Episode 46 Homes Under the Hammer

Hello and welcome to the show. Now, all three of us

are self-confessed property obsessives.

Yes, and the one reason we are addicted to development stories

is finding out that magic mix of buying in the right location and at the right price.

Yeah. Well, one way you can stack things in your favour

is by buying your next home under the hammer.

You really do need to do your homework if you buy your property at auction.

And if you do careful research then there is more chance that you

will find a real bargain.

Yes, so what inspired the buyers on today's show?

Let's take a look.

Well, the hope of giving my legs a rest has gone out the window

at this end terrace in Derby.

Just when you want to go upstairs without using your old knees,

there's no batteries.

In South Wales, I use my own steam

to uncover a surprise at this bungalow.

Well, quite a good little bungalow, actually.

And a trip upstairs at this office in Silverdale,

Newcastle-under-Lyme, just hurts my head.

Upstairs, the layout's pretty baffling.

100...

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

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

Sold to you, sir.

We are in Derby now and if you believe the recent census,

it's not just a good place to buy a property.

The survey revealed that if you are a real ale drinker, which I am,

then this might just be the place for you,

with 334 different real ales available -

more than anywhere else in the country.

Sounds like I'm moving!

I'm just 15 minutes away from the town centre

on this very traditional but very quiet terraced street.

Are we really 15 minutes away from town?

Anyway. This is our property.

It is a two-bed end terrace and has a guide price of £55,000 plus.

Now, as soon as I look at this place,

I know there has been a bit of movement.

Look below that top windowsill there and if I look at the bottom,

you can see exactly the same.

Little sneaky trick though, if you bend down,

and you get the level of the outside wall, you will see it is straight

and that inside windowsill isn't.

Any more signs of this inside?

I hope not.

OK, traditionally...

..with a house like this, straight through the door

into the first reception room, and it's not a bad size.

First and foremost, I can't see any signs of cracks.

But the wallpaper can often cover a multitude of sins.

In this case it hasn't worked.

This would all have to come off and you'd have to re-skim again.

Just looking over here...

"Rad." That either means "radical" or they were thinking about putting

radiators up here, but I can't see any in here at the moment.

But there is a little bit of original coving up there,

so I'd try and keep that.

Through here we have got, firstly...

..we've got these glass doors.

Get rid of them. They are dangerous and a hazard.

I don't want them anywhere in my house!

Now, into the second reception room.

Again, it's what I would expect of a house of this age -

nice high ceilings,

you've got a fireplace there which has seen better days.

It needs to be completely decorated yet again

but I have noticed that the windows do look OK.

And through into the kitchen.

It's very, very small. There's hardly anything in here as well.

HOLLOW KNOCKING

You know what I'm going to say - you could actually create space by

knocking this through and having a nice big kitchen-diner.

But look what I've spotted, just out of the corner of my eye.

have a look at this, people.

We've only got a stairlift!

OK, here we go, see you in a minute.

Just when you want to go upstairs without using your old knees,

there's no batteries.

You could of course sell this on, but there are charities that recycle

them for people who otherwise might find them out of financial reach.

Give me two seconds. The old knees aren't what they used to be.

We are upstairs in the family bathroom.

It's not a bad size bathroom at all.

You would have to rip all this out, start again,

put a fresh, brand-new suite in here, but it is upstairs,

which is what I like.

Second bedroom's here.

Again, there's lots of space in here.

It's a double bedroom.

Lots of woodchip, though, so I'd like to get that off the walls.

Again, freshen it up,

brighten it up a little bit as well

and in the hallway,

you have got damp and more damp.

Damp damage everywhere in this hallway.

Get that sorted as soon as possible.

HOLLOW KNOCKING

Wow. Have a look at this.

Look at this movement.

Now. Just a guess, but I think that could be a false wall,

to be honest with you. That could come out or you could even think

about partitioning that room off in there. Just an option.

And across the hallway to the main bedroom.

Polystyrene tiles - the first thing I have seen.

Get rid of those. They are a huge fire hazard.

Brighten this whole place up,

brighten the whole of the upstairs up, modern colours,

modernise it completely throughout.

And outside needs modernising, too.

Added to that, there's still an outside loo.

But hold it - before you think about demolishing it,

they have become very popular for gardeners

and they are handy for kids that are playing outdoors.

Save all the mucky feet trailing through your kitchen.

It's a decent Victorian end terrace that needs pulling into this century

with a guide price of £50,000 plus.

An agent from the auction house that sold it

accepted our invitation to tell us his thoughts.

First impressions with this property,

it really does need some money spending on it,

ranging from a new kitchen, bathroom, rewiring,

gas central heating system and general decor and flooring improvements throughout.

So when renovated, what does he think this house could rent for?

I feel it is likely to achieve in the region of

£500-£525 per calendar month, when renovated.

And if it went on the resale market?

On the open market again, when renovated,

it is likely to achieve in the region of £110,000-£115,000.

So, a couple of issues. The outside, you can see that subsidence

or that little bit of movement,

I think that is historic and has settled, so no problem there.

On the inside, you have got that damp issue

which would need to be sorted.

It's an end terrace, it's yours,

you can get on with it and get the pros in,

get it sorted as soon as possible.

After that's all done,

I think you've got yourself a good little project.

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

I'm looking for a start at 55,000.

50. At £50,000, bid me.

At 50,000, thank you sir, at 50.

Off the mark at £50,000, but this lot had a long way to go.

We rejoin in the midst of a bidding war, with the price at £72,000.

He's bigger than you, sir. And you're all bigger than me!

At £72,000 at the back of the room, at 72,000.

