Episode 30 Homes Under the Hammer

Hello and welcome to the show.

Now, buying a property can sometimes feel like a long, drawn-out affair.

Sometimes it feels like it takes forever to get that deal done.

Yes, however, there is one way that can prove quicker and easier.

Yes, if you want to get the deal done ASAP,

then head down to your local property auction house.

Property developing might sound simple.

You buy somewhere, you do it up, and you sell it for a profit.

-Sometimes, it is.

-Yeah, but those cases are few and far between.

Most people can expect a few bumps along the way.

Let's find out if today's purchasers

managed to navigate their projects successfully.

Here's what they bought.

In Margate, Kent, where does this lot rank on my property chart?

I've seen worse.

Actually, not much worse.

Whereas Lucy gives this Shepherd's Bush flat a pretty high score.

Tick, tick, tick. It's a good Central London pad.

And in Birmingham, I get to grips with the scale of this task.

This plot of land is pretty small.

I mean, in parts, I'd guess no more than five or so metres width.

All 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.

-GAVEL BANGS

-Yours at 78, sir.

This is Margate on the Kent coast.

Back in the 1800s, famous painter JMW Turner was a

regular visitor to this seaside town,

and was inspired enough to paint its skies and seascapes.

Now, Margate is undergoing an era of regeneration.

There is now a world-class art gallery

named in Turner's honour on the seafront,

and a growing arts scene and cafe culture.

Well, close to the seafront and all that redevelopment is the property

I am here to see. It's not a house, it's not a bungalow,

it's not a plot of land, but it's down this lane.

This little back lane seems really tucked away,

but we're actually only

a few minutes' walk from the seafront and the town centre.

The lot in question is at the end.

I am going to intrigue you further,

because the guide price was just 18,000 to 20,000 quid.

What does that buy you? Well...

..this.

Well, you didn't expect that much, did you?!

It's a former workshop.

It looks pretty dilapidated.

Well...

I've seen worse.

Actually, not much worse.

There's the good, the bad, and then there's the plain ugly.

The tatty, worn render is more OK Corral than seaside abode,

and the condition of the lane at

this end has really deteriorated into more of a dirt track.

So, realistically, what could you do with it?

Well, it is certainly not very big, so...

I don't know.

Maybe you could store your car here.

That would work. Everybody needs storage space,

or maybe somewhere to store rubbish.

That's a starting point. How about renting it out for somebody else to

store their car? Yeah, that would also work.

How much is it going to get you?

I don't know, maybe 30 quid, 40 quid, 50 quid a month?

Depends what they are around here.

How about using it as a building plot?

Well, it's only 0.007 of a hectare, or 0.01 of an acre,

so it's not exactly very big.

Could you squeeze a house on that?

I really don't know.

# Nothing better to do When I'm stuck on you

# I'm still in here trying to figure it out... #

It's not often I'm flummoxed, but I am.

Perhaps looking inside might inspire me.

So, what do you find when you walk through the doors?

Well, obviously it is just a disused garage.

It smells like a disused garage, it looks like a disused garage,

it really is in a right old state.

But the plot itself is quite surprising.

It goes back a reasonable distance,

another 20 or so feet from where I am, so it's not a bad size.

Using it as it is, well, there's obviously electricity.

I do not know if there's water, I can't immediately see,

so it's good to know that there is at least one service here.

Now, I think pretty much everything relies on knocking it down and

building something else.

But, build what, exactly?

There is what looks like a recent development around here,

so my instinct would usually say, "Yes, build a house."

But it's a small plot, and it might be tricky for access, and of course,

it's reliant on getting planning permission.

We asked a local estate agent to have a look at this lot,

guided at £18,000 to £20,000.

Does she think it has any potential?

Potential is the big one!

Yeah, no, it's got masses of potential.

You can see along the street as well some other developments that have

popped up, which always encourages, you know,

the rest of the area to be developed along with it.

It's got a good little site on its own - a nice,

detached property would sit quite well here.

So, yeah, it's got a lot of potential.

OK, the "potential" word.

But what does the agent think

you could fit in to what is a rather modest plot?

Providing that planning was issued, I could see a nice sort of

two-bedroom detached property with a small garden at the back.

I don't know necessarily if there would be any specific issues that

they'd have. Obviously, there are a lot of properties.

Parking and things like that might be a little bit of an issue.

There are pros and cons here, and it doesn't scream, "Planning granted".

But if it was, what could a two-bed

detached house be worth on the sales market?

If you built a very high-spec nice,

detached two-bedroom property,

you could achieve between £195,000 to £200,000.

And what about the rental market?

A two-bed property in the immediate area for rental normally achieves

between £750 per calendar month to £800 per calendar month.

So, what do we think about this one?

Well, for £18,000 to £20,000,

it could come into that category of hope.

A hope category, yes,

you hope you might be able to achieve something with this place.

It hasn't got planning permission at the moment,

but maybe you could get it.

Or, you could use it as a garage, yeah.

At the end of the day, it's going

to be down to whoever bought it when it went under the hammer.

A former workshop with potential.

Start me where you will on that one.

Do you want to come in at £20,000, someone?

£20,000 to get us on the way.

£20,000 is in the room and I'm on the way.

At 22 now, do I see?

A £20,000 bid, I have got.

22 at the back, 25 if you like.

24?

No? 24, I've got.

26, now, may I say?

