Episode 36 Homes Under the Hammer

Hello. If you're like Martin and me and you absolutely love property,

sometimes it can be quite difficult to switch off,

even in these difficult market conditions.

Yes. When you're looking for your dream home, you could see it walking around town,

when you're on holiday, or maybe in an estate agent's window.

There's always temptation out there.

And one place to really get your pulse racing is in an auction room.

Well, when it comes to property, everyone has different requirements,

whether that's looking for a new home or somewhere to do up and rent out.

For some, it's about location, for others, it's about the character,

and for the rest, well, it's about the money it can generate.

So, here's what we've got for you on today's show.

'The layout of this one-bed flat in Sydenham needs a rethink.'

The first thing I would do would be to get all of these out

and put them all along here.

'There's a psycho shower horror in County Durham.'

One part of the property that is completely disastrous is the bathroom.

'And when you hear the guide price of this two-flat conversion in Stoke,

'you might think it's a steal.'

Just be aware that security might be a bit of an issue.

-'All of these properties went to auction.'

-500.

-'We'll find out who bought them and what they paid when they went under the hammer.'

-Sold.

'In the 19th century, the sleepy village of Sydenham

'was a day trip on the train for Londoners wanting to escape the city's smog and soot.

'And it became very fashionable when Crystal Palace was re-sited here.

'It still has lovely green spaces

'and the shops and cafes give it a trendy, villagey vibe.'

This street is conveniently located just off Sydenham high street,

which means you've got plenty of amenities close by,

including the local pub, if you fancy a quick drink.

Now, this is an area where one-bedroom flats sell on average

for around the £160,000 mark.

So when I tell you I'm here to see a flat of that size

which had a guide price of only £80,000,

well, I'm sure you're going to be as interested as I am. I'm going in.

'It's a period dwelling and the entrance is not straight onto the street level, which is good.

'Not so good is the shabby paintwork and the unwelcoming communal hall

'that leads to the upstairs flat

'and the one I am here to see.'

Hm. Bit of a cramped entrance area.

Not terribly inviting.

The bedroom is through here. Quite a good space.

A really lovely, big bay window.

And through here into the kitchen/living area, perhaps?

Straight away, the only redeemable feature in this room

is that big window, and there's a blooming great load of units right across it!

If this were my flat, the first thing I would do

would be to get all of these out and put them all along here

so you could enjoy that aspect.

It's a lovely, bright, sunny space.

Don't forget, you've got to eat in here,

you've got to live in here, you could put a nice table and chairs under there,

there's got to be enough room for a sofa, so I'd think carefully

and zone this room out.

But there's another door there, so I'm wondering what's through here.

What is it? A-ha!

Yes, of course, it's the bathroom!

I quite like the way these stairs divide the space.

It's far enough away from the kitchen to be acceptable.

I quite like that. And there's plenty of room in there

to maybe think about a shower cubicle,

so you could rearrange that so it really works to your advantage.

It's this little corridor that's rather unusual.

This here is a partition wall.

Let's get rid of that and open up this room

and you can incorporate this as part of your kitchen.

I think that would really work well.

# In every nook and cranny

# Could I see it there?

'This flat is a conversion in a three-storey building.

'Now, I have mixed feelings about conversions,

'as sometimes you do end up with rather odd proportions and useless spaces.

'This one isn't too bad on that front, but there are no period features, which is a shame.

'One other point to consider with conversions is soundproofing,

'as it's often not very satisfactory.

'But there are more obvious areas that require attention here.

'That kitchen is definitely beyond rescue.

'However, after a bit of research, I feel brighter by the minute.'

Now, I know this is a popular rental spot,

and with the guide price of £80,000,

I think this little flat could provide a very exciting yield.

Time to get my calculator. Bear with.

So, you could rent the flat out for £900 per month,

which is £10,800 per year.

If you spend let's say £10,000 on the refurbishments,

then that is a total outlay of £90,000.

Divide your rental income by your total spend, times 100,

well, you have a rental yield of 12 percent!

That is fantastic!

As I suspected, this could be a great rental machine.

# You got the money-maker

# Show them your money-making

# Get out, out, out

'If someone bought this property for around the guide price of £80,000

'it could be a real money-maker.

'Let's find out if a local estate agent agrees.'

The £80,000 guide price is a very good guide price.

There's hardly any properties in Southeast London you can get for under £100,000.

