop up with monotonous regulatory.

To the rear of the development here,

there is some land that they were

originally looking on to build.

And the chap in the JCB was digging merrily away

to see what the subsoil

was like, and found one of the mine shafts.

Thankfully, although the digger disappeared,

the driver escaped unscathed.

According to the agent, this was over 25 years ago,

and even if you suspect the tale has been exaggerated slightly over

the years, I'd definitely get a mining report.

Subsidence can have many causes.

Soil shrinkage accounts for 75% of insurance claims.

While drains and trees can also be the source of the problem.

Regardless of the cause here,

the agent thinks this is definitely one for a cash buyer,

and best as a rental opportunity.

I think anybody that contemplates buying it and doing it up to sell on

again will hit problems with the settlement.

A lot of banks and building societies

still won't contemplate giving a mortgage on it,

mainly because a lot of the insurance companies won't cover it.

So, once refurbished, what sort of rental income could this achieve?

They would be able to let the property in the region

of £600 per calendar month.

Guided at £19,000-£24,000,

what could it achieve on the sales market?

If it was all done, then the top end on a sale price

would more than likely be in the region of about £75,000.

There is a lot of work that needs to be done here,

and it's not all cosmetic. This is a big corner plot, in a nice area.

What I would say, it's not a project for the faint-hearted, though.

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

This next lot is a three-bedroomed...

The auctioneer started well above the guide price,

and it certainly had some interest.

50,000, anywhere?

Thank you, madam, at 50,000. And what a buy this will be.

At 50,000 I'm bid, and thank you. Is it 60 now?

At 60. Thank you, sir. I have you first at 60.

At 60 I'm bid. Is it 70 now?

At 70 I'm bid.

Is there 80,000 anywhere?

At 80,000 I'm bid, and thank you.

Is it 90 now? No?

Do you want five, madam?

Or anywhere? 85.

Thank you, at 85. 90, sir?

No? At £85,000, then,

are we all done?

Madam, could I see your number?

Is that 90, sir?

Thank you. A new bid at 90.

At 90 I'm bid. Madam, is it 95?

Do I have 95 anywhere?

£90,000, one...

..two...

..three.

Congratulations, just the one bid was enough for you, sir.

Escaping our cameras at the auction,

but with a massive top bid of £90,000,

was Prince, on the right,

and his nephew and property development partner, Jay.

We met up to find out their plans for this subsiding house,

which they paid nearly four times over the guide price for.

-Prince, nice to meet you.

-Hello, how are you?

-Congratulations.

-Jay, same to you.

-Nice to meet you.

-Right, let's start at the beginning.

-All right.

Subsidence. Did you view the property?

Did you know it had subsidence? Talk to me, tell me.

Well, we didn't actually view the property.

I wasn't at the auction on the day.

Prince was at the auction, and what we've got,

we've got somebody local who's part of our team,

who normally does the works. He had a look.

He had a look from outside, as far as we know.

We know he didn't look inside.

So, subsidence, we didn't quite know.

We've come to know,

and, yeah, we're going to have to deal with it.

Oh, dear! Sending someone you trust to view

is better than not viewing at all.

But not seeing inside was a crucial mistake, and has meant that they

have bid way more than was wise.

People, you know what I'm going to say,

I've said it before and I'll say it again.

If it looks too good to be true, it probably is.

Originally, what had happened is,

the potential which they noticed on paper

was the land, and the potential to either build a separate plot

or to extend the property,

and the idea is if we can get the planning permission,

separate the plot off, do the legals and sell that separately

to the house once refurbished, so we've got the two parts

and that's the maximum sort of return we can make on this.

Prince and Jay reckon a plot for a two-bed house at the side is

the way to go. It sounds good in theory but, again, do some homework.

The subsoil the agent mentioned could be an issue.

Even if modern foundations would fare better than this original house,

it would still put buyers off.

So, what are their plans for the semi?

We're going to sell it. Basically, we are just doing a development,

just basically trying to make some money out of it,

-so we can reinvest again in another property.

