Episode 17 Homes Under the Hammer


Episode 17

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Transcript


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Buying property can have its highs and its lows.

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It's not that easy, especially if you're stuck in a chain.

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You can eliminate that by buying under the hammer.

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Any investor tempted to divide up this large London flat

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could be making a mistake. I think you should keep it wide, spacious, airy.

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Does this commercial property in Crewe have the potential to become flats?

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The plans for downstairs were great.

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Not so here.

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These properties have been sold at auction and we'll find out

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

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Highbury in north London

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is one of the more desirable places to live in the capital.

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It has a fashionable mix of good restaurants,

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excellent transport links and was the historic home of Arsenal football club.

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When you're investing in property,

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you should look not only at what's happening in the area now

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but you should also research what's happening in the future.

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For Highbury in north London,

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there's exciting and interesting times ahead. More of that later.

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I've come to look at a one-bedroomed flat in this tall Victorian building.

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It's Flat G, so I'm presuming it's right up there.

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Perched at the top of these three flights of stairs

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is the property I'm looking for.

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The guide price is £160,000,

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which seems rather a lot for a one-bedroom flat

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but remember, this IS London.

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I'm slightly puffed out after running up all those stairs.

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Something I've noticed - there's no intercom system so whoever lives here

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will have to run downstairs to let guests in and then run back up again.

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My first impression is it's quite boxy in here.

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Don't forget it is a one-bedroom flat.

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Quite a small kitchen. Not much character, I have to say.

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But it's not going to be expensive to install a new kitchen

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because you can't get many units in here.

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Although you could think about knocking this wall out.

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It's only a partition wall and it would really open the space up.

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At the end of the landing is the bathroom.

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It's a big room and the white suite looks pretty good.

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There's no shower, but you could easily put one in.

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In here, you've got fantastic window dimensions.

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The light coming in here is incredible.

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Look, almost floor to ceiling windows here.

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You don't normally get that in top-floor Victorian conversions.

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It's a great room. You've got fantastic views out to that big wide street.

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Now, a lot of developers may want to come in here

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and create that extra bedroom just to get the extra value.

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They may think about putting a kitchen in here, using the kitchen space as another bedroom.

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But I wouldn't want to carve up this flat.

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I think you should keep it wide, spacious, airy

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and have that lovely grand Victorian feel about it.

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You know I said earlier there were exciting times ahead for the area.

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Let me show you why.

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This bedroom has got a very interesting view.

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Out there used to be the home ground for Arsenal football club.

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They've now got a brand-new stadium,

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literally a couple of minutes down the road.

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Now, this site here is really exciting.

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There's lots of development going on. Over 100 new homes are being created,

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there's leisure facilities and the old football pitch is going to be two acres of parkland.

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Now, lots of money is coming into this area

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and there are exciting times ahead.

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So this flat could potentially be a very good buy.

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Now Arsenal are playing in their new stadium,

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this road has lost the match-day crowds.

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The new development will retain the historic entrance to the old ground,

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as well as the wall at the back of the flat.

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Period conversions like this are always in huge demand,

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especially since it's moments away from Arsenal tube station.

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So who bought this place when it went to auction and how much did they pay?

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Lot 26 is Flat G. Nice looking building.

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Highbury. Good area.

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Realistic reserve.

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Where do you want to start?

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250.

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255.

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Have a think. 251. 252.

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253. 254. 255.

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256. 257.

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258.

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259.

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259. 260. 261.

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Have a think, of all you. 260 in the aisle.

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Anyone else? 261.

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No? If not, 260 with you in the aisle. First time,

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second time...

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third... 261.

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262.

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263.

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264.

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265.

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264. First time, second time, third and last time.

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265. 266.

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267.

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267, sir?

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266. First time, second time,

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third and last time. Have you all done?

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Sold. 266.

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With that fall of the hammer, the flat changed hands.

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It's now owned by Jusar, a property developer from London

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who paid £266,000.

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I met him at the flat to find out his plans.

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Have you got fantastic ideas for this flat?

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I think so. We're gonna make quite some changes here.

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Shall we go to the kitchen and have a chat? Follow me.

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Jusar already has a portfolio of 60 properties around London.

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He intends to rent this one out.

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But he's having second thoughts about the accommodation.

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I was gonna leave it as a one-bedroomed flat

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but having another look around, I can potentially make it a two-bedroomed flat.

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Hopefully it will generate a better return for me in the long run.

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If it sells as a two-bedroomed, it'll be more attractive.

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I'm disappointed you're going to do that.