The works needed on this flat would be a new kitchen, new bathroom,

rewire, new plumbing, and reskimming all of the walls, at least.

'How much could this flat sell on for?'

I think if the flat was renovated and it was renovated well,

I think you'd get between £160,000 and £170,000.

'Do his potential rental figures tally with mine?'

In terms of rental, the property would rent for £900 per calendar month.

Well, it might only have one bedroom, but the proportions of this flat work well.

And with some modernisation, it could provide a great rental income for someone.

However, I still feel there is some potential to improve that layout further

and really make the most of the space on offer.

And no-one is going to argue with that guide price.

Let's see who seized the opportunity when we went to auction.

Who'd like to get me started on this? 80,000 anywhere?

Should be worth that all day long.

How much? OK, we'll start there. Who said that?

Both together, yeah? OK, 70, we'll start there.

71 if you want. 71. 72.

73. 74.

75.

76. 77.

78. 79.

80,000. 81.

81. 82?

Yes?

No? OK. With you, £81,000 on my right.

Thank you, 82. 83.

84. 85.

86. 87.

88.

89.

89. 90,000. 91.

91. 92. 93.

Still cheap. 93. 94.

95. 96.

96. 97.

98. 99.

100,000, back in, nearly.

101.

Back with the guys on my left. £100,000. Against you on my right.

Anybody else for lot 164?

If not, 100 for the first,

100 for the second,

-100 for the third and final time. All done?

-HAMMER BANGS

'Nipping in with that winning bid was Moheet.

'Property development's a bit of a sideline for him,

'with three properties he lets out.

'His real job is being a solicitor.'

# You're the legal man

# You've got to prove that you're no liar

'I met up with him at his latest purchase

'to hear about his plans for this flat.'

-Moheet, congratulations.

-Thank you.

What about this property did you like so much? Did you view it and do your homework?

Erm, I never physically viewed it myself from the interior.

I sent my father to have a look

and he said, "Yeah, it's fine, just cosmetically it needs updating,

"but otherwise, it's in a good location, good area, just off the high street," so I went with that.

-So you feel happy you've got yourself a good property?

-Yes, I do.

'And I agree. Moheet's faith in his father's judgement has served him well.'

# Father knows best

You're a solicitor. How do you combine that with property?

Well, I work full-time as a solicitor,

I have my own business in Shoreditch, East London,

and property I do on the side.

So I put time aside and look through auction catalogues, speak to local agents,

and I have a general keen interest in property.

It's quite handy, as well, solicitor, property developer,

it does kind of go hand-in-hand in a way.

-Yeah, exactly. I don't have to pay anyone to read the legal pack.

-Brilliant!

-Yeah.

-Do you read your own legal packs?

-Of course.

-And you understand it!

-Yes.

-Which is brilliant, cos not many people do!

I know. I've heard a lot of stories, even clients of mine buy something without reading the legal pack.

'For most mere mortals, the legal pack is a mighty tome.

'But for Moheet, it's little more than light reading.

'He believes that with the experience he's gained from previous renovations,

'this will be a straightforward development.

'He has a healthy budget of £10,000

'with a £2,000 contingency

'and hopes to have this flat ready to let in eight weeks.'

Now, I think the best way to add value to a property, of course,

-is to either extend or to find areas that you can improve on.

-Yes.

What are you going to do with this flat? Because it is very small. How do you think you can improve this?

Well, it needs a major renovation. I intend to put in a new bathroom, new kitchen,

there is a wall which I intend to take down, as well, to make the property feel a lot bigger.

Look at this. That's a waste of space!

You can get rid of that wall for starters and you can really open this room up.

Yes. I'd like to take that wall down.

It would create a bit more space, make the living room/kitchen feel a lot bigger.

I don't think it serves any particular purpose whatsoever.

One of the nicest things in this room is that rather grand window.

But you've got a whole stack of units and a sink going right across it

and you really lose the proportions of the window.

What about putting the kitchen somewhere else, against another wall, along there, for instance?

I have been advised by a building contractor who came to see the property that

that is probably the best location, so you get full functional use of the window.

It looks odd but I think we'll try and fit it on that side of the room.

-It's been fantastic meeting you today. Good luck.

-Thank you.

-I look forward to seeing what you do.

-Thank you very much.

-Good luck.

-Thank you.