-OK.

That's how we look, actually.

-You spent a lot of money on this property.

-Mm.

-A lot over the guide price.

-Yes.

-We've had a look at the market.

We've had a look at what's on the market around here,

and there's one a few doors away,

without the extra sort of space and land.

It's on the market at £140,000.

-OK.

-So, that's all pristine condition.

So, we've still got a margin to play with here.

You know, there's one down the road, smaller, £120,000.

So, we've still got a margin to play with here.

-OK.

-We didn't realise it's going to be major work needing to be done.

But sometimes you have to take a gamble in business.

You make some profit from one property,

and then you lost something.

But overall, we think we should be OK.

That's why I feel confident because business is something you have to

be prepared, loss and profit.

Prince and Jay's company paid £66,000 more than the guide price.

Beside the extra work caused by the subsidence,

they wanted to do a basic standard refurb

using their regular workforce.

It begs the question - what's the budget?

Originally the budget was £10,000.

-OK.

-We won't get it done with £10,000.

We're quite aware of that with all the structural works, et cetera.

We are probably looking sort of in the region of £20,000

-on the works now.

-OK.

-If we keep everything very tight.

How long's it going to take?

We'd like to have this part ready and done

-within three months.

-OK.

And the planning has got an eight-week process.

Our architect's talking for pre-application advice.

We'll find out what can be done or can't be done.

If it can't be done, we'll just move on and carry on,

a bit like what Prince said.

We bite the bullet and carry on and sell it with it, perhaps

sort the garage out, so there's a proper garage there

and then sell it on.

-Prince, good luck.

-Pleasure meeting you.

-Hope it all works out for you.

-Thank you.

-Jay, same to you, pal.

-Good luck to you.

-It was lovely meeting you.

-Pleasure.

-Thank you.

This is why I always bang on about reading the legal pack

and viewing the property.

Jay and Prince had no idea that this place had subsidence.

So their budget has gone out the window.

They also are trying to get planning right there

to build another two-bed house.

All I can say is, good luck, lads.

I wish you all the best.

You can find out how they get on later in the programme.

Still to come - there are big plans

for this two up, two down in Watford.

From floor to ceiling, it's going to be completely brand-new in here.

And back in Willenhall -

after buying that cracking property,

we find out if Jay and Prince managed to smooth things over.

But before all of that, let's head back to Cornwall,

where we first met Andrew and Mark in 2014.

They had purchased this two-bed bungalow at auction for £132,000,

and there was only one thing on their minds.

The overall idea of it is to knock it down,

and hopefully to build two houses.

But before this quirky construction was reduced to rubble,

it would serve one final purpose,

a temporary home for Mark and his girlfriend, Tamsin.

-Girlfriend's not very happy about it.

-Oh, right! Why not?

Well, from what I'm living in now to living in this

is a little bit different, really.

As it turned out, it leaked like a sieve,

so Tamsin was spared that ordeal.

Fast forward now to 2016,

and the porous bungalow was long gone,

and in its place stood two new but, as yet, unfinished houses.

# How long

# Has this been going on? #

Good question! By that point it was two years,

and most of the delay was down to a change of plan

about what they were going to build here.

We didn't think we were going to get planning on these two houses,

but six weeks it had come through.

And we actually put the digger bucket in

12 months to the day we actually bought the place.

The four-bed house was nearer completion than its three-bedroomed

neighbour. But Andrew was relaxed about timescales.

Hopefully, we will finish one now within the next three months,

and maybe even the other one. We haven't really decided yet.

Would Andrew and Mark manage to drag this project over the finishing line?

Or would the money run out?

Would they manage to make a profit?

So many questions.

The only way to find out the answers, nine months later,

after our last visit to the building site, we're going back.

A beautiful Cornwall day shows off

this sparkling project to perfection.

The four-bedroomed house has been finished,

and it's just awaiting carpets.

The stunning kitchen and dining area

illustrates just how much space this building has.

