Episode 4 Homes Under the Hammer

Hello, and welcome to the show. Now, possibly like you, we find

the whole world of property

interesting, exciting, even addictive.

Yes, but in order to succeed, you have got to make sure you buy

-at the right price and in the right location.

-Yeah.

One way you can do that is to head down to your local auction house and

buy your next home under the hammer.

You really do need to do your homework if you are buying

a property at auction.

Because if you do that, you might just grab yourself a bargain.

So will any of today's properties turn out to be great deals?

Here's what people bought.

This overgrown plot in Brompton has Lucy feeling optimistic.

According to the auction catalogue, this is land with potential.

Let's keep the gardener on standby

for this two-up, two-down in Wolverhampton.

You do not want this in this place at all.

It's more scissors than shears at this multipurpose building

in Newcastle-under-Lyme.

And, as you can see, it's a working salon.

Morning, ladies.

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.

I frequently visit the Medway area of Kent,

but I'm not in one of my usual spots today.

No - this time, I'm in the picturesque village of Brompton,

which is situated between Chatham and Gillingham.

It's a convenient location, with a couple of local pubs

and if you fancy a quieter, leafier style of living,

this could be a great place to find property.

The origin of the name Brompton also has a leafy element.

It derives from "broom".

You know, the yellow shrub.

Brompton might not have the fast train links or facilities

as its neighbours do, but they're near enough.

However, I'm not here to see a house.

Oh, no. I am here to see this.

It might not look very exciting from the outside,

but this is not just any old parcel of land.

According to the auction catalogue, this is land with potential.

Now, it had a guide price of £35,000 to £40,000.

I'm going to take a closer look.

So what have we got here?

Well, it's a rectangular parcel of grassland

and you also get some parking spaces here as well.

This certainly does have potential

but because this is a conservation area,

the design would have to fit in

with the established period properties about here.

But it is flat and there is access.

It's 0.09 acres, so what to do?

I think a detached family home or a pair of semis

would work really well in this residential spot

and certainly be a much more profitable way to go.

However, planning is no shoo-in.

There are plenty of aspects of a development here

that could prove stumbling blocks -

parking provision, privacy for neighbouring properties

and, quite possibly, preservation.

And have you noticed this tree on the site here?

This could also pose a problem to a planning application

and that is because anyone proposing to cut it down,

top or lop a tree in a conservation area

has to give six weeks' notice to the local authority

who will then visit the site to decide whether

a Tree Preservation Order should be applied.

If not, then you should be OK to chop the tree down

but if they decide the tree should be protected, well,

that could affect what and whether you can even build here.

# Tell me why this is a land of confusion... #

It's quite simple, Phil.

Literally it's the law of the land.

There are historic parts of Brompton,

but luckily, this isn't one of them, which will make things easier.

Also, in the past, there was a building here,

making this brownfield land.

For guidance, we called a local estate agent

with experience in these types of cases.

The likelihood of somebody getting residential planning here

I think, is good. But like anything with the local authorities,

it is a little bit of a gamble, so it could go either way.

So why would someone take on a £40,000 gamble like that?

If you were to sell this land on with planning permission,

I think it could be worth in the region of £100,000 to £150,000.

If you were to build a four-bedroom detached property,

I think you could achieve a value

of £250,000 to £275,000.

Well, this is a residential location

and it seems fitting that a new house or houses

could even be built here.

However, it is not quite as simple as that

and nothing is guaranteed when it comes to planning permission.

Let's head to the auction and find out who was prepared to risk buying

a rather expensive bit of garden land.

Nice site, this one. Little corner site

that has been left untouched for a long time.

35 to 40 is the guide price.

Kick me off at 35,000.

Straight in at 35. I'm obliged. 35.

Now 40. 40 in front.

This is going to be easy, isn't it? 45 behind.

Bidding continues apace, to where we rejoin, looking for 80,000.

At 80,000. 80, I've got.

And two. 82.

82, I've got.

And four.

84. And six.

£86,000, I'm looking for.

Or five, if it helps anybody.

85, I've got. At 85, over on the left-hand side.

86, I'm looking for.

We are all done at £85,000.

No, I've got 86. 87. 87, I've got.

And 88. 88, I've got.

And 89.

No. Is that a no, or is that...?

No, that's definitely not.

£88,000, I'm back with my maiden bidder.

For the first time at 88,000.

For the second time at £88,000.

Third and final time, if you are sure you're all done.

Well done. £88,000.

And that's H080.

That top bid of 88,000 came from David and wife Maureen.

David is a pastor in a local church

and Maureen assists him with his work.

They live in nearby Chatham

and plan to build a house to live in on this plot.

David and Maureen, congratulations.

-Thank you.

-Good to see you.

So let's talk about auction day, and the price you paid.

Did you expect to pay as much on the day?

Personally, yes.

I felt that the area that we're in is quite a good area

and the size of the plot was reasonable.

It was right at the top end up our budget, though.

Is this something you've been looking into and planning for many years?

Or did you just see a plot and instantly think,

"Oh, that would be good"?

We've been looking for land for quite a while,

scanning everywhere, walking.

-Walking the roads and streets, looking.

-Oh, really?

-Yeah.

And when you saw this plot of land, Maureen, how did you feel?

Because it doesn't look like, "Oh, look at that plot of land!"

It's almost a little bit, you know, unusual in shape.

It is a funny shape.

And with all the stuff that's on it as well,

the wall, and the trees, and everything,

you sort of thought, "Oh, I don't know."

But we found out somebody else was thinking of putting two houses.

So you've paid nearly £90,000 on auction day for this plot

-without planning permission.

-Mmm.

Now, how does that make you feel?

Very nervous - at first.

The golden rule is not to buy a plot of land

without even outline planning.

But because there had been a property on here once before

many years ago, we felt there's a very, very good chance.

Guys, tell me about the sort of house you want to build.

A highly insulated house.

A passive type of house,

where everything is geared for keeping heat in

and keeping the cold out.

That's high on the list. We're going to spend a great part of the money

on the insulation of the walls.

Yeah, it's going to be three-bedroom.

An en suite, and probably a bathroom and toilet upstairs

and then downstairs, we'll have a wet room and a toilet,

as well as, sort of, the open-plan.

-Is it just for you two?

-Yes.

No grandchildren, no kids.

-Just the grown-ups!

-Just the grown-ups!

A grown-ups' house!

Maureen's laughing away.

-Is that true?

-Yes!

Is that quite exciting? Or is that completely a lie?

-Yeah.

-That's a fib!

David, what are you doing to me?

Come on, who is this house going to be for?

And what's it going to be like?

It's for us, but we've got three daughters

and now they've all grown up and got they've their own families as well.

Our house is just too small when we have a family get-together

so that's why we want it all open-plan.

There's no walls - apart from the utility room, there's no walls.

You've got to think outside the box.

You know, like, we've been discussing where the stairs will go,

and all this sort of thing.

And you so think about what your house is like now and think,

"Oh, no, it doesn't have to be like that. We can just do it whatever."

So it's quite scary, thinking outside the box.

What are you most looking forward to?

I think to have the off-road parking.

I know that sounds very strange.

-Such a man thing.

-I know.

-Isn't that such a man thing?

"Oh, the off-road parking."

Not the bathrooms or the kitchen!

THEY LAUGH

So you're looking forward to the off-road parking.

-I am.

-Tell me why.

I think because where we live at the moment,

all our vehicles have been on the road

and severely damaged at times.

So getting the vehicles off the road is really great.

But also the excitement of building something that maybe will help

in future-proofing our financial position

-in the later years.

-Mmm.

And what sort of materials are you looking at to build this house?

-Timber-framed stud.

-Oh, OK.

Are you going to be importing something like that?

-We are. If you're talking importing from Ireland.

-OK.

We have a company in Ireland that we would like to use.

Then we're going to employ subcontractors

and I'm going to be the project manager.

Tell me how you're both going to work this with your daytime jobs.

-Tell me about that.

-We intend to live on site.

We can't have a home and live in that as well as pay for the project.

So we're going to sell up

and move directly onto site as the building starts.

Right from the word go.

-In a caravan?

-In a caravan.

-Living in a caravan!

Are you quite excited by that? It's quite an adventure, isn't it?

Yeah, that's right.

Well, I bet David will be visiting his parishioners a lot for tea.

Living in a caravan can be a challenge -

however, these two have got lots of support to help them

get a meaningful start.

We have said, though, we're going to have a big ground clearing day

so we'll have ground clearing day barbecue,

sort of get everyone on site to help.

-What sort of budget have you got for this build?

-100k.

-That is it?

-Mmm.

And your timescale? How long do you think it's going to take you

from start to finish?

This year, we're just doing all the homework and everything, and then,

of course, the planning permission.

And then we've got to sell our house,

so hopefully next year, it'll get going.

So in terms of months, how long?

Six months.

Six months from start to finish?

Do you really think you can do it that quickly?

Yes. The house can actually go up, from the foundation to the roof,

in six weeks.

And then after that, of course we put up the external brickwork,

the roof tiles, and then kit out the inside.

You guys both look so happy.

And I'm just really excited you've got the chance in life to build

your own dream home for you and your family.

I mean, it's an opportunity that's just not to be missed.

-Yeah.

-Absolutely.

-Well done. Maureen, lovely to meet you.

-Thank you.

Thank you so much for coming along today.

-It's great. Good news.

-Yeah.

-Thank you.

Well, it might be the first time they've built a new home,

but David and Maureen already have a plan of action and a team in place

ready to build their new, sociable property.

However, it's not as easy to obtain

that all-important planning permission,

and they can't make a start until they have that in place.

We'll find out later in the show

if they're given the green light to go ahead

with their eco-friendly house.

I'm in Wolverhampton. Traditionally, it had an economy dominated by

engineering and manufacturing.

But now Wolverhampton is known as one of the major

retail centres in the West Midlands.

It's popular for commuters,

as it's only 15 minutes' train journey from Birmingham,

the UK's second most populated city.

So what do you have to pay for a property

in this part of the country?

Well, potentially, not very much,

because up for auction was this -

it's a two-bedroom mid-terrace, guide price 29,000-34,000 quid.

OK.

It is just one of those auction properties where

lots of stuff has just been left,

and that can sometimes be a little bit distressing.

But let's just look at the fabric of the property.

Through the front door, traditional layout,

straight into the lounge and then through this little area here

into your rear sitting room area.

Not a bad size space.

Stairs up to your bedrooms there, and then continuing

the very classic sort of original two-up, two-down terrace.