And a half. 73.

And a half.

It's the chap on the wall at 73.

And a half if you want, sir, 73 and a half.

74, sir, it's your turn.

74 and a half, sir.

75 now.

And a half again.

76. And a half.

Let him have it. Very gallant, sir.

At £76,000, to the big gentleman on the back wall.

£76,000, for the first time, second time, third and final time it goes,

at £76,000.

Sold to you, sir, at £76,000, and thank you.

A battle fought in good spirits, but it was Adam who emerged victorious.

He has been dabbling in property

with his wife, Philippa, for 15 years,

building up a decent-size portfolio in that time.

He's based in Northampton so I met him back at the house

to find out what brought him up the M1 to Derby.

-Adam, nice to meet you.

-Hi there, nice to meet you.

-Congratulations, pal.

-Thank you very much.

How did you find it?

We were looking in the Derby area.

Had a look at one before Christmas and didn't go through with that one,

looked into the auction side of things,

thought I'd go and have a look at the auctions.

I did do a bit of homework, went out to see some properties.

Went to the auction, two were interesting,

one went far too high, bid on this one and I managed to get it.

Is this the kind of property that you look for?

It is, yes. It needs a lot of work doing to it

but there is some added value to get out of it,

so if we can get it at the right price,

do a bit of work, it'll be worth more money.

So what are your plans? It's now yours.

Yes. It's great, isn't it?!

We are going to have to take the whole place almost to pieces.

It's got no central heating. We need to put some gas central heating in.

It needs a new kitchen, new boiler, new carpets, new decoration,

need some plastering, it's got lovely fire hazard tiles. Yeah.

The list goes on, it's a long list.

But we reckon about 12,000, maybe around that area.

Where is the majority of that 12 grand going to be spent?

Because there's a little bit of movement, as well.

Out the front, I can see a bit of movement.

I think that's long-standing.

There's a little bit of cracking on some of the bits.

We've had somebody look at that,

they are happy it's been there a long, long time.

So there's nothing going on,

well, until the electricians and plumbers get in there

-and probably start hitting it a bit.

-And making things go wrong.

We'll be looking at those to make sure they stay where they are.

And what about the damp?

A little bit of damp, not much, I think it's more condensation.

Again, there's no central heating in here,

so whether there's ventilation gone through the house properly,

I don't think it's major.

OK. Timescale - how long is it going to take to do the work?

Probably, he says,

having had the gas people come today

and look at the house,

four to six weeks is what they're going to take to put the meter in.

-OK.

-We'll probably be done by then.

-Really?

-Waiting to plug the pipe in.

-Yeah.

-Four-six weeks from start to finish.

That is moving some!

It is, but when you guys leave today, there will be work going on,

so it's looking like this for a very short period of time.

Who does it? Who does your work? Do you get involved?

Do you get your overalls on and start knocking stuff about?

Yeah, I do get involved.

We do anything that's not qualified.

So plumbing, gas, obviously,

you've got to get the professionals in

-and then on top of that, carpentry, I can do some.

-OK.

But I'd rather pay someone to come back and fix it if it all goes wrong.

-Yes, OK.

-So professionals will do the certificates.

Once the refurbishment is complete,

Adam and Philippa plan to rent the house out,

but there is a third party involved in this property investment.

This particular property, my older son is going to have a hand in,

financially, and he's going to have hand in it physically.

-Is he?

-Yeah.

-He's going to do some work?

-Absolutely!

Absolutely! So we will be using some brute force and ignorance

and he's got some friends as well, which will help,

because we've got to remove one of the floors downstairs,

which is solid onto soil.

It's been there a while.

There's got to be something that he's getting from this in order to

-be helping you.

-He will be getting from this,

because he's actually saved up quite a lot of money,

from family and friends over a period of time, he is 20,

so he is working as well,

he's put money away. He will have a share in the house.

Fantastic. So is that he wants to do?

Does he want to follow in your footsteps

and get a portfolio rolling?

I think being on the property market in any part of the country

is quite difficult if you're young,

and I think if we can help him out on that first stage

and he's contributing - we're not handing it out to him,

let's put it that way, we're certainly helping him,

but we're not going to hand it out to him, forthwith and 100%.

"There you go. It's yours.

"I'll do all the work, you can have it."

That won't be happening!

But, then again, he won't be doing all the work, either.

He'll understand a little bit about what it takes to get a house into a liveable position.

I wish you all the best, I hope it all goes well

and you stick to that 12 grand budget.

So do I. Nice to meet you. Bye-bye.

Now, there's a confident man.

Adam knows exactly what he wants to do and how to achieve it on this project.

But will his tradesmen uncover any unexpected and expensive surprises?

You can find out later in the programme.

I'm in South Wales in the village of Penrhiwceiber

which is set in the beautiful Cynon Valley.

There are local amenities on your doorstep and a train station,

but you're only a half-hour drive from the Welsh capital, Cardiff,

so it's an ideal commuter village.

Well, I must have visited the valleys of Wales

literally hundreds of times over the years on Homes Under The Hammer

and most of those times I am here to see a terraced property,

not surprisingly, because a lot of the properties in the Valleys

are exactly that, terraced houses built for the miners and others.

So what do you think I am here to see today?

It's a...

bungalow!

£68,000 plus was the guide price. Two bedrooms, very intriguing!

Bungalows are often favoured for being on one level

and this steep site and stairs could be a problem,

but access to the house is made much more possible by car.

Those stairs seem hard to avoid entirely.

So what have we got inside?

Well, you walk into this very strange room.

It's obviously the kitchen, but it's the full width of the bungalow.

