Episode 55 Homes Under the Hammer

Hello and welcome to the show.

Now, do you ever feel like a change of career,

maybe giving something else a go?

Well, property developing appeals to lots of people looking for a change

of lifestyle and a chance to be their own boss.

Yes, and it's not as easy as it seems.

But there's one place you can start, your local property auction.

Now, if you find it tricky picking that one property out of many on the

market, I think the auction house could be the place for you.

Yeah, but it's good to keep your options open and do your research on more

than one property, in case your first choice...

Well, you're outbid on it, for instance.

Let's find out what today's buyers did manage to grab hold of when they

went to auction.

On today's show, I eventually find just what I was looking for at this

former chapel in Devon.

Now, that's more like it.

I'm at the Lancashire coast to see a retirement property but, before I do,

better get the kettle on.

Lovely wee tea trolley.

And in Derby, if you think I've learned my lessons about cracking

bad jokes, well, think again.

That is proper...

..old school.

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.

Sold. It's yours, madam, well bought.

I'm in Princetown, Devon.

Set in the beautiful landscape of the Dartmoor National Park,

the village dates back to 1785 and was named after the Prince of Wales

because it was built on moorland leased out by the Duchy of Cornwall,

the Prince's estate.

Dartmoor is also well-known for the ponies and the prison and there's

usually some interesting property, too.

I'm hoping for something rather special in this lovely location.

What I'm here to see is this, a former Methodist chapel,

built in the late 1800s and a guide price of £65,000 to £85,000,

very imposing it is, too, built out of solid local granite.

It's played all sorts of roles in the local community in recent times,

but let's see what its future holds.

I'm pretty excited to see inside this grand building.

I'm praying for light to be streaming in through the giant windows

and discover it's blessed with plenty of original features.

Hoo-hoo-hoo!

OK, OK, OK, OK...

Oh, dear.

That wasn't what I expected.

Where's the big room with the high ceilings and the original features

and oak floor and pews and organ?

Oh, well, what have we got down here?

More like... I don't know, an officey admin area.

We've got lots of little rooms. There's one there.

There's that little entrance porch that I came through.

What's that? A little room.

Kitchen area there.

Bathroom.

A bit flat really.

# Don't let it get you down

# Don't let it get you down. #

Up the stairs to the left and you'll be let down by the kitchen and more

of the same office-type rooms split up by partition walls.

And there seems to be a serious issue with the roof,

which isn't good news,

but it does offer a glimpse of what's down the hall.

Now, that's more like it.

That is what you'd hope to have seen when you walked through the front door.

But...that's looking up. Looking down, yeah...

As you can see,

a floor, or rather a ceiling has been put in for whatever it is that's downstairs.

And this bit of the building bizarrely doesn't look like it's

been utilised, well, for anything.

How very odd. Because this is it, isn't it?

This is what you want. What could this be?

Can you imagine this as an amazing room?

Look at those windows.

You are going to have to face various issues like...

With a building like this, all the sort of conservation stuff going on.

You know, your windows are going to be paramount.

Getting those changed to something that is going to be warm is going to be

a bit of a challenge.

But look at the brick, the natural stone there.

Just the feeling, that loftiness, the beams.

Wow!

A building like this really gets your developer's brain buzzing.

What would you do with it?

One house, perhaps?

Well, it would certainly be spectacular.

But I don't think it's quite right for this location,

not least because you haven't got a garden or parking and the amount of

money you'd hope to get back, I just don't think you would.

So, flats perhaps.

Well, yes, that would work.

Maybe two, three, possibly even four flats.

Same issues - no garden, not so much an issue. No parking, big issue.

What else? Leisure centre?

Nice place for a dance place here.

Maybe a gym.

Community centre.

Wow! It really is one that gets the brain buzzing.

And there's no easy answer.

Parking would seem to be the issue I keep coming back to.

But perhaps an agent from the auction house that sold it will have

an answer that I haven't come up with yet.

The property, because of its scale and size, could easily be

converted, I believe, into residential accommodation,

whether that be a horizontal or vertical split into either flats or maybe

houses. Maybe three units is probably the maximum I could see being

passed by the planning authority.

Before making any decisions,

it's good to know what kind of market there would be for flats in

Princetown.

I don't actually know if there's any other flats or apartments in the

vicinity. I've certainly never seen any.

It's all terraced houses

and sort of detached residences.

So to have flats here would be quite unusual and untried and untested.

Hmm...that is interesting.

So it certainly wouldn't be straightforward.

If residential planning was granted, however,

what could potential residential dwellings sell for here?

If the property is converted into probably two-bedroom flats,

that sort of apartment size could fetch somewhere in the region of £120,000 to £125,000.

If it was converted into a three-bedroom terraced house,

maybe two or three of them, they could fetch individually maybe £135,000 to £150,000.

Well, it's a big, bold building with bags of potential for sure.

But it's going to take divine inspiration and someone with tonnes of cash

to sort it out. Let's find out who that was when it went under the hammer.

We move to one of my more favourite lots of the catalogue, actually.

But it is just a handsome old building in part of the moor.

So, 75.

OK, I won't go any lower than 60. 60,000. 60.

Three hands. 60.

No, not a bit. Sorry. 60 on the right, though, I'll take.

60, we are away. At 60.

At 60. At 60,000 for the first time.

62 and then I'll take 64 from you, sir, sat behind.

All very close. 64.