Well, anybody that enjoys reading a legal pack and understands it

gets a gold star from me.

I like the fact that Moheet trusted his dad's judgement

and he bought himself this great little flat for a decent price.

So far, there seems to be no strings attached here,

but when it comes to property, we all know that appearances can be deceptive.

Will this really be a project without an incident for Moheet?

Join me later in the show and you can find out.

'This is County Durham in the Northeast of England

'and I'm near the coastal town of Seaham.

'With its stunning cliff-top views over the harbour and restored beach,

'it's no surprise that Seaham now thrives on tourism,

'while the rows and rows of red-brick terraces

'reflect the town's rich history of mining.

'All this is just a short bus journey from the ex-colliery village of Murton, where I'm off to today.'

Well, the property I'm here to see has certainly got great transport links.

Right outside it is a bus stop. Good stuff.

It's actually this here. It's a three-bed semidetached on a corner plot.

Had a guide price of 59,950 quid. Let's take a look.

'OK, it might be rather close to the bus stop,

'but this former local authority house does appear to be in good condition.'

Oh, nice big entrance. I like that.

Somewhere to hang your coats. That's what you need, practical space.

Stairs up to bedrooms and bathroom. Nice size living room there with a bay window, so that's good.

Down a slightly dark corridor, through to the kitchen.

This is where it starts to go a bit strange, cos in terms of kitchen units,

a little bit minimalistic. And, obviously, if you like tongue and groove, it's ideal.

But I don't think this is making the most of the space, for sure.

I would, I think, be radical. Knock out the whole of this wall,

make it a really through-flow kind of feel to this lower part of the house.

So you've got the lounge there, a sort of lounge/dining room area here.

Open that out with a set of French doors and Bob's your uncle!

'Yes, taking out that dividing wall would do wonders for the layout

'and no doubt make it a more desirable home.

'Through the kitchen door is a handy little utility area.

'But if you think this ground floor layout needs a bit of attention, just take a look upstairs.'

Well, one part of the property that is completely disastrous is the bathroom.

As you can see, they've built the bath into this little alcove.

It's horrible, it's claustrophobic,

and if you change nothing else in this house,

that has to go!

-HE SIGHS

-Calm down. Deep breath.

Meanwhile, up here, lots of space. Three decent size bedrooms, a separate loo.

Phew.

'Thank goodness for those three bedrooms. There are two at the front,

'one large and one not so large, while at the back of the house,

'there's a good size bedroom which has the slight look of a sauna about it.

'Definitely a house for tongue and groove enthusiasts.

'So, like the rest of the house, those bedrooms need work.

'Now for the garden, carefully avoiding that bathroom on the way down.'

Well, at the rear of the house, not a huge amount of space,

as the corner plot disappears to a triangle at this point.

But a few nice shrubs and fairly low-maintenance because of all this concrete.

But while we're out here, take a look at the back, which you should always do when you visit a property.

As you can see, nothing too scary. We've got hardwood windows but only single-glazed.

The guttering and the fascia boards could do with a bit of a paint.

But nothing out here too much that frightens me.

'As long as I don't go near that bathroom.

'But overall, apart from its layout issues, it's a great little property with bags of potential

'for that guide price of £60,000.

'Time for a second opinion, so we asked a local estate agent

'for his thoughts on this three-bed semi in Murton.'

First impressions of the property, it seems structurally sound.

There's no sign of any rising damp, no sign of any penetrating damp,

which would tend to suggest the roof's in good order.

I think first on the list of things to do would be a new kitchen,

maybe an alteration of the layout of the kitchen,

a new bathroom and a general overhaul, which would include redecoration and some reskimming.

'Just what I thought. Great minds... But is this three-bed semi right for the Murton property market?'

There's certainly a demand for this sort of property in both sales and rentals.

Thankfully, it's in quite a low price bracket, which will attract first-time buyers.

It'll attract the small family, as well, because it's a three-bedroom property.

'What sort of returns could this place achieve, first if sold on?'

Once renovated, I'd expect the property to achieve between £85,000 and £90,000.

-'And if let?'

-Once renovated, I would think this would achieve

between £475 and £495 per calendar month.

So, a good, solid house with loads of space.

Yes, it needs a bit of work, especially the kitchen and bathroom, surprise, surprise,

but in general, a good one to go for.

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

Lot number 38. We've got this with a price guide of £60,000.