Somebody has done what most people would do -

stick an extension on the back, which now houses the kitchen,

and through the kitchen to the bathroom and the loo.

You know, in an ideal world, of course, that would be upstairs

but I think in this kind of property,

it's often expected it will be here,

and people can live with that.

So, first job, sort out all the stuff.

Next job, see what you've got,

and then take a look at what you're going to have to do to sort it out.

Clearing everything out of a house can actually take a lot more time

and effort than you think.

If it's going in a skip or two,

then the cost will have to be factored in as well.

You could also ring round your local charity shops,

as some of them may do free pick-ups for any items

still in usable condition.

And people will benefit from it,

rather than seeing items go to waste.

So come upstairs, and two bedrooms,

one towards the front of the property here,

and then it gets a bit strange because over the side, yes,

it's another bedroom, but look - it's deeper than that one.

I know what it is.

Underneath there on that side,

and probably going the whole way across,

but it hasn't been used, is an alleyway.

And this bedroom has a flying freehold across that alleyway.

Now, my guess is the next-door neighbour's probably comes in

on the other side into that bedroom.

It's not necessarily a problem,

it's something which mortgage companies can be a little bit sensitive about.

So, you know what to do, don't you?

# Ch-ch-ch-ch-ch-check it out

# Wh-wh-wh-wh-what's it all about? #

Yes, you get your solicitor to check the deeds and see who has

the responsibility for upkeep and repairs to the shared passage.

They may also advise taking out indemnity insurance

to cover any possible eventualities that may affect your property.

Well, out at the back of the property, you've got

a half-decent-sized garden.

Now, one issue you have got out here is this -

in fact, there's more to come as well.

But this is a big old tree

and you do not want this in this place at all.

It's close to drains, it's one of those dreaded conifer-type things

that's going to have roots spreading in all sorts of places.

The good news is it wouldn't have any kind of preservation order on it

so you could chop it down.

However, don't underestimate the amount of effort that will take.

And if you're going to get somebody in to professionally do it,

it's actually going to cost you a reasonable amount of money -

especially as it's not going to be that easy to get the old bits of wood out.

And it gets worse, because at the end of the garden...

..there's another one. Uh-oh!

Double the trouble.

It's a big job, so make sure you get an expert in to remove them.

What can an agent from the auction house who sold it

tell us about this property,

guided at what seems a relatively affordable 29,000-34,000?

The property's quite a pleasant little one.

It's in reasonable condition.

It will probably want redecorating.

They might consider changing the bathroom and kitchen,

although they're not in bad condition.

Once the property's finished and on the market,

I think the property will have a fairly strong demand,

as there's nothing been for sale on this particular road for some time.

That sounds promising.

Could that demand be reflected in the sales value?

I would imagine the property would achieve something

in the region of 85,000.

It might make £90,000 if it's done up particularly well.

Wow! On the face of it, that might look like

there could be a massive profit in this.

But you really need to be asking yourself some questions

and do some research.

For instance, given that this area is known for mining,

is there a mining report?

What do other properties sell for around here?

Is this guide price realistic?

Another question - what could this rent for once done up?

If the property is put out to rent,

then I would forecast a rental income of somewhere between

£475 and £500 per calendar month.

So a few things to do to sort the house out.

Nothing too major, and it could be a nice little project.

But definitely one of those where you really need to keep a tight rein

on the budget, because there'll definitely be a ceiling price

for properties around here.

Make sure you know what that is before you buy.

Let's hope that's what the person here did

when they went to the auction.

Lot 37. £50,000 to start.

40, then?

Well, 30,000, then?

30, sir. Thank you at the back, at £30,000.

With your hand in the air at 30.

35? Lady's bid. At 35.

40, sir. 40, I'm bid.

45, madam. 45...

It sailed past the guide price and kept climbing.

We rejoin at 68,000.

68, I'm bid.

70, sir. 70 bid.

72, sir. 72.

74, sir. 74.

76. 74.

Have 75 if you wish, sir.

I'll take £1,000 anywhere.

Thank you, sir. 75. 76, sir.

Where are you? No? £75,000.

It's the original bidder. You're out there.

The bid is there.

Going, going, gone to 881, sir.

Thank you very much, 881.

The successful bidders, paying a whopping £41,000

over the guide price, were Tom and wife Joan.

Tom is a support worker for the council

and came along to tell me more about why they snapped this up.

-Tom, good to meet you.

-Good to meet you as well, Martin.

Congratulations. Tell me why you wanted to buy this place.

I bought this place, Martin, because it's a new venture.

Myself and Joan, my wife, have been thinking about it for a long,

long time, and we thought we'd venture out and what capital money

we've saved over the years, that we'd purchase a property.

Brilliant. So you've had houses before that you've just lived in?

Just lived in them, yes.

Why now?

Because I am semi-retired.

-I got back into the job market because of being bored at home.

-OK.

So with whatever redundancy I got,

I thought this would be an ideal opportunity

-to look at something new.

-Great.

But my wife, Joan, will be the project lead, because she...

It's her idea, really. She's pushed me.

Are you happy you've been pushed?

Absolutely, because behind every successful man, shall we say,

is a successful woman, maybe!

And hopefully it'll be a successful project.

Now, it went for a lot more than guide price, didn't it?

Were you surprised?

I was surprised, but there was...

I think there was a couple of bidders in at the end

and I kept turning round to Joan and saying, "Shall I, shan't I?"

And she was saying, "Yes".

She didn't want to leave without buying a property.

So there we go.

But my advice is know your budget.

You know what I mean? Know your budget.

-Did you go above your budget?

-We went above the budget, yeah.

How much above the budget?

Well, we were hoping to get it for around 50-55.

Right? Maybe 60.

And what do we say on Homes Under The Hammer

about paying over your maximum budget?

# It's a, it's a, it's a...

# It's a sin! #

And although they didn't commit the sin of not reading the legal pack,

unfortunately, being new to this game, they didn't scrutinise it

enough and they have found themselves having to pay

seller's fees and admin charge,

and auctioneers' fees over five grand.

That's why you should go through it with a fine-toothed comb.

Why this particular house, then?

Because we thought that this particular house would be a good start.

It's small, it's compact.

Yeah, it does need a refurb, renovating, but it's manageable.

And how much of the work are you going to be doing yourself?

As little as possible, Martin, to be quite honest,

-because we want it done ASAP.

-OK.

We want to get a fairly quick turnover on it

and then get back onto the market.

The renovation budget is going to have to be readjusted

due to a significant overspend,

and they hope to do it for 8,000-10,000.

So what jobs will they prioritise?

-The obvious thing is the tree in the back garden's got to go.

-Yes.

Probably strip the walls, look at the plaster underneath.

There's a leak on the roof that we've got to sort out

because the roof doesn't look too good out there,

and a general refurb on the garden.

What is the timescale?

I'm hoping three to four months.

How much are you hoping you might be able to sell it for?

Well, we're thinking if it went up for 115 and we got 110, 108, 110,

-we'd be quite happy with that as a first venture.

-Yeah, 20 grand.

-And a quick turnover.

-And what will happen if you can't sell it?

Will you just keep lowering the price,

or will you rent it out, or what?

We have talked about it.

Joan did mention renting it out, but ideally, we'd love to sell it.

If they spent their £10,000 budget,

that would bring them to the £90,000 mark

the estate agent valued the property at.

But maybe the demand for properties in this area will help them out.

Either way, it's their first venture and it's all a learning process.

So what has Tom learned already on this?

Look at the legal pack, look at that,

and ensure that the costings that are put on top,

which I thought were going to come out of the purchase price,

are either in the purchase price or they are on top,

because it is a bit of a shock.

When did you actually discover that?

When the solicitor sent the paperwork through.

So that's my mistake!

But, you know, so is life. You learn by your mistakes.

-Well, listen, congratulations. Good luck with it.

-Cheers, Martin.

-Look forward to seeing how you get on.

-Thanks.

So, Tom going over budget at the auction and not realising

there were extra costs to pay.

That is a bit of a double whammy.

I'm a little bit concerned as well about his budget

for doing this place up.

I think it might be slightly higher than he thinks.

It really is a case of first-time buyer at the auction problems.

How will he get on, though? Hopefully OK.

You can find out later in the show.

Still to come, I'm exhausted thinking about the possibilities

at this property in Staffordshire.

Come on, guys. Just give me five minutes' break!

We'll find out if it's a case of beginner's luck

or rookie mistakes in Wolverhampton.

It's took a long time, let me just say that!

Time to return out to the picturesque village of Brompton

in the county of Kent, where Lucy saw this plot of land.

OK, it was rather lacklustre, but it did have lots of potential.

I think a detached family home or a pair of semis would work really well

in this residential spot.

There were, however, a few obstacles in the way.

The land had no outline planning permission,

so who knew if you could build anything at all?

It was also in a conservation area,

so whatever you build would need to fit in with established

period properties in the surrounding neighbourhood.

Despite the obvious issues,

it was a match made in heaven for local pastor David

and his wife, Maureen, who paid £88,000 for the plot.

It might have been in a conservation area,

but their plans for the inside weren't so traditional.

There's no walls - apart from the utility room, there's no walls.

You've got to think outside the box, you know?

Like, we've been discussing about where the stairs will go

and all this sort of thing,

and you so think about what your house is like now and think,

"Oh, no, it doesn't have to be like that, we can just do it whatever."

For David and Maureen, "outside the box"

was their very own eco-friendly, highly insulated home

with space for family gatherings with their grandchildren.

They hoped they could get the house up in six months

and had a budget of 100,000.

So when we returned two years and nine months later,

let's see if they have their own divine creation.

# Oh, heaven, oh, heaven

# I wait with good intentions

# But the day, it always lasts too long. #

The couple's eco-dream house is now a reality.

The brand-new kitchen is looking heavenly

with a mix of natural materials and modern fittings.

The ground floor, as promised, is an open-plan living space.

All the windows in the property are passive triple glazed,

which means they are virtually airtight,

so the house is very cost-effective to heat.

There is a utility wet room with sleek modern fittings.

But how is it looking upstairs?

# I'm nothing like before. #

A gallery landing is at the centre of three double bedrooms.

There's a Jack-and-Jill bathroom

and a roll-top bath in the master bedroom.

It's all terrific,

but creating a house from scratch has proven a challenge.

Our original plan was not successful.

We had to change architects,

and the second architect really got to grips with what the council

were looking for.

Because it's a conservation area, it was really hard

because the property had to look like the property around here.

The front of the house looks the same as the rest of the street,

the windows also look the same as the church just down the road here.

So we were able to make the design quite a modern design by using

the features that were in the area, so that was a learning curve.

Conservation is quite a difficult one for us ordinary human people

trying to work it out.

Despite having to make compromises, they've created a fabulous house.

But what about the plan they had to live on site in a caravan?

Living on site allowed us to get control of the site

and keep it on a daily basis.

And Maureen was excellent at making tea and lunch!

She was really good.

My job was to project-manage,

and so we worked hard with keeping all the trades going

and knowing what was needed the following week,

or the in the next few days.

We managed to keep all the orders coming in,

getting all the deliveries.

Maureen kept David's energy levels up with those lunches,

but what are some energy-saving features of the house?

One of our requirements that we placed on ourselves

was to capture all the rainwater and re-use it.

We do this by sinking a rainwater harvesting tank below ground

and we've drained everything, from the house roof,

right into this area down here.

And it works really well.

From here, we draw up the water to our toilet and washing machine.

The eco-house also has recycled newspaper in the roof,

acting as insulation known as blown cellulose,

and a heat recovery ventilation system

that brings in fresh air from outside.

They really have achieved something special here,

but was their £100,000 budget realistic?

Naively, we watched many of those programmes

where they bought a house for £100,000.

That obviously, as we progressed, was not going to happen.

It was a good idea, but it wasn't going to happen.

And so we end up spending between

150 and 180,000 on the actual build.

They blew the budget for their dream home,

but I think it's worth it.

But what is the house worth now it's complete?

We invited along two local estate agents to give us their opinions

on the couple's £268,000 investment.

I'm really, really impressed with the property.

One of the nicest features is the large windows

and how light the property is.

It's very modern and, sort of, futuristic.

The condition of the property is ten out of ten, as far as I'm concerned.

It looks like it's been done to their own taste as well, which is good.

You see a lot of new builds,

they're normally a little bit boring in what they offer.

It looks very unique and I think it'll stand out

if it was ever to go on the open market.

And if it were to go on the open market,

what sort of sales value would the house achieve?

I would recommend an asking price of £375,000.

If we were to put this property on the market I would recommend

an asking price of £380,000.

Yeah, that's probably more than I thought it would be.

Definitely.

A rather reserved reaction, considering the house is

potentially worth more than they've spent creating it.

But as it's their forever home, they won't be going anywhere.

So how have they found the experience working together?

We work together anyway, so it's been no different.

Through the church, we have various projects that we work on

but this one, we're definitely going for marriage counselling!

THEY LAUGH

Newcastle-under-Lyme is an elegant town in Staffordshire

with its mixture of old and new.

It's known for its market,

but for me, I'm not interested in the fruit and veg -

it's more the property market that floats my boat.

The property I'm here to see is a big old unit.

And here it is.

It's described in the auction catalogue

as being a "mixed-investment opportunity",

and is already bringing in over £15,000 a year.

However, the auction catalogue also mentions that figure could double.

It's got the guide price of £195,000 and I'm intrigued.

And part of that rental income

is from the ground floor commercial unit at the front of the building.

But I'm going to check out the other spaces first.

What an amazing staircase.

You've got all this original detail.

A really nice banister, very pretty as you come upstairs.

That's modern, that's original.

I know which one I prefer.

What have we got? A huge front room.

Really high ceilings. You've got some more original features there.

Central heating, original fireplace,

and a massive window, letting loads of light in as well.

So a very, very good start.

I'm impressed so far. Let's have a look.

Further down the hallway and round the corner,

at the end, we've got a toilet and a kitchen off to the left

and it even goes further round as well.

There's so much space on this floor.

But the original tiles in that toilet are so pretty.

Into this huge room, more central heating, again, lots of light

coming in, and the strip lighting up there tells me it was

possibly an office.

But all the same, lots of room, big space, lots of potential.

Well, there is just room after room here.

And if you were thinking,

"Wow! What a great flat this would make,"

you only have to go up one more flight of stairs

to see you'd be right.

On the top floor, which is a two-bedroom flat,

which is already tenanted.

Got a huge lounge just at the front of the property there,

top of the stairs

and this really is a massive bedroom.

Really, really nice. Then you've got the family bathroom,

a single bedroom and then the kitchen.

What I do like about this place is it's incredibly well kept.

What I like even more is that it's bringing money in already.

So this top floor shows what potential there could be here.

And if I venture down to the ground floor, the options continue.

Downstairs on the ground floor and there is even more space.

You've got two lots of access just here, it even goes further.

In through there, you've got another room,

you've got an area to the right-hand side as well.

There is just so much potential with the whole of this property.

Well, I think this could make a great studio flat.

And although there is a basement, there is less space here.

That's because the commercial unit is also on this floor.

So I'm in the commercial part of the building and, as you can see,

it's a working salon.

Morning, ladies.

And it's in a great location.

You've got a little bit of hanging space there for the coats,

and out the back, there's even more salon space,

more or less the same size as the front.

And this place is on a five-year lease.

So you've got the top of the property making money,

you've got the bottom of the property making money

and all the rest is going to make you even more money.

I love this place.

This building has so many options - commercial, residential, flats.

There is also a nearby university so an HMO,

or a house in multiple occupancy, may be another good option.