66, I'm looking.

With the scarf.

A few bidders were competing for the property and we rejoin the bidding at 76,000.

Behind, 76?

And 78, may I?

78, he goes. And 80.

80. And two?

Shake of the head. You are in, sir.

Seated at the back. At £80,000.

For the first time. Are we all done?

Selling at £80,000...

Sold. Congratulations.

Well done.

The successful bidder paying £80,000 for it was

Princetown local Paul. He has lived in the village for 16 years and is very familiar

with the former chapel, from when it was the local community space.

Paul, good to meet you.

-Hello.

-Wow!

Project and a half, then.

How does it feel now you've bought it?

Strange.

To say the least, yeah.

But, no, it's going to be an interesting project.

No kidding. What are your plans for it, then?

Hopefully we are going to be very sympathetic with the property.

Have two flats upstairs, a flat downstairs...

-Oh, really?

-Incorporating at the back of the property three garages,

which can't be seen from the road.

Oh, right. So actually build the garages into the building?

-Into the building, yeah.

-Cut a big hole in the side.

Yeah. A bit like a coach house, really.

Ah, that's an interesting way...

Because that did strike me as the biggest hurdle you would face, or anyone

would face, developing it, is finding a place to park cars.

It all depends on the National Parks.

-Yeah.

-And then, once we've been through the National Parks,

we've then got to write to the Duchy to get clearance from the Duchy

because they've put a couple of covenants on it about alteration to walls,

or any of their fences, anything like that.

OK. A fairly big...

Big challenges and problems if you don't get agreement for that,

wouldn't you have thought?

Well, we will change it into storage units or...

I joke about a swimming pool in here and put a gym...

-Well!

-It's big enough.

-Yeah.

I wonder if there's a market for that. I hadn't thought about that.

But plan A is to convert it into flats.

-Yeah.

-And why did you decide to go down that route?

Retirement fund. Pensions aren't doing anything.

So try and get some money back through investment through property.

So the idea would be to build them and then rent them out?

Yeah. And then, maybe later on, sell them.

Paul has some experience in renovating properties,

particularly non-standard construction houses,

also known as Cornish units,

where he has re-blocked them and made them mortgagable again.

This late 19th-century goliath with covenants, though,

that will certainly be another thing altogether.

-Anything on this scale?

-Nothing on this scale.

-Right. OK.

-First time for everything.

Well, I know, absolutely. So, what's the project plan?

How are you going to go from where we are now into what you'd like it to be?

-Talk me through the plan.

-We've got an architect coming up on Thursday.

So he's going to do the initial drawings and then see what he can make of

the property. Then we hope to basically gut the whole building.

So it will be a shell, the outer shell.

-Oh, right.

-Obviously, going into flats,

we will probably put beaming block floors in.

Things along that line because it helps with the fire regs.

-Right.

-Concrete stairways

-at the back.

-Right.

-Yeah.

-What is it going to be like up here?

Because, obviously, this is a fairly spectacular room, as it is.

Are you going to keep the lofty ceilings and...?

Depends on

how we can get around the insulation problems.

So we might have to extra-insulate the roof to compensate for the walls.

-Right.

-We won't touch the front.

Can't do anything with the front. We are in a conservation area. So that will have to stay.

So have you had preliminary discussions with the planners?

-No.

-Oh.

That's going to be an interesting day for you, isn't it?

It is.

I'm on the parish council, the local parish council.

So I do know some of the planners

and I know what they're looking for

within the National Park.

This is a big project but, as yet,

Paul doesn't have a figure worked out. But he does have a plan for the

-work.

-I'll do a fair bit of work.

-Right.

-My wife will do a bit of work, as well.

Project manage.

We've got a lot of builders at the moment up in the village

who haven't got work.

So, yeah, they want to get in and get on with it.

OK. What about timescale?

Depending on planning, but we are looking at about 18 months.

-OK.

-Realistically.

Are you excited by it?

Yes. Definitely.

What do you do when you're not doing this kind of thing?

Fork truck driver at a local food factory...

-Right.

-..and a retained fireman.

-A retained fireman.

-Yeah.

Oh, fantastic.

So you're on call, are you?

Yes. I'm on call now.

-On call now?

-Yes.

So if my beeper goes off, I'll be saying goodbye.

Well, absolutely, you've got a job to do.

Quite right. Well, congratulations.

-Good luck.

-Yes, lovely.

-Super.

-We look forward to seeing how you get on.

-Thank you very much.

Well, for this one,

local knowledge and contacts is certainly the key

and Paul seems to have those in abundance.

However, this is a conservation area, a National Park,

and there are covenants from the Duchy of Cornwall.

This one could take a while.

You can find out what happens to this place later in the show.

Lying four miles north of its more famous neighbour Blackpool is the

altogether more serene town of Thornton-Cleveleys.

Boasting its own beach along with the promenade and Jubilee Gardens,

the area has benefited from recent large-scale improvements.

The property I'm here to see, well,

it's one where you definitely want to read the small print because the

auction catalogue describes it as an age-restricted flat

in a managed complex, which basically means

a retirement community.

Now, there are some legal fees that come with the purchase of the flat

and also there's no mention of how long the leasehold is in the catalogue.

So this is one where you want to read and reread the legal pack.

Well, here is the complex.

It's ground floor, one bedroom, guide price of £25,000 plus.

Let's look inside.