Now, there's no way this was the original design.

I reckon this is some kind of extension

and it is kind of unusual.

But through there, you can see,

that would originally have been an exterior window on the property but

through into what is now, could have been the kitchen, I don't know,

into the living room.

It looks to be in pretty good condition.

Pretty nice carpets, doesn't smell damp

and the condition of the paint on the walls and stuff is good.

Through into what would have been, I guess,

the original main entrance to the property

and could still be, in fact,

and a more traditional kind of layout you have here.

Living room over to that side there, bedrooms to the back.

And, yeah, again, it's not in bad condition but lots

of intriguing things going on. I mean, what's up here?

Well, it was obviously originally the attic but it's been boarded out

and obviously has been used as a bedroom.

And my guess... Well, no,

I know, this does not meet building regulations with this ladder and stuff like that.

So you can't describe it as a bedroom.

It's a useful space though and, yeah,

a good additional thing to what has proven to be quite a good little bungalow, actually.

You can convert the loft into a bedroom under permitted development,

as long as the roof space meets space requirements

and you don't extend or alter the roof itself.

You do however have to meet building regulations standards for stairs and

openings that comply with fire regulations,

and ensure that the ceiling joists can support

the load of a new room.

There is one thing puzzling me in this room, though.

With an opening that small, how did this double bed get up here?

# Could it be magic now... #

To get it back down, you could saw it in half

but unless you can magic it back together,

it's destined for the skip.

Let's head outside and see if this bungalow

has any more tricks up its sleeve.

Well, as you might have expected from a property

built on to the side of a valley,

the garden is actually fairly steep and terraced

but lots of retaining walls here.

Of course, very expensive to put right if they go wrong

but just get them checked out to be sure.

Another few little bits and pieces

which certainly you should have a look at.

This roof over the kitchen area there.

As you can see, it's not all similar to that roof and the fact

that the pitches are a different angle,

the tiles are vaguely similar but I'm not too happy about the angle it's at.

I mean, normally you'd be looking for 30-degree slope off a roof

to give you the right flow of water,

especially off concrete tiles like that.

So maybe that's something you could look to put right.

But, again, come out here,

lots of places for your chairs and tables

and really make the most of that major asset of this property,

which is THAT view.

# Look at that, look at this

# Gimme a hug, gimme a kiss... #

Beautiful but, of course,

there's no getting away from the steepness of the location.

If access by car isn't sufficient,

an outdoor stairlift could offer a solution.

A resident eligible for a disabled facility grant

might get some funding from the council, but don't assume anything.

You'd really need to check it out first.

# Hey, hey, and off to school we go... #

You learn something new every day.

So time to learn something

from a local estate agent.

I think this property would appeal to an older generation because

they like to have bungalows because they're all on one floor.

It makes it easy for them. And I think maybe it would be suitable for

somebody that has mobility issues as well.

The agent thinks a simple and no doubt cheaper solution

to the access would be to rejig the path so it's less steep.

Good idea. No doubt about it -

once you're inside on the level in this bungalow, it's great.

I do love bungalows.

Even if you thought an outside stairlift

was an unnecessary expenditure,

the garden and the retaining walls might need quite a bit of work.

And when it comes to the inside, the renovations are going to cost

quite a bit, so would spending all this money be worthwhile,

bearing in mind the £68,000 plus guide price?

Once the work is complete on this property,

I would suggest a marketing value of £105,000.

Well, you certainly can't knock location,

and bungalows are eternally popular

so a good set of combinations there.

Bungalow in a lovely location

and at a very decent guide price.

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

Guided at 68,000.

Got to be 60 to start, hasn't it?

Wave a hand at me, then.

55. Make it 50 if you like to get it going.

Thank you, 50, I've got you right at the back.

At 50. And two now, can I see?

I've got 50. 52 I'm looking for.

52, thank you. 52.

54. 56.

The lot came up at the end of auction day

but clearly had attracted a lot of attention.

We rejoin at 75,500.

75 and a half.

76. And a half.

77. And a half.

78.

And a half? No.

At 78,000.

Back with you, then. For the first time.

Second time.

Third and last time at £78,000...

Yours. Well done, sir, madam.

Sir, your number, please?

# I got your number

# I know you're gonna be there when I call... #

The magic number for husband and wife David and Heather

was 78,000, and that's how much they paid for this at auction.

I met up with them at the bungalow to hear why they went for it.

Heather, David, great to meet you both.

-Nice to meet you.

-Congratulations.

Tell me why you wanted to buy this bungalow.

Originally we were looking for something

to sink our pension money into.

You say "originally".

Has the plan changed, or what?

Yeah, because we were going to rent it out.

-Right.

-But I think this is a do-er-upper and seller-onner.

It'll still form part of the pension pot, though.

It's just a slightly different strategy.

Yeah. And then reinvest it in something else

that we could rent out.

OK. Great, so why this particular house then, Heather?

Well, originally...

You're laughing, what's going on?

When we went to the auction, we were going to bid on another house.

-Oh.

-And then this was a last-minute addition.

-Not many people had seen it.

-Oh!

And I said to my husband, "Look at this, this looks great!"

So he said, well, we haven't seen it, we can't go for it.

I said, no, but it's lovely.

So you went and read the legal papers.

-Yeah, so, the first cardinal sin was we hadn't seen it.

-Hmm.

But, I've seen your show, so the first thing I did,

I rushed out the room,

went down and found the legal pack and read through it.

The auction was starting and there's me reading through the legal pack.

-Not ideal.

-No.

-Wow.

-But I could see nothing wrong in the legal pack so I felt happy about bidding for it.

-OK.

We didn't actually see inside until yesterday.

Oh, wow. What did you think when you walked through the door yesterday?

I was pleasantly surprised, to be honest.

I know it needs a bit of work, updating, etc,

but some of the places we've been to see at the auctions,

this is a palace.

Well, I don't think it would necessarily get

the royal seal of approval right now, but once Heather and David

have completed their planned works,

which includes sorting the kitchen roof out

and a full renovation throughout,

as well as a new kitchen and bathroom,

it will be fit for a king or queen.

Upstairs though, well, that's a different "storey"!

So, what about upstairs? What's the plan for that?

-Well, I think...

-That came as a surprise. We didn't know.

Yeah, we were a bit shocked to find...

We knew there was a room up there and it said it was boarded out

but when we saw there was a bed in it and units and bedside table,

that was a bit of a surprise because obviously it is an illegal bedroom.

There's just a ladder going up, and I can't see any way

you could put stairs in, really.

You did mention about a study though, didn't you?

Yeah, could be used as a study or a playroom, even.

The rest of the rooms, just a bit of refurbishment?

Yeah, tart 'em up a bit.

So, who's going to be doing the work?

It'll be me, mainly. Brian's going to help me out.

That's Heather's brother.

Is he qualified? Is he a builder, or...?

No, no, but he wants to learn, so...

Great. Give him a property to learn on.

That's it, yeah.

What about you? Have you got experience?

I've got a building background.

-Oh, OK.

-Although I have been a maths teacher for 20 years.

-OK.

-But before that, I was in the building trade.

-Right.

-What they call the gentleman bricklayer and stonemason.

OK. And are you going to get involved in the renovation at all, Heather?

-Yeah, mostly the colour, the decor.

-Nice.

And keeping the books, how much we spend.

Yeah, which is?

Well, before we saw it,

we thought about 10,000 but we might have to go up to 15, I think,

because of everything we've got in mind now.

-What's the timescale for the work?

-Thinking about six months,

mainly because we live in Northampton

so it's quite a trek from there.

And if this is a success, on to the next project?

Knowing David, definitely. Yeah.

My future son-in-law calls me Project Man.

Oh, does he? You like your projects, do you?

If they could all be as potentially successful as this, then great.

Well, listen, congratulations. Good to meet you both. Good luck with it.

-Thank you.

-Looking forward to seeing how you get on.

Thank you very much.

Well, Heather and David showing one excellent reason why you need to

attend the auctions yourself there.

This property? Well,

they wouldn't have found it had they not been there on the day.

It seems that they've got themselves a really great place.

How will they get on sorting it out? You can find out later in the show.

Coming up, this Silverdale office might not look much

but it could be a hot property.

I'm pretty sure you could get at least five bedrooms in here.

And David and Heather's work has cooled off

thanks to the glorious Welsh weather.

-It does rain a lot here.

-It just doesn't rain, it RAINS!

It was just a few miles outside Derby city centre that we first saw

a two-bedroom end terrace house that not only had some signs

of historical movement outside -

inside wasn't looking too clever either.

Have a look at this. Look at this movement.

# Shaking all over

Now, just a guess, but I think that could be a false wall.

And this slightly wobbly house also had signs of damp,

plasterwork not in great condition

and generally was in a bit of a sorry state inside and out.

But for 76 grand,

it was bought at auction by part-time property developer Adam

who was ready to give it all his attention.

So, what are your plans? It's now yours.

Yeah. It's great, isn't it?

No, we are going to have to take the whole place almost to pieces.

It's got no central heating. We need put some gas central heating in.

It needs a new kitchen, new boiler, new carpets, new decoration,

needs some plastering, it's got lovely fire hazard tiles.

Yeah, the list goes on, it's a long list.

# All I want is everything...

# Am I asking too much?... #

Adam hoped that long list could be done with a 12 grand budget

and a timescale of four to six weeks.

We're back 11 weeks later.

MUSIC: Light Me Up by Birdy

# You light me up

# When all I see is darkness

# You light me up

# When I'm down

# And if I fall apart, you know where to find my pieces

# Where they're gonna be found... #

So, downstairs is all looking pretty good

and this has been a thorough refurbishment from the ground up.

We've had to remove floors, lino,

we've actually taken out a rather lovely quarry tile floor because

it was a solid floor, which the foot of soil or thereabouts underneath is

currently sitting in the back garden, waiting to be re-landscaped.

Unfortunately, because the road is narrow,

they weren't able to get a skip outside.

Getting materials in and out can be a real issue

and well worth thinking about. This lot will be taken out of the back,

loaded up for dispatch.

But what about the upstairs?

Oh, that's more like it.

They've rebuilt those wobbly walls.

Good job.

My wife is responsible for doing all the painting of anything wooden -

doors, skirting, picture rails, round the windows

and I rollered everything else.

So we work quite well together, but she's worked incredibly hard

and a done a lot of hours with a paintbrush.

Adam's wife Philippa wasn't the only member of the family getting their hands dirty.

# Dig it, dig it... #

The lucky people who helped me dig the whole of the floor out

were my sons. They did a bit,

and also friends of theirs as well who were quite fit and healthy.

They were a bit tired after the two days it took to do it.

And to complement the hard work done by the family and friends,

there was a team of builders that did the skilled work

such as rewiring, plastering, plumbing and the central heating.

They toiled away in the week

and then they passed the baton back to Adam and his team at the weekend.

# I'm ready for the weekend, weekend, weekend... #

So the other challenge we've had is that we both work full-time,

my wife and I, and we live about 50 minutes to an hour away.

So we've done this in spare time that we don't have,

so we've been here every weekend for about ten weekends

and partly evenings and sometimes in the week, so we've both been here.

It's been quite tiring and if anyone is thinking of doing this,

in a timescale, they really need to throw some hours at it and

be prepared to do some tired and late nights.

Well, it might have been hard work, but all the effort has certainly

produced a much improved property.

But with a couple of weeks still to go to finish off,

mainly in the back garden, their timescale has slipped a few weeks.

But has their budget remained on track?

So, we had an original budget of around 12,000.

We lost it in some of the plastering, we had a bigger job plastering than we thought.

We've done a lot more carpentry work,

which we've had to pay somebody to do as well.

We're probably rising towards 15,000 rather than the 12.

We always knew it would go over.

And, along with the 15 grand budget,

Adam reckons he spent four grand on auction fees

so with his £76,000 purchase price,

he's in this for a grand total of 95 grand.

So, has it been money wisely spent?

What do two local property experts think?

This is my second visit to the property and my initial thoughts

with the renovation is, it's done pretty well.

It's right for this type of property, good neutral decor.

I think there will always be a good sort of resale

with this type of property.

First impressions of this property are that it's clean,

it's tidy, very functional and perfect for the rental market.

Adam is keen to rent the property out,

but having spent in total 95 grand, is this a solid investment?

I think for resale purposes,

you're likely to achieve in the region of £110,000.

For resale, I would offer this property to the market at £110,000.

That is exactly what we thought, somewhere between 100 and 110.

If they'd gone to the top side of that, that's brilliant.

So it's what we expected. So, yeah, happy with that.

So, a pre-tax profit of 15 grand might be available to Adam

but this is all about the house's rental potential.

For rental purposes, on the open market,

in the region of £500 per calendar month.

On the rental market I would expect to achieve

in the region of £525 per calendar month.

That's interesting, because we've had a couple of people out

and we are way above that in what they're saying.

Whether we achieve it is another matter.

We'll see how that goes, but I think we'll get above that.

Yes, in fact, Adam is currently marketing the house

at £650 per calendar month which is quite a jump

from the agents' £500-£525 per calendar month valuations.

But the average of the two would see a rental yield of above 7%.

So what's next for Adam?

We've already bought another house,

a little bit closer to home this time, down in Northamptonshire,

and we'll be looking to not travel perhaps an hour each way

on top of eight and ten hours at the weekend

so, yeah, we've already moved on to something else.

Silverdale is a town just a mile from Newcastle-under-Lyme.

For over 100 years, it was home to a large colliery

where coal was mined, and for that reason much of the housing

in the town is made up of traditional terraced houses

built for miners and their families.

Whilst Silverdale colliery closed in the 1990s,

the attractive terraces remain alongside more modern developments.

I'm here to see a terraced property

but it's not your average two-up, two-down.

Here it is. It was most recently used as an office.

Before that, it was two separate residential properties,

now with a big commercial space on the ground.

It had a guide price of £75,000.

I'm intrigued to find out how it works on the inside.

It sounds like an office

and everything about this screams "office",

from the carpets to the ceiling to the flooring.

So it could make a great commercial space, as it already is,

but I happen to know this comes with planning permission

to put it back to two residential properties and actually

it's very obvious where the properties were once separated.

Look at the length here. Loads to work with.

I'm intrigued to find out what else there is.

I'm going to have a look.

Through to the kitchen, it's clear to see this has been an office kitchen -

the wood-panelled walls.

It needs a lot of love and attention,

just like the rest of the ground floor.

It's been fine for commercial purposes,

but you want to make it feel homely

and that will require a bit of effort.

Now, looking around this ground floor space,

what's clear is there's so much space,

more space than anyone would ever really need for a living room.

So, with Keele University just a five-minute drive away,

why not think about making this into an HMO property?

So, multiple occupancy for students.

It sounds like a great idea to me.

MUSIC: Handbags And Gladrags by Stereophonics

So, it could be time for this office to clock out,

and time for you to cash in

with a potentially lucrative house of multiple occupation.

Let's see if the rest of the house fits the bill

as well as the ground floor.

Upstairs, the layout's pretty baffling.

So you have a long stretch of rooms,

room after room,

and you also have that mirrored on the other side.

So much space,

I'm pretty sure you could get at least five bedrooms in here.

And the more I look around, the more I think it's perfect for an HMO.

Of course, you have to get a change of usage,

and that's very important - it's not always a given.

The layout is baffling. You need to get your head round that.

It's very functional. Clearly it's an office

but look past all of that and there's loads of options.

There's currently seven rooms up here as well as a bathroom.

I'm thinking, change that into five habitable rooms

and keep the bathroom where it is.

Any more than five bedrooms up here and you'd need a second bathroom,

based on local HMO guidelines.

Let's see what an agent from the auction house that sold it

thought of the commercial premises,

guided at £75,000.

It's a bit of a maze as you walk around the property,

trying to get a feel for it as it was

and how it's been used.

But it could lend itself to a number of purposes

for that potential client.

It could be a business, it could be two houses,

but does the agent agree with me that this spacious lot

could make a great HMO?

Where the property's situated close to the university,

it does have that potential for student accommodation.

Of course, if you didn't want to go with the current planning

for two houses, and preferred it as a HMO,

there would have to be an application for change of use and,

of course, you would have to comply with HMO regulations,

install all the health and safety features required,

like smoke alarms, fire doors

and the appropriate bathroom and cooking facilities.

Could there be any other stumbling blocks with this property?

One of the main issues with the property,

whether it be for residential resale or to let,

will be the parking in the area.

It is on-street and on the road parking,

and there's not much access and space to the rear.

If you were renting to students from the nearby university,

it's not likely they'd all need parking

but I'd have a chat with the planning department

to get their take on it first.

So, what kind of rental could the house achieve on the HMO market?

If the property was converted into student let rooms,

we would look to place the rooms available

somewhere in the region of £70 per week per room.

And what if you were to turn the property back into two houses?

What could they be worth on the sales market?

We would look to place the properties for sale

somewhere in the region of £90,000 per house.

Having options is never a bad thing, and here you have lots.

Plan A, you could keep it as a commercial property.

Plan B, you could change into two houses,

and it already comes with that planning permission.

Or Plan C, you could ask for change of usage to multiple occupancy.

Who knows? Somebody might have thought of a Plan D

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

Guiding it at 75.

I'm going to say 65 to start.

Gotcha. Thank you. 65 bid.

At £65,000.

Going once, bids at 65.

66 on the net.

66 in the room.

The bidding climbed slowly but surely,

and as most of the bidders in the room fell away,

an internet bidder was still battling it out

with the remaining room bidder.

We rejoin with the bidding at 98 grand.

98 on the net.

98. 99.

100 on the net.

100. 101 in the room.

Net's out. 101, then.

In the room at £101,000.

102, anywhere else?

If not, I'm selling it at £101,000 for the first time...

£101,000 for the second time...

Third and final time, 101...

Sold to you, sir. Thank you for your patience.

The successful bid of £101,000 came from husband and wife

Mark and Alison, who are professional property developers,

and I met them for a chat to hear all about their plans

for their newest acquisition.

-Alison.

-Hello.

Hello, congratulations.

-Mark, congratulations.

-Thank you.

Now, what attracted you to this place particularly?

The size of it. We thought it would be a good property to use as an HMO.

How experienced are you in property?

We have about 20 properties altogether,

some HMOs and some normal properties as well.

So, a lot of people would love to do that,

but you've got to start somewhere.

Tell me how you started and built that up.

It was back in 2006, wasn't it, when we really...got married,

we bought our first one.

And it just ballooned, really.

We went from one property to this,

but it was always Mark's dream to do this.

# Dreams can come true

# Look at me, babe, I'm with you

# You know you got to have hope

# You know you got to be strong... #

With 20 properties under their belt,

Mark's dream has certainly come true.

But it's wake-up time, with rather a lot to do.

So what's the plan?

Hopefully, upstairs there will be five bedrooms.

-Yeah.

-There's fairly... five bedrooms layout there now,

so we won't need to change the layout much.

Erm, we'll split the bathroom into two bathrooms.

Downstairs, here, we hope to have three bedrooms,

a decent-sized living room and two kitchens downstairs.

-There's a lot of layout work to be done.

-Yes, an awful lot.

Yeah, we need to put a new door in to get from one side of the house to the other.

The layout upstairs at the moment,

one side of the house hasn't got a bathroom.

There's only a bathroom on the one, on the other side.

So we need to put a new door in between the two sides,

so that one side can get through to the bathroom on the other side.

There are a number of things that make this feel like an office as soon as you come in.

The windows at the front, they take up most of the front,

which is unusual for a house.

What would you plan to do there?

We'll hopefully rebuild the wall at the front of the house

to replace the windows, and make it back into a house.

The ceilings? Again, very officey. Plans there?

This is just a suspended ceiling.

It's not too much trouble to take it out.

It's only a lightweight suspended ceiling.

The original ceiling is still in place above it.

And have you converted any commercial space before?

We've done one. Yeah, that was into five bedrooms.

That was at Hanley.

What was the biggest obstacle you faced when

converting the commercial before?

-Planning permission?

-Definitely, getting planning permission, yeah.

Yeah, it's difficult.

It's quite a big thing getting plans drawn,

putting them all in and waiting to see if they give you permission or not.

Do you have any concerns when it comes to the change of usage

to an HMO, anything that might hold your application back?

I think the main thing is going to be the parking.

We've only got parking on the street outside.

There's no parking at the back, so that could be a problem.

If they can't convert to an HMO and rent the rooms out,

Mark and Alison do have a Plan B.

They'll stick to the planning permission in place,

and change the property back into two houses and sell them on.

Let's hope it doesn't hold them up too much.

I think it'll take at least two months

to see if the plans get passed.

After that, maybe three to four months to do the work.

So from now, five or six months.

And budget?

I would hope to keep it around 20 maybe.

But it's only an estimate. We're flexible.

And in that 20, what have you got earmarked?

What do you think the big chunks of money will go on?

There's some structural work to do,

building up the front wall to replace the office windows.

There's no central heating in here,

so that'll be quite expensive to get a full boiler and central heating system put in.

We've no gas supply, have we, yet?

We've got the pipe, but no gas.

There's no gas in the building.

I'm guessing you have good tradespeople lined up,

you have people you know and trust to do a good job for you?

Yeah, we've got people we've used on other projects we've done in the past.

So hopefully we'll use the same people again to do most of the work.

And you're dab hands at this, you're experts.

Does it get to the stage where you're, like,

"Yeah, we can do this. No worries"?

Yeah, but this is the biggest project we've took on so far.

So watch this space, really.

It's always a concern when you're trying to get things done.

Are you going to get permission?

How much do you have to spend?

There's always lots of worries, but so far, everything's ran OK

so hopefully, this will, too.

Well, there's lots to do.

But I feel like it's in the right hands.

Best of luck, and congratulations again.

-Thank you very much.

-Thank you.

Alison and Mark have plenty of experience,

but this project is their biggest by far,

and there are lots of question marks over layout and planning.

Will they find the answers?

You can find out later in the show.

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

but what about the other two?

Yes, will they look any different,

and has all that time and money been well spent?

Let's go back and find out.

Time to head back to the Welsh Valleys,

where I saw a rather charming bungalow

that was set into the hillside.

So what have we got inside?

Well, you walk into this very strange room.

It's obviously the kitchen, but it's the full width of the bungalow.

Now, there's no way this was the original design.

I reckon this is some kind of an extension.

And it is kind of unusual.

The side extension felt cramped,

and the ceiling rather low,

explained by the pitch on the extension roof, which in my opinion,

was not at the right angle if you wanted the rain to run off properly.

# Something unusual... #

However, the rest of the layout was pretty standard, with two beds,

a bathroom and some attic space.

Retired maths teacher and bricklayer David

bought the bungalow for £78,000 with his wife Heather.

They hoped to flip the property,

and the proceeds could go towards their retirement fund.

So why this particular house, then, Heather?

-Well, originally...

-Why are you laughing?

When we went to the auction, we were going to bid on another house.

-Oh.

-And then, this was a last-minute addition.

He said, "We haven't seen it, we can't go for it."

I said, "No, but it's lovely."

But we didn't actually see inside until yesterday.

Oh, wow. And what did you think

when you walked through the door yesterday?

-I was pleasantly surprised, to be honest.

-Yeah.

I know it needs a bit of work updating, etc.

But... Some of the places we've been to see at the auction,

this is a palace!

At least they did follow the golden rule and read the legal pack.

Heather and David planned to have their palace turned round in six months.

However, two YEARS later, we're back.

Will the red carpet be out for us?

MUSIC: Raise The Roof by Tracey Thorn

# What you do

# Raise the roof

# Everybody

# Wants you to... #

The new roof has raised the game of that extension,

which now houses a brand-new kitchen.

The new roofline has created a bright, airy space.

The old side entrance has been replaced with a new window,

and means there's lots more work space.

No red carpet for us,

and the old carpets are still there, awaiting replacement.

But down the hall, the old bathroom suite is, thankfully, gone.

Quality units and finishes in kitchens and bathrooms

make this a spot-on renovation.

The rest of the house has been given fresh decor

and once the new carpets have been laid,

it'll make the place feel open and modern.

The house has been rewired,

and a new central heating system is installed.

David has had to travel up from Northampton,

so stayed here when doing any of the work

with Heather and her brother, Brian, helping out where they could.

Their dog Caffrey

no doubt gives this renovation a "paws-itive" review.

Ouch! But that doesn't mean

things haven't been "ruff" getting to this stage.

Brian, my brother, came over to help David quite a lot.

But then he had to have two cataract operations on his eyes.

So unfortunately, a lot of the time,

he couldn't help David as much as he wanted to.

But he's been a great help doing the kitchen, all the heavy helping,

shifting things around.

And some painting.

-Yes, he's been a godsend, really, hasn't he?

-Yeah.

And sadly, it's not just Brian who had issues with his health

over the last two years.

I had to have a major operation,

so that put me out of service for quite a while.

But I've mainly been...

Little bits and pieces, painting, helping.

I had a bit of a setback as well,

because I had to have an operation on my hand,

and the surgeon said that actually it takes 18 months

to get over it completely.

So, that set us back a little bit, as well.

So, between the three of us, yeah, we had quite a few setbacks.

Plus the weather.

It doesn't rain a lot here.

It just doesn't rain, it RAINS!

So, there was a lot of outside work on the actual building, wasn't there?

-Yes.

-And that put us back quite a bit.

# When it rains, it really pours...

And the knock-on effects of the health issues didn't stop there.

David's had to travel backwards and forwards.

Because of my ill health

I had to stay in Northampton a lot of the time.

So, a lot of the time he's been a one-man band here

doing everything herself.

Going away on the Sunday night,

coming back on the Wednesday night or the Thursday, back on the Sunday,

and that's been going on, other than your hand, near enough all the time.

That's right, yes.

Thankfully, everyone seems to be on the mend.

David and Brian did most of the work,

but pulled in the appropriate tradespeople

for the central heating and rewiring.

The good news is that they haven't gone wildly over their 15 grand

budget, having spent £16,000.

So it's been trying times for the trio.

Will they triumph over adversity?

We asked two local estate agents along for a look.

First, the agent who saw it the last time.

I think the changes that have been made

are to a really high standard.

They fit in very well with the shape of the property.

And it would be nice to see the work finished.

The standard of finish is absolutely right for the area and the property

itself, because somebody who wants to buy this property

would like to move straight in, and it's ideal for that type of market.

Heather and David has spent a total of £94,000 on this bungalow,

and are looking to sell this one on to fund their next project,

so what could this bungalow be worth?

I'd advise an asking price of £130,000 on the open market.

This property could achieve, on the open sales market, when finished,

£130,000.

130,000. I suppose that's in the region of

what we thought it would be.

So, yeah, I think that's about right.

Yeah, I think, quite happy with that.

A £36,000 profit minus taxes and fees isn't too bad at all,

and that money will be invested in another property.

But this time one that's more suited to bringing in a rental income

that will supplement their pension.

But before any of that, first things first.

We've got a snagging list to do,

so, inside, we'll do work on the snagging list.

And then we'll think about it.

And then, yeah, and then we'll get a month off!

We're supposed to be retired - that's the thing!

Silverdale in Newcastle-under-Lyme is somewhere we've visited

frequently on the show, but we've not seen much quite like the lot

I saw earlier.

What had been two residential homes had been made into an office,

and the 75 grand guided lot

now came with planning permission to change it back into homes.

# Change your heart... #

Now, looking around this ground-floor,

what's clear is, there so much space.

So, with Keele University just a five-minute drive away,

the more I look around, the more I think it's perfect for an HMO.

# Everybody's gotta learn sometime...

HMO for students is what Mark and Alison had planned

for their 101 grand purchase.

The couple were the type that learned on the job,

having followed Mark's dream of being property developers

and they'd amassed 20 properties,

including a commercial unit they'd converted.

What was the biggest obstacle you faced when converting the commercial before?

Planning permission, would you say?

Definitely getting the planning permission, yeah.

Yeah, it's difficult. It's quite a big thing getting the plans drawn up

and putting them all in and waiting to see if they're going to give you permission or not.

In university degree terms, I thought their timescale

of allowing two months for planning permission

and then four months to do the work was a Geoff Hurst -

that's a first...

class degree.

But the 20 grand budget...

hmm, more of a Desmond which, of course, is a 2:2!

Nine months on, will a bunch of young students

be setting up home here?

MUSIC: The Kids Are All right by The Who

# I don't mind

# Other guys dancing with my girl

# That's fine

# I know 'em all pretty well

# But I know sometimes I must get out in the light

# Better leave her behind with the kids, they're all right

# The kids are all right

Six rather than the claimed eight students will live here,

but Mark and Alison have gone for a much higher standard,

with ensuites in every room.

# Sometimes

# I feel I gotta get away... #

And, if you need to slip away,

each room has its own dedicated study area.

There's also a bright communal kitchen and living area, too,

and this feels a notch up from usual student digs.

The kids are all right.

But did Mark and Alison make it through the planning process OK?

Before we started, we had to get a change of use permission from the council.

That involved putting an application in to the council and then

they have an eight-week turnaround time to give you their decision.

There was no issues with that. It was granted without any problems.

To have planning permission, we had to get an architect,

and then he had to submit the application to the council.

It takes a long time to come back,

and you're waiting a lot of time thinking,

are they going to grant it or not? But there was no problems with it.

It all came back OK, approved.

-It was really frustrating, wasn't it, waiting all that time?

-Yeah.

The last part of the project is the exterior of the building,

and it's one of the reasons they're three months over their timescale.

At one stage, we thought we'd just put a window in the front on the one

side and leave the big window that was already there on the other side,

but once we'd done the first one,

we decided the other one wouldn't look very good, the existing window,

so we decided to do the second one as well.

That meant we had the put a second planning application in to get the

permission to brick up the other window.

So, we put that in, that took another eight weeks to come back,

and the reason we put blocks in the second window was because we

decided to render the front, which still remains to be done.

The builder's going to start that soon.

So, it didn't matter what brickwork was there,

because you wouldn't see it, because it would be rendered.

And he's gone off on a well-deserved holiday.

He'll do it when he comes back.

So, what were the other big challenges facing them?

That's got to be the water.

Definitely, yeah. The biggest challenge was getting

the water supply in to feed the ensuites. It was a big job.

We wanted to put six ensuites in the house,

but we found out that the water supply coming into the property was

insufficient to support those, so we ended up doing it a different way,

and putting four tanks in the loft

for stored hot water,

which was quite a big job. Erm...

So that's what had to be done to get the water for the ensuites.

The standard is really good for the students,

but would Alison and Mark pass a course in project budget management?

Yeah, the budget is a bit over,

but we had to do a lot more than we originally planned.

Yeah, we did have, originally, a £20,000 budget.

I do the books, and I was watching all the invoices coming in, and in, and in,

and it's ended up at about £28,500 we've spent.

I'm afraid, Mark and Alison,

that a mere 50% overspend will lose you marks!

But I will award extra credit for pride taken in your work.

I feel really, really chuffed.

I think it's our best one to date.

To see the change from what it was to this,

it makes you really, really proud of what you do.

I don't think we'd do anything bigger.

It was very stressful getting this done.

We've enjoyed it, though, haven't we?

So, we've had a few tears and frustrations...

-Yeah.

-But we enjoyed it.

-We're relieved now it's finished.

-Yeah. Very.

Sounding like a student after his finals there, Mark,

but will it get top marks from two local property experts,

including the agent who saw it before the renovation?

Yeah, there's been a huge transformation in the property.

All done throughout, but absolutely fantastic job.

Great first impression for anyone coming in, looking to, obviously,

with the room shares.

But very clean, tidy.

Excellent job that he's done throughout.

The standard of finish and the overall layout of the property is

absolutely excellent.

That overspend

has meant this project has cost Alison and Mark £129,500.

What kind of per-week rental would they be achieving?

Per room, you would be looking at £100 per week,

40 weeks of the year.

We would look to market each room in the region of £80 per week.

The figures for the rental are not far out.

So far, I've let four rooms out.

One at 85, two at 90 and one at 110.

Those rental figures they've achieved

would give them an 11.5% yield,

and the rooms aren't let out all year round.

And they still have two more rooms to let.

Letting those two other rooms could bring their yield up to around 17%.

So, a long, stressful semester comes to a close.

But will Mark and Alison keep chasing their property dreams?

If we found the right property, yes.

And believe me, he'll find one.

HE CHORTLES

We hope you enjoyed watching

and maybe learnt something along the way.

Yes, and if we've done something to inspire you,

then we've done our job.

So, join us next time for more inspiration

on Homes Under The Hammer.

-Bye-bye.

-Goodbye.

-Bye-bye.