At £24,000, 26.

28? Are we all done at £26,000, then?

£28,000 bid, I've got.

Fill it up to 30 if you wish.

At £30,000. These little lots don't come along very often.

£30,000 bid, I've got, and 2 I'm looking for now.

At £30,000 bid, I've got, and 2 I'm looking for

I'm selling for the first time, then at 30.

Second time at 30.

Third and final time, £30,000, seated at the back, all done...

Yours, sir, and it's T426.

Thank you.

# Let's go, girls! #

It wasn't a sir, but actually,

26-year-old Kirsty who bought the garage

with her husband, Tom, for £30,000.

I caught up with her to see what they had in store for their first development project.

-Kirsty, great to meet you.

-Hi.

-Congratulations.

-Thank you.

-So, tell me why you wanted to buy this place.

Well, it's been a long-term goal of ours to go into property and

investments. We've worked really hard at getting some money together,

-and this is where we started.

-So, what is the big objective of this?

Is it to try and get planning permission for something?

Yes, hopefully a two-bedroomed house.

Right, so what was it about this place other than, I guess,

the price, that really attracted you?

The price! It's a chance that we took as well.

It's got a risk to it, but it's local to us, we know the area,

and we're pretty positive that we can get planning, and hopefully,

move onto the next.

So, it seems Kirsty and Tom are quite single-minded,

and are chasing a property development future.

But let's stay with this one for now.

They are hoping to build a two-bed house, so with that positive attitude,

they must have spoken to planning, surely.

-No.

-Ah. So, what are you basing your positivity

that you might be able to get that on?

Well, down the road there, there's exactly the same -

a garage that's now been converted into houses.

And then next door to us, again, they've got houses.

Right, so within the area, similar things have been done.

And it is very dilapidated.

I would've thought the council would be supportive of it being brought

-back into use.

-I hope so.

Kirsty and Tom are hoping to get planning permission to build a

two-bed town house, with parking underneath and living accommodation on the first

and second floors. It's not dissimilar to the other properties on this

street, but it's definitely a gamble.

At least if planning is granted, they'll be off to a flying start.

-Well, my husband is a builder.

-Oh, that works.

And we have also found one or two properties for investors beforehand,

so we have found them for other people. So it was our turn now.

Right, OK. So, what about preliminary plans?

-Have you got some ideas?

-Well, we've done a few drawings,

and we've spoken to a local architect who is hopefully going

to come down and take us through the next steps.

Right, OK. So, what's the budget?

70 to 75.

Right, you paid £30,000 for it, so that's about 100-odd.

What if you got what you wanted?

Have you any idea what it might be worth?

I'm hoping 140, 160 at a push.

OK, so maybe the 40 to 60-grand profit if you can get what you need.

What are you going to do if planners say, "Absolutely not".

Then, our plan B is to build a double garage on it, and if, in the future,

any laws change, we can then maybe change the use of the garage.

Right, OK. What would you do with a double garage if you built it?

It will be used as sort of an office space for now,

and hopefully long-term...

For you,

-or rent it out?

-Rent it out.

Great. What's the timescale for what you're planning?

A year, because of my husband being a builder,

he's going to do it in his spare time.

Right, OK, are you excited about it all?

Yeah, hopefully. I'm looking forward to it and seeing what the future holds.

But mostly, it's going to get knocked down, clear plot of land,

and then you'll take from there.

-Definitely.

-Well, listen, good luck with it.

-I'm looking forward to seeing how you get on.

-Thank you.

Well, it's potentially a £30,000 gamble for Kirsty and Tom.

There is no planning permission,

there's not even an outline for planning permission.

There isn't even a conversation with the planners to see if it even might

be vaguely possible, sort of, permission.

Will they get it?

You know, there's lots of money to be made if they do.

You can find out how it all goes later in the show.

Lucy is in bustling Shepherd's Bush in West London.

And this is an area that has seen a great deal of change over the years.

At the heart of Shepherd's Bush lies Shepherd's Bush Green.

And it is just down the road here.

It's thought the name dates back almost 400 years,

and refers to its use as a stopping off point for shepherds who were

herding their flocks to Smithfield market in London.

There is no need to flock to Central London now,

because there are plenty of shops right on your doorstep,

with a modern shopping centre and a more traditional market, too,

though today, we are more concerned

about what's in store on the property market.

So, what could a shopping trip to the auction offer you in this area?

Well, for a guide price of £360,000, it's this one-bedroom ground floor

flat, and it's situated right here in this Victorian terrace.

Looks promising on the outside.

# I wanna go...inside

-# How about

-Inside... #

It's a little bit of a tight squeeze

getting in this Victorian conversion,

but you've got a good-sized double there, which is great.

And into the sitting-room, the lounge,

whatever you like to call it, but what a lovely room.

Now, straightaway my checklist is, lovely bay window, tick,

although you might want to upgrade those windows,

because I noticed there's a school over the other side of the road.

It could get a little bit noisy during term time.

But a great space, you've got ceiling height.

You could put a nice fireplace and surround there.

There's loads you could do to upgrade this room, and it feels

solid, it's got character. Yes, very nice indeed.

# I'd like to say Baby, you so nice... #

Well, this long, winding corridor certainly makes this flat feel a lot

more spacious than it is. You've got a rather small bathroom.

I think it's one of the smallest baths I've ever seen!