It's not often we get a property in a retirement community, so let's find

out what's going on with all the additional fees and the leasehold.

Inside, well,

it's exactly what I thought it would be like in a retirement complex.

It's sweet, it's quite small, dinky,

good storage space to one side of the hall and on the other

you've got your bath, a shower, and your washbasin.

And the place is...

It's dated, it's not been loved for a while.

That bathroom, for instance, has been in there for decades.

Wallpaper is coming off.

Here you've got suitcases, bin bags, chairs,

and then you have your fitted wardrobes, which really dates the

place in the bedroom. You'd want to take that out.

I've also spotted storage heaters,

so you might want to think about getting your gas central heating in.

But, of course, because it's leasehold,

you would have to check with the freeholder.

But, all in all, nothing's worrying me so far.

It's a nice wee place.

This purpose-designed flat is perfect for someone in their golden years

and as there is an age restriction on it,

its market will be restricted, too.

So anyone bidding for it needs to be aware of that.

Through to a reception room, lovely wee...

..tea trolley! I'd say this place hasn't been redecorated since the late '80s.

But what you can tell, it's got a charm,

somebody has loved this as a home.

Well, here's your kitchen.

As a kitchen, it works layout-wise because it's actually quite nice how

you have the differentiation between this and your reception room, but you

still have a form of open-plan living.

So a nice wee kitchen area, but definitely needs replaced.

Now, I've spotted, in each of the rooms,

you have a pull cord which will alert a warden,

who is on hand 24 hours a day in a retirement complex like this.

They are absolutely critical.

Spotted a wee veranda as well and the sun is out just now,

you can picture having your cup of tea with breakfast.

It's really quite charming.

You know, the place is dated, it absolutely needs a redecoration.

New kitchen, new bathroom,

but it wouldn't take much of a budget to really make this place sing.

Yes, get it right and you could be hitting the high notes here.

But something that could leave you flat with this flat is the management fees

that also have to be paid.

These include services such as the upkeep of communal areas

and for staff to monitor the emergency pull cords,

which could total thousands of pounds a year,

not to mention the uncertainty over the length of the lease.

Still, if you got this flat for a song, would it be worth the risk?

Well, we rang a local estate agent and asked him to come along

to see what this flat, guided at £25,000 plus, could be worth.

Once this property is done up,

I believe the remarketing value would be around £55,000 to £60,000.

This is a flat with a very specific market.

You're definitely not looking for students to move in.

It has a real charm to it.

And we're always saying, do your research, read the legal pack.

But with a property like this,

it is particularly important because there's no mention of how long the

leasehold is in the catalogue.

So let's find out who did their homework when it went to auction.

It came at the very end of the day, but was the best saved till last?

25 is your guide, then.

Start me, 25. 20.

20 bid.

At 20. 21. 22.

22. 23. 24. 25. 26.

26. 27. 28.

Late as it was, there were still a few bidders interested in this lot.

We rejoin the bidding at £41,000.

At £41,000 for the first time...

Second time of asking...

I'm selling at 41.

Half, new bidder.

42. 42.

And a half.

Half. 43. 43.

And a half. Is that out?

43, with you, madam.

£43,000, with you and against you.

I am here to sell. First time...

Second time... Are you done?

Selling away, then...

Well done, madam.

After a bit of a battle,

the successful bid of £43,000 belonged to husband and wife

Rick and Debbie. I'm excited to hear their plans for their latest acquisition.

-Congratulations.

-Thank you.

Is this your first property?

It's something we do together and have been doing a number of years now.

-Ah-ha.

-So we started with

buying houses to rent, so we've got a portfolio of properties

and then we bought a letting agent to look after our stuff and, obviously,

other people's stuff and two years ago

we sold the letting businesses and started buying to sell.

OK. So you still have your portfolio of rental properties?

-Yeah.

-Yeah.

-And you also are enjoying the turnaround of selling on, too?

Yeah, which is different to the letting,

where we sort of keep that and it's ongoing,

where this is different to buying it,

doing it up and then selling it on. So, yeah.

It's a lot less hassle, buying a house and selling it,

rather than doing it up, renting it and then looking after it that way.

So, yeah. It's good.

Is that a move you are trying to shift towards, doing the...?

I don't know. We have always sort of done the rental.

We have got 70 of our own, which I tend to run the portfolio.

-70?!

-Yes.

-That's good going!

-Yeah.

So it keeps us busy, anyway.

Well, that and you look after...

You do the accounts at the nursery, as well.

We've got a children's nursery, as well.

So, yeah, all busy, busy, busy.

You are like Superwoman and Superman.

This is a sideline.

70 properties and a kids' nursery.

There's no flies on these two.

After being made redundant,

they decided to invest in property way back in 2002 and haven't looked

back ever since.

What about this property?

It's in a retirement community.

Is that a first for you?

Yeah, I mean, your dad actually lives in a retirement property in

St Anne's. So we saw it and loved the concept where you have a communal area,

where people socialise. This one's actually got a salon for the ladies.

They have coffee mornings, bingo nights. So it's great.

It does have a lovely feel to it.

You can imagine somebody living here and being very happy.

Not least when you've done your thing to it.

So what is...? What are the things you're going to do?

One thing is get rid of everything that's in here.

There's been a lot left.

So it's going to be a mass clear-out.

And then we are going to strip the walls back and

I think we are going to re-paper and paint.