The living room is equally spacious, and both feature sliding

patio doors that lead out into the landscaped back garden.

There's also a downstairs toilet and a large integrated garage.

Upstairs, the pick of the four rooms has to be the master bedroom,

complete with dressing room,

en suite bathroom and stunning views across Bodmin Moor.

The other three bedrooms

are a really good size, and the accommodation is

completed by a large family bathroom.

We chose not the cheapest products.

We tried to use good things throughout,

hoping it would enhance the value of the property.

As you drive up to the actual building now,

and seeing the actual end product, the four bedroom,

it really stands out, it's a fantastic building

and it's something to be proud of.

Next door, the three-bedroomed house is lagging behind,

but Andrew isn't that worried.

Timescale was never really a problem to us.

It was going to be what it was going to be.

It was obviously our aim to get one to market to sell it,

to enable us to finish the second property.

And that's exactly what they've done.

The four-bed house has recently been sold, and Andrew is looking forward

to receiving the funds to finish the three-bed.

I would say from today, to finish the three-bed,

we're probably looking another three months

to get the quality that we want.

The timescale has been flexible and so has the budget.

Back in 2014, Andrew costed

two bungalows at £200,000.

Revising their budget to £300,000 for two houses.

Now it looks like £350,000 will finish the job.

But hopefully, their profit will climb, too.

With one down and one to go,

what will two property experts think of this new development?

The layout with the kitchen fitments in,

you can see it's a good sized family kitchen-living room.

Garage is excellent.

Finished off with the utility area.

The main bedroom, with the dressing room and en suite really sets it apart.

It's a really good finish, of a high standard.

I think they're in really good position,

the vendors have really thought about what buyers want.

What families will be living like when they live here,

so they've positioned them very, very well.

Both like what Andrew and Mark have produced here,

but in the almost three years since this plot was purchased,

how has the housing market developed?

Since I last saw it, the property market's improved,

particularly in the higher-priced properties in this region,

which is above £250,000.

There is a high demand for properties in this area.

Obviously, we've got people waiting that would love to buy.

Obviously, there is a short supply of three-, four-bedroomed properties.

On to the sales values.

There's already been a price agreed for the four-bed house,

but how close will the agents' valuations be?

I think for a property in this area, I would put a value on it

of about £350,000.

Hoping to get offers of £340,000 and above.

I would expect it to be on the market around £350,000.

And because of the standard it's got and just the way it appeals,

the selling price ought to be £330,000 to £340,000.

I don't see it going below that.

We have actually sold this property for £330,000.

It just proves to me that the prospective buyer's got a bargain.

But will Andrew and Mark be laughing all the way to the bank?

With total costs estimated to reach £482,000,

the sale of the four-bed house will go some way towards paying the bills.

But they need another £152,000 to break even.

So what can they expect to get for the three-bed?

Although it's a three-bedroom,

size-wise, you could put four bedrooms into it.

And I think somebody appreciating size, quality and space,

and again the views from there to Bodmin Moor,

I can see that one achieving £300,000.

A three-bedroomed property would be valued at £320,000,

looking to get any offers above £300,000 and £310,000.

I would say, spot on.

So, if they did manage to get £300,000 for the second house,

that would leave them with a potential profit, before tax,

of around £148,000.

As his property adventure comes to a close,

a different sort of adventure is just about to begin for Mark.

I've just had a little boy.

He's two weeks old now.

So, it would be nice to finish off and actually spend some time with him.

With the patter of tiny feet making demands on Mark's spare time,

I wish him good luck in finishing in three months!

So, is Granddad Andrew keen to buy at auction again?

For me, at the beginning of this year, I had one grandchild,

by the end of the year I will have four.

It means we've got to do it again,

because I've got to earn some money to take them to Disneyland!

Watford is a town in Hertfordshire which is well located.

Close to the M25 and M1 motorways, with their links to London,

Midlands and the North.

It's also home to the Colosseum,

which was built in 1938,

and earned a worldwide reputation for its fine acoustics.

It's been used to record well-known film soundtracks,

including The Lord Of The Rings and The Sound of Music.

It's also been the venue for acts such as The Who,

Oasis and Robbie Williams.

# Let me entertain you. #

On that note, it's time for me to entertain you,

and show you around an auction property.

A ten-minute walk from Watford's high street, and I'm on this popular

residential road, which is home to the two-bed terrace I'm here to see.

It had a guide price of £310,000.

This is it. Is it just me, or does it look really narrow from outside?

Best go inside to see if it's such a squeeze inside.

Yes, it is small.

But, you know, pretty well proportioned.

It's a square room.

What is more concerning, however, is this - very obvious signs of damp.

You really want to get that checked out.

Is it rising damp?

Is it coming up, or is it penetrating damp?

It is being caused by a leak or a burst drain?

Such a shame in a Victorian property not to see an original fireplace.

That's obviously been put in. You'd probably want to take it out again,

because it's pretty dated now.

Current building regulations would never allow you stairs that steep.

They're really steep.

And through to another pretty well-proportioned room.

Woodchip on the walls.

You've got sliding doors over here, which...

..not only dated, probably not the safest.

Definitely want to take them out.

I'd say anyone buying or renting this would expect the property

to have central heating. A bit of an expense, but well worth it.

A poky kitchen.

Really poky and again very dated.

You'd want to rip that out.

And here we have a dilapidated-looking lean-to.

This is your only source of natural light,

so the place has a feel of just being gloomy,

and it definitely needs a lot of work.

One thing I haven't found yet is the bathroom,

and that could be good news,

as it means it has already been moved up to the first floor.

I'll check that out shortly, but first, I'm heading outside.

Upon closer inspection, this lean-to

is actually even more flimsy than I first expected.

So, away with it, I say. Probably the same for this.

These outbuildings aren't really doing much.

They're not adding much at all.

If you did get rid of them, you would create a bigger garden,

because here we are in a garden that is not huge and you could make it

bigger, or you could extend.

Taking away these outbuildings, and if you were to extend within the

three metres permitted,

then you would have no need to seek planning permission.

And an idea would be to make the kitchen-dining area big, open,

create some natural light coming in.

You're adding value and all of a sudden things are looking up.

-# Suddenly I see

-Suddenly I see

# This is what I want to be. #

Suddenly the prospect for this house isn't so gloomy.

Now, permitted development rights do allow alterations without planning

permission, but I always recommend

you contact your local planning department first.

Certain types of work might need a planning application in some areas,

but not in others.

And of course you still need to comply with building regs,

and when you see those stairs, you can see how having those regulations

has improved things over the years.

Yep, those stairs are as steep as they look.

Made it to the top to a first bedroom,

which is a really good size.

Huge window, but I'd like to see a bit more character.

It seems that a lot of the features have been ripped out.

There's no original fireplaces.

You have polystyrene roof tiles, which definitely need to come off.

They're a real fire hazard.

Woodchip on the walls, which can be a nightmare to come off.

Now, I said it was a good thing that the bathroom must be upstairs.

I hadn't found it downstairs.

Still true. But I still haven't got to it.

I'm still walking.

Yes, you have to walk through a bedroom to access your bathroom.

This is never ideal, whether you want to rent this out or sell it on.

Who wants to walk through someone else's bedroom

to get to the bathroom in the middle of the night?

No, you have to change the layout.

Now, the way to do this is pretty costly,

but you would flip the stairs around.

You would change the layout so that there's a corridor along here,

so you can access your bathroom.

A lot to do. Quite a lot of money.

But it could just work.

And I'd also extend the bathroom into this tiny boxroom.

Can't see what use it is, and it would be much nicer to have a

window in the bathroom.

So, that's the house tour, but what about the neighbourhood?

It's time to hear from a local estate agent.

This road is a very popular road.

A lot of people are buying in the area to get their children into the

girls' school, so there's a lot of families buying in this area,

and also there's a lot of people buying for investment

to rent to families that also want to get into the girls' school.

A popular school in the area will always push up property prices.

And so, can she take an educated guess as to how much this place

could fetch when fully refurnished?

If the property was renovated, I'd expect the property to reach

£350,000-£360,000 on the sale side.

On the rental side, £1,250 to £1,295 per calendar month.

The agent also reckons that although building a rear extension will make

the property more sellable,

it might only add £10,000 to the resale value.

This property is not without its issues.

Not least that damp and the first-floor layout.

But if you have the budget to throw some money at it,

it's got loads of potential,

especially if you take that option to extend.

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

Watford, Hertfordshire.

Unfortunately we're unable to show you the bidding for this lot.

But it sold for bang on the guide price for £310,000.

Sold, 310.

Lee came along to tell us his plans for the property,

however, he wasn't the person who parted with the readies for this

two up, two down.

-Lee, congratulations.

-Thank you.

-So, you weren't at the auction yourself.

What's your involvement with this property?

So, we've got a client of ours,

who's obviously bought this property with a view of redeveloping it,

and I'm going to help him with the redevelopment through our architects

-and structural engineers.

-OK.

When you say a client of yours, what is it you do?

I'm an estate agent. He's bought properties through me previously.

I've got a brand-new agency and with the brand-new agency,

what I'm looking to do to take things to new levels is to

attend auctions where needed, if clients can't make it,

purchase properties on their behalf and help with the redevelopment,

-with the team we've got in place.

-Do you know this area?

Yes. Yeah, yeah, we know the area well. It's a growing area.

We're very, very close to the hospital,

which thousands of employees and stuff at the hospital,

close to the football club as well.

And over the next couple of years,

there's going to be some train stations real close by as well,

linking into Watford Junction. So it's absolutely a growing area.

You think you can get some profit from here if you do it up?

Yeah. The long-term plan is to let the property out,

so we're not looking to make a quick buck on it

in terms of a resale point of view.

Watford is an area just north of London.

We get a lot of the London market coming out this way.

It's still a very, very easy commute back into central London

for a completely different lifestyle.

How long would the commute be into central London?

Once the new station, things are put in place here,

you're probably looking at 20 minutes max.

Great! Let's talk through what there is to be done, because it's quite

-dated.

-Do you think so?

Well, you know the sliding doors and there's a lot that needs replaced.

What are your plans? What's most of your budget going to go on?

The whole house needs doing. It completely needs gutting,

so from floor to ceiling,

it's going to be completely brand-new in here.

We're looking to extend out the back as well.

Single-storey extension out the back,

with a loft conversion to give it a real good sized double bedroom up there,

with an en-suite bathroom as well.

In terms of the interior space right now,

it's just going to be a case of re-modernising the whole thing.

Ripping it all down, starting from scratch.

It's going to take more than a feather duster, this place, anyway.

And the bathroom which is upstairs -

good it's upstairs - not great you can only access it through a bedroom.

Do you have plans to change the layout of that first floor?

We do. Yeah. I mean I put a lot in the hands of our architects and

structural engineers, obviously professionals in their field.

So we will play around with the structure slightly to make sure that

we've got a proper landing space upstairs to try and get the bathroom

off the landing, as well as incorporating going up into the loft as well.

So, we're going to be turning it into a three-bed,

two-bath instead of the two that it is now.

This place is going to change massively over the next kind of 10-12 weeks.

So, yeah, I'm looking forward to seeing the end kind of product.

-12 weeks?

-Mm.

12 weeks!

There's an awful lot to do - structurally, there's a lot to do.

Yeah. I know we're going to meet the timescales we set out with the

architect team we that we've got in place with the structural guys we've

got in place as well. 12 weeks will be achievable.

We're probably a week away from start.

What about budget?

So we're looking at up to £100,000.

-Substantial?

-Yeah.

It's a serious client.

He's not in the game of kind of making a quick buck,

but having extremely unhappy tenants and things like that.

For us, it's the bigger picture,

making sure we've got a happy family living here, moving forward.

With that, we want to present them with a beautiful home.

Short term, Lee has his hands full with this project for a couple of

months, but he's got a few properties of his own

and aims to build up that side of the business,

and all for a very special reason.

# Doing it all for my baby. #

My long-term plan is just to create a better life for my son.

Whether that be through the agency that I've got,

leaving him something which is a huge agency -

We're looking to expand over the next couple of years -

or through the properties that I've got.

Either or, just as long as I know I'm doing something for him moving

forward. So if it's to be more properties,

-then it's to be more properties.

-How old's he?

-Two and a half.

-And he's an absolute diamond.

-Of course he is.

By the time he's 18 you could have a huge portfolio.

Yeah, yeah, absolutely.

-I can't wait to see what you do with the place. Good luck!

-Thank you.

Well, Lee has a big budget for lots of plans,

and hopefully a huge transformation.

What isn't so big is that timescale - 12 weeks.

Will he get it done in time? And will his client be happy?

You can find out later in the show.

Now, even very experienced property developers can miss deadlines

-and go over budget.

-Yeah, even the simplest of budgets

can sometimes throw a major curveball.

Yes, so have our two remaining buyers stuck to their budgets

and timescales? Let's find out.

It's back to the West Midlands now and the town of Willenhall,

where, earlier, I found getting around this three-bed

semidetached house a bit of a struggle.

Straight away, I'm thinking, "Ah, that's why it has a guide price

"of £19,000-£24,000, because it's got subsidence."

Right, right,

I might need a bit of help getting to that end of the house.

Lads, would you mind?

Thank you very much. Hold it.

OK. Go upstairs, radiator.

Fresh plaster on the ceiling.

The early signs weren't encouraging, and since I like to think I'm a

straight talker, I'm going to level with you.

If you look at this, those floors are definitely out.

Now, if your floors are out,

your walls are going to be out as well. Clear as day.

Basically, everything's out.

It was business partners Jay and Prince who forked out £90,000

for this sloping semi, but were they really aware

of just how big a challenge they faced?

Well, we didn't actually view the property.

I wasn't at the auction on the day.

Prince was at the auction and what we've got, we've got somebody local.

He had a look, he had a look from outside, as far as we know.

We know he didn't look inside.

So subsidence, we didn't quite know.

We've come to know,

and, yeah, we're going to have to deal with it.

And their plan to deal with it involved renovating the existing property,

dividing the plot into two

and applying for planning permission to build a two-bed house,

but they were well aware that this was a risky proposition.

We didn't realise it's going to be major work needed to be done.

But sometimes you have to take a gamble.

Well, Jay and Prince certainly took a gamble with this property.

We've returned six months later to see if it's paid off.

I think these pictures indicate that not much has happened here.

There's been a bit of a tidy up.

And outside, the garage has been taken down.

But the house is still standing, which is a positive.

With Jay otherwise engaged, we caught up with Prince and Mohammed,

who is the third partner in the business,

to find out exactly what's been going on.

When we begin, when we bought it actually,

we had a quotation from the builders regarding underpinnings,

and they said it's going to be £30,000, roughly.

Even then, that's the price they quoted. It might go over that.

So we had some quotations with a local estate agents,

what sort of price we can sell the property for.

They said £130,000-£140,000,

and there's quite a lot of extra land just off the property,

and then we decided that's a long process because we

haven't got much time and we thought it's not advisable to do this.

Rather we sell that in auction and get the money out and reinvest

in somewhere is more advisable.

Facing a scenario where the area ceiling price of £140,000

would prevent them from making a workable profit,

the house was put back into auction.

The next gamble was,

could they recoup the purchase price of £90,000,

plus fees of £7,000?

It was sold for £87,000

and the buyer actually paid £10,000 as a deposit,

which is non-refundable.

So I think the buyer was struggling to get the finance,

so he backed out,

so we got £10,000 from that deposit.

So that cut down from £97,000

to £87 ,000.

But if at first you don't succeed, put it back up for sale at auction.

So, now we've resold the property again at auction for £87,000.

So, basically, overall,

and he already put on the 12th of this month,

already paid another £10,000 deposit to that.

So we're thinking about finishing that within 28 days.

So, hopefully, we should get that done, and once we get the money,

then we can reinvest again.

Hopefully the second sale will go through smoothly,

and the guys will move on from this having learnt some valuable lessons.

But what about the future for this property?

We asked along two local experts

to tell us what they think could happen here.

Starting with the agent who saw the property earlier.

It may sell to hopefully a cash buyer,

who perhaps wants to live here and doesn't mind the fact

that it slopes forward somewhat.

Alternatively, they could smarten it all up and then rent it out.

It's not going to be viable for someone to buy this property,

refurnish it and still leave the subsidence in place.

They're not going to be able to finance it,

therefore, they're not going to be able to sell it on the open market.

If the subsidence can't be resolved,

then it could even be as severe as, you know,

the property needs to come down to start again.

Well, that's a gloomy scenario.

But assuming the underpinning work was carried out successfully,

and the property was refurbished,

would the house be any more attractive?

I think if they decide to sell it after they've underpinned it,

they are still going to have problems,

because the property's still going to be sloping downwards.

And building societies are probably still going to be reluctant to give

mortgages on it, because their insurers are probably not

going to be too happy with it.

So, even after all that work, this place could still remain a cash buy.

Although similar houses have sold in the area for £140,000,

the agents were sceptical that once renovated, this house could achieve

anything near that.

So, what about a buy-to-let option?

The rent for demand in the area is probably,

I would have said probably extremely high.

Anything which comes up for rent which is half decent, yes,

it goes like that.

It is a good sized plot and we are in a nice cul-de-sac here,

tucked away from the main roads, with great access.

I would say this would be on for £625 per calendar month.

They would achieve in the region of £600 per calendar month.

It's no point for us putting it in there

for the long-term as an investment.

We either do a development and get the cash out,

and use those resources on another investment.

They only have a few tense weeks to wait before the completion of the

auction sale. If the money comes through, Prince,

Mohammed and Jay will just about break even.

After that, they may just take a huge sigh of relief.

So, chaps, what have you learned?

I think everybody needs to make a mistake to become somebody wiser.

I think we had the opportunity, I'm very grateful,

we learned our trade and we are much more wiser and smarter now.

Let's head back to Watford,

where earlier in the show I visited this two-bedroomed terrace house,

with a guide price of £310,000.

This one had definitely seen better days.

Very obvious signs of damp. You really want to get that checked out.

Is it rising damp?

Is it coming up? Or is it penetrating down?

With two public rooms and a very small kitchen on the ground floor,

this house was crying out for an extension to create a bit more space.

And an idea would be to make the kitchen-dining area big, open,

create some natural light coming in.

You're adding value, and all of a sudden things are looking up.

Upstairs, the layout of the rooms left a lot to be desired,

particularly the awkward position of the bathroom.

I'm still walking.

Yes, you have to walk through a bedroom to access your bathroom.

The house sold for £310,000, and the new owner wanted to push through

an ambitious list of improvements to turn this into a high-quality rental

property. Looking after the property was estate agent Lee.

He often takes on refurbishments for clients and definitely had a handle

on what needed to be done here.

The whole house needs doing. It completely needs gutting,

so from floor to ceiling it's going to be completely brand-new in here.

We're looking to extend out the back as well.

Single-storey extension out the back, with a loft conversion.

It's going to take more than a feather duster, this place, anyway.

There would be no penny-pinching with this refurbishment,

as Lee's client had set aside a very healthy budget of £100,000 to do the work.

For us, it's the bigger picture,

making sure we've got a happy family living here, moving forward.

With that, we want to present them with a beautiful home.

I had my doubts about the tight schedule,

but Lee was adamant that 12 weeks was sufficient to complete the job.