And everywhere in this flat, well,

it's just covered floor to ceiling with woodchip. Look!

And it looks like it's been on for a million years.

You'll never get that stuff off.

And the kitchen at the back of the property,

just where I like the kitchen.

Not the largest I've seen.

In fact, I think you might be able to extend to the side.

And I'm wondering whether or not you can get some lovely bifold doors

in there, or even something a little bit more traditional.

But is it worth it? Does it have a nice enough garden?

Let me check.

Well, the good news is, this flat has sole use of this garden.

And what a lovely little garden.

Now, look, it's not the hugest of spaces, but this is London.

You're right in the action of everything here,

and I think it's got potential.

Put some nice bi-folding doors here. Can you imagine?

And still have enough space to sit out here and have a barbecue.

So, yes, tick, tick, tick, it's a good central London pad.

Bear in mind, though, this is a leasehold flat,

so you will need the freeholder's permission to do any work.

There are only 99 years left on the lease, and perhaps more worryingly,

there are some damp issues.

This is more of a pad fit for a frog at the moment.

# Lady, kiss that frog... #

We have asked a local estate agent

to hop on over and give it a once over for us.

# Jump in the water... #

Now he has had a look around,

what are his thoughts on this one-bed flat guided at £360,000?

# Splash, dash, heard your call... #

If this property was mine, the first thing I would do is extend it.

The potential to the side, which is wasted space, is massive,

and I think also with the build line,

you could go a bit further out as well,

so what we call it in the trade is a wraparound extension,

and you would be able to extend from a one-bedroom, old,

grotty flat to a really beautiful two-bedroom flat.

So, if the full side and rear extension was done,

I would see this become the master bedroom, followed by another bedroom,

then a small bathroom in the middle going onto light well,

and then the rear would be a really

nice, big, open plan kitchen and living area,

and then some nice bifold doors leading to the garden.

That sounds like a good plan, but remember,

you'll likely have to get planning permission for any extensions here.

It will consume both time and money,

so it all depends if you want a quick rental turnaround or more

longer-term growth.

What do the numbers say?

If I was going to renovate it and keep it as a one-bedroom,

which I wouldn't recommend, I think it would sell for about £400,000.

And if you decided to rent it,

you'd probably get about 1,300 per calendar month.

The really exciting potential for this is to make it into a really

nice two-bedroom apartment, reconfigure it,

and I could see it selling for about £750,000.

It's a good-sized one-bedroom flat.

Yes, it needs a bit of work, but with the potential for extension,

well, I think it could easily become a two-bedder.

It's in an up-and-coming area, so there isn't anything to bleat about.

Let's see who flocked to the auction for this property when it went under

the hammer.

Who would like to kick off on this?

I don't know... Shepherd's Bush, start at 300,000.

I am not going to go below 300, so 300, anywhere?

300 with you.

Anyone else?

305. 310. 315 on the phone?

315. 320 in the room.

325 on the phone.

This Shepherd's Bush lot had plenty of interest from the room,

and the phone bidder. We rejoin the bidding at £350,000.

350? 350

in the room. 355 to the phone.

355.

360 in the room.

360 with you.

362.5 in the room, yeah? 362.5.

365? 365

with you, yeah? 365 with you.

367.5. 367.5.

370 on the phone.

If not, it's going at 367.5 here.

First time, second time, third and last time, if you're all done...

-GAVEL BANGS

-Sold, 367.5.

Unfortunately, in the crowded auction room,

we didn't manage to spot the successful bidder, paying £367,500.

But Ibrahim, who bought the flat along with his business partners,

came along to chat to Lucy back at the property.

-Congratulations.

-Thank you.

So, Ibrahim, tell me, why did you want this flat in particular?

Well, it's mainly the location, really.

We looked at a couple of properties in this area, and the guide price,

and what we went up to, was within our budget.

It was a good buy. I mean, there's a lot of work to be done,

-but there's a lot of potential as well.

-So, you talk about potential.

How can you add value to a property like this,

and how are you going to in particular?

We're going to do a full refurbishment inside,

but the main works is going to be the extension in the garden.

We're going to have a side extension and a back extension that will extend the

kitchen, which will accommodate a kitchen and a living room together.

-It's just going to be an amazingly light filled room.

-Yes, open...

-Open space.

-And I think it will work having that living, kitchen,

dining all being zoned off in a rather large space.

-Oh, definitely.

-And that will allow you to have the two bedrooms.

-Yes.

-And I think it will be the selling point of the flat.

Definitely. I mean, it will make it easier in terms of planning as well.

There has been some planning issues. We have to apply for planning permission

and consent from freeholders as well,

but there are a lot of other properties that have the same sort

of proposals as what we are proposing,

so we shouldn't have much of a problem, really.

Ah, yes, planning, which means paperwork.

Mountains of it, no doubt.

Normally something most developers dread, but not Ibrahim.

His main day job means he and his business partners can push the pens,

dot the Is, and cross the Ts.

Basically, me and my partners, we're all solicitors, right?

So we do a lot of conveyancing, i.e. property, for clients,

so we have been seeing potential anyway. People buying and selling.

So we thought, let's get into it as well.

And for anybody watching this,

would you advise anybody buying at auction, they must see their

solicitor and check it out with their solicitor first?

It's a must, but I am sure a lot

of people are not going to listen to it. It's a must.

-I agree.