This place is so big, I'm going to have a bit of a rest.

Come on, guys. Just me five minutes' break.

# Got me going mad sitting in this chair

# Like I don't care

# Gotta get him out my hair. #

Well, while I get my head polished and catch up on the gossip,

what can a local estate agent

tell us about this humongous place and what he'd do with it?

I would look at two options.

One option would be to keep the hair salon and the rent from the premises

and then to turn the rest of the building into

a house of multiple occupancy and rent per room per calendar month.

The second option would be to turn

each floor into two-bedroom apartments,

still keeping the hair salon and the rent from that premises.

So let's try for some figures on this place

that was guided at £195,000.

The resale value of the hair salon

is somewhere in the region of £75,000.

Each of the two-bedroom apartments

would have a value in the region of £75,000.

Looking at the property as an HMO,

I would say, value-wise, somewhere 200,000 to maybe 225,000.

So either option would give the potential total resale price

of around 300 grand.

With the flat and salon already bringing in 15 grand a year,

what additional income could flats or an HMO bring in?

Looking at a house of multiple occupancy,

each room would bring in somewhere

in the region of £300 per calendar month.

Two-bedroom apartment - in this location -

would be roughly £500 per calendar month.

This is a great project with loads of options

and a huge amount of potential.

You've got all those students nearby -

surely you can't go wrong.

It's already making money, but it could make you a lot more.

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

Lot 83. Impressive-looking building, isn't it?

It's a three-storey mixed-use investment.

It is only partially let at the moment.

What shall we say? Shall we say 180?

Thank you. 180, I have.

I'm now looking for 185.

I think we will do 185.

185. 190. 195. 195?

No. It is 190.

Going once. Can I bring you back in at 191?

Thank you. 192. 193.

193 and a half. Can I say 194?

Thank you very much. Can I say 195?

195.

196. It is against you again, now. Do you want to make it 196 for me?

Here we go, then. For the first time at 195.

For the second time at £195,000.

I am going for the third and final time.

I'll take a half bid, if it helps anybody at the last second.

If not, £195,000.

It's sold. Well done. 195.

So, spot-on the guide price at £195,000.

The large multipurpose building in Newcastle-under-Lyme

was bought by Tomeh.

Tomeh and wife Ronit met me back at the house to find out their plans.

-Ronit, nice to meet you.

-Nice to meet you.

-Tomeh, nice to meet you.

-Nice to meet you too.

-And congratulations, sir.

-Thank you very much.

This place is huge.

It is indeed. It was one of the reasons why I was interested in it.

It has so much potential.

Were you looking for something this big?

Well, yeah. We're property investors

so whenever we are going to look at properties,

it is, "What is the potential it has?"

"What are the different options we have to use?"

And this one has a lot of options and potential.

So how long have you been doing the property for?

Well, we have a few properties in the United States,

14 properties there, that cash-flow quite nicely.

-Wow!

-Yeah. And lately, we started involving in here,

in the UK, and we're just building our portfolio.

So why property? What were you both doing beforehand?

So I was an executive in a software company, which...

That's why we moved to the US and we came there in 2009,

which, back then, it was the crisis.

Houses were very cheap.

We started buying them, we liked that.

And then I moved here, or we moved here as a family,

almost three years ago, again, for work.

I recently actually quit my job and

decided to do the property as full-time.

Houses in the US right now are paying the rent

and now we decided to create a portfolio here in the UK,

and it's...

-And the rest is history.

-Yeah. We like property.

-History and future.

-And property likes us.

They do indeed like property.

They have another two more properties they're converting

along with this beast, so clearly not fazed

by lots of projects or lots of work.

Tell me exactly what you're going to do with this beautiful building.

Right, so one of the reasons why I bought it when I saw the property

before we went to the auction, I have an apartment,

a flat upstairs, which is immaculate.

There is nothing to be done over there.

It is already producing rent.

And there is a shop downstairs that is also producing a rent.

So we will try to make this part of the building into an HMO,

a house of multiple occupancy.

-OK.

-So we will rent it by room.

What would be your next option? What would you like to do?

So if we won't be able to get permission for an HMO,

for like, eight rooms HMO,

so we will probably get permission to do a flat and five rooms HMO.

-OK.

-That's another option.

-Yes.

-So the upper one will be a three-room flat

and then we can do five rooms HMO.

OK, just break it up.

And if we won't be able to get permission for that,

we might be able to get permission for three different flats.

For something, we will get the permission.

Depending on what option you are allowed to do,

you get planning to do,

that is going to change your budget, obviously.

-Correct.

-Yes.

-What is your budget?

What is the top and bottom of your budget?

I would say that for a property like that, depending on which way we go,

probably ranging between £50,000-60,000.

And along with that 50-60 grand budget,

they are hoping to complete all the work in four months.

But they will need to get change of use

from office space into residential

and they need to get consent for that preferred HMO option.

So that might delay things.

Are you enjoying being in the property world now

more than your old job?

Is it more fulfilling?

Yes. Since we don't work, yes.

I mean, right now, this is the thing that is actually financing our way

of life and we like to enjoy our time, family, we have three kids,

we enjoy going on vacation as a family

and this is what allows us to do it.

I mean, when I was working as an executive in the software company,

I spent 180 days outside of this country,

so travelling all the time.

-I actually like being home a little bit.

-Yes.

You can sit, you can look at the properties,

go out to the area where I invest once in a while

and then find a gem like that.

It's exciting, isn't it?

-It is exciting.

-Yeah.

-I wish you all the best.

-Thank you.

-I hope you get what you want.

-Thank you.

-I hope so, too. Thank you very much.

-Good luck.

-Good luck.

-Thank you.

Now, that's an experienced couple.

They know exactly what they want and how to achieve it.

With a building of that size and all those options, that's some going.

And, by the way, they're already achieving an 8% yield.

How much will they add to that?

You can find out later in the programme.

Well, earlier on, we saw how one property turned out,

but what about the other two?

Will they look any different now and has all that money been well spent?

Let's find out.

Back to Wolverhampton now, and this two-up two-down.

While it was an OK house, it had one striking feature.

Guide price 29,000-34,000 quid.

Inside, the house was in good condition

but in need of a clear-out at the least.

I hoped a few charities could benefit from whatever circumstances

had meant there were still belongings here.

Looking past the contents, it was a traditional two-up two-down,

but it had a small extension housing the kitchen and bathroom.

However, the flying freehold running underneath,

and large trees in the garden, would require closer attention.

It certainly grabbed the attention of council worker Tom and wife Joan,

who paid £41,000 over the high end of the guide price.

And Tom had already learned a valuable lesson.

-We went above the budget, yeah.

-How much above your budget?

We were hoping to get it for around 50-55.

I hate to go on about it, but it is important to stick to your budget

and scrutinise the legal pack,

because while the couple did read it,

they missed additional fees,

which meant another £5,000 on top of the £75,000 they paid.

Conscious their profit margin might be taking a pounding,

they were keen to learn from their first project, with a budget of

£8,000-10,000 and the timescale of three to four months.

And we returned 13 months later to see how they'd got on.

The clutter is gone and in its place is a stylish, modern kitchen

with brand-new fittings.

The whole house has been rewired and by moving the bathroom wall,

they've made the kitchen a little bigger.

They have ditched the old bath in favour of the shower

and by knocking down the dividing wall in the bathroom,

it is a much brighter space, not to mention sparklier.

The front reception room is looking much brighter,

with fresh white walls and a brand-new electric fire.

The second reception room looks just as smart.

So how does it look upstairs?

The two double bedrooms are looking fresh and clean,

with white walls and new carpets.

But did they get rid of those huge trees?

Yes. Thankfully they've gone,

and outside is fairly maintenance-free,

although not very eco-friendly.

However, some good planting might soften it in time,

but, as we've seen, it's essential to check out

the maximum size of your plants.

Last, but not least,

Tom and Joan have replaced the pitched roof on the kitchen.

They have done a great job for their first attempt.

So did they enjoy the process?

When you see it on the television, Homes Under The Hammer,

and they say, "it's great, it's this, it's that and the other,"

for us it wasn't that.

It wasn't that, it was...at times, very frustrating.

It was all a little bit messy and it could've been done and dealt with

a lot better, IF you'd got the time to do it.

There is no denying it can be stressful,

especially as Tom is now back at work full-time,

which has taken its toll on the schedule.

It has took a long time, let me just say that.

It has took a very, very long time.

And I'd advise anyone going into it to break it down and ensure that

their own lifestyle and wellbeing is uppermost

before they venture out into one of these projects

because they're not easy.

So the timescale went over and so did the £8,000-10,000 budget.

Tom and Joan spent 25,000, which,

along with the £75,000 purchase price and five grand in fees,

takes the total spend to 105,000.

It has been a long, hard road, but they have managed it.

So are there any positives to take from the experience?

I think the basic thing is the self-satisfaction of seeing

the property in its state of repair, if you like,

beforehand and seeing it now.

And you can walk in and say, you know, it's really something.

It really is. Everything has been done,

from electrics to plumbing to pebbledash and roof repairs.

It is easy to see how the cash racks up.

Time to see if Tom and Joan can claw back some of that overspend

on their £105,000 investment.

We've invited along two local estate agents to tell us what they think

of the changes, starting with the agent who saw it last time.

They have been and they've modernised it out,

they've made a very good job of it.

It's mainly white all the way through,

which does give people a blank canvas when they move in.

My first impressions of the property is that it's nicely presented,

very big, spacious rooms,

nicely done out.

Would suit a family, although there is only two bedrooms.

It's fairly positive, but can Tom and Joan make a profit

on that £105,000 investment?

I feel the open market figures should be between £85-£90,000.

I would imagine it would achieve in the region of £85-90,000.

I'm quite surprised at that.

I'd be quite happy with that.

And if we could squeeze a little bit more then that would be great,

but initially, we're going to start to rent.

Not including taxes and fees, that is a potential £15,000 loss.

But the rental features are more forgiving,

with the agents giving a value of £550 per calendar month.

And the couple have someone lined up to move in, paying just that,

giving them a decent yield of around 6.5%.

So their investment is bringing in the cash

and they've gained invaluable knowledge

should they ever have another go in the property game.

We would do it again, but with a plan,

because this was ad hoc, really.

So I would advise anybody that was going into it for the first time to

really look at their work life,

as against the time and effort they can put into the property

to do it up, really.

Spot-on, Tom. Great advice, and good luck with the next one.

Time now to return to the town

of Newcastle-under-Lyme in Staffordshire,

where I saw this charming property

that was a mix of commercial and residential premises.

# Darling, don't you go and cut your hair... #

So, I'm in the commercial part of the building and, as you can see,

it is a working salon.

Morning, ladies. And it is in a great location.

You've got a little bit of hanging space there for the coats,

and out back there is even more salon space,

more or less the same size as the front.

The tenants were on a five-year lease,

so this part of the building was already producing income.

But the untapped potential here

was the rest of the ground floor and first floor.

This former office space was huge

and the opportunity for further development

continued to the top floor,

which was a tenanted self-contained flat.

It was hardly a project for beginners,

which suited professional property developers Tomeh and his wife Ronit

who got this at auction for a relative snip,

bang-on the guide price at 195 grand.

Tell me exactly what you are going to do with this beautiful building.

We will try to make this part of the building into an HMO,

a house of multiple occupancy.

So if we won't be able to get permission to an HMO for, like,

eight rooms HMO,

we'll probably get permission to do a flat and five rooms HMO.

The couple were determined to find a solution that could work for

them and the property,

but the salon would be staying as it's already bringing in cash.

For the rest, they had given themselves a four-month timescale

and a budget of 50,000-60,000.

Nine months later, we're back to see

if they managed to achieve one of their options.

Yes, they have. There's now a bright and trendy kitchen.

These communal rooms are on the ground floor,

as is the first of the HMO rooms, complete with en suite.

Upstairs on the first floor, there are four bedrooms.

As the couple are hoping to attract young professionals, they've aimed

for a stylish, contemporary finish.

The rooms are very individual in colour and style.

Two of the rooms are en suite,

while the other two smaller rooms share a bathroom on this floor.

They have kept the top floor as a self-contained flat,

but it has gone from a two-bed to a three-bed

which they will rent out on a per-room basis.

So they have maximised the space here with eight rooms.

But what was the biggest challenge?

Getting the approval from the council,

because they almost didn't give their approval

and then, at the last minute, they did.

Usually it is a two-month process.

In this case it was almost three-and-a-half

because we were rejected once

due to changes that we needed to do in our plans.

So it took us almost three-and-a-half to four months

to get the planning.

We then had to wait for our builder to finish another project before us

and then the real project itself was only two months,

or even less than that.

It was actually quite condensed in terms of time

but it was worth the wait for the great team

that has done this work for us.

It is never easy converting an older building.

Stringent regulations on soundproofing it

meant they had to upgrade the windows

and install acoustic flooring underlay

instead of lowering the ceilings, which would have been a shame.

So after all the delays, has that eaten into their 50-60 grand budget?

We actually reduced the budget to 45,000

and we're probably going to spend about £2,000 more.

We'll still be below the original budget,

so we are quite happy with that.

Under budget? That rarely happens on this show.

What is the secret of their successful partnership?

I manage more the family, he manages more the business,

and we find a balance, like we do with everything.

I can manage the portfolio and everything we are doing

from anywhere in the world so it is a great way to live,

it's a great way to make money

and it's going to last for a very, very long time.

Well, Tomeh and Ronit are certainly optimistic.

So let's hear if two local estate agents

are equally pleased about this £242,000 investment,

starting with the agent who saw it first.

Wow, what a difference.

The property is a veritable TARDIS.

Standing outside, you would not imagine there is as much

accommodation as there actually is.

First thoughts on the property is

it's a very unique, substantial property.

The finish is done to a very high standard.

With the finish and, actually, the size of the rooms,

it is sure to attract professionals.

So what does this vast property hold in the way of profit?

Well, both agents agreed that the current rental figure

for the salon was about right, at £750 a month.

But what about the new investment of the HMOs?

Per room per week, I would say you're looking at around

£100 mark.

We would look to rent somewhere in the region

of £110 per room per week.

The top figure of £110 per week would see the five-bed HMO

bringing in £2,200 per calendar month,

although the couple are hoping to achieve a slightly higher figure.

But of course, there is another three-bed flat to this property.

So what could that be worth on the rental market?

We'd look to rent for somewhere in the region

of £500-550 per calendar month.

You will be looking at a figure per calendar month

of around about £550.

Based on the agents' top values, the income from the salon,

HMO and the three-bed flat comes in at 42 grand a year,

which makes an impressive yield of just over 17%,

although Tomeh and Ronit are hoping to achieve closer to 48 grand.

And whilst tricky to value,

as there's nothing similar on the market,

the estate agents estimated the whole of the property

at up to 350 grand which, based on their total investment of 242 grand,

gives them a profit, minus taxes and fees, of £108,000.

Usually, the way that we would have the valuer look at it would be based

on the income. The income from that property is going to be about

£48,000 per year.

Usually they will multiply it by a number so I would estimate this

entire building would be worth somewhere between 350 to £400,000,

based on its income,

which is really what we are aiming to achieve in this case.

With their property empire coming along nicely,

what's next for Tomeh and Ronit?

Next up for us would be studios and one-bedroom flats,

and we think there is a strong demand for those properties

and it will be in the area of the north-west of England as well.

-We like this area. So our journey is going to continue.

-Yeah.

We hope you've enjoyed the show

and maybe learned a few lessons along the way.

Yes, perhaps we have inspired you to have a go yourself.

Join us next time for more Homes Under The Hammer.

-Goodbye.

-Goodbye.