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I walked in here and straight away loved the whole feel

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-of that grand room.

-Yeah.

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Where will your kitchen go?

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I'm gonna move it into the lounge area.

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The fashion around here, I find, is that people want to have a social aspect to the kitchen.

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They want to cook for their friends as well as watch TV or whatever.

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I think it will spoil the dynamics of that room.

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-It's such a spectacular room.

-Sure.

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Your kitchen's there so you need a table and chairs.

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-Do you think that room can take it?

-I think so.

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People who live round here are gonna grab bites or have TV dinners.

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Rather than have a formal dining table and chairs, cos it's quite a small room,

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I'm gonna have a large coffee table so they can put their feet up.

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The tenants you need are people that don't eat dinner!

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-Happy to sit in front of the TV!

-Microwave dinners!

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He plans to convert the kitchen into a second bedroom.

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But I reckon that'll be a tight squeeze.

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You think this will suffice as a bedroom? It's really small!

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It's tiny. I wouldn't live in here. I plan to move this wall here.

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Two or three feet to slightly widen this room.

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Do you honestly think that then this bedroom would be a good size?

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I think it'll be a reasonable size. Technically a double bedroom.

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And you're dead set on that? Have you thought it through?

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I think so.

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I think so. It's changed the budget a bit,

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but in the long run it'll be better value.

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'How much does he think it'll cost to convert to two beds?'

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I think round about 25,000. I don't really want to spend more than that.

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A lot of it is labour.

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How long do you think it will take you to change the layout now?

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With the new format, I'm guessing it'll take three to four weeks.

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'Well, a quick turnaround for this fast-food flat,

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'where the microwave looks like it's going to rule.'

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There's no doubt about it. Jusar spent a lot of money on this flat at auction.

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I know his plans to turn it into a two-bedroomed property

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will be worthwhile in the long run.

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I just can't help thinking this place really works as it is.

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Let's see what happens when we come back later in the programme.

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This is Crewe, where business is booming -

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a good sign as it makes it a smart place to invest.

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Well, former commercial property

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can often throw up interesting residential development opportunities,

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and I think there's one of those here in the west end of Crewe.

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It's a former taxi offices.

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It's got a guide price of £75,000.

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Not much from the outside, but you never know.

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This two-storey former taxi office

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may sit on a main road with no easy parking at the front,

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but at the back there's not only a flat-roof extension but also a large free car park.

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That's quite a bonus but the best is yet to come.

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The great news is that this property already comes

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with planning permission for a one-bedroom flat downstairs and a two-bedroom flat upstairs.

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So what have we got, then? This is what I guess was the main taxi office.

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This is going to be a bedroom on the left-hand side

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and a living room, like a through living room, on the right.

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So through into what is going to be the kitchen area.

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That wall is coming out. So is this one, which is going to create a really nice sort of open-plan area,

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which for a small flat is going to give it a big feeling of space.

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But the key is closing off the existing entrance and putting a new door here,

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then a doorway leading through to the new bathroom there.

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So you've got bathroom there, kitchen, open-plan living area. Really nice plan.

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Let's take a look upstairs.

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So, with a bit of sorting, this hotchpotch area could be turned into a decent one-bedroom flat.

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That's all fairly encouraging and so is the top floor.

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Well, this is a bit of a turn-up for the books -

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right at the top, an extra room.

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You can't call this a bedroom because it doesn't meet building regulations.

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Staircase way too narrow and far too steep.

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But also the head height. To make it a proper room,

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it has to have a certain percentage above a certain height.

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I don't think it meets that but a useful space and you'd have to ask yourself,

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is it worth converting it into a bedroom, getting planning permission?

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There's certainly space to go into the eaves that way, like here,

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but you have got issues with things like the floor, because I don't think...

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..it's terribly strong at the moment.

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In practical terms, that means you'd have to replace the entire floor

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with load-bearing beams which would put quite a strain on your budget.

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One thing which might influence your decision to get planning permission

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to convert that to a bedroom is what's going on down here on the first floor,

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because the plan is to convert it into a two-bedroom flat.

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You know how I said I thought the plans were downstairs were great?

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Not so here. What have we got, basically? Two bedrooms.

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This is going to be the lounge area so you've got

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a set of stairs coming into it, a set of stairs going out of it.

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But that isn't the bad bit.

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The really bad it is in here.

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You've got a tiny space which is currently the bathroom.

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It's about 10ft by 4ft and the plan is to convert this into

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the bathroom toilet and that bit, the kitchen of this flat.

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For a two-bedroom flat! You've gotta be kidding!

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This is bonkers.

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There's not enough space to swing a cat here, let alone a frying pan.

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I can't help feeling there must be a better option for the layout of this two-bedroom flat.

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Well, maybe not the most glamorous of properties, but you know what?

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It's a really good investment one to go for.

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You could convert those flats and rent them out for a bit of a profit

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or do them up and sell them on.

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Either way, I reckon it's a good one to go for.

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Let's see who spots the opportunity at auction.

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Lot 24, 118 West Street, Crewe, this time.

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60 then, start me at 60. 60 I'm bid. Thank you.

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At £60,000, for lot 24.

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Opening bid of 60.

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£61,000 waving at the back.

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At £61,000. 62 is it now? 62.

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63 is it?

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£63,000. 64.

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65. 66.

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67. 68.

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69.

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The half then? 69 and a half?

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70. Another half?

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£70,000, then the bid's left.

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Coming back in at £70,000 for Lot 24. Are we all done?

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At £70,000 then.

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You bought it, sir. Well done.

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So for £5,000 less than the guide price,

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the new owner of the old taxi office is David.

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He was born locally and has recently returned to Crewe to open a pub

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after a career as a management accountant.

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With the pub now running smoothly,

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he's finally given in to the old ambition to develop property.

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# Oh, how I want to be free

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# Oh, how I want to break free! #

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Purchasing an ex-commercial property

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that has already got planning permission

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certainly gives David a good chance of success.

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But he isn't too impressed with the proposed layout for the top flat.

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When it comes to the upstairs, I think there's an opportunity,

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if I can get permission to do it,

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to improve things substantially on what was originally planned.

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And then what will you do then? What would your plans for that...?

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-Upstairs?

-Yeah.

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Get building regs for the loft space to be used as a proper bedroom.

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What is currently the second bedroom would then become a kitchen-diner,

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so it will all become a big, sort of open-plan area.

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And then what was proposed to be the kitchen,

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-the toilet and the bathroom...

-Disaster!

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..would be just the bathroom.

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Right. Much better plan.

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-Fingers crossed.

-Absolutely!

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-What about downstairs? Do you like the plans for downstairs?

-Yeah.

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We're sticking to the plans for downstairs.

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David has spoken to the council about these potential changes

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and may not have to go through the planning process again,

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which will save him time and money.

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What about budgets for what you're planning?

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Well, as you know, the building cost myself £70,000.

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I'm working to a budget of 20 for materials and labour for everything,

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so that'll make me 90 plus 1,000 or 2,000 for legal costs and things.

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So I'm working to a budget of about 92, £93,000.

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Have you got somebody lined up to do the work?

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Yes. Yeah, I've got a good friend, Mick,

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who's one of the friends who lives in...

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Well, used to live in the area, knows it really well,

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so he knows the kind of...

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He's done these kind of properties before.

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He knows what he's doing, so I'm happy to work with him.

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-Is he a builder?

-Oh yes. Yeah.

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So what does builder Mick think of David's purchase?

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One of the main problems we've got in this house is leaks and damps.

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One of the big problems is on the wall,

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and out here, there's the rendering, the water's getting behind it

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and soaking it up like a sponge.

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Plus the soil starts leaking and on the roof.

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So what I'll have to do is take all this back

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and redo it and reseal the wall.

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With builder Mick on hand and armed with a 20-grand budget,

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the ever-optimistic David seems ready to take on this taxi office.

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Let's hope it's not too taxing.

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As David goes to prove,

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it's never too late to start in the property development game

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and his management background has meant he has all his ducks in a row

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and I'm sure he will make a great success of this project.

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It's a challenge though. Find out how he gets on later in the show.

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Well, days, weeks and months have passed,

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so work should have started on our properties.

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Will there be brick dust and ladders all over the place,

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-or will the properties look brand-new?

-Let's find out.

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MUSIC: THEME TO "MATCH OF THE DAY"

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We've shot back to Highbury in north London,

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the once-famous home of Arsenal football club.

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This one-bed top-floor flat overlooked the old ground

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and was bought for 266 grand by Jusar.

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There must have been a great team-talk by Jusar

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because inside, what a change!

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The large living room has a new kitchen at one end.

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Yet surprisingly, it still feels really big.

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The original bedroom remains

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although that has been extended into what was the bathroom.

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And a new bathroom's been installed. But there's no sign of that second bedroom.

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So has Jusar had a rethink?

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I've changed the layout of the flat.

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We only decided that after we started work.

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We've removed some of the walls - the bedroom and bathroom walls -

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and decided to keep it as a bigger spacious bedroom

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as opposed to having two cramped bedrooms.

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The other thing is I've relocated the kitchen to the lounge,

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the bathroom to where the old kitchen was.

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We decided not to have a full-scale bathtub and everything.

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We just put an extremely large shower cubicle.

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Jusar had planned to move just the stud wall between the kitchen and bedroom

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but ended up totally removing the wall between the bathroom and bedroom.

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Right, what we decided on this room was to open it up.

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There was a stud wall here and a stud wall here.

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This housed the bathroom with the bathtub behind me.

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Adjacent to that we had the storage cupboard for the water tank.

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We initially removed the two walls and decided it made a nice living space.

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We also looked at the ceiling and decided

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there was a lot of space hidden there on a suspended ceiling.

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So we removed all the tiles

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and you can see it's more or less the same height as the original bedroom ceiling.

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As he was looking up to the heavens, Jusar was blessed with a nice surprise.

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The hidden potential I found in this flat was the loft space.

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It's much bigger than I imagined.

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It's head height and the full width of the building.

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So there's plenty of space for another bedroom up there.

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It's a future project. It will increase the value of the property significantly.

0:19:520:19:57

Was it luck or a developer's hunch?

0:19:570:19:59

Either way, it looks as if Jusar could well get that second bedroom after all.

0:19:590:20:04

I was really concerned about putting the kitchen into that lovely living room.

0:20:040:20:08

But it actually remains quite spacious

0:20:080:20:10

thanks to another space-saving trick.

0:20:100:20:13

What I've done here, cos I felt this was quite narrow and too long,

0:20:140:20:18

is I've brought this cupboard storage back about a foot and a half.

0:20:180:20:24

I've retained the storage but not as much. It was excessive for this flat.

0:20:240:20:28

So we've got a bit of extra living area here.

0:20:280:20:31

The bathroom has an expensive shower,

0:20:310:20:33

though to my mind it doesn't make up for the lack of a bath. However,

0:20:330:20:38

the finish throughout is excellent.

0:20:380:20:40

All the fittings are mid-range, not basic DIY,

0:20:400:20:44

and the whole flat will have solid wood flooring, not just a laminate.

0:20:440:20:48

So how's the budget looking?

0:20:480:20:50

The budget was originally set for between 20 and £25,000.

0:20:500:20:54

That was for the entire flat.

0:20:540:20:56

The final cost, including materials and labour

0:20:560:20:59

has come to £19,100, so I'm quite pleased with that. Under budget

0:20:590:21:03

and to a layout which is slightly better than I'd originally planned.

0:21:030:21:08

Jusar plans to rent this flat out,

0:21:090:21:12

adding it to his portfolio of 60 properties

0:21:120:21:14

with 100 tenants.

0:21:140:21:16

Time to discover what two local property experts think it could fetch.

0:21:160:21:20

To sell the property you'd be looking for 290,000.

0:21:360:21:39

'Oh, dear. He'll barely break even.'

0:21:390:21:43

A little bit less than I'd expected.

0:21:430:21:45

I was looking more like 310, 320.

0:21:450:21:48

But I'm not looking to sell it immediately, anyway,

0:21:480:21:52

so it's just an academic figure.

0:21:520:21:55

'Right. Well, let's check out the rental return.'

0:21:550:21:58

On the rental market, you could achieve about £1,350 per month.

0:21:580:22:02

That's pretty much in line with what I was expecting.

0:22:020:22:05

I'd gauged it at around £300 a week.

0:22:050:22:08

It's pretty much as I thought.

0:22:080:22:11

'But this flat will remain with one bedroom

0:22:110:22:13

'until such a time as the loft conversion adds that second one.'

0:22:130:22:17

Back in Crewe, one-time accountant turned publican, David

0:22:240:22:28

had bought an old taxi office for 70 grand.

0:22:280:22:31

Well, from the outside, these new windows and doors

0:22:310:22:35

make it more like a residential property.

0:22:350:22:38

Inside, it's been opened up to make space

0:22:380:22:41

for the bedroom and kitchen diner, as David explains.

0:22:410:22:45

Well, as you remember, this was one big taxi office.

0:22:450:22:48

This wall wasn't here.

0:22:480:22:49

There was a wall here and a Saniloo toilet

0:22:490:22:53

and then another wall, door through there,

0:22:530:22:55

into a small back office.