-Just spend a couple of hundred pounds,

pay a solicitor to get advice on what the terms and conditions are,

and the legal pack, what they're getting themselves into.

-Do you love what you do?

-Yeah, I really, like, enjoy what I'm doing,

but it's a very, very intense job.

Long hours, you have to put in a lot of hard work,

whereas property is not a lot of hard work.

That's the way I see it at the moment.

Hopefully, it's going to carry on like this.

Ah, they might be your famous last words!

-They might come back to bite you!

-Yes!

One thing for sure is that Ibrahim's plans of extending out the back here

will certainly take one big bite out of the renovation budget.

How much money have you got to spend here?

To be honest, we're looking at a maximum of £30,000, yeah?

So, we have got a high budget to work with for a small flat, I know.

It may be less, and we can do it for a lot less,

but we want to put in a large budget

so we can get the right equipment, right people,

to make it look really, really nice.

And so, what is the maximum amount you think you could sell this for?

Because around here, you know,

you have got to be a little bit careful at the moment.

Yeah. I have had some feedback already from agents.

I even had an estate agent come in today,

which...they've given me a guide price

for the region of 550,000 once it's done up, yeah?

Based on the plans that I've given them.

So we'll be happy with 550.

We may end up getting more.

Because the property prices are really going up at the moment,

especially in this area.

So, how long do you think it's going to take you to get this flat as you want it?

I mean, build wise, it could take up to two months, right?

But there's issues in relation to planning permission consents.

So planning permission, usually, you know, on average eight weeks.

Along with that, consent from the freeholders,

that could take up to four-five weeks as well,

so that may delay things,

but we wouldn't be stopping and waiting for those consents.

We'll be starting to do the works inside,

you know, getting down everything, getting rid of all the rubbish,

perhaps start plastering the inside, and then, hopefully,

if we get the consents and the planning permission,

then we want the extension.

So it could be between two to three months.

So, my next question is,

you're a solicitor now and a part-time property developer.

When does that swap around?

When do you become a bit full-time property developer,

-doing a bit of conveyancing on the side?

-I mean, we aim...

By the time I'm 40, I want to retire from the legal profession,

hopefully, and be more involved in the property

which all depends on how these projects run, if we can make some profit.

You know, it may be shorter if we

-can make a lot of profit in the long run.

-How old are you now?

-I'm 33.

-Oh, you've got ages!

-Yeah, ages, yeah.

-Listen, good luck with this project.

-Thank you very much.

-I can't wait to see if you do get permission and what it's going to look like.

-Thank you very much.

-Lovely to meet you, Ibrahim.

-Thank you.

Well, Ibrahim is definitely maximising this property to its full

potential, and I agree, I think it's going to look fantastic.

It's funny, though, how he sees the complex world of property developing

as an easier ride than his profession as a solicitor!

Let's hope he gets planning permission and all the consents he needs.

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

Coming up - I'm off to Birmingham,

and I'm not here to see a house or a flat.

Nope, I am here to see a plot of land behind this fence.

And back in London, we find out why

the solicitor's flat wasn't such a brief encounter.

It's taken over two and a half years to complete this project.

But first, we return to Margate in Kent, where we first saw,

not a house, or a flat, or even a plot of land.

No, in this case, it was, well...

So, what do you find when you walk through the doors?

Well, obviously, it's just a disused garage.

But the plot itself is quite surprising.

It goes back a reasonable distance, another 20 or so feet from where

I am, so it's not a bad size.

I think pretty much everything

relies on knocking it down and building something else.

-# Why don't you tear it down?

-So why don't you tear it down?

-# So why don't you tear it down?

-Why don't you tear it

-# Why don't you tear it

-Why don't you tear it all down? #

So, in essence, it wasn't even a garage that was up for sale,

more of a potential building plot.

But, with no planning permission and just 0.01 of an acre,

it wasn't the biggest of areas.

But with a guide price of £18,000 to £20,000,

it didn't have the biggest of price tags, either.

And that's what appealed to Kirsty, who bought it at £30,000,

and she knew exactly what she was taking on.

Well, it's got a risk to it, but it's local to us,

-and we know the area.

-Right, so what is the big objective for this, then,

is it to try to get planning permission for something?

Yes, hopefully a two-bedroom house.

Kirsty's husband, Tom, is a builder, so,

providing they can get planning permission,

he would build a two-bed house in his spare time.

They hoped a budget of £75,000 and a timescale of a year would see a

completed house on the site.

Nine months on, we're back to check on the progress.

# So take a look at me now

# Well, there's just an empty space

# There's nothing left here to remind me

# Just the memory of your face

# Now take a look at me now

# Cos there's just an empty space... #

OK, so there is no house, but there is no garage, either.

So, it does look like things are progressing, so what's going on?

Since you were last here, we've got the drawings completed,

we've got planning permission approved,

and we're starting on party wall agreements.

We've taken the building down and disposed of all the waste.

-We're moving forward.

-Getting planning permission wasn't completely

straightforward, with the original plans needing to be resubmitted.

It took five months to get the green light, but at last,

they are ready to build the site back up.

# Now I'm ready

# To rise again

# Just look at my hopes Look at my dreams... #

But, into what?

Got planning for a two-bedroom house, two-up, two-down,

open-plan with a little bit of storage at the front,

hoping to give it a bigger living room.