New kitchen,

rip out the wardrobes in the bedroom,

just to create more space.

And then bathroom, new bathroom suite,

and we are also going to try and create a walk-in shower.

With it being a retirement home,

we were thinking that people might struggle to get in and out of a bath,

so we are going to try and create a walk-in shower.

So, so far, so rosy, but there's that leasehold.

So there was no mention of how long the leasehold is.

No. We are kind of struggling with that.

Places like this have what they call a management company,

as you will know. And you pay them X amount a month,

which we still don't know. Obviously,

you get your legal pack and it's usually part of that

or an addition to that. And it just wasn't available,

even up to the day of sort of the auction.

And still, since the auction, which, as you know, a good few weeks ago now,

we still haven't tracked them down yet.

So that's for my solicitor.

They'll soon be after us when they want the monthly payments.

That they will and it could end up being more costly than they bargained for.

That, plus the restricted sales market means Debbie and Rick will have to

keep a close eye on their budget.

It's going to be in the region of £6,000 to £7,000.

And your timescale?

three to four weeks, max.

-Yeah.

-Wow!

So you guys really put your mind to it and you shift it when you get...

Yeah, you do. Well, it's your business.

Yeah, it's kind of...

Without being crude, it's dead money just sat here doing nothing.

And somebody might as well be in here enjoying it, as well.

So, yes, as soon as we can get it round, turned around,

get it on the market and hopefully get somebody nice in.

-Yeah.

-Move on to the next one.

Debbie, Rick, can't wait to see what you do here.

-Best of luck.

-Thank you very much.

-Thank you.

-Thank you.

Rick and Debbie are pros when it comes to property.

They've got 70 in their portfolio,

so clearly they know what they're doing.

They've got their budget in mind and a really quick timescale to turn the

property around.

The only potential problem could be not knowing how long

that leasehold is. I still can't believe they don't know what's going on there.

You can find out what happens later in the show.

Coming up in Derby, this house might be a bit of a tight fit for some...

I don't want to embarrass myself,

but I'm going to gamble that I can get this through.

And find out how Rick and Debbie squeezed more features in this flat.

We are especially pleased with the bathroom because we did manage to get

in that extra shower cubicle.

Back now to the village of Princetown, Devon.

So named as it forms part of the Duchy of Cornwall's estate in the

Dartmoor National Park.

Here, I saw this former Methodist chapel, dating from the late 1800s.

I was expecting a big expanse of pews,

high ceilings and maybe even an organ.

OK, OK...

But...

A bit flat, really.

Flat being the operative word.

Because the new owner, retained firefighter, Paul, was hoping to convert his

80,000 purchase into two flats.

We are going to be very sympathetic with the property.

Have two flats upstairs.

A flat downstairs.

Incorporating at the back of the property three garages which can't be seen

from the road. A bit like a coach house really.

We've then got to write to the Duchy because they've put a couple of

-covenants on it.

-OK.

Fairly big problems if you don't get agreements for that.

Change it into storage units.

I joke about a swimming pool in here or put a gym.

-Well...

-It's big enough!

-Yeah.

No stranger to redeveloping, although not on such a grand scale,

Paul still had to decide on a budget.

He had an 18-month timescale and a project manager in his wife Bridget.

We are back four years,

three months and two days later to see the progress,

with no sign of a gym or swimming pool.

Music: Take Me To Church by Hozier

In fact, Paul has built three houses inside the chapel.

Dividing up the structure vertically to create upstairs living areas and

downstairs bedrooms.

This house at the front of the chapel has three double bedrooms,

two sharing a family bathroom,

and a master with a walk-through wardrobe and an en-suite shower.

Access to the other two houses is from the new entrances on the right-hand

side of the chapel. House two in the midsection of the exterior has a

family bathroom off the front entrance hall to serve the two front

bedrooms and a master en-suite bedroom near the back of the chapel.

Paul decided upside down living worked better.

More light in the living areas and, as heat rises,

the bedrooms will be cooler.

Paul installed a total of two miles of underfloor heating pipe.

Property three has two bedrooms.

A family bathroom and an open-plan living space.

The National Park didn't want flats, hence the change of plan,

but I think three houses are a triumph.

Using the same bathroom furniture,

fixtures and tiles across all three houses afforded economies of scale

in purchasing.

Something which also applies to the kitchen cabinets and work surfaces

throughout the development.

Savings from bulk purchasing like these are essential when a project

overruns its timescale.

Over to Paul and his favourite part of the project.

This is the upstairs at the front part of the building.

As you can see, we've got the big windows that we had.

And now we've got a nice, stable floor.

It was a little bit unsteady when we first filmed it but, as you can see

now, it is a bit of a show stopper.

Paul replaced the old rickety ceiling joists with an open metal web system.

This type of joist has greater strength than just timber,

gives better access for running services through,

whilst improving vibration and sound transfer.

But before Paul could install new materials,

he had one of the biggest jobs of the build.

Removing the 280 tonnes of stuff that was inside,

it all had to go out with a wheelbarrow out the front door, so...

And then getting everything back inside because it's quite hard to build

houses inside a big building.

And Paul's burdens didn't end there.

MUSIC: Crying In The Chapel by Elvis Presley

His finances got stretched with the extended timescale,

with an estimated £3,500 going in council tax, water and electricity.

But consumption of mains gas was zero to start with, because it cost

£10,000 to get it into the building.