0:22:550:22:57

We decided to take all of those away, create the bedroom,

0:22:570:23:00

a lovely living area, and a kitchen,

0:23:000:23:02

and a dining area, and we're very happy with it now.

0:23:020:23:06

It's quite an open and airy space.

0:23:060:23:07

David was always happy to follow the agreed plans

0:23:070:23:11

for the downstairs flat,

0:23:110:23:12

but the upstairs apartment was a different story.

0:23:120:23:16

Making all these changes happen was David's builder mate, Mick.

0:23:160:23:25

As you can see up here, we've opened it all out.

0:23:270:23:30

We took this wall out here to give it more room into the kitchen,

0:23:300:23:33

and along here.

0:23:330:23:35

This originally on the plans was gonna be a kitchen-bathroom.

0:23:350:23:40

We've just made it into a nice comfortable bathroom.

0:23:400:23:43

David has sacrificed a bedroom to get a separate bathroom and kitchen

0:23:430:23:48

and has definitely come up with a better configuration than the original plans,

0:23:480:23:52

but hadn't he hoped to get that second bedroom back

0:23:520:23:55

by using the loft room?

0:23:550:23:56

We originally intended to get permission

0:23:560:24:00

to make that second bedroom

0:24:000:24:02

to replace the bedroom that we lost by moving the kitchen.

0:24:020:24:05

But when it came to getting building regulations

0:24:050:24:07

and the work that we would have had to have done to achieve those,

0:24:070:24:10

we decided not to do it.

0:24:100:24:12

Apart from that, the staircase that came down into this room

0:24:120:24:16

spoilt this space,

0:24:160:24:18

so we decided to do away with that idea,

0:24:180:24:20

do away with the staircase, replace it with a loft ladder

0:24:200:24:23

and make this a whole presentable living area.

0:24:230:24:26

I think that was a sensible idea.

0:24:260:24:28

Getting permission for the upper room to be converted

0:24:280:24:31

into usable living space would have cost both time and money.

0:24:310:24:34

It probably wouldn't have massively increased David's return,

0:24:340:24:38

so I think he and his builder Mick have chosen the best compromise.

0:24:380:24:41

Mick is an experienced builder but David was a rookie project manager.

0:24:410:24:46

On a conversion like this,

0:24:460:24:48

there is a fair number of regulations to deal with.

0:24:480:24:51

Not easy when you're new to it all.

0:24:510:24:54

Well, this has been a very steep learning curve for me,

0:24:540:24:59

and the one thing that I would definitely do next time

0:24:590:25:03

is sort out the utilities before...

0:25:030:25:06

Or as early as I can, let's put it that way.

0:25:060:25:09

Because that's one of the things that's delayed us.

0:25:090:25:12

But has that steep learning curve

0:25:120:25:17

meant this project has cut corners and cost him money?

0:25:170:25:20

Time to ask the agents.

0:25:200:25:22

David paid 70,000 for the whole building at auction

0:25:350:25:39

and has spent £25,000 turning it into two separate flats.

0:25:390:25:43

So, what could he get for each?

0:25:430:25:47

I think there is very little to differentiate in values on resale.

0:25:470:25:52

But I would suggest that they are both between

0:25:520:25:55

probably £65,000 to £70,000.

0:25:550:25:56

David plans to rent the flats out for a few years

0:25:560:26:00

and then, as the area continues to improve, sell them on.

0:26:000:26:04

So, can the rent sustain a mortgage here?

0:26:040:26:06

For rental purposes, what I would suggest

0:26:060:26:09

is a figure of £375 per month for each flat.

0:26:090:26:12

Very good return, I'm happy with that.

0:26:120:26:14

David hummed and hawed about doing property renovations

0:26:190:26:22

for a number of years.

0:26:220:26:23

I've had the opportunity to do it for the last 10, 15 years,

0:26:230:26:27

but actually, I've got on with it now and got stuck in.

0:26:270:26:30

I really enjoyed it. I found it a positive experience.

0:26:300:26:32

And to actually see something develop in front of you

0:26:320:26:36

and be created, and be part of it, is really good.

0:26:360:26:40

I'm a happy accountant.

0:26:400:26:41

Well, the numbers have definitely added up for this happy accountant.

0:26:410:26:46

And after putting it off for so long,

0:26:460:26:48

David is now firmly bitten by the property bug.

0:26:480:26:51

# It's not too late... #

0:26:510:26:55

We'll be back next time for more Homes Under The Hammer.

0:27:010:27:04

-Join us then for more action from the auction.

-See you then.

-Bye-bye.

0:27:040:27:08

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0:27:190:27:20

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