This sounds like it should make a decent starter home,

and a good test of their first solo building project.

And they don't want to go it alone with the construction work.

Originally, we were going to borrow the money to do the build,

but now we've decided we're going to front the money ourselves,

so, therefore, we're having to work for the money and then pay for bits as we go.

We had a little bit of an adaptation. I started doing smaller

work, thinking I could get the time to come here,

but then the funding didn't match up,

so I've had to go back to bigger jobs,

and that's going to help us with what we're doing here.

So, Tom and Kirsty have readjusted their strategy,

and think this approach will see the house built within a year.

But how much extra income will Tom

need to bring in to fund this project?

The budget is between £70,000 and £75,000.

With us doing most of the labour ourselves,

we think we can pull it in for that.

Having bought the old garage for £30,000,

with a proposed £70,000 to £75,000 build cost,

they're looking at a total investment

of between £100,000 and £105,000.

So, is this the right site and right house for the local market?

What do two local estate agents think?

The development is good.

A two-bed house will be popular, in demand,

and the local area is very sought after at the moment.

It's situated in a good location, close to the train station,

close to local amenities, and a very short walk to the seafront as well.

I think the plan for a new build here will work.

There's a lot of appetite for new-builds currently in

the Margate area, and across the country, in fact.

So, yes, certainly, there is an appetite for that.

The only downside would be parking. Local parking is fairly busy,

and I most of the roads around here are quite metered now,

so a parking space would be a nice added benefit to the space,

but obviously, it's quite limited around the surrounding areas.

The house itself would be sellable,

but parking is always an added benefit.

In order to move on to other projects,

this build needs to be a sell-on project, but it also needs to make money.

So, will that be the case if they bring it in for the proposed

£100,000 to £105,000 total spend?

To put the new property on the sales market,

I would be confident of achieving around £170,000 to £175,000.

In the current sales market, I expect this property to achieve

between £165,000 and £170,000.

I think that's a fair price.

-I'm very happy with that.

-Those are the figures that we had in mind,

-aren't they?

-Yeah.

So, a potential pre-tax profit of between £60,000 and £75,000 on

the resale market.

The agents also thought rental returns around £725 per

calendar month, or a yield of around 8% would be possible.

So, if it all goes to plan, I'm sure there will be smiles all round,

but what has pleased them the most so far?

I am most pleased that we have got the planning permission!

It was a pretty big gamble that we took, but it paid off.

# I'm feeling happy now

# You know I'm happy now

# You know I'm happy now

# You know I'm happy now... #

Today, we're in the Nechells area of Birmingham,

sandwiched between two branches of the Birmingham Canal network.

These canals were crucial to the industrial success of Birmingham

during the Victorian era, and they

carried coal and iron across the city from the Black Country.

It's been a while since these canals were used for any

commercial purposes,

but what they do do today is offer a unique backdrop to properties across

the city.

# All along the water, baby

# Take me to your water, baby

# All along your water, baby... #

Not far from the canals,

and I'm just a ten-minute train ride from Birmingham city centre.

This is a residential area, but I'm not here to see a house or a flat.

Nope, I'm here to see a plot of land behind this fence.

It's 167 square metres, with a guide price of £20,000.

But I don't think I am getting through there.

Let's find out if there's another way in.

# I gotta find if there's another way in

# I gotta find, I gotta find, I gotta find... #

OK. This plot of land is pretty small.

I mean, in parts, I'd guess no more than five or so metres width,

but it's about the same footprint as the other houses I've seen on

this street which means you could definitely get a house onto this site.

Now, what's interesting is it looks like there's definitely been

something, a property, here before.

You can see the concrete foundations,

even the remnants of some tiles.

That said, if there has been something here before,

and that tree was planted afterwards, it was a pretty long time ago.

That's a mature tree.

So that's the risk element - getting that planning permission.

Another risk element is attaching onto a neighbour's wall.

If you do that, you need to get permission from your neighbours.

It's called a party wall, which sounds like really good fun.

It's not when you knock on the wall, and say,

"Keep the party noise down!"

It's just means a shared wall with another party.

# You gotta fight

# For your right

# To party... #

Consulting with the planners and the neighbours might not be a party,

but it should be worth fighting for,

as there are indications that building a new house here could be

pretty straightforward.

I have been looking for some signs that the property that was here before

was at some point connected to services, and I've found some.

You have drains, you have cables, and that's a really good sign,

because if a property has no previous connection,

it can be a nightmare getting there.

The time process to get it connected can be very long and drawn-out,

but this is a residential area and all the signs are good.

-# Always looking for a good sign

-Looking for a good sign

-# I've gotta keep on trying

-Gotta keep on trying

-# Oh, yeah, oh, yeah

-Oh, yeah... #

The foundations have literally been laid here.

So, the question is, how to make the most of this narrow parcel of land?

This might not be the widest of plots, but it's deceptively long.

I might not be able to make it through there, it's very overgrown,

but really, that length gives you the potential to extend.

Of course, you need your planning permission just to build a property

first. But if you want to go past that building line, and add, say,

another bedroom, you could apply for that.

Now, I have seen the properties in

this very row have extended the ground floor.

This could be a really good sign

when it comes to that all-important permission.

It's tempting to try and squeeze as much potential profit out of this

plot, but it's good to get a second opinion on what could be built here.

We have asked along an agent from the auction house that sold it to

give us his thoughts on what size of

property would be best suited to this piece of land.