Anyone want to pay and give me 60,000?

58? 56?

55,000 anywhere?

One bid of 55. I can't sell it at that, but we're off and running.

Anyone want to play in? Anything further?

56,000 on the front row. 57? I'll take 500.

I'm going to sell to the lady at 56. I'm selling it once at 56.

For the second time at £56,000.

-HAMMER BANGS

-Sold to the lady on the front row at £56,000.

Buying at auction's easy, isn't it? One bid and you're in.

'Easy-peasy in this case, that's for sure.

'That successful and only bid made by Julie

'was on behalf of her son and his partner, Nicole.

'Nicole came to meet me at the property without her partner, Richard.

'It turns out he's a very busy man,

'as he couldn't even make it to the auction,

'where they managed to get the three-bed semi for £56,000,

'£4,000 under the guide price.'

-Nicole, lovely to meet you.

-Nice to meet you, too.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-It's very close to our farm,

just up the road, a turkey farm up in Murton.

-A turkey farm?

-A turkey farm.

-Oh, wow!

For Christmas. Someone's got to do it.

So we wanted this property because we want to make a bit of an investment

but we want to move into somewhere straight away.

-So it's to live in?

-Yes.

I hardly see my partner at the minute, cos with him being a farmer,

he's working an average of 14 hours a day, so I hardly see him,

so we want to live together and hopefully one day move into the farmhouse

and the money off the house when we resell will hopefully go towards a bungalow for his mother and father.

-OK. Great. So quite convenient, where it's located.

-Yes.

You go up the main road, turn right and it's there.

-And that was one of the main reasons for buying this.

-Yes. It's so close.

-Tell me more about the farm. How many turkeys have you got?

-About 500.

-500? Free-range?

-Yes. They all live outside and come in on a night when they're ready.

-Do they?

-Yes. HE LAUGHS

-What do they do at night? They don't go up on perches like chickens, do they?

-I don't know.

I haven't really sat in enough to know.

# Gobble-diddle-ip, gobble-gobble-diddle-ip

# Gobble-diddle-ip, gobble-gobble-diddle-ip

# Come on, let's turkey trot

# Let's get it while it's hot

'Whisper it quietly, but it seems that getting this place

'has killed two birds with one, well, auction bid.

'Nicole and Richard will have a home together, and when done,

'it'll provide the finances for a new house for Richard's parents.

'So let's talk turkey about what the couple have planned here.'

This house is a bit of a project.

Hopefully, getting it at the price we did, it'll be a bit of an investment.

There is work to be done to it, but it's not loads.

We can just move in straight away and just do things as we can afford it.

Right. OK. Have you got a budget for what you're planning?

No, we haven't. Just as we can afford things, we're going to do it.

So at the moment, zero budget?

-Well, budget of how much we can afford out of our bank accounts.

-Right.

So, what are you going to do, then, to start off with?

I think we'll start in here, in the kitchen.

It's a dining room at the minute, but we're going to move the kitchen into here,

make an L-shape of units

and then really work on the bathroom, cos the bathroom is in much need of looking at.

Right. It's currently two, isn't it? A bathroom and a separate loo.

-Are you going to keep it like that?

-No. Knock the wall through, make it into a longer bathroom,

and the bath with the tower at the end,

-we're going to knock that through so it's an actual bathroom and not a little corner to hide in.

-Right.

-So that doesn't come for no budget.

-No, it doesn't.

-How are you going to cope with it?

-We'll just save and then we'll do it when we can.

-Literally a bit at a time.

-Yeah. Sounds crazy, but yeah.

-Well, no! But in the meantime, you're going to be living here.

-Yes. Move in as soon as we get the keys.

It's obviously difficult for young people to get on the property ladder at the moment.

-How have you managed to achieve this?

-Well, it's going to be part of an investment with the farm.

Richard's now becoming a partner, so his first investment is going to be to do up this house

so we can live together, but at the end of it, we will be able to sell it on

or rent it and get something from it.

'Whether they decide to sell or let this investment,

'it will provide income to go towards a new house for Richard's parents,

'which will most likely be built on the farmland.

'As with their unknown budget and the timescale for the work,

'how long they'll be living there is equally up in the air.

'That will depend on when Richard's parents decide to retire.'

-Tell me a bit more about you.

-I'm at university studying photography.

-Oