Episode 9 Homes Under the Hammer

Hello and welcome to the show.

If you've ever been tempted to go to an auction, I think it's

time you took the plunge because there's so much variety to be had.

Yes, and there's lots and lots of auctions happening up and down

the country throughout the year,

so why not get in on the auction action,

and find your Home Under The Hammer?

Well, people are always asking for tips about behaving in the auction

room, well, here are just a few.

I mean, there are no hard and fast rules, but set yourself a budget,

make sure you can be seen by the auctioneer,

and, oh, back to that budget, stick to it!

Yes, and if you do put a bid in,

make sure you do it clearly and visibly, and don't go

over your budget because it will cost you in the long run.

Let's find out what today's buyers got up to.

I'm in Leamington Spa at this 1930s semi that has a wee problem.

It is sodden with, there is no other word for it, wee.

I'm in Plumstead looking at this three-storey mid-terrace,

that has a loo with a difference.

It's got a window.

And Lucy's making a splash at this plot in the Isle of Sheppey.

Let's not forget a boat. This would be a great space to house a boat.

You've got the harbour 100 yards away.

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, 140.

Royal Leamington Spa, to give it its full name,

is a picturesque town in the heart of south Warwickshire.

Formerly known as Leamington Priors,

its name changed in 1838,

following the discovery of alleged medicinal qualities of its spring

water. Although people no longer flock here hoping to be healed,

it's still a popular tourist spot and, looking around,

well, you can see why.

# I go to my happy place... #

Well, just a mile from the centre of beautiful Leamington Spa,

is the property I'm here to see.

And it's on this street of 1930s semis, so you might be surprised,

or probably not, to hear that it is in fact a 1930s semi.

Guide price was in excess of £125,000. Sounds OK.

One thing I do notice, though, unlike some of these other houses,

it hasn't got off-street parking.

So that's one way you could immediately add value.

Anyway, let's have a look.

So, very standard layout, these 1930s semi-detached houses have,

which is good,

because you could take inspiration from what other people have done to

them. This looks to me like it's been fairly untouched so far.

The stairs up to the bedroom, as I said, very standard layout.

Here is your front living room and this is definitely one of those

instances when you are definitely better off where you are,

on the sofa with your feet up

or in bed or with a chocolate biscuit and a cup of coffee,

rather than being here,

because, if you were here, you would be smelling...

Bleurgh! ..what I am smelling.

This room here, if you glance down at the floor, is sodden.

And it is sodden with,

there is no other word for it, wee.

You might think a bit of bleach on this and you'd be able to sort it

out and the smell would go.

Unfortunately, urine has a way of getting into wood.

It seeps into the timbers and often the timbers below.

So there's no amount of scrubbing and polishing and sticking it full

of disinfectant that is actually going to get rid of the smell.

Often, the only way to get rid of it is actually to replace the

floorboards and probably make that decision early on and save yourself

the hassle. It's really horrible.

# Ooh-wee! I've got you on my mind

# I get a funny feeling every time... #

To get rid of the doggy doings,

there are some other options.

Some people would recommend a biological washing powder,

or bicarbonate of soda.

But on a scale such as this, I think you'd be wasting your time.

Beyond the pongy problem, though, there is a nice living room with

the added bonus of double-glazed bay windows.

Heading away from the source of the smell,

the typical layout continues

with a small kitchen and a rear reception room next door.

There are no prizes for guessing what my next suggestion will be.

The first thing I would be thinking about doing is taking out that wall,

opening up the kitchen into a kitchen/living area here,

and the second thing, opening up that into a big set of French doors

opening out into the garden.

You don't have to do much more downstairs

to really transform this place.

So, it is a blank canvas but it's like one of those paintings where

there's, like, the little outline things

with numbers on so you paint by numbers. That's what it feels like.

You just have to paint the numbers, like similar properties elsewhere.

# Painting by numbers... #

There's a back garden which is a blank canvas too and there's plenty

of room so no problems finding space if you want to expand.

Back inside, upstairs is not in bad nick either.

The layout, like downstairs,

extremely classic for this kind of house.

It's three bedrooms, and the bathroom is in the right place,

it's upstairs at the top of the stairs there, which is good.

Got a little boxroom there,

a nice-sized double bedroom towards the front,

and a nice-sized double bedroom towards the back.

One thing that's a bit of a pleasant surprise,

you've got new double glazing which is good.

But it's really just a property that you're going to have to spend some

time and effort totally renovating and modernising.

It's not too big a job,

though I smell trouble with those whiffy floorboards.

But what does an agent from the auction house that sold the property

think of it?

Having looked around the property,

the first thing that comes to light is the fact it absolutely stinks.

The property needs mostly everything apart from the windows,

the windows have been done.

But the wiring will need checking, it will need a new bathroom,

a new kitchen, redecoration throughout, new floor coverings,

and that's about it, really.

Yep, that's it. But the fabric of the house is sound.

And three-bedroom properties are always popular.

So what could this house - guided at in excess of £125,000 sell for?

Resale value as a three-bedroom property, once renovated,

I'd anticipate the property being worth somewhere in the region of

£220,000 to £225,000.

Well, apart from the wee,

nothing particularly wrong with this property and I think,

that would possibly have put a few people off.

So, hopefully, it was a bit of a bargain

when it went under the hammer.

I start with Lot 87 which is, as you see,

a vacant freehold semidetached property.

Starting at 130 for Lot 87.

£130,000. 120, then, 120.

Thank you, sir.

120 on my left. At £120,000...

Unfortunately, our cameras didn't manage to catch the bidders

for this auction lot, but the bidding soon gathered pace

and we rejoined at £190,000.

£190,000, the gentleman seated, are you coming back in, sir?

At £190,000. It's being sold, make no mistake, at £190,000.

One, two, three. It is yours, sir, 364, for 190.

The successful bidder paying £65,000 over the guide price and

getting the property for £190,000 was David.

At the age of 23, this is his first auction purchase.

And I wanted to find out more.

David, great to meet you. Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this place.

It's in a very nice part of town,

it's not the most expensive part of town,

I think it's a good kind of trade-off

for what you get for your money.

It's got quite a lot of space to it, and nice garden,

so it's really ideal.

Now, is this something you've done before?

No, no, I'm actually...

I've just been working for about a year in a job,

so it's the first property I've owned myself,

I've been renting as a student up till 12 months ago.

Great, what is your job?

I'm a mechanical engineer.

Oh, OK. So, is your mechanical engineering going to come in handy,

-do you think?

-I've got some ideas of the structure,

-I can see some bits from lectures coming through...

-Really?

..but I'm probably a bit too theoretical.

-Take a sledgehammer, what could go wrong?

-Exactly.

I don't know if you've noticed, I've got a slight yellow bit just there,

-that happened from a hammer.

-Oh, no.

-Last weekend.

-Why, what happened?

-I had just knocked out an old shelf and...

-It bounced back?

-Yes.

-What a nightmare. So, are you DIY friendly?

Oh, yeah, to a certain extent, exactly.

But not probably to the extent of plastering.

I could do some tiling but, you know, within reason.

David, at the age of 23,

has managed to get to this stage by sacrificing a lot of time with sheer

hard work and determination, helping run club nights and DJing,

amongst other things.

I've been working part-time for, I guess, coming up to six years now.

I've even started a small business, alongside my job in the last year.

My parents have redeveloped properties in the past.

It was always my aim as soon as I became a professional to try as hard

-as I could to see what I could put together.

-Wow!

So, you did it the old-fashioned way, which is just saving hard?

Yeah.

But this is the result of your labours, if you like.

Yeah, I'm so happy to have it.

It's, of course, you know...

You can understand as you go through and you see the house more and more,

you realise there's more and more bits you need to spend and more work

to be done, but I still think when I first did the budget I added in some

contingency, so I hopefully, touch wood, think I'll be within.

And then what about the overpowering smell of wee?

Yes!

-It's just a thing we're going to have to sort out.

-Could be a replace

-the floorboards job?

-Yeah. That's the thing I'm worried about.

I was hoping that you could just take out the carpets,

but it does look, if you look in one of the rooms,

it does look like it's soaked in.

I've spoken to people who've had exactly the same

-and they had to replace the floor.

-Hm!

But, you know, take up the floorboards,

stick a bit of hardboard down, you'll be fine.

Exactly. It shouldn't take too long.

I've got some very good builders, so touch wood.

There's a lot of touching wood going on here. Have you noticed?

Yes, but I trust the fact that my builders are pretty good and,

hopefully, not too expensive from what they've spoken about so far.

So, like you say,

I've already started noticing every time I touch wood,

I'm eating into that contingency.

David has a healthy budget of £30,000,

not including his contingency.

He plans to create a kitchen/diner and build a small extension and he

has plans for himself and girlfriend Fleur to move in.

But I'd also like to rent out one room to one of our friends,

because she's still got another year at university.

So that way it helps us kind of pay back

a little bit shorter timescale for the mortgage.

And obviously for her,

it also means we can give her a slightly nicer place than some other

rental accommodation you can find.

Great! What's the timescale for doing the work?

Are you going to live in here while you're doing it?

We won't be living in here because we've got a set contract of where

we're renting at the moment. So that runs out in beginning of September.

So that gives us about ten weeks.

And then is this the start of a big property developing career,

-do you think?

-Well, we'll see.

I guess it depends how well I can do it this time around.

If I do it very well and make some money, then potentially.

Good luck with it all. I look forward to seeing how you get on.

Thank you very much.

So, there you go. 23-year-old David getting into his first house,

by doing it the old-fashioned way,

working hard and saving hard.

He's bought a good house. There's lots of work to do.

How will he get on sorting out that and the dog smell out?

You can find out later in the show.

South-east London and Plumstead,

and a property that is close to plenty of amenities.

There are good shops and transport links, both by train and road.

Things will get even better with Crossrail,

which will begin at Abbey Wood and draw below the surface of Plumstead

and Woolwich and will also take travellers into central London.

That will definitely boost the area.

Could Plumstead be a property plum ready for picking?

Halfway up this road is the property I'm here to see.

But if you carried on past the house I'm here to see, you would get to

Plumstead Common.

It's always, always good to have green space nearby.

This is our property. It is a mid-terraced house

over three levels and it has a guide price of £270,000, plus.

Let's go and see what you get for your money.

# You got one, going in

# You got one, going... #

OK.

OK, a lot of mail underfoot here in this quite long hallway.

I can see there's a lot of textured finish here on the walls.

Not a massive fan of that.

The first reception room is just here. It's a good size.

Nice, high ceilings.

The fireplace has been bricked up.

Very old-fashioned, that. And you've got two big windows at the front.

It's a decent-sized room, actually.

As I come down the hallway,

you've got the stairs right in front of me going up to the bedrooms and

then we've got reception room number two.

A little bit smaller than the first room.

Not a lot of character in here at all.

You have got central heating, which is always a bonus.

The windows would need to be changed.

They are very old-fashioned windows.

But there's not a lot more to reveal.

Two rooms on this floor. There's got to be more.

# In the midnight hour, baby

# More, more, more

# With a rebel yell

# More, more, more

# More, more, more... #

Of course there's more.

It's a three-storey house.

It looks like on this floor there was a bedroom and maybe a study.

But no sign of a kitchen or bathroom or anything.

The layout is intriguing,

as you are about to see me down in the basement.

What have we got down here?

Straight into the kitchen.

Nice spacious kitchen.

It's all a little bit dated.

The floor's dated. It's coming up. Not very pretty.

These are '70s, '80s cupboards.

If you were to take all this out,

you'd get a really nice kitchen in here.

These tiles are not very pretty either.

And just in there, you've got a toilet/shower room there.

Right directly opposite the stairs, we have got this spacious room.

Now, right, off the kitchen, not sure, a lounge, maybe.

But it looks like it may have been a bedroom.

There's a bed over there and you've got a wardrobe here.

Central heating down here as well.

I'm taking a guess this is not original.

I'm all for features, but maybe just not this one,

as this room is off the kitchen, it seems to me, with a revamp,

it could work as a good living/dining area,

which would make sense for family living.

Heading outside, the large garden is also very family-friendly.

Back inside and another thought.

There is a bathroom down here and that front room has its own access,

which makes me think it could work as a bedroom in a HMO -

a house of multiple occupancy.

So, there's three bedrooms up here.

But I'm pretty sure that bedroom through there

used to be one bedroom.

They've split it into two to make three. So the choice is yours.

Three bedrooms or two up here.

You've also got a toilet as well...

with a bit of a difference...

It's got a window.

Now, I thought about this one,

I knew I was missing something at home!

A window off my toilet over the stairs.

# I don't belong here... #

I'd love to say that that's the weirdest thing I've seen on my time

on Homes Under The hammer, but it's not even close.

Internal bathroom window aside,

what did a local estate agent think of the spacious property guided at

£270,000-plus?

I would say the property would need full refurbishment inside.

It may need new electrics, new heating system,

and new double glazing throughout.

However, it does offer huge potential and lots of space.

What kind of possibilities does this house have to offer?

I see the property as a potential family home.

However, there is demand in the area

for HMOs and multiple occupancy rooms.

What kind of money could the property, guided at £270,000-plus,

be worth as a family home?

Once renovated, I would suggest a value of £425,000 for the property

and a rental of £1,500 per calendar month.

And if you were to convert it into a five-bed HMO, with one public room,

what it could achieve on the rental market?

I would suggest that the property would rent for around £2,500 per

calendar month. Approximately £500 per room.

There is a lot of property in there.

But there's also a lot of things that need to be done.

The big question here for me is, what do you do with it?

It's got so many options.

Let's find out who had the answers when it went under the hammer.

Lot 30, six-room, three-storey mid-terrace townhouse.

I don't know, start at 280 on this, go upwards from 280.

280 with you.

280.

£280,000.

285 with you.

290. 295.

300.

305, sir.

The bidding got off to a flying start.

We rejoin at £360,000.

360.

365.

370.

375. 380.

Have a think.

375 with you.

380 elsewhere?

Phones?

377, have a crack?

375, first time,

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

Sold, 375.

Well done.

# Blue jeans, white shirt... #

The successful bid of 375 grand came from Qasim, on the left,

and Tex, on the right.

They are professional property developers who have joined forces,

and I caught up with them to find out their plans for this,

their fifth property together.

-Qasim, nice to meet you. Congratulations.

-Nice to meet you.

-Same to you, Tex.

-Lovely to meet you too.

-Good on you, chaps, well done.

-Thank you.

Why this particular property, then?

It was just in the right area and for the right price,

so we were looking for something as a longer-term investment,

we've done a lot of short-term, you know, buy to sell on,

whereas at the moment now we're looking for something that's going

to benefit from longer-term capital gains,

and then it ticked that box,

along with also somewhere that could offer a good yield.

OK, did you view the property?

No!

-We tried!

-Honestly.

You know... There was unforeseen, you know, things that came up.

I think it was, we know, we've been looking at the area so much,

we've just done a project ten minutes away.

There's only so much that can be wrong with the property,

looked at the particulars before the auction and went with it.

Sometimes you've got to be a bit bullish, and it's paid off.

'Let's hope it won't be a case of famous last words.

'Are they as confident when it comes to plans for their property?'

-Looking at it, we're basically looking to do HMO.

-OK.

It's going to be multiple rooms,

five rooms, and to be quite high-end,

so with them all to be en suites.

-Nice.

-It's part of the reason why we looked at this area,

because it's got good transport links that are only going to improve

with the Crossrail coming, so in terms of the room rental market,

in terms of what we paid for the property versus what the potential

rents are, it's a good option for something we're going to keep for

-the long-term.