It would fit probably a two-bedroom one quite happily.

A three-bedroom one,

I don't think the bedrooms would be

particularly large if you got the three on here.

Now, whether they will be able to connect to the adjoining property's

wall is all going to depend upon

whether the people there will agree to allow them to do it.

If not, then, it would have to be built as, if you like,

a freestanding wall,

that they would build,

which would probably narrow down the size of the building somewhat.

The agent doesn't think there will be any changes in value if it was a

terraced or a detached property, as there would be so little space.

He also reckons there wouldn't be much difference between the two

or three-bed house, because a three-bed house

might mean having to have a downstairs bathroom.

So, what would a three-bed house fetch on the sales market?

I would imagine that it would

realise in the region of £110,000 to £120,000,

but that will depend upon the state of finish

and sizing that they get away with.

At first glance, there is not much

to get excited about with this plot of land, but it's deceptively long.

And I'm pretty sure there was a property here before

which could make things much easier down the line.

So, actually, I am pretty excited.

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

So, who will bid me, then, for this parcel of land?

£30,000 to get us started?

20, then? I don't want to go lower than 20.

We know we're going to go past this. At £20,000 I'm bid.

You told me earlier you have the banker's draft, sir.

At 20, I'm bid. 25, sir?

A condition of the sale on this lot meant that you could only bid if you

had a banker's draft.

There were a few interested bidders who had them in hand.

We rejoin the action at 29 grand.

29? 29. 31? 31.

Thank you. 33.

30... 35.

At 35, I am bid.

I've got 35 in front of me.

37, sir?

Thank you. You have a draft?

37. 39?

That was your magic number, 35, was it?

37,000 on the aisle.

Can I see your number, sir? Number 530.

Do I have 38? One, two, three, this is yours, sir.

GAVEL BANGS

Yes, well done, congratulations.

The successful bid of 37 grand was made by Riaz.

Riaz is a semi-retired scientist turned property developer

and project manager, and has been on the show before.

He and his business partner and builder Sylvester

have already tackled a 3-storey

terraced house in the Birmingham area of Handsworth.

They transformed it from being damp

and dull to something bright and light.

They've also bought a piece of land to develop in that area.

We'll hopefully see that project in the future, but,

back to the here and now.

What about this one?

-Congratulations.

-Thank you very much.

-Thank you.

You've got your very own plot of land. Why did you want it?

Actually, comparing to the previous land we bought,

this seemed like an easier build, because

although it's overgrown, it's flat, isn't it?

It's a really nice plot, and simple.

Yeah, this is really one I like!

What makes it a nice plot for you, Sylvester?

For me, when I am building houses, I need space around for delivery,

for everything.

So, it sounds like you had done your homework before you went to auction.

We did, yes.

We kind of did the background work in terms of the area and location

itself, and also the fact that there was a house here already,

and that gives us fair confidence that we should be able to obtain

planning permission for this property.

OK. Have you talked to some neighbours? Because I have noticed that...

I'm guessing you would attach on to the end of this terrace?

Yes, that would be the logical thing to do.

The other alternative is that we might just leave a small gap.

And so, then they can preserve their end-terrace status,

and we can then preserve our detached-house status.

While a detached house would be great,

-I guess every inch counts in a plot of this size.

-Sure.

-Yeah.

-What would you rather do?

I think I am actually comfortable

with the detached house status, to be honest.

As you said, every inch does count, but that's only the width.

Lengthwise, we're doing well, so instead of going that way,

we could actually go lengthwise into the garden itself.

Let's move inside the house, what are you planning for inside?

Well, we are planning a three-bedroom house, and Sylvester...

A pair of classical bathrooms.

Some of...

Try an extension to see if it's possible to do it.

Normal kitchen,

extra toilet downstairs, because there is lots of houses here

that doesn't have toilets downstairs.

So it's about providing something that might make this really attractive?

-Exactly.

-Yeah.

-So you'd be planning on three bedrooms upstairs?

Three bedrooms upstairs with a family bathroom, and a WC downstairs.

-Yeah.

-OK.

And a kitchen, and a sitting area?

Yes, that's right, and also possibly an extension with the garden.

By going for three bedrooms,

Riaz and Sylvester may be making it more difficult for themselves to get

planning passed on this relatively small plot.

Although going for a detached property will mean that they won't

have to get a third party wall agreement.

That might un-complicate things a bit,

but the planning process can move at a snail's pace.

Big question - how long is this going to take you?

Over to my friend here!

No, it's... My plan is maximum four months from now to completely done.

Four months for a complete new build?!

-Yeah.

-From when we obtain planning permission.

-OK.

-When it's all ready, I will build up to four months.

And the budget?

Well, we think it will be about 60,000 to 70,000,

so we will go for 60,000 with a contingency of 10,000,

so that's our folder.

OK, and what do you want to do with it?

-Do you want to sell it on straightaway?

-That's the idea, yes.

We're planning to...

I can't wait to see what you do and I wish you the best of luck.

-Thank you.

-Good luck, Riaz.

-Thank you.

-Good luck, Sylvester.

Thank you very much.

I think this development is all about getting that important

planning permission. It's about keeping the council happy,

and of course, the neighbours, too.

But if anyone can do it, I reckon it's Riaz and Sylvester.

They have a great working relationship and plenty of experience.

They just need to get that planning permission.

You can find out how they got on later in the show.

We've followed the journey of one of our buyers,

but what about the other two?

Yes, did their projects treat them well

or was the relationship turbulent?

Let's find out.

It was in the West London area of Shepherd's Bush where Lucy first got

to look around a ground floor one-bedroom flat.

And she had big ideas on how to develop it.

..with a kitchen at the back of the property.

Not the largest I have seen.

In fact, I think you might be able to extend to the side.

And I'm wondering whether or not you can get some lovely bifold doors in

there, or even something a

little bit more traditional, but is it worth it?

Does it have a nice enough garden? Let me check.

And the answer was a resounding yes.

So, with an extension, there was

a possibility of putting some genuine wow factor into the flat.

It was bought at auction for £367,500

by Ibrahim, who had, shall we say,

kept a watching brief on the property market.

# The way you watch me

# The way you watch me walking through the do-o-o-or

# I know what you really... #

Basically, me and my partners, we are all solicitors, right?

So we do a lot of conveyancing, i.e. property, for our clients,

so we have been seeing potential anyway, people buying and selling,

so we thought, "Let's get into it as well".

So, Ibrahim, with two other colleagues,

seemed well positioned to be a property developer.

And yes, he read the legal pack, and, yes, a he knew flat was leasehold,

and yes, he knew exactly what he wanted to do with it.

The main works is going to be the extension in the garden.

We are going to have a side extension and a back extension that will extend the kitchen,

which will accommodate a kitchen and a living room altogether.

Of course, the project timescale was reliant on planning permission,

which Ibrahim was hoping would take eight weeks.

He hoped to get the freeholder's permission by then, too.

Build time, he reckoned on being another two months.

So, with a bit of luck, he hoped to

complete the refurbishment from start to finish in four months.

He had a healthy budget of £30,000 to get ready to sell on,

and with three solicitors on the case, what could possibly go wrong?

Now, 33 months later, we're back.

Well, so far, it's promising,

but this refurbishment was all about improving the size of the kitchen

space, because do you remember what it was like?

# When I was little

# Yeah, once when I was little... #

Yes, it might have been small once, but the kitchen is all grown-up now.

The bathroom is now a posh shower room.

And, with such a large kitchen/diner at the back,

the front lounge has been turned into a bedroom.

With the old bedroom refurbished, this is now a smart two-bed flat,

but why has it taken so long to sort it out?

Basically, this is a terraced house,

so obviously we need to get party wall agreements done by both neighbours,

so that, you know, on its own, took over six months,

so that delayed the project by six months.

# It's my party and I'll cry if I want to

# Cry if I want to Cry if I want to

# You would cry too if it happened to you... #

A party wall is not just about the shared house wall.

It applies to garden walls and foundations near boundaries,

so they needed a party wall agreement,

which meant a lengthy legal process.

Then there was time negotiating

the freeholder's permission and extending the lease to 125 years.

The planning process took longer than planned,

and add all these into the mix, and slowly watch the time trickle away.

Thank goodness they didn't have to pay all the legal fees!

So, aside from the paperwork, who carried out the hard labour?

We had a builder that was doing the work.

Obviously, he had his own tradesmen dealing with the electrics and

plumbing and everything else separately,

but we mainly managed the project ourselves.

So we was hands on, with my other business partners.

The building team actually did the work in four months,

but they had to negotiate a premium with the freeholder of £25,000 to

carry out the renovation,

so I rather expect they overspent that £30,000 budget.

At the end, we've ended up spending around £70,000.

That includes all the freeholder's premium, surveyors' fees,

for the party walls. That delayed, and obviously that exceeded, you know, costs.

It incurred further costs.

A £70,000 spend on top of the purchase price of £367,500

would take the trio's costs to £437,500.

But, in the buoyant London market,

could a two and a half year wait

actually end up paying dividends for this now two-bed flat?

What do two local property experts think?

Having just come into the property, I'm very impressed with the light.

The fact that it feels very spacious,

and you've got very good ceiling height,

particularly in the entrance hall and the bedrooms.

I understand the property was a one-bedroom flat before,

and the owners have redeveloped it into a two-bedroom,

and I think they've really maximised the space.

The overall standard of the finish is very good.

There's lots of nice features, and would certainly be very

appealing for the market you're aiming at in

this area, which is generally young city or media professionals.

The property market is stable,

and we're very lucky that we are in London,

so there are always people that need to live somewhere.

It's really done to a high standard, it's in a good location,

it should sell at the right price.

The plan for Ibrahim and his colleagues is to sell the flat on.

Indeed, they already have it on the market.

But what do the agents think their £437,500 investment could be worth?

If this property was to come to the market,

I feel it would achieve a price in

the region of £625,000 to £650,000.

I would expect this property to come onto the market in the region of

£650,000, and the owner should seriously

consider any offers in excess of £635,000.

So, what does Ibrahim think of those numbers?

We are looking to achieve between £620,000 to £650,000,

so anything close to £650,000 would be great.

And those kind of figures could see a potential pre-tax profit of

£182,500 and £212,500

minus taxes and any remaining expenses.

They could also get rental figures of around £2,000

per calendar month, which is just over a 5% yield,

so it looks like time has been kind to them.

It's been great. I mean, it's been really challenging.

Obviously, we've had a number of problems,

and it's taken them over two and a half years.