To be fair, Paul only worked on the project from nine to five three days a week.

The rest of the time was spent on his full-time jobs.

If I brought those three days a week together,

throughout all the weeks that we've done,

it's probably only actually taken a year.

Delays with planning were a major factor but, eventually, Paul found a way.

So, what's it all cost?

Spent near on £400,000 and that's including the purchase price of

£80,000. So the original idea was to have flats and rent them out but,

because we went down the line of building houses,

so we had to basically empty the whole property, and start again,

we decided that we will probably sell all three properties in the end.

So, let's find out from two estate agents the valuations on his three

houses, cunningly disguised as one chapel.

Of the three houses, I favour the one at the front,

just due to the lovely aspect plus also the lovely tall light windows.

The three properties have been converted to a very high standard.

And they've been completed very well.

The garden space obviously for each individual property would have been an ideal scenario.

But other than that, I think he's done as good as he can.

The negative parts about the property is no parking and no garden.

The agents gave a top value for the front house of 210,000,

200,000 for the middle house and 185,000 for the rear two-bedroomed house,

giving a grand total of £595,000,

a potential pre-tax profit of 195,000.

Worth all the effort and time, then, Paul?

Yeah, that's good valuations.

So, any advice to someone wishing to buy a chapel with restricted

covenants in a National Park conservation area?

It's going to be a long road you are going down, so...

But, yeah, do your homework and look forward to it.

The city of Derby sits on the banks of the River Derwent in Derbyshire.

It's where English philosopher Herbert Spencer was born in 1820.

He was a supporter of Charles Darwin's theory of evolution and coined the

phrase "survival of the fittest".

MUSIC: Survivor by Destiny's Child

I wonder if today's property is a natural selection...

This is our property.

Entry, so you've got access to the back of the property, and...

I'm hoping this job was done by "Arthur" at half price because he's

only done half a job. That shouldn't be like that, I've got to say.

Right. Three bedrooms.

Guide price of £68,000.

I'm going in to see what you get for your money.

The steps are a bit too high for my old footballer's knees,

I've got to say. But you are off the street,

you're straight into the first reception room.

As you come in, it does feel a little bit cold.

You can smell a little bit of damp.

Can't see it as yet but it does feel a little bit damp in here.

Old-fashioned gas fire there, look,

which...

They've not finished fitting that. Surely, they haven't.

And through into the second reception room.

And as you come in,

you can see there's damp issues around the window,

you can see this is old-fashioned, as well.

It's a little bit rickety, the stairs there.

Brand-new windows, though. Happy with that.

And then a bit further towards the back of the property,

you've got a galley kitchen.

Now, it's a very narrow galley kitchen

and I don't want to embarrass

myself, but I'm going to gamble that I can get this through.

Here goes.

Ah, not too bad. Get all this out.

Get this kitchen out, get something new in here and then this...

..is an extension.

Now, there is no ceiling in here, and I'll tell you why,

because it's actually sopping wet.

You can see the colour of the wood change.

You've got dark wood, which is wet, and then this is a little bit drier there, with the lighter wood.

Bathroom down here, for me, just doesn't work.

It's really tight, off the kitchen, as well.

Get it all out. Start again.

Find out where that water is coming in.

Reconfigure down here for me.

MUSIC: Rearrange by Miles Kane

To fully get my head around how to fix this layout,

let's have a look at what upstairs has to offer.

At the front of the house is a large bedroom.

But look at this down here, can't ignore this.

It's a bit too small for my backside, but...

Look at this. That is proper old school.

Anyway, let's move on.

Down the corridor, in the middle, is the second bedroom,

which is a pretty decent size.

OK, so down the corridor, then, and before I go into the last room,

I don't mind this feature up here, but that,

that glass there is not going to pass fire regs.

You would need half-hour rated glass in there.

But I'd want to try and keep that feature. I do like the light coming into the corridor.

On this side, though, look at this.

Absolutely sopping wet, that.

Just falling away at your fingertips.

That's definitely got to be sorted and in here, the third bedroom...

Which does feel tiny.

Absolutely tiny.

The dimensions of this room are very, very small.

Would you get a bed in here? Possibly a single.

A very small one. But I believe it would be much better as a bathroom.

Get that bathroom upstairs.

Losing a bedroom might be a radical idea,

so we've asked along the auctioneer, who sold the house, to come along and

give his opinion on the layout issues.

With regard to the bathroom and the kitchen arrangement,

it just doesn't work.

That bathroom needs to come upstairs.

Yeah, you are going to lose a bedroom.

But the bedroom is incredibly small anyway.

I think, get the bathroom upstairs, make the most of what is here

and offer it to the market with what people

would expect for modern occupation.

And if it was put on the resale market as a two-bed property,

what could this house guided at 68 grand be worth?

I would say, if offered to the market to a good standard, this house would

sell for somewhere in the region of £110,000.

And if it was kept as a three bed?

I would say, if you look at the comparison of the sale of a two bedroom or

a three bedroom, the difference would be outweighed by the fact that

bathroom is downstairs.

I would actually say that the figures were the same for both the

two bedroom and the three bedroom.

So, there's a bit of damp at the back, a bit of damp at the front,

and a bit more damp upstairs.

There is a fair amount of work that needs to be done here and a fair

amount of cash that needs to be spent to get it right.

That said, the windows are OK.

Let's find out whose spirits weren't dampened when it went under the hammer.

Mid-terrace, close to town,

accommodation detailed for you in your catalogue there.

Where do you want to start with this?

Who's got £60,000?

Thank you, we are away.

At £60,000, I have here.

61 now elsewhere.

£60,000 his bid and one.

61 is bid and two.

And three now. 63 is bid.

-And four.

-Despite the poor condition of the house,

there were a number of interested bidders vying for this lot.

We rejoin the bidding at £79,500.

And a half. At 79,500 for the second time.

We are selling, ladies and gentlemen, make no mistake.

New place, back of the room, at 80,000.

And a half again. And a half.

81, sir? 81.

And a half. Shakes her head.

Well fought. At £81,000, then, at the back of the room for the first time.

At £81,000 for the second time.

Fair warning, third and final time, the hammer is up, it goes...

She is back at 81 and a half.

Another one, sir? Try one more?

82. No.

You are out. 81 and a half, you're bidding number, sir?

It's 361. For the first time, second time, third and final time.

Sure and done it goes.

Sold at 81,500 and thank you, sir.

Bidder Andy must have property in his blood because he bumped into his

relatives at the auction.

He is following in his parents' footsteps by getting into the

property business.

I met up with Andy and dad Ian to find out why this house

became his first auction purchase.

-Ian, nice to meet you.

-Good to meet you, as well.

Andy, nice to meet you, too, chaps.

-Nice to meet you.

-What made you want this property?

I think the main thing for me was it was in the right location because

it's not far from the unis.

I viewed it twice with both you and Mum. So, yeah...

You viewed it twice and you still wanted to buy it?

Yeah!

Yeah, absolutely.

Some would call us crazy.

Tell me, right... Let's get to the nitty-gritty of it.

Let's start downstairs.

What are your plans downstairs here, then?

Yeah, so, at the moment, what I thought was,

obviously, you've got a kitchen basically down here and then a bathroom.

-Yeah.

-Now, what I'm thinking is take away the bathroom,

put that upstairs...

OK.

And then what we will do is extend the kitchen and have a double doors at the end.

Gotcha. Will you keep a toilet down here?

-No.

-The toilet upstairs.

Yeah, we are going to have the toilet upstairs, switch it around,

as you can see it's going to need a full rewire.

Full works.

Full works.

We're going to need central heating. It's going to need plasterwork.

Everything, basically.

-Let's talk damp.

-Damp, yeah.

There's a lot of it. It's rife in this building.

-Absolutely, yeah.

-Is that going to cost you a lot of money to get it right?

-Yeah.

-It's effort and time, really.

I don't think it's necessarily the money,

it's a case of knowing what to do and how to do it.

-That's the key thing.

-Also, we've got a roof repair that needs to happen.

-OK.

-So the roof is going to be done,

so obviously that will be the first thing that we do, get the roof...

-Get it watertight.

-Yeah, absolutely.

And the same thing down here.

It needs a DPC down here.

-Yeah.

-We are going to do all that, as well.

Regular viewers will know that DPC stands for damp proof course.

This is a treatment to prevent damp.

And there are other techniques.

Either way, you can get a damp proof specialist to advise you on which is

the best course to take.

I'm sure that, in this house,

solving the damp issue is going to take a bit of time and money.

What kind of budget have you got for that?

How much have you got to spend?

I'm going for 25.

-25k?

-25k. It's a bit optimistic, but I think we will try and keep to that.

So, 25 grand budget.

-Yeah.

-And how long is it going to take, the work?

I'm saying four months.

-Yeah.

-Four months from start to finish.

-Yeah.

-Yeah.

-And do you get involved in the work at all or...?

-A team of builders?

-Yeah, I mean, Andrew...

We are getting together a lot of quotation work at the moment.

So, yeah, there will be a lot of people involved in getting it done.

Andrew will control it.

And that's what he's really keen to do.

And, yeah, we'll make sure it's done properly and in the right timescale.

What are you hoping to get back off this?

Are you looking to sell it or rent it out?

Potentially, we would look to buy it from Andrew when he's actually done

all the renovation work and our other properties are buy-to-let properties,

so that's what we'd be wanting to continue with.

Let me get this straight. You are buying this and you're going to do it up

and then...potentially...

..you're potentially going to buy it off of Andy?

-Yeah.

-OK,

so are you going to try and make as much money as you possibly can off

-your dad?

-That's the balance.

-OK.

-Yeah. It's going to be a lot of discussions along the way.

I bet.

And my wife will have quite a bit of say.

Because it's a formula we've developed over the years.

-OK.

-And it has to be right.

So this will be right.

And then we'll look to potentially buy it.

But I'm going to want to make a good bit of money.

So it's making sure that these guys have got a good house to go buy,

but it also gets me a bit of money.

I wish you all the best, chaps.

I hope it works out.

-Thank you.

-I hope he doesn't take too much profit

-off you.

-No, no.

Mum and Dad have been good to me,

so I'll make sure they get a good job here.

See, you've always got to look after your parents.

-Absolutely.

-Andy, that's very clever.

-Good luck to you, pal.

-Cheers.

-Ian, good luck.

-All the best, chaps.

-All the best.

-Thank you.

So, Andy and Ian have got all the right ideas, but getting this place

up and running for 25 grand?

I'm not sure that's going to work.

Now, I know Andy knows all about costings, but I think Andy's costings are

going to be costly. You can find out how they get on later in the programme.