-Because that's where we see the market going as well,

house-sharings, co-living, because of the prices, rental prices,

so we want to be known for high-end HMOs,

-we want to deliver a brand to the market and be known for that.

-OK.

The plan for the newest property in this brand's empire is to restore

the top floor to two double bedrooms with en suites,

so it's goodbye to that tasteful toilet window.

They'll have another two double bedrooms with en suites on the

ground floor, with the last double bedroom on the lower ground floor,

along with all the communal living space.

-What is your budget, then?

-I think we're looking at 40,000.

OK, start to finish?

Would you give it a range?

I think 40,000 is a good ballpark figure,

and then I think it just is a discussion on any additional,

because if we do extra things,

-then potentially it's going to incur additional costs.

-OK.

You know, period properties as well, there's a lot of,

-"What's behind door number one?"

-Exactly!

When you take off the tiles, you know,

and having a basement level as well, is there damp? Luckily it looks...

There's areas, but it looks quite good

for somewhere with a lower ground level, so I'm quite pleased.

So 40 grand-ish.

-Ish!

-Tex is thinking, "Ish!"

-Ish?

-I'd say 40 to 50.

-OK.

-Give it that.

-A bit of leeway.

-Yeah.

-So 40 to 50 is your budget.

What about the timescale?

-Timescale...

-Thinking four months?

-Nah, two to three months.

-Oh, I like it!

Confidence, confidence, come on!

We've done something similar before,

so hoping we can learn from those lessons and deal with things quite

quickly. We've got a good team of people that we work with.

-Luckily.

-That have done things previously with us.

-We're confident.

-I like that, no, I like it,

you've got to be that way - two to three, four,

doesn't really matter as long as you're working together.

You know what you want to achieve, common goals.

So tell me, what are each of your skills?

My background is supply chain and logistics,

so I have a very technical mindset, so it's the project management,

the scheduling of the contractors,

and then looking over the budget and timescales.

And Qasim is very much the more action orientated...

-Oh, OK.

-I'll make it happen!

-OK.

I'm very get up and go, so I'll go out there,

he'll have an idea and then he'll be like, "Can you go and execute,

"can you go and speak to these people, can you negotiate the deal?

"How can you make it happen,

"how can you make sure that we secure that property?"

-Just procurement as well.

-Get it done.

-Yeah.

Getting it done. So, chaps, I wish you all the best,

I hope everything works out for you.

-Qasim, good luck.

-Thank you.

-Tex,

-good luck.

-Thank you very much.

-No problem at all, pleasure, well done.

So, Tex and Qasim have got big plans for this project.

They want to turn it into a high-spec HMO,

but will it be Qasim's estimate of two to three months,

or will Tex be right with the four-month timescale?

All will be revealed later in the programme.

Still to come, this lot in Kent has Lucy changing her thinking.

If you're not keen on thinking big,

thinking small might make you a bit of money as well.

And, back in Plumstead, we find out if Tex and Qasim hit those targets.

Have to say I was right!

Back to south Warwickshire now and Leamington Spa.

Earlier, I looked around this 1930s three-bed semi.

It had a guide price of in excess of 125,000 and was in reasonable

condition, apart from one slightly overpowering issue...

If you were here, you would be smelling...

Bleurgh! ..what I am smelling.

This room here, if you glance down at the floor, is sodden,

and it is sodden with, there is no other word for it, wee.

The doggy pong raised some worries.

It could mean replacing floorboards.

But it didn't put the bidders off on auction day.

It's yours, sir.

Bought for £190,000 by 23-year-old mechanical engineer, David.

David had worked hard and made a lot of sacrifices to save up for this,

his first property, and he had it all planned out.

What we're hoping to use it for is for my girlfriend and I to live in,

but I'd also like to rent out one room to one of her friends, and so,

that way, it helps us kind of pay back

little bit of a shorter timescale for the mortgage.

David was clearly a young man with his head screwed on right

and he hoped to get his property ready within ten weeks

and to a budget of 30,000.

Well, it's now seven months later

and time to see exactly how David has got on.

Wow! An excellent extension at the back has opened up this property.

The once narrow kitchen has now been transformed into an open plan

kitchen/diner with access to the back garden.

Brilliant!

What was once the front reception room is now an extra bedroom and now

the only smell around here is the sweet smell of success.

Moving upstairs, the bedrooms are looking lovely.

The entirely new bathroom suite also adds to the fantastic finish

throughout this property.

Outside is work-in-progress but David and his girlfriend, Fleur,

have done an incredible job here.

We put the extension on the back of the house,

we've ripped everything out, we've had rewiring done,

we've had plumbing done, completely new central heating system.

We've put in a new kitchen ourselves,

which was a bit of a challenge, but it was fantastic

and glad to have done it and saved us some money.

We've put a new bathroom in, we've redecorated,

new carpets, so the works.

They got tradesmen in to do the wiring and plumbing which is a must.

You should only ever use qualified people for those jobs but I am

amazed and impressed at them taking on fitting a kitchen,

and then there was that other job to tackle.

So the front room smelt pretty bad when we got it.

We ended up, we didn't rip the floorboards out in the end,

but we ripped a few out and we used some urine neutraliser, didn't we?

And some bicarbonate of soda and vinegar.

It worked pretty well and then we ended up yacht varnishing it.