But we've learned a lot,

to be fair, so it's been a good experience, really.

It was close to the Birmingham Canal network

in the Nechells area of the city

where we first saw something that could float someone's boat.

But buying it would be considered a bit of a punt.

OK. This plot of land is pretty small. I mean, in parts,

I would guess no more than five or so metres width,

but it's about the same footprint as the other houses I've seen on

this street, which means you could

definitely get a house onto this site.

Yes, it was a tight squeeze beside the existing house.

# Next to me, oh-oh

# Next to me, oh-oh... #

But there had been a building previously on the site,

which meant services were accessible,

and that the chances of

planning permission being granted were pretty high.

And so, it was bought at auction by part-time scientist turned property

developer Riaz and his builder and business partner Sylvester

for £37,000.

They had already sized up the opportunities here.

Instead of going that way,

we could actually go lengthwise into the garden itself and put a garden

room and everything, so from that perspective, I am quite comfortable.

Let's move inside the house.

What are you planning for inside?

Well, we're planning a three-bedroom house and a family bathroom,

-and a WC downstairs.

-Yeah.

Big question - how long is this going to take you?

My plan is maximum four months, from now to completely done.

Four months for a complete new build?!

From when we obtain planning permission.

-OK.

-When it's all ready, I will build up to four months.

So, once planning permission was granted, Sylvester wasn't hanging about.

Along with the proposed four-month build time,

they hoped to construct the house at

a cost of between £60,000 and £70,000.

So, how has it all gone?

Well, now, six months on, we're back.

# Oh, now, all I see is pretty little flowers open up to me

# Take them home, press them well

# Bring them to the garden and lay them by the wishing well... #

Hmm. Pretty flowers they might be, bluebells, if I am not mistaken,

but in terms of signs of construction, the site's looking a little bare.

So, what's going on?

My architect and I put together a plan for the site and,

having a detailed discussion with the architect,

it was going to be a really tight squeeze to have three-bedrooms in,

so he suggested simply going for a two-bedroom house,

and so that's what we submitted to the council to obtain

planning permission, which we duly got a month or so ago.

Right, well, that's good,

and I can see a two-bed makes more sense than three,

but a month has passed since planning,

and Riaz and Sylvester said they'd have it all built in four.

Well, since then, things have changed.

I have two other projects on the go, and one of them,

I was hoping to complete and

sell off and that's unfortunately running behind schedule

by a couple of months,

and so I need some injection of cash for the other project.

So we took a decision that we'll actually simply sell this and then

use the cash to fund the other two projects.

# No time for making my moves

# No time

# No time for hitting my grooves

# No time... #

Sometimes I guess you just have to prioritise,

and it seems this development was one too many for the pair.

But, it's not just the flowers that have now made this site more

attractive to sell on.

It's now got those plans, and Riaz is pretty pleased with those.

Imagine there's a lovely porch here, coming through.

You enter into the front door.

Stairs leading up to the first floor, and then over here would be a

kitchen, and then leading onto beyond there would be

the dining room and the lounge. And then walking upstairs

would be the landing leading onto the master bedroom above,

as well as this second bedroom, and also a large family bathroom.

I think this will make a great little house,

and it should be fairly straightforward to build.

And I can't help but feel that Riaz

and Sylvester are missing a trick not building a house here.

But what do two local estate agents think?

Oh, I think that the design of the property is the right property.

It's very similar to the properties that are around it,

and I think it would blend in very, very nicely.

And I think that the plans that have been done and the designs

are exactly what's required for this plot.

I think the land is a good piece of land for the development.

It's a residential area.

A two-bedroom detached house would sit nicely here.

The site cost £37,000 for Riaz and Sylvester to purchase at auction,

and with the additional costs of getting the plans drawn up and

passed, they think their total spend to date is 40 grand.

So, how much is this plot worth now

that planning permission is in place?

The land, with planning permission as it stands,

would be in the region of £30,000.

I'd say the guide would be roughly

between £30,000 to £40,000 for the land.

Well, at this moment, we've given

permission for the auctioneer to auction this land and put a

reserve price in the region of £44,000.

As long as we get somewhere between £40,000 and £44,000,

I will be happy.

Yes, I get the feeling that Riaz really just wants to get rid of

this plot and move on as soon as possible.

But could building the house be a better financial option?

The house, once it's constructed,

depending on the quality of the finish,

would fetch somewhere between £125,000 and £130,000.

Looking at recent comparables in the area within the last three months

that have sold, I would say in the region of £130,000 to £135,000,

the house could be sold for.

'With build costs of around 70 grand,

'the pair might have seen a pre-tax profit of between £15,000 and

'£20,000 if they had constructed the two-bedroom house.

'So, what does Riaz feel about that now?'

That's in line with what I had in mind,

so if our plan to sell doesn't come into fruition,

then we'll just build and sell on.

So, I guess, never say never,

but this could still be something they see through to the end.

But, whatever happens, how does Riaz feel about purchasing this plot?

It's always a risk, and sometimes risks pay off,

and sometimes it doesn't.

I work on the principle that, you know,

you celebrate success and you learn from failures, so either way,

I'm going to win.

Whether you are an auction beginner or a bidding expert,

there's always bargains to be had under the hammer.

And we love following the journeys that start in the auction house.

And we'll certainly have lots more

for you next time here on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

-Goodbye.