So, just over ten weeks later,

we're back to see if Lee's super confidence was well founded.

Well, everything in here has completely changed,

and if you're sitting there thinking it doesn't look much like a family home,

then you're absolutely correct.

Two weeks into the project, Lee's client had a change of mind,

and decided instead of a family home to rent,

he wanted an HMO, or house of multiple occupancy.

As planned, the house has been extended to the rear

and up into the loft.

The entire internal structure has been altered to accommodate five

en suite bedrooms, two on the ground floor,

two on the first floor and one in the loft conversion.

But how did Lee manage to perform the equivalent of a handbrake turn?

It's obviously a little bit more in-depth if you're doing something

on an HMO rather than just being a kind of one family home kind of rental property.

But the relationship that we've got with our architects now,

they know what our expectations are and we know what we're going to get

from them as well. So once we decided on the HMO and the initial

requirements and stuff that we needed to meet to go in line with

the regulations, they hit the ground running.

You might think that with such a drastic change of plans, this would

have had an impact on the timescale and budget.

Well, Lee and his team managed to turn this around in nine weeks.

Three less than their original estimate. And the budget?

We had a budget from our client of £100,000 and we spent £100,000.

So we stuck to the budget. We stuck to the timeframe.

So, yeah, client's very happy.

But he's not resting on his laurels just yet.

There are five bedrooms to fill and Lee has been busy drumming up business.

The main thing is that you get good clientele living in the

property. So, here, what we've based this on is the five rooms.

Advertised, marked to the HR department over at the hospital,

so that we can get nurses and doctors in.

So, there are some real good clientele who are going to be moving

into these rooms real soon.

In keeping with the fast-paced and changeable nature of the project,

there's one final change Lee has to tell us about.

I had a client approach me talking about HMOs in the area and what did

we have, what did we have that was available?

And we're now at the stage where an offer's been placed.

Our current client's accepted it, and now we're just in that kind of

negotiation stage to get it through.

Lee's reluctant to say how much it has been sold for,

but we can of course find out its market value.

We invited two local estate agents along to see if they could put some

figures on the property.

The client paid bang on the guide price of £310,000 and they've

transformed it into an HMO.

So how could this investment fare?

I'm really impressed with what they've done with the property.

I remember it coming up for sale before Christmas,

and looking at it now, it just looks fantastic.

I love it. It's a great property. Great part of town.

The conversion they've done actually works very well.

Let's get some valuations now.

Can they estimate how much this HMO would be worth on the resale market?

On a resale value, we would actually value the property between 450,000

to 475,000.

Looking to achieve anything between those two regions.

If I was looking to put this on the market for a sale,

I'd be looking at putting it on maybe at 450,000.

Yeah. I can see where they're coming from in terms of current market conditions.

Yeah. Yeah, I mean, it's £450,000, £475,000,

that is obviously some way down on the figure we've agreed

with a client, with the deal that's going to go through.

So, yeah.

Oh, Lee, you're such a tease!

But finally we managed to get a figure of £500,000 from him,

which means a potential profit of £90,000, minus tax and fees.

But for the new owner what kind of rental income could a five-bed HMO generate?

Right, the smaller rooms in the property,

we would expect to achieve £110 per week. The larger rooms

in the property, we'd probably look to achieve £125 per week.

Per week, I would value the rooms in the range of £110 per week,

up to £125 per week.

Yeah, yeah, that's good.

Again maybe slightly lower than what our expectations are.

But, yeah, probably in line with current market conditions.

The agents agreed that an annual income of around £34,000 could be

expected, which would represent a yield of nearly 7%

on a purchase price of £500,000.

And there's good news for Lee, too.

He's just picked up a new client.

We're probably a month away, I would say, from that deal going through.

And excited to work for my new client on this, with it being

a fully managed HMO by us.

Hopefully our stories have given you some tips and insight into the world

-of property developing.

-And maybe it's given you a bit of inspiration

to start bidding on your own project.

Yes, and join us next time for more property tales here

-on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

-Goodbye.