The bicarbonate of soda and vinegar was a great one -

something Fleur found online

that actually saved us quite a lot of money.

But before you get your bucket out,

I know lots of people online like it as a green option.

But bicarb and vinegar are not just two innocent kitchen ingredients.

Put together, they create a chemical reaction,

so you really should tread with care.

Do thorough research and make sure you protect your hands and eyes and

always keep the area you're working in ventilated.

However, with one problem sorted,

another unexpected challenge came about.

We didn't realise, there wasn't anything in the legal pack to say

there was a drain that ran all the way through our garden,

so underneath where we're standing now in the extension.

You need the water board's permission

to build over their drains,

which took us, it's an eight-week process, and so obviously,

that is pretty much what put us back

about two weeks extra for us messing about.

Well, property developing is always a learning curve,

but David and Fleur have done an excellent job on this,

their first project.

They spent £35,000, which means an investment total of £225,000,

so will two local estate agents think it as a wise investment?

My general opinion of the property is it's very well presented,

it's much improved and it's got

some nice refurbishment features throughout.

I think he's done a very good job, actually.

It's to a level that would let out quite quickly, I would have thought.

Well, David and Fleur are already letting out two rooms to friends,

as well as living here themselves.

The agents valued the rental figures at between 950 and £1,400

per calendar month.

That top valuation would mean a yield of just over 7%,

so what do they make of that?

That sounds great. But from our point of view, of course,

the best thing is, at the moment, we're renting two rooms out and

we're getting a good rental whilst we're living here, so that's good.

They've come up with a clever plan here -

creating their own home whilst being prepared to share

means they can work on getting that mortgage down.

But what if they decided to sell up?

What would their 225 grand investment be worth?

With regard to the sales value of this property,

I would anticipate it being £235,000.

I foresee the resale value of the property to be between £240,000 and

£245,000, with a marketing price of £245,000.

That top valuation would mean a pre-tax profit of £20,000 minus

taxes and fees, which is very respectable.

So how do they see the experience of property developing now?

Stressful but fun?

Yeah, stressful, yeah.

It's been worth it. Worth it.

But it will be nice now to be able to go into work,

not tired from working on the house the night before.

We'll have a bit more social time.

-Yeah, that as well.

-See some friends again or something.

Today I'm on the Isle of Sheppey in Kent and, yes,

it is an actual island,

separated from the mainland by a seawater channel.

Now, Sheppey is much better connected than it ever has been

with a vast concrete bridge built seven years ago

at a cost of 100 million quid,

and easy access means Sheppey is back on the map with investment in

the island definitely increasing.

# Like a bridge over troubled water... #

The older bridge had to be raised to allow boats to pass underneath but

today it's easy to visit the pretty Queenborough Harbour where

Admiral Nelson himself once lived with his mistress, Lady Hamilton.

A prestigious heritage indeed.

Will today's lot have quite the same provenance?

A mere moment's walk from the harbour is the lot I'm here to see,

and here it is.

Now I can't pretend from the outside

it's not fairly disappointing, but you should know by now that the most

unappealing first impressions can result in exciting opportunities.

Well, you can but hope.

Now the guide price, £25,000 to £30,000.

We've definitely seen worse lots on Homes Under The Hammer.

Let's keep an open mind.

Well, from the outside,

it looks like a workshop and on the inside, it looks like a workshop.

But it's a fantastic space.

You've got the little inspection pit here, so if you're a car mechanic,

you'd go underneath, or, of course, let's not forget a boat.

This would be a great space to house a boat.

You've got the harbour 100 yards away.

It's in really good condition.

Nice and light to work in.

Let's see what's out here.

# Building a boat Building a boat

# Pieces of wood Pieces of boat... #

Down the side of the workshop and it's into building number two,

which seems to be an old office.

Again, decent space in reasonable nick.

You've got the loo, a desk, what more do you need?

There's no space behind this building.

The plot sits right up to the boundary at the back,

so this is literally it.

So what could you do with it, apart from the obvious?

# Building a boat Building a boat... #

Now, here's where you're hoping I pull out a big set of plans that

have already been passed to develop the site into something exciting.

Well, I'm afraid I can't do that as there aren't any yet.

Let's face it, this site is house sized,

and it's in residential street.

There's plenty of parking and I reckon you could easily fit

a three-bedroom home on here

and I've heard a rumour that 20 years ago,

planning was passed for just that.

Now, clearly, that doesn't mean you'd get permission now, but it's

another reason to give it a whirl.

# Rumour has it Rumour has it... #

You'd probably not get more than one home on here, but surely there's

space for a three-bed house.

Before you get carried away and start thinking big,

remember you are very close to the waterfront here

and on the edge of a flood risk zone.

You'd really need to investigate

whether restrictions apply to this area as it really is borderline.

If there are, it does limit what you can build and how you can build it.

Any other thoughts?

If you're not keen on thinking big,

thinking small might make you a bit of money as well.

Rent this place out as a workshop, and you could make 400 quid a month.

It would only take you around five years to earn the purchase price

back and that's if you bought it for around the guide price.

Now, that is plenty of time to pursue a planning application.

I can't quite give that idea up yet.

Yes, it looks like this one is

rather floating Lucy's boat but what does

a local estate agent think of this property,

guided at £25,000 to £30,000?

This site is a very nice size.

It's a good plot for a workshop,

which it has been used for in the past, and could be used again.

It has potential for planning for a three-bedroom house or possibly two

one-bedroom flats.

So as well as a family home, a flat could be an option,

but do the figures stack up?

A three-bedroom house in this area would be around £150,000.

A one-bedroom flat in this area would be around £75,000.

Those returns sound pretty healthy, but will the buyers be tempted?

Let's see who thought it was worth the risk at the auction.

A single storey workshop and office premises with development potential.

What are we going to say on that one?

£25,000, hands should be shooting up everywhere.

25, do I see?

Gave me 20, then. Start me where you will.

At 20, I'm on the way.

And two now, do I see?

At 22 and four.

24 and six.

And eight. 28 and 30.

29 if you like?

Yes, 29.

And 30. At 30 and one.

At £30,000 bid I've got.

One, I'm looking for now.

One, do I see? We're all done at £30,000.

In the room, it's going to be sold.

£30,000 then, back row, left hand side, maiden bid for the first time,

second, third and final time...

Are we all...

31, I've got. 31 I've got.

32, sir? 31 and a half because you were so close?

So close. No?

£31,000, then, I have for the first time.

£31,000 unless I get another 500 for the second time.

Third and final time at £31,000.

Are we all done? Yours at 31, then, sir, late bid but well done.

The successful bid of 31,000 came from Steve.

Steve and his wife, Hasmita,

are professional property developers

and regular viewers of the show might

remember them from 2008 when they bought a two-bed terrace in

Sittingbourne. This time round,

they met Lucy to share their plans for their newest acquisition.

So congratulations on this.

Did you expect to get it on the day?

Well, to be honest with you, it started off about 25,000 and I kept

out of it and it was between two other people.

I thought, in my head,

I thought, "I'm going to go up to 35,000, so I went 31

and I thought it was going to go a bit further with

someone else but it didn't so I actually

got it and I was really pleased that I got it for 31.

You are the perfect husband and wife team, is that right?

Yes, I have to do as I'm told!

Hasmita, what's your involvement?

I do all the money side of it, basically.

Once he says, "I need the money for this, I need money for that,"

I manage all the financing and he

does all the building and then on the side of that,

I do quite a lot of voluntary work as well for local

charities and my own charity.

So you're a busy, busy couple?

Yeah. She gives me pocket money, basically!

Steve and Hasmita have been renting

and renovating properties for the past

16 years and Hasmita also runs her own charity for victims of domestic

violence. So while they definitely

have their hands full with various projects,

they have big plans for the plot.

So, guys, come on, spill the beans, what I want to know is

what are you going to do here? Why have you bought this?

-Well...

-He didn't tell me he was buying it!

He didn't tell you?

-No.

-Oh, that's a bit sneaky of you, Steve.

I was at a spa day and he phoned me up.

Basically what it was, because when you go to auction, you never know,

do you? You go there and it can go silly money.

If it went 50,000 or something, I wouldn't be interested.

Basically, Queenborough is a nice place to live.

It's got a little marina over the back there

and it's got a regeneration programme.

They haven't actually started it

because of the money and the recession,

but if they do start it, they'll have little restaurants along there.

There's loads of nice houses,

-there's going to be a lot going on.

-So you thought,

-"Let's get in early and be ahead of the game"?

-That's right.

So, like all good property auction goers,

Steve did his homework,

spotting opportunity where others

might have just seen a couple of tired old sheds.

What's the plan?

We're going to knock all this down and we're going to build

two one-bedroom flats or two two-bedroom flats if we can.

Obviously we're going to work with the council.

If they accept that,

that's what we'll be doing but if they don't accept that,

then we're going to try and put a three

or three-/four-bedroom house on it.

OK, but what about the fact you're looking at building flats?

I'm quite surprised at that,

purely because I'm assuming there's a slight flood risk.

Are you in the flood plain area here?

I think we're just out of it.

Because obviously building flats means you've got to have sleeping

accommodation on the ground floor whereas if it was a house,

you could put the sleeping accommodation on the top floor

so that's the only thing that would concern me about building flats.

I think you just get more for your

money if you did do flats but if not,

a house is fine. We've been having a debate about a four bed.

I'm trying to get the extra in!

So, Hasmita, you're the lady who holds the purse strings.

-Yeah.

-What's the budget?

I think it's going to be around 90,000 to do this project.

-Am I right?

-Do you agree?

Yeah, I said 90,000 but I think we could get away with 80.

-Really?

-Yeah.

-That means ten grand for me!

You've got to allow 90 but we've

allowed 100 so we're pretty good there.

For two separate flats?

-Yes.

-One-bedroom flats, two-bedroom flats?

Hopefully we'll try to get two two-bedroom flats.

That would be ideal but if it comes to it and they say, "No,

"there's not enough room," we'll accept two one-bedroom flats,

-it'll be fine.

-What is the rental potential on two two-bedroom flats?

With two bedrooms, about 625 each.

The value of the two flats will be just near 100 each.

So, I can see why you're choosing the flats over a house.

-Yes.

-So, how long do you think it's going to take you?

Probably about six months altogether.

It could go into... To be honest with you,

it will take eight months but we're hoping to get it done in six months,

-basically.

-Wow, to complete the project,

and then onto your next one?

Yes, onto the next one.

-We're always looking.

-He can get

one done before the end of this year!

To be honest with you, we have got other projects to do anyway but we'd

like to get this one done first, purely because obviously,

it's sitting here, it's renting, it's quite exciting as well.

Guys, I can't wait to see what you do here.

Congratulations and I hope you do get the permissions you need.

-Thank you very much.

-Lovely to meet you. Nice to meet you.

-Thank you.

So, two-bed flats, one-bed flat, a three-bed house,

what will we find here when we return?

Who knows? You can find out later on in the programme.

When you're doing up a property, it can take longer than you think,

so, remember, just put a few days in lieu, just in case.

Yes. We've seen how one property turned out,

but what about the budget and timescales for the others?

Have they stuck to them? Let's go back and find out.

Back now to south-east London and Plumstead.

It was here I looked around this mid-terrace property that was guided

at £270,000 plus.

It was in need of updating but it

did have good room proportions, although

some of the features were a little unusual.

I've thought about this one.

I knew I was missing something at home.

A window off my toilet over the stairs.

# I've got a room

# I've got a room with a view... #

Spread over three levels, including the basement,

plus some outdoor space,

this property screamed potential.

Two gentlemen who recognised that were business partners Qasim,

here on the left, and Tex.

They paid £375,000 at auction and

had some very exciting plans for this tired terrace.

Looking at it, we're basically looking to do a HMO.

So, multiple rooms, five rooms, to be quite high-end,

so we want them all to be en suites.

So five rooms, all en suites so we want to be known for high-end HMOs.

We want to deliver a brand to the market and be known for that.

The HMO or house in multiple occupancy

made a lot of sense with Crossrail improving already decent links to

London city centre.

This was a plum spot for professionals.

The boys have already worked together for several years -

Tex looking after the logistics, Qasim project managing.

To get this property how they wanted it,

they had a budget of 40 grand and a timescale of...

Well, that was up for debate.

The timescale...

Three-four months?

Nah. Two-three months.

-Ah, I like it!

-Confidence.

Confidence, come on!

It's five months on and that high-end HMO they promised?

Well, I'm confident.

Well, what an absolutely brilliant property.

On the ground floor are two of the five bedrooms Qasim and Tex have

created, all with those en suites they promised.

Moving to the top floor, each room is beautifully finished and unique.

Plus, that split room is a thing of the past.

So this bedroom used to be two rooms.

There was a partition wall up here.

It was a very small boxroom, so for the purpose of a shared house,

it just wouldn't have worked for us,

so we removed that and created two en suites

for this room and the room next door,

which meant we had two good-sized rooms.

Really pleased with the way it turned out.

The room next door is just as impressive.

That room with a view is now a useful bit of storage for tenants

and, heading all the way down to the basement,

this property continues to impress.

Contemporary, fresh, clean lines.

Just what young professionals are looking for.

And where there once was a grotty bathroom,

there's now a communal dining room.

The fifth and last bedroom is a great size,

plus it benefits from its own entrance.

Stepping out the back, and even the garden's been spruced up.

And the building itself?

Well, it's expertly rendered.

This is one very smart HMO and I like the fact that all the rooms

have a bit of individuality.

When it comes to property developing, these guys are no mugs.

So the first thing was removing the chimneybreast to give

the additional space in the rooms, because it does, you know,

take up quite a bit of space and just where

we're trying to create good-sized

double bedrooms, it's important to maximise where possible.

New staircase...

With the fire regulations, for HMO requirements.

The local authority will only grant

a licence when you have complied with

the regulations on fire safety and amenities.

Qasim and Tex knew all about those jobs and budgeted for them.

But there is always the unexpected.

We had to render the front and rear of the property, which wasn't

originally sort of costed for,

some changes to the staircases...

One issue was we had to replace the cylinder, as well,

in the loft because we didn't

realise the loft height was so short.

So just little things like that, but nothing, you know...

As builds go, nothing too bad.

When we initially visited,

they thought the budget would be around £40,000.

It's come in at £56,000,

which isn't too bad.

But what about that timescale? Who was right?

So the timescale - I have to say, I was right.

Just under three months for the entire refurbishment which,

for a project of this scale, you know,

we're very pleased about and we're kind of, you know,

satisfied with the results.

Yeah, 100%.

This project has now cost £431,000.

So have the boys made a sound investment?

We asked along two local estate agents for their opinions.

My first impressions of this property are

it's been basically converted to a fantastic level and a fantastic

specification. Definitely targeted at the young professionals.

I really like the layout of the property.

Every room's been individually designed.

You've got an en suite for every individual room.

And you've got a kitchen next to the dining area which works really,

-really well.

-Converting this

property in this way for the HMO market is

definitely the most efficient use of space and generates the most income.

Let's find out what kind of rental

can be expected for this property as a HMO.

In the current climate, I believe this property will achieve

between £600-£625 per calendar month, per room.

And both agents agree, so what could that mean for monthly income?

That would give a total yield for the property of between £3,000 and

£3,125 per calendar month.

I think those valuations are very good.

We came in at 3,200, so, collectively, both agents

have come in with a figure that is where we targeted to hit.

Tex and Qasim's projected figure of £3,200 would give them an annual

yield of nearly 9%, which is pretty good.

And although they have no intention of selling,

the top resale valuation for the whole shebang was 480 grand.

That could be a profit of £49,000 minus taxes and fees,

but in the long term, HMO is the plan.

So what's next?

We've got another three projects

similar to this that are coming up so

it's going to be a busy period and we just plan to grow and keep moving

forward. This will add growth and we will keep growing the business and

keep doing the same thing.

Mm-hm. Happy landlords, happy tenants!

Time to sail back to the Isle of Sheppey in Kent

where Lucy viewed a lot just moments from the harbour.

On the plot, guided at 25,000-30,000,

stood an old workshop that,

from the outside at least, wasn't the most inspiring.

# Come on, everybody, and rock the boat... #

Well, from the outside, it looks like a workshop and, on the inside,

it looks like a workshop,

but it's a fantastic space.

Look, you've got the little inspection pit here so,

if you're a car mechanic, you'd go underneath, or, of course,

let's not forget, a boat.

This would be a great space to house a boat.

You've got the harbour 100 yards away.

# Oh, rock the boat

# To beautiful

# Beautiful music... #

The shed was certainly functional and,

along with the office space at the rear of the plot, complete with WC,

there was ample opportunity to get this on the rental market ASAP.

But Lucy had bigger fish to fry for this harbour-side shed.

Let's face it, this site is house-sized,

and it's in a residential street.

There's plenty of parking and I reckon you could easily fit

a three-bedroom home on here

and I've heard a rumour that 20 years ago,

planning was passed for just that.

And when it came up for auction,

professional property developers and husband and wife, Steve and Hasmita,

had a similar idea and snapped it up for 31,000.

We're going to knock all this down, and we're going to build

two one-bedroom flats or two two-bedroom flats, if we can.

Obviously, we're going to work with the council.

If they accept that,

that's what we'll be doing but if they don't accept that,

then we're going to try to put a three-/four-bedroom house on here.

All their plans were permission dependent but

for their first choice of two two-bedroom flats,

they expected the work to cost in the region of 90,000 and take around

six months to build.

Well, two-and-a-half years later, we're back...

..and it looks just the same.

Same windows, same workshop,

same office.

So what happened to all those options

Steve and Hasmita had in mind?

Well, since we last saw you, we've actually got the planning.

We've got planning for two

three-bedroom semi-detached properties.

The only reason we haven't built it is because we've been doing

developments since.

We've actually built four one-bedroom flats.

And that's took about a year and, the following year,

we had a three-bedroom house

and we converted it to two one-bedroom flats

and two two-bedroom flats.

And basically, we've got another project to do so,

the following year,

we're hoping to jump on here and build these two.

We might be doing it sooner.

Yeah, we might be doing it sooner.

She keeps me busy all the time, so...

With the build for the two

three-bedroom semis planned for a year's time,

the couple are really proving they are the perfect team.

Steve will be doing the groundwork and project managing, while Hasmita

will be in charge of their 120,000-150,000 budget.

These are the two houses.

They're quite traditional for this area.

So on this plot of land, we've got two three-bedroom properties.

We've got living area at the bottom,

two bedrooms on the second floor and then one bedroom inside the loft.

The architect did a wonderful job for us, so we've got two bedrooms,

kitchen and a living room, and a downstairs toilet

and another bedroom at the top.

So they're quite good family properties.

So it would be all in keeping with the community and environment.

The couple's plans will really

maximise the potential of the land that,

let's not forget, only cost them £31,000.

The shed hasn't just been sitting empty, either.

It's been rented as a boatyard almost the entire time,

bringing in a yield of over 11.5%.

Buying this plot has really been a savvy business decision,

so hopefully they'll be imparting some of that know-how to their kids.

We've got three sons that are sort of helping us as well now.

They're starting to get interested.

They are buying their first...

We're helping them by their first property,

but they've got to save up their deposit theirselves, so nothing...

We only started off with £30,000.

And it can be done,

so I'm encouraging my sons to do that now as well,

so, hopefully, it'll be family business.

Can they lead by example and make a profit on their projected

£181,000 spend?

We invited two local estate agents

to tell us what they thought of the plans.

I think they've maximised the potential of the plot,

considering it's so small.

I believe these properties are well-suited to the area.

They fit in with similar properties around, and are always popular.

The fact they've got planning for

two three-bedroom semi-detached houses on

this particular plot is quite remarkable,

bearing in mind the size of it.

I think fair play to the architect for the drawings.

It's certainly better than a sort of falling-down shed

that's on here at the moment.

The couple's plans are really making the most of the land,

but two houses means paying for two of everything so

will they see a return on their projected £181,000 investment?

I believe that if the properties are built as per the plans,

they'll be worth about £175,000 each.

I'd expect the prices to achieve somewhere in the region of around

£180,000 for each house.

-That's really good.

-Yeah, for my wife, not me!

That's really, really good.

I mean, I didn't expect it to be

that much so that's quite a shock for us.

Based on the top value,

the properties could sell for a combined £360,000.

That's 179 grand profit, minus taxes and fees.

Does that mean Hasmita has forgiven

Steve for buying the plot without her?

He's done really well.

Really proud of him, because he can see potential building projects

where I can't, so we work as a good team in that way.

Yeah, to be honest with you, I couldn't do it without Hazzy anyway.

So, you know...

She's my... She's my rock.

So that's it for today's show but

anything can and does happen on planet property.

So please join us here again next time on Homes Under The Hammer.

-See you then.

-See you.

-Goodbye.