We've seen what happened on one of our development properties, but did the

other two fare better or worse?

Yeah, did they finish the project with gusto and are ready to move onto

the next one or are they put off for life?

Let's go back and find out.

Time to head back to the Lancashire coast, where I saw something slightly

unusual for a Homes Under The Hammer property.

It was a ground floor flat in a complex restricted to those aged over 65.

One thing that wasn't complex was the layout.

With a bathroom off the hall,

a decent-sized bedroom and a living room with a small kitchen just off it.

So, nice wee kitchen area, but definitely needs replaced.

Now, I've spotted, in each of the rooms, you have a pull cord which will

alert a warden who is on hand 24 hours a day in a retirement complex like this.

Services like these, of course, cost money, so when taking on this auction lot,

you would have to pay the annual management fees and, on top of that,

there was also a worry about the lease,

as there was no mention of how many years were left on it in the legal pack.

Experienced property developers Debbie and Rick knew all this but it

didn't put them off purchasing the flat for £43,000.

It was a bit risky, all right, but with 70 properties in their portfolio,

they had the experience to turn this round.

It's in a retirement community.

-Is that a first for you?

-Yeah,

so we saw it and loved the concept where you have a communal area,

people to socialise... This one's actually got a salon for the ladies.

They have coffee mornings, bingo nights.

So it's great.

They also had smart plans on how to best modernise the flat itself before selling it on.

With it being a retirement home,

we are thinking that people might struggle to get in and out of

a bath, so we are going to try and create a walk-in shower.

They were going to arm their regular building team with seven grand and

three to four weeks to get the work done.

So it is a surprise that we are actually heading back three months later

to see how they got on with this little retirement flat.

MUSIC: Golden Years by David Bowie

I think it's safe to say this flat now has its best years ahead of it.

The revamped bathroom also has a walk-in shower.

Debbie and Rick have done a gold standard refurb throughout.

So, the renovation is complete and will make a lovely home for someone in their golden years.

However, have Rick and Debbie found out how many years are left on the

lease since we last saw them?

When we first bought the property, we didn't know what the leasehold was.

Since then, we found out it was 125 years and it started in 1989,

which leaves us 97 years.

That's a relief. They also discovered that the total service charges and

the ground rent here amount to £3,300 per year.

So in the last three months, that will have already cost them £825,

so I'm a bit surprised they didn't push to get the work done closer to

their four-week original plan.

In regards to the timescale, we are over.

But we have been on holiday.

In the meantime, we have bought two other properties and our contractor

has been here, there and everywhere.

When he was here, it actually took him, in a total time, about four weeks.

It might have taken a little while longer than planned, but the building

work itself came in just under their seven grand budget with a total spend here of £6,500.

This project seems to have gone very smoothly but, even with Debbie and Rick's years of experience,

there are always unexpected problems to deal with on every property.

The biggest challenge on the project was probably the water cylinder,

which you don't see, it's in a cupboard.

But it was replacing the old one, which leaked, to bring it up to date with

the new system. Originally, we thought we could keep the patio doors,

but they were made of wood.

Again, very old. So we had to put new plastic ones in.

We would have liked to put French doors in but, to keep within the

regulations of the building, we had to put sliding patio doors in.

Overall, the thing we are most pleased with is the overall outcome of the

property, but we are especially pleased with the bathroom because we did

manage to get in that extra shower cubicle.

Rick and Debbie do have other rental properties in their portfolio,

but this flat is destined for the sales market,

so we've asked along two local estate agents for their opinions.

The main selling points of the property is that

the bathroom incorporates both a bath and a shower.

The negatives towards the property are that it is on a busy road,

so you can hear a bit of noise pollution.

However, the pro side to that is the fact that some people do actually like

to people watch and so they do like that on their doorstep at the same time.

First impressions of the property,

it's been done to a good standard.

It's nice and modern. New kitchen and bathroom.

Demand for this type of property is hit and miss.

Sometimes, they can sell really quickly.

Sometimes, they take a bit of time to go, as well.

It will have a limited market,

as you have to be 65 years or older to live in this retirement community.

But I'm sure this modernised flat, only five miles from the beach

and local shops, will be popular.

Just what kind of sales return can Debbie and Rick expect on their

£49,500 investment?

Due to the level of competition in this area,

the average property is going for 75,000.

But due to the standard of this property,

I would put an initial price of 85,000 on.

On the sales market, we'd expect this to achieve round about £85,000.

I think that's kind of realistic.

-Yeah.

-It's on at 89,950 at the moment.

But we'd be looking in the region of 85,000, yeah.

Yeah. That would be good.

That's a profit of £35,500 before taxes,

fees and, of course, what their total maintenance and ground rent fees come

to by the time they've sold the flat.

Not bad going, though.

Debbie and Rick must be pleased with how it's turned out.

The project has been quite a good one for us...

-Yeah.

-..because it's been a quick turnaround.

-Yeah.

-So this was a baby one, but it was a good one.

This experience has been a little bit different with it being a retirement community,

as in having to liaise with the warden,

having residents to consider, but everybody has been absolutely lovely,

very excited about Homes Under The Hammer.

Everybody wants to tune in to watch it, so we will definitely do it again.

I've never played for Derby County.

Scored against them, obviously.

But I did visit the city earlier in the show.

It was raining. I'm hoping this job was done by Arthur at half price

because he's only done half a job.

Sorry. This three-bed terrace had seen drier days.

Smell a little bit of damp, can't see it as yet,

but it does feel a little bit damp in here.

MUSIC: Love Is All Around Me by Wet Wet Wet

Nowhere more so than that downstairs bathroom...

Now, there is no ceiling in here because it's actually sopping wet.

..and the upstairs corridor.

Look at this. Absolutely sopping wet, that.

Damp was all around me.

In summary, the house was wet, wet, wet.

But building professional Andy saw the appeal and bought

it for 81 and a half grand with a view to doing it up and selling it back to his parents

for their rental portfolio.

I liked his style when I met him with his dad, Ian.

It was in the right location because it's not far from unis.

I viewed it twice with both you and Mum. So, yeah.

So you viewed it twice and you still wanted to buy it?!

Yeah!

-Yeah, absolutely.

-Nothing was going to dampen Andy's spirits on this one,

so let's see how he's got on five months later.

Being close to the universities meant that this was a no-brainer as a student let

and Andy has converted the house accordingly.

The front lounge is now a bedroom and, yes, that is the front door.

It'll make sense a little later.

He's had a damp proof course installed and re-plastered throughout,

even hacking back to bare brick himself.

What was the rear reception is now a communal living area.

In sharp contrast to how it was,

I think a new tenant will find this house to be...

# Home and dry. #

The old downstairs bathroom and kitchen area is stunning,

with integrated appliances.

As well as a way into the rejuvenated garden,

the French doors give independent access to the lounge and upstairs via

the side alleyway. With full central heating and double glazing,

it will become a welcome place to feel...

# Home and dry

# Home and dry. #

The house will be let furnished and all the bedrooms have wardrobe and study space.

So the bedrooms are now made up of this single and two doubles.

And what was the smallest bedroom has now made a superb bathroom.

Although it did require a new soil part installation.

Worth the cost, as were the roof repairs that were needed.

We did know about that before, but...

So we allocated costs, but one of the surprises was that there was actually

dry rot in some of the joists.

So that wasn't ideal.

That was just above the kitchen. So that kind of went pretty smoothly.

We got a sub-contractor in.

Working with tradesmen is one project management skill, but how was it

working with Mum and Dad?

We did have a few differences of opinion but, you know, we got through it,

as you do. So, yeah, they have been a massive help and guide, as such,

with my first project.

So, what's been the biggest learning curve?

I had quite a good idea about costs and how much they would be.

But I think the thing I have learnt is logistically and individual tasks.

So the garden, for example.

It was undulated, the soil was everywhere.

You couldn't see the path, you couldn't see the back hard landscaping.

Yeah, now it's a good place for the students just to chill out,

maybe have a barbecue.

During the renovation, Andy decided to improve the quality of some things,

fitting oak veneer flooring, better quality bathroom and kitchen,

which has increased the budget.

It's gone up to £27,000.

But we've increased the specification throughout the house.

And so I think it's money well spent.

It's not just about cosmetic work, though.

Landlords are required to meet regulations.

He didn't need a HMO licence in this location, but Andy needed to comply

with regs like fire alarms, heat detectors and carbon monoxide alarms,

so costs had to be factored in.

But, in this case, the improved spec had increased timescale and budget.

We actually had pretty much finished within four weeks,

but we had to do loads of snags within that month and we had to finish

off the garden. Well, I did. So, yeah...

Green-fingered Andy paid £81,500 at auction,

plus £27,000 refurbishing the place,

so we invited along two local agents to get their opinions.

First impressions, this property is of a very high standard.

It's light, it's bright,

it's incredibly inviting for the prospective purchaser or the tenants in occupation.

The demand for student property in older terraced housing

is on the wane in Derby.

So you've got to have this kind of quality to compete.

Otherwise people move into purpose-built new flats or halls.

Students can also look to local councils' landlord accreditation schemes

to assist in finding good, safe accommodation.

So clearly, high standards in this competitive market was the right way to go.

So, what's the property worth now it's been refurbished?

Anything over Andy's £108,500 total spend is a potential profit.

Resale, it ought to go on the market round about the £125,000 mark.

I see this property on the open market by private treaty within the region of £125,000 to £135,000.

I was hoping for the top end of that,

as people would expect.

But, yeah, I'm pretty happy with that.

Let's hope Andy's parents will be happy to pay that top figure.

Which would give him a potential profit of £26,500 before taxes and

expenses. But what yield can Mum and Sad expect on their purchase of

£135,000?

This property, if it's let out to students per room, per week,

would be within the region of £75 per week.

If the property is let out into the student market,

it would roughly be £75 per week per room.

Working on the agents' assumption of a 44-week tenancy,

that total is £9,900 a year for the three rooms,

giving Mum and Dad a yield of nearly 7.5%.

In fact, Andy's parents have contracts with three students already on that

basis, so it's a win-win situation.

So, what's next for Andy?

So I'm going to be doing my chartership next year with the

Royal Institute Of Chartered Surveyors.

So that's what I'm going to be focused on next.

But, in the meantime, I think I'll be trying to purchase another property

and refurbing it, so that's what's next for me.

That's it for today, but we'll have more properties and enthusiastic buyers

-for you next time.

-And maybe that enthusiasm's rubbed off and you're

thinking about giving property a go yourself.

If so, there'll be lots more advice for you here,

next time on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

-Goodbye.