Episode 7 Homes Under the Hammer

Hello, welcome to the show. Property auctions are pretty exciting.

When the bidding starts, it can get very tense, and even dramatic.

Yes, you can sometimes cut the atmosphere with a knife.

If you are the last bidder standing when the hammer falls,

the property's yours.

People who buy regularly at auction know all the tricks of the trade.

Do your research, view the property and, please, read the legal pack.

Yes, so did today's buyers stick to our golden rules and do things by the book?

Well, here's what they bought.

It's back to school today.

In Hertfordshire, Lucy is on a plot of land, brushing up on her geometry.

It's OK, roughly triangular in shape.

I'm up north in Scotland.

At this two-bed flat in Motherwell,

I suggest something a young me hated in school.

Let's do some sums.

We've had geometry and maths,

now it is science in this two-bed Derbyshire terrace.

You know, you don't have to be a rocket scientist to figure out that

that's not right, is it?

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.

The hammer is going...

Lucy is in the Hertfordshire town of Stevenage.

It was the first of eight new towns designated in 1946.

It has good road connections and is only just around 30 miles north of

central London, so you can bet it wouldn't take long for Stevenage native

Formula 1 star Lewis Hamilton to get there.

Well, I'm here in this residential part of Stevenage to see, well,

not a standard house, but this row of garages.

But it could also be a potential building plot.

It went to auction with a guide price of £79,000.

Here they are. Take a look.

OK, I'm looking, Lucy.

There's not much to see.

The question is, does it have shedloads of potential?

At the moment, as you can see, the plot has garages in a long row,

just sitting here. It was used for parking for the local area.

As building plots go, well, it's OK.

Roughly triangular in shape,

it's flat and is already has established vehicle access to the road,

of course, due to the garages.

But the best thing about this plot is that it already has outline planning

permission to knock all this down and build one three-bedroom detached house here.

Now we're talking!

But be warned,

outline planning permission does not mean you can start work straightaway.

It basically just establishes whether the proposed development,

in this case, a three-bed house,

will be acceptable to the local planning authority.

Before you can build anything at all,

you have to put forward another application, covering all the details,

such as layout, access, scale and appearance, and landscaping as well.

Only when all that is approved can you start to build.

In other words, whatever you decide to do here,

it's probably not going to be a quick turnaround.

But at the end of it, you could have a fantastic family home.

But let's get an expert opinion.

We invited along a local estate agent to tell us about

the surrounding area and the possibilities for this land.

We are about two miles out of the town centre.

It's majority housed by terraced properties, two- and three-bed.

A lot of people within this area like to stay in this area because it's

got that really good community feel.

Good local schools, great sporting facilities in Stevenage as well.

So, what does he think of the outline planning granted for a three-bed

detached house?

Personally, I would be looking to do a semi, two- or maybe three-bed.

In Stevenage at the moment, what we are experiencing is

two-bed properties are of a premium and they

achieve quite good value.

Also, three-bed properties do,

but I probably would have gone down the line of two two-bed semis.

So, it would be a question of weighing up the time and money spent to

reapply to change that outline permission,

versus any increase in profit from two smaller semis instead of one big house.

So, what do the numbers tell us?

A three-bed detached house in this area would be worth between £290,000

and £300,000.

Bearing in mind that guide price of £79,000,

and build costs of, say, £100,000, that's still a good number.

But what about the agent's preferred two-bed semis?

A two-bedroom semidetached property in this area would be worth between

£210,000 and £220,000.

Well, the fact is,

this row of garages is destined to be knocked down and a house will be

built here. But as there's only outline planning permission in place,

there's still quite a few planning hoops to jump through first before you

can start building.

So, who was willing to take on the challenge?

Let's head to auction and find out who did buy this plot.

Lot 22 is the land at Stevenage.

Pretty old site, this,

with planning permission for a three-bedroom detached house.

Shall we say 100 for it?

95, then?

95, 96 is from you.

97, 98?

98 behind you, 99.

100. 101, 102, 103. 104, 105.

Sure? Straight ahead of me, then, at £104,000.

Are you all done with it? 105?

No, you're not. 106. 107.

108? Are you sure?

Here, then, at £107,000 now.

108 anywhere else, before it goes?

At £107,000 for the first, 107 for the second, third and final time...

Your land, sir, at £107,000.

Hidden from our camera was bidder Malcolm,

and we won't be seeing him here, either,

because he sent wife Felicity and daughter Zoe along to tell us about the family project.

They paid £107,000 for the site, and Lucy met them to find out more.

Felicity and Zoe, congratulations.

Now, you weren't at the auction, were you, girls?

-No.

-Who was at the auction?

My husband, Zoe's father.

We've been looking at properties for over a year at auctions.

I'd gone with him to a number of auctions, so we hadn't been successful.

So, one day, he went off on his own and then I just didn't believe he would get it.

We were actually looking at two plots.

And he didn't get the first one.

So Dad turned up on his own, thinking we weren't going to get it again.

Obviously, we did.

Zoe, how do you feel and what is your involvement going to be,

with your dad having bought this plot?

Mum and Dad have bought this plot, it is technically Mum's plot.

She's bought the land.

I'm going to be living in one of the houses, once it's built.

Hopefully, we are hoping for two houses.

So, a pair of semis, one for you and one for...

-My older brother, yes.

-One for your older brother?

But it only comes with outline planning for one house.

Yes. So we've put in planning permission for two houses,

with the hopes that we can get it.

We've got an architect on board.

He's trying to design something that would be suitable for the area.

We want to fit in and we want to do it as a family project,

for both of our children to have a starter home.

Zoe and her brother Dominic

are getting a great leg-up on the housing ladder here.

Dad Malcolm, who is a retired IT consultant,

is going to project manage a team of professionals.

Of course, the plan depends on them getting change in that permission.

How can you be sure that you'll get your permission to build two houses

-and not one?

-We don't know,

but we feel that it would be more in keeping with the area to build a pair

of semis here than to have the single detached, with three rooms,

which is our present planning outline that we have.

And how are you intending to build?

What type of houses are you thinking of?

We're hoping to be able to move in before the end of the year.

In order to do that, we need to build something which is going to come up quite quickly.

A timber frame is probably something we'll be looking into.

Timber frame does go up a lot quicker.

Obviously you are very keen to get in, aren't you?

I finish university this year,

so I'm hoping I'll be able to move in quite swiftly and leave the parents' home.

How's that going to be for you, Mum?

Absolutely fine.

I'm hoping she'll do a lot of the painting and decorating.

We want to do the finishing touches.

We are quite keen on choosing the designs.

I think we're in agreement, yes.

Girls, are you going to be really heavily involved in this?

Are you going to get your teeth into it?

Obviously, it's the first time you've ever done anything like this before, Zoe?

I'm really hoping to.

It's a complete adventure for us all.

I'm hoping that, together,

we'll be able to have a really good time and it will go smoothly.

What about the fact that you have four garages there?

Have you had the chance to get inside and see what you've actually bought?

No, that is the big mystery.

There could be treasure!

Yes! Or a load of old junk.

That's another thing. You could have so much fabulous stuff behind those

doors, or not.

We have taken into consideration there might even be asbestos.

We really don't know. We know that is a specialist removal job.

We are waiting with bated breath,

because the keys of the doors have disappeared.

And they are nowhere to be seen?

How much do you think it is going to cost you?

Have you budgeted for the build,

and what you think the realistic costings are?

If we manage to get planning permission for a pair of semis,

we think it will be in the region of about 125 per semi.

125 per house, let's say?

-Yes.

-We have some contingency.

But we don't really want to build over and above what the local market

-recommends.

-Yes, that is a great way of thinking.

Do you have a plan B, girls, if it doesn't happen,

if you don't get permission?

Would you be happy building one house that already has outline planning?

I think probably not.

We might just prepare the site and

sell it on. The whole purpose is to build two for our children.

If we can't build two, I don't think they want to share.

You could always put a nice stud partition wall up!

I mean, it's an amazing thing what you're doing,

building two houses for your kids.

It's great that you two are going to be living next door to each other.

You've just got a long way to go from here.

How long do you think something like this is going to take you?

We're hoping to do it in around a year.

OK, so there's no immediate hurry for this?

No. We've got to allow...

We've been through the planning permission route before and had to go to

an appeal. We know how long that can take.

The actual build, I think at the moment,

builders are highly sought after

and having a good one, for us, is going to be essential.

What are you most looking forward to with this project?

Just having my own home, it'll be crazy.

-How old are you?

-I'm 20.

-Wow.

-I'll be 21...

-Well, hopefully.

-Hopefully, she'll get the key of the door when she's 21.

How fantastic to have your own house at 21.

And, of course, how does Dominic feel about this?

Well, I think he's really looking forward to having a place of his own,

and the fact that this particular location is quite close to main road

routes, good train routes for London, so I think he'll be quite happy.

Ladies, congratulations and I'll keep my fingers crossed and hope planning

permission does go your way.

-Well done.

-Thank you, Lucy.

-Thank you.

-Well done, thank you.

Well, this project will really be a big adventure for all the family.

Building from scratch for the first time.

But will they get the planning permission they need to build two,

and not just one house?

You can find out how Felicity and Zoe get on later in the programme.

Up to Scotland now, to the town of Motherwell.

Sitting just 12 miles south-east of the city of Glasgow,

Motherwell was once the centre of Scotland's steel production.

The Ravenscraig Steelworks shut in 1992,

but it can still be seen on the crest of Motherwell Football Club's team shirt,

who are nicknamed the Steelmen.

The site has been rejuvenated and now offers a new college and sports

facility within a mile of the town centre.

But I wonder if today's property will be a STEEL?

Just a short walk away from the town centre

and the train station, which has direct links to Edinburgh and Glasgow,

is the property I'm here to see.

It's a two-bedroom top-floor flat, with a guide price of £20,000.

That's quite low. But I'm not sure how you get in.

Let's try round the back.

So, round the back it is and to be honest it's going to be quite a trek

and take some time to get to the top floor.

The flat comes with a garage, but looking at the grass and the communal

garden, it looks like no-one's driven on here for quite some time.

Right, time to make the climb.

Spare a thought for my old footballer's knees, please.

The communal stairs aren't in the best nick and are a bit windy for me,

if I'm honest.

I've almost made it to the third floor.

Finally, I've found the entrance.

Look at this hallway - it's nice and wide, it's nice and bright,

and the first thing that hits you is that.

Hopefully... It is original, actually.

That's original parquet flooring there and it's all the way through the hallway.

I can see there that's one of the bedrooms just there.

Hopefully, it's the smaller of the two.

Round the corner here we've got even more parquet flooring.

The bathroom, which is a little bit tight, it's a bit snug.

And it also looks a bit tired, so I'd look to replace all of that.

And into bedroom number one which is a good size, nice high ceilings,

you've got some fitted wardrobes as well.

You'd quite easily get a double bed in here.

Now, I did mention that low guide price of £20,000.

Let's do some sums. Imagine you got this for £25,000 and you spent

£5,000 on it.

That would give you a total spend of £30,000.

I know, in this area, two-beds will get you £400 a month.

Now, I've done my sums and I know what kind of yield that gets you.

Wait for it. 16% yield.

I think that is absolutely amazing.

Where else are you going to get that kind of return on your investment?

Of course, always bear in mind the yield goes down the more you decide to

spend on the flat, so it's important not to get carried away.

OK, the loft space, you might be thinking, great, let's extend,

let's make it bigger. It's not as straightforward as that,

especially with flats.

There's always the issue of who owns the loft space.

Well, the way to find out is to check the title deeds and if there's

nothing in the title deeds that specifies who owns the loft space then

it's, generally in Scotland,

the top floor own the loft space and you have the potential to make your

flat bigger.

Now, as always on Hammer, double check, double check,

double check again. Check with planning,

check with your solicitor and check those title deeds just to cover your back.

OK, and into the kitchen-lounge area, which is not a bad size.

You've got two big, nice windows there and a kitchen which is a little bit

dated but it's not in bad condition.

You'd probably get away with changing the handles,

giving it a bit of a clean,

and you might want to change your oven and hob as well.

Saying that, I've got to remind you, £20,000 guide price.

For me, that would be money well spent with that potential yield as well.

This is one that I'd possibly go for.

So, it might be all systems go for me.

But what does an agent from the auction house who marketed it think?

What will it take to get this flat up and running?

You have a choice. You could keep it the way it is

and go for a low-value rental market

of which there is a plentiful supply here.

I think most people would choose to strip the flat back, redecorate,

replace the kitchen, the bathroom,

upgrade the central heating system and they'll get a far better quality of tenant in after.

Good long-term tenants can save you a lot of hassle and money.

Would it be possible to go the whole hog and extend into the loft,

and would it be worthwhile?

Yes, there is an option here because this flat actually owns the loft space as well.

There are other flats in the street that have extended into the loft space.

Extending upstairs here might not add great extra value.

Post-renovation, this flat should be worth around £45,000 as a standard top-floor flat.

So with the extension upstairs, the value of the flat would

probably move to between £53,000 and £55,000.

Hm, that maximum increase in value of £10,000 doesn't seem like it's

enough to make the conversion financially viable.

Even with the conversion, the top rental figure would be £475 per month,

so maybe it's best to stick to the simple solution of a good solid refurb.

But it depends on your circumstances, of course.

This flat isn't in bad condition at all and you can do as much or as

little as you please.

And if you were to get it for anywhere near that guide price

you would be looking at a very healthy yield.

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

Two-bed top-floor flat, home report, at 28, high ceilings,

town centre location, low guide price.

Let's get away. At 15, then.

At £15,000. 15. 10.

Need a bid. 10 here, at 10 I'm bid.

11, can I say?

11 bid. 12?

12 bid. No.

Here at 11. At £11,000 are we done?

12 here. 13.

14. 14 bid.

15. 16?

16 bid. 17.

17 bid. 18?

No?

You're out. Here at 17.

At 17, are we done? At 17,000.

18. 19, sir?

20?

20 bid. 21.

22. 22 bid?

23, sir? 23 bid.

24?

23 there with the bonnet.

At 23. 24, back of the room.

25. 25 bid.

26?

26 bid.

27? 27 bid.

28? 28 bid. 29?

29 bid.

30? At £29,000 seated, against you at the back and against you here.

At £29,000 for the first time, second time, selling away, sir.

Thank you. Can I have your paddle number?

Bidder 178 was Gerry, who bought this with his wife Keira, seen here sitting to his left.

Keira came along to tell me why she and Gerry decided to buy this

top-floor flat for 29 grand.

-Keira, nice to meet you.

-Hi, Dion. How are you?

-Congratulations.

-Thank you.

-What was it that attracted you to this property?

Well, to be honest, the guide price was pretty low.

It seemed like a good opportunity in terms of, you know,

getting into the buy-to-let market.

And it wasn't a huge risk in terms of capital.

That's not a Scottish accent.

-No.

-Where are you from?

-I'm from Dublin originally.

-Are you really?

-Yeah.

Love Dublin. Been there many times.

Many times. So what made you look in this part of the world?

Well, my husband's originally from Glasgow.

We've been living in the Middle East for about the last, almost ten years.

And that's... We decided we were coming home.

Wow. Whereabouts?

-What were you doing?

-We were both living and working in Qatar.

I was working in HR, he's an engineer.

So, you know... Both in the construction industry.

Coming back home. Was it the family, or was it heartstrings that brought you back home?

Well, yeah, no, it is.

You want to be nearer family and you're very conscious that you're missing

out on family stuff so, you know, just time.

So, why property? What's the attraction to property?

Well, we already have two other properties that are currently rented.

One just up the road and another one in Dublin.

So, it just seemed like a good way to use your savings from

your time working in the Middle East.

Good on you. So, tell me what you're going to do with this particular property.

Well, to be honest,

the plan is to actually try and get this rented out as soon as possible.

So we want to get the work done quickly and

improve the kitchen.

It's quite dated.

The bathroom needs, in my view, total revision.

Yes. Yes.

We'd like, obviously,

to get rid of the texture on the ceilings in the bedroom and the hall areas.

Don't want to spend a huge amount of money.

While we do own the loft space and all that,

the loft conversion, in terms of how long it would take to get planning

permission or anything, wouldn't be worthwhile in terms of the investment

it would take, you know, and the return on that,

and the time delays it would cause.

-So that's not an option at this juncture.

-OK.

How much is all that going to cost you?

What's your...what's your budget?

Really don't want to spend more than about £5,000 or £6,000.

So, Keira, what will that bring your total spend to, then?

37...

-At the top end.

-Is that what you had in mind?

-Is that about right for you?

-Yeah, you know, it's OK.

The rental market in this area's fairly healthy.

And, uh, you know, you do tend to get more longer-term tenants.

That's really what we want. We wanted to make this somewhere

that somebody's going to want to live on a longer-term basis.

Good on you. And how long's all the work going to take you to do?

Six to eight weeks maximum.

And who's going to do the work for you?

Do you get involved yourself? Does, your partner get involved?

I've actually already done quite a bit of research in terms of fittings

and things like that

for the property. But

honestly, it's quicker for things like painting and stuff,

which I would normally do myself,

somebody else will get in here and get this whole place painted in a day,

whereas it would take me the best part of a week.

So to expedite the process, I'm not going to really do a huge amount of

work myself, more project managing it.

And we have another project under way as well at the moment.

So you're doubling up at the moment, are you?

-Yeah.

-So, Keira, I wish you all the best, I hope it all works out for you.

-Good luck.

-Thank you, Dion.

-Good luck.

So, Keira hasn't given herself a huge budget or timescale and

she's thinking about doing quite a lot in this flat.

Will she get it all done? You can find out later in the programme.

Still to come, I'm in Derbyshire at an end-of-terrace that doesn't seem

to, well, end.

Oh, that's a bit of good news.

There's an extra room there. That's a nice surprise.

And no surprises with what's been holding up Keira's flat renovation.

The availability of tradesmen certainly caused delays.

We're heading back to Stevenage in Hertfordshire now, where Lucy parked up

at a row of four garages that went up for auction.

It wasn't much to look at, so you might have thought this site was a boring prospect.

But the best thing about this plot is that it already has outline planning

permission to knock all this down and build a three-bedroomed detached

house here. Now we're talking.

You'd still have to do a lot of talking with the local planning

department to put in full plans, but it certainly made it an attractive

lot, especially for those flying the nest,

which is what husband and wife Malcolm and Felicity thought when they paid

£107,000 at auction.

They didn't want to build one house, they planned on two semis.

One for each of their children, Dominic and Zoe.

Lucy discovered there was a lot riding on getting planning permission.

If you don't get permission,

would you be happy building one house that already has outline planning?

I think probably not.

-No.

-Really?

-We might prepare the site and

sell it on. The whole purpose is to build two for our children and if we

can't build two, I don't think they want to share.

Knowing that a planning wrangle lay ahead and all that a new-build entails,

the family had allowed a year's timescale.

Well, it's two years on.

Did Zoe and Dominic get their new homes?

Well, there's a smart new-build but it's not a pair of semis,

it is a three-bedroomed detached house.

Planning concerns that this site was overdeveloped meant two semis didn't

get out of the ground.

And, no, Zoe and Dominic have not decided to share.

Dominic has bought his own place and Zoe is in a shared flat,

so it was left to Mum and Dad to try and maximise their return on this

house by going for a high-spec finish, which is clearly evident in this

stunning open-plan living kitchen area.

The stylish ultramodern appliances are sure to wow potential purchasers.

Back towards the front of the house,

there is a downstairs utility and shower room.

The full-length double windows offer so much light when you walk in.

Upstairs, there is a sleek family bathroom, but if you are in the master

bedroom, you won't have to use it because it has an en-suite.

The whole house uses an underfloor heating system so furniture can be

arranged against any wall.

That's a bright idea.

This is a fabulous house, but Felicity and Malcolm said they didn't want to

build just one house.

Even the project manager thought that their plan to sell the plot on was

best, so why the change of mind?

We don't give up easily and we were just keen to plough on come what may

at that stage. We'd invested so much time and emotion in it,

so I didn't really have my business hat on when I turned around and said,

"No, I don't want to sell it."

And being determined came in handy when they hit unforeseen problems.

What we didn't know on this infill plot,

it was a bit like Crossrail underground and we had to move so much that we

dug down and down and I could've met my nephew in Australia because we

went down two and a half metres.

With a mix of oak tree roots,

sewerage pipes and an electricity cable to contend with,

it's no wonder their world got turned upside down on this project.

They did hire professionals to guide them through the process and they

must have picked up some tips and tricks from them in the past two years.

Photograph your noggins.

Because I photographed all the noggins at first fix and then when I looked

back at the photos, I thought, they are boring, I'll delete those.

So when the plumber came to put something up, he said,

where are your noggins?

I should probably jump in and explain here that a noggin -

or a dwang, as they're known in Scotland -

are struts placed in between the wall studs or joists to give them extra

strength and are visible at the timber frame stage.

So it's very useful to photograph your noggins otherwise you can get holes

in the wall where you don't need them.

Thanks for all that advice, Felicity.

Originally, the total budget for building two semis was 250,000.

However, the budget has climbed.

The total, including the land purchase, now stands at a staggering

£420,000.

There is not a lot of profit in this.

We are trying to go to the top of the market, not halfway down,

not three quarters,

but to the top to get some money and some profit for the two years of work

that we've put into this.

OK, then, time to find out if they will get their money's worth.

We've asked two local estate agents to come along and see the house.

First, let's hear from the agent who saw the plot when it was just garages.

I think it's a massive shame they didn't get the planning

for the two semis they were originally going for.

I think it would have been far more in keeping with the area and I think

it would have generated a higher profit margin, in all honesty.

What they've actually done with the property I think it's a very,

very good job, very high standard of finish.

It's a lovely property.

I would say the selling point for this property most certainly will be

the downstairs living space, the open-plan kitchen lounge-diner.

Great space for entertaining, great for families to grow.

Great feedback, but will the final sales figures give any profit

on Malcolm and Felicity's 420 grand investment?

A sales valuation - I would suggest a guide price of 415 to 430,000.

Given it's the only detached property in the area,

I think that would be a sensible price.

If the property was listed on today's open market,

it would achieve between £425,000 and £450,000.

I think those values are fairly fair.

Obviously, we hope for the better and the topmost price

because we put the topmost quality products into the home.

That top value of 450 grand could mean a pre-tax profit of 30,000,

but this one is not just about the money.

Felicity and Malcolm are going to build a house for themselves

with all the experience they've gained.

We've looked at a potential site.

All we have to do is move this and then move on.

But we will make sure that underneath the ground is as good as on top of

the ground before we actually purchase.

Time to take a trip to the Derbyshire countryside now and the village of

South Normanton.

It grew from a small agricultural community to a larger village

when coal mines opened in the late 1800s.

The nearby Carnfield Hall is a grand country house dating back to the 15th century

which fell into decline in the 1960s after suffering subsidence

caused by the mining in the area.

Thankfully, it's been restored in recent years.

Don't get too excited, though.

This one isn't going under the hammer.

Our lot is definitely not as grand.

And up for auction was a two-bedroomed semidetached at a guide price of

just £37,000 - plus it's on the end here.

Hmm!

Ah, yes,

it looks as questionable on the inside as it did at first glance

on the outside and straightaway we are seeing solid floors that are starting to

show signs of, oh, I don't know, coming up in lots of different places.

Maybe a problem with the substrate.

I doubt there is any damp proof course in this house

and straightaway, looking around, seeing all sorts of signs of damp.

And then, boom,

you don't have to go very far to see a huge crack in the wall.

You know...

How far have I come?

About three feet.

Not making a very good first impression, is it?

Let's try and see above what we've got though, to, as usual,

what it might become. Come through here.

Little storage area under the stairs.

Into the rear kitchen.

This would've been a classic two up, two down in its day.

Again, problems with the floor, so we're looking at completely digging out the floor, for a start.

More signs of cracking in here.

Oh, that's a bit of good news. There's an extra room, there.

That's a nice surprise.

But basically, it's a rip-it-all- out-and-start-again job, isn't it?

Well, up the very rickety stairs to the first floor and you don't have

to go too far again just to get that feeling something's not right with this property.

The floors look like they are all over the place,

the door frames are wonky and then, you know,

you don't have to be a rocket scientist to figure out that's not right.

A massive crack in this wall,

so this is a classic case of potential subsistence.

Now, this area is a mining area and the first thing

I will be looking at, therefore, is a mining survey.

Is there a mine or a mine shaft close to this property?

Secondly, I'd like a structural survey in here to check out exactly how bad

the movement is because that could definitely blow your budget pretty darn quickly.

Which is a shame, because, like downstairs,

it's a bit of a surprise, this property,

partly because of this room here which almost dovetails in with the

next-door property.

So from the front, it doesn't look that big but you've got this room here

and the one below it which gives so much

more space to the house, which is amazing, really.

At the moment, this is configured as the bathroom and it's huge,

so I think there is some internal configuration or reconfiguration needed.

Taking out some of these walls, to create maybe two,

possibly three bedrooms and still a decent sized bathroom.

So, you know, the potential here is huge but you've really got to sort out

the basics first and know exactly how much it's going to cost you to get

the house structurally sound again.

This house's structural issues are clear to see but one thing less obvious

is the space on offer in the back garden because it's so overgrown.

I might have spotted something else just over the wall.

Now here's an interesting thing - because at the side of the property,

there is this garage.

Now, it isn't mentioned in the auction particulars

but it is clearly associated with this property somehow.

It really needs some investigation because you need to know,

does it form part of this property? How long has it been there?

Is there a possibility that, over time, it could have been amalgamated with this property?

What about this bit of land? Who owns this?

Do you have rights across it?

All sorts of things that your solicitor really needs to look into.

In the meantime, can the auctioneer from the auction house that marketed

the property help shed any life on the situation with that garage?

There appears to be a precast sectional concrete garage which may belong

to this property - however it seems to be fairly clear that it's on land

that doesn't belong to this property.

What a new owner should do is check out whether that is a registered

title and if it is, find the person concerned,

should he want to buy an access to the garage.

If it isn't registered title,

he may have a claim for possessory title because I think the garage has been

there probably 25 years.

Possessory title, I hear you ask?

Well, that's squatters' rights to you and me.

The term is usually applied to property in possession

by the squatter for more than 12 years.

In some cases, the squatter can get full title.

Given the £37,000 guide price, it's well worth investigating.

What could this house be worth, once renovated?

My estimate is it would have a value between 70 and £75,000 on the open

market at the present time.

That, of course, would not include the garage.

Well, it's a low guide price,

but as ever there is a reason for that.

It is a property that needs a lot of

work and so somebody needs to do their numbers very carefully.

Let's find out who did that when it was sold under the hammer.

The guide on this is 37,000.

Who will start me off on the guide at 37,000, may I say?

Bid me. 35, 34, 33,000.

33 is bid, thank you.

We're away at £33,000.

33 is bid, 34, I'm looking.

Thank you, sir, at 34.

And with a few interested bidders around the room,

the bid soon went above that £37,000 guide price.

We rejoin at 42,500.

And a half. And three. And a half.

The bid is £43,000 to my right... And a half.

44 is bid. Shakes his head.

With you, sir, at £44,000.

We are all done with it for the first, second, third and final time.

Hammer's up, 44,000.

It's yours, sir, well done.

The successful bidder, paying £44,000 for this lot, was Eric.

You might recognise him, as Eric has been on the show before, back in 2015.

Eric is an electrician who renovates houses with his brother, Jack,

who is a plumber.

They've both renovated their fair share of properties

together in the past couple of years, despite only being in their early 20s.

Eric came along to tell me what his plans were for this latest acquisition.

-Eric, good to see you again.

-And you.

-You've been a busy boy.

-Busy.

-And this is property number...? Whatever it is?

Yes, this is number 25.

That's fantastic, that really is.

Congratulations. 25 in what period of time?

It's just over two years.

Two years. What's the plan? How many are you aiming for?

We're just going to keep going until we get sick of each other, I guess.

No, we'll keep going and just when the point comes to where we think we need

to stop or we get too big, we'll just take it from there, really.

-Just see how it goes.

-And what do you think

the real sort of... reason for your success has been?

In anybody's...by anybody's standards, you know,

over 20 properties in a portfolio in the space of two years is pretty darn impressive.

Just hard working, really.

Nobody wants to work, but if you work hard enough,

you can get your working life out of the way early, I guess.

Right. What do you want to go and do, is it travel the world?

Yeah, I've already had a taste of going travelling, so, hopefully.

You'll have this little nest egg in the UK which is earning money while

you sleep and walk across Sydney Harbour Bridge and sleep on a beach in Fiji!

Hopefully, yeah.

-Live the dream.

-Why not?

Hey, property can lead to it, so that's brilliant news.

So why this particular house?

I asked myself that exact question.

-Did you see it before you bought it?

-I didn't, no.

-Naughty, naughty.

-I know, yeah.

Was it worse condition than you thought, when you saw it, then?

Yeah, this is by far the worst one we've bought, so

we have our work cut out with this one, I think.

So how do you see it, then? What needs to be done?

Well, they're's a few cracks.

Obviously, that needs to be sorted first of all.

And with the upstairs bathroom being, well, through a bedroom,

that needs to be reconfigured upstairs.

So maybe the chimney breast might have to come out.

There's quite a lot of building work before we get to anything aesthetic inside.

And then just a full programme of new kitchen, new bathroom,

-new electrics?

-Everything will be brand-new inside.

There's a few new windows need going out the back, as well, so,

it's a big job.

Eric's not kidding! He reckons the budget will be in the region of 20 grand

and with a timescale of six to eight weeks, which is a short timeframe, indeed.

Have you learned anything from the experience with this one?

Yeah, make sure you go and view it before you buy it.

That's a good idea.

Would you have walked away?

I almost bought it for 40 grand.

-Oh, wow.

-And I thought that was going to be a steal for the area and

property, so...

And somebody outbid me.

I thought, I'll just give it another couple of goes.

But I wish I hadn't.

One property was going to come sooner rather than later.

If you've got 25,

you've got to have a bad one somewhere.

Well, hopefully, this isn't it,

but it's teetering on the edge of possibly being it.

-Possibilities.

-Let's talk about the garage outside.

What do you know about the circumstances surrounding that?

Well, we knew about the garage and we found out about the gentleman

that owns the property before buying the garage,

but we're not too sure exactly about the land, and who owns the land.

I'm in contact with solicitors at the minute,

just trying to find out the plans and if we do own the land.

-Right.

-That would be a bonus.

-Right.

-And make up for

the state of the property,

so we'll take it from there and see how it goes.

Your little brother, has he seen it yet?

I'm keeping him well away!

-Are you?

-For now.

Because it's a 50-50 joint venture, isn't it?

Yeah. Yeah. He trusts me with the buying of the properties, so

it'll be me that takes the brunt of it when he sees it.

Oh, dear. Well, listen, good luck with it.

-I hope it isn't as bad as you fear and we look forward to seeing it.

-Cheers.

Well, Eric proving there that even experienced property developers

occasionally make mistakes,

and I think he would admit that he's made a slight error with this one.

It comes down to that basic thing of viewing the property before you buy.

If he'd seen it, he wouldn't have paid that extra money.

Luckily for him, he's got a big enough portfolio that he can absorb those

extra costs and in the long run it will probably turn out all right.

However, in the short-term, he's got one heck of a job on his hands.

How will he get on? You can find out later in the programme.

I wonder if our two remaining sets of buyers' plans have all worked out,

or has it gone a bit pear-shaped?

Well, it's the moment of truth.

Let's go back and find out.

Time to head back to Motherwell now, in Scotland,

where I took a long trek around the back, up some winding stairs,

to a two-bed top-floor flat.

Look at this hallway, it's nice and wide,

it's nice and bright and the first thing that hits you is that...

Hopefully it is original, actually. That is original parquet flooring there.

It's all the way through the hallway.

And the bonus was that the flooring continued throughout.

With a bit of restoration, it could be a real asset,

not to mention a money-saver.

Someone who'd already been saving money was Keira and her husband Gerry.

Having worked in Qatar for ten years, they were keen to invest here.

Scotland was their choice as Gerry was from Glasgow.

Keira hales from...

-Where is it again?

-I'm from Dublin originally.

Oh, are you really?

-Yeah.

-Love Dublin.

Been there many times.

..Dublin. How could I forget?

Maybe because I've been there lots of times

and had a few pints of the black stuff.

However, this flat needed more than a few tins of the white stuff

to get it back in top condition

and ready for Keira to rent out as soon as possible.

The bathroom needs, in my view, total revision.

Yes. Good on you. And how long is all the work going to take you to do?

Six to eight weeks maximum.

Six to eight weeks seemed like a decent timescale for a new kitchen,

bathroom and redecoration, right?

Well, we're actually heading back almost a full year later.

Let's see how they've got on.

Well, there's a fully tiled modern shower room that, without a bath,

adds that little bit of extra space.

The textured walls and ceilings are gone.

Now every surface has been freshly plastered and painted.

I'm sorry to say the parquet flooring has been covered over with laminate.

But it does give the flat a fresh, modern look,

which is most evident in the open-plan living room and kitchen area.

The thing I'm most pleased to see gone is the dated kitchen units in the living area.

Keira wants to let this flat and she's made it very rentable indeed.

And having the same flooring throughout means the same look can flow into

the two bedrooms.

So all the work has been done.

But given it's not a huge project,

why did Keira go so far over her timescale?

Because of the number of trades that were involved

and the availability of tradesmen certainly caused delays.

In terms of access to the flat, there is a rear stairwell,

which is quite windy, and in terms of

getting equipment and materials and things up here,

I think that might have been off-putting, actually,

and certainly would have impacted on people's interest in doing the work.

I suppose it's about not letting those things frustrate you and just

keep going, keep ploughing on and just don't let it get you down, really.

When Keira did finally get a contractor, the work only took eight weeks,

so her determination got her there in the end.

I'm really pleased with the overall end result because it is much brighter

and cleaner than it was when we got the property originally.

I'm actually really pleased with the kitchen,

because I just think it really makes the room look bigger.

And I think it's much more user-friendly than it was,

so I'm happy with that.

But is Keira happy with the overall spend here?

The original budget for the work was five grand and the work such as

replastering throughout, moving the boiler from the attic to the kitchen,

would have been a bit pricey.

We probably were doing the flat to a higher spec than maybe a lot of

landlords would and because we decided to invest in a boiler

with a ten-year guarantee and quite a high quality boiler,

that certainly upped the cost.

The total cost has been 12,500.

That added cost has taken their total investment here to 41,500,

but Keira thinks it's money well spent.

We take the view ourselves that we would prefer to have a longer term,

more stable tenant,

because they can see that you have an interest in the property

and you've obviously taken some care in terms of getting it ready for them,

which means, hopefully, they'll look after it and that,

you know, that will continue on through the relationship.

Keira is thinking along the right lines of being a successful landlord.

Will two local estate agents think she's on the money with her 41,500 investment?

I think the overall standard of finish is really good.

I think they've used the right colour schemes.

They've tried to make best use of the space they have

and it's got clean lines,

good quality appliances and everything's brand-new.

The layout of the flat works quite well.

Two beds, one of a reasonable size, one somewhat smaller,

but I think for a two-bed at the price point we're looking at,

I think it works quite well.

Although Keira and Jerry aren't planning on selling,

the price point that the agents placed on the flat was between £45,000

and £50,000,

which would give them a profit of between £3,000 and £8,500.

But what about that crucial rental figure?

I'd expect a rental valuation figure of £375 per calendar month.

I'd suggest the rental market for this property

would be somewhere in the region of 375 to perhaps £400 per calendar month.

Well, I think those estimates are pretty standard.

Actually, we've already got a tenant and we've achieved 375 a month,

so that's about right, in my view.

That works out at nearly an 11% yield,

which is pretty good and means this project has been a success,

even if it did take the best part of a year to complete.

Now they've been back in the UK for a year, are they finally settled in?

There are two things I still miss -

the ease with which you can dry your hair and your laundry outside in

Qatar in about 15 minutes.

Whereas here, it's more of a challenge.

But other than that, yes, we're settling in pretty much.

We're heading back to the village of South Normanton,

where I saw a two-bedroom end terrace that, from the outside,

seemed to be in rough shape.

And things weren't any better inside.

Straight away, looking around, seeing all sorts of signs of damp, then,

boom, you don't have to go very far to see a huge crack in the wall.

You know...

How far have I come?

One, two...

three feet. It's not making a very good first impression, is it?

Every room revealed a new sign of subsidence, or damp,

and the upstairs bathroom was only accessible via the second bedroom.

The one positive, well, potential positive,

was the garage that belonged to the previous owner,

but it wasn't clear if they actually owned the land it was built on,

or had right of access to it, which is why I was surprised that Eric,

a vastly experienced developer with some 25 properties,

decided to take a crack and spend £44,000 at auction.

So why this particular house, then?

I asked myself that exact question.

-Did you see it before you bought it?

-I didn't, no.

-Naughty, naughty.

-I know, yeah.

Was it worse condition than you thought, when you saw it, then?

Yeah, this is by far the worst one we've bought, so...

We'll have our work cut out with this one, I think.

The question still to be answered was if business partner and brother Jack

would think the same thing when he saw it.

Eric thought that it could be sorted for 20 grand and in an eight-week schedule.

We are back a year and a half later.

Wow, what a massive change from the old rundown property.

The downstairs has been transformed from three separate rooms to a large

open-plan dining-kitchen with a front room off it.

The real work here has gone on underneath, though.

The floor's been dug down and re-concreted with a full damp course.

Those cracks have been taken care of and even improved the structure by

inserting steel bars and resin into the walls.

Upstairs, the layout has been much improved by moving the bathroom.

A corridor has been created and the bathroom has now been moved into the

middle, meaning the back bedroom is a good-sized double and the room to

the front is the same.

The new flooring,

plastering and central heating have really brought this house bang

up-to-date, and the neutral colour scheme is ideal for the rental market.

It's not just inside that's changed, though.

Eric and Jack have done the majority of the work with their three mates,

but they had to get in specialists to re-render the exterior.

And that old garage looks much improved - and is that access to it,

as well?

Well, that is a nice little bonus.

Eric must be thanking his lucky stars Jack hasn't fallen out with him for buying it.

When we first bought the property, obviously,

we didn't even know what it looked like,

so we didn't know if the garage was ours or not.

We found out it is and the bit of land in front of it is also ours and we

are trying to find out who owns the land on the right-hand side of the

garage to see if we can probably build some properties on there in the future.

Well, nothing ventured and nothing gained, I guess.

Although buying blind is certainly not something I'd recommend.

It was too cheap to turn down, really,

and I thought it was worth the gamble.

Until, er...until we came inside after it was purchased.

And realised a lot of work needed to be done.

The biggest challenge was the floor.

We've never done that before in a property.

And secondly, the chimney breast, also. We'd never done that, either.

However, we both make them work.

I think there's always something to learn.

A different property brings a new challenge, sometimes.

It's good to see that, despite all the extra work this house has given to them,

they've picked up new skills along the way.

But it's taken a very long time,

as it's been just three months shy of two years since they bought the

property at auction.

Normally, we do a property in about six to eight weeks.

This property was on the top end of that, maybe nine weeks,

but it was all spread out over a long period of time because we couldn't

actually get here in a big block period.

When we bought this property we bought one at the same auction and we had

properties we were currently working on before that, as well,

and then we bought some more after this one, which we decided to do first,

as they'd be quicker to get the rent in than this one would be.

That added time has meant they've lost rental income on this property and

it's also cost them 25 grand instead of that 20 grand target budget,

taking the spend here to 69,000.

Let's see if two local estate agents

think the work they've put in has been worth it.

The general condition of the property is very good.

They've done it to a nice specification.

They've modernised it throughout,

keeping it very neutral, very plain,

very simple, but have done a really nice finish throughout.

For me, the selling point of this property, without a doubt,

is the quality of the finish, having new kitchens, new bathrooms,

it's ready to move into, it's like a new home.

Eric and Jack normally aim for a 10% yield,

which would mean they'd need to command a monthly rental figure of £575 per calendar month.

What do the agents think?

The rental value of the property would be £475 per calendar month.

I would offer this property for around £475 per calendar month.

Yeah, 475 is what we thought it would go for, as well.

They are just 2% off that 10% target.

Even sales valuations of £85,000 on their £69,000 investment won't sway

them from keeping this as part of their now over 30-rental-strong portfolio.

With so many properties, is there any sign of stopping?

I think we're too young to even

think about stopping now.

We do get along on most things.

Obviously, we have little squabbles here and there,

but obviously I always come out on top!

Well, we hope you enjoyed those stories of properties that went under the hammer on today's show.

Yes, we'll have more thrills and spills right here on Homes Under The Hammer.

-See you soon.

-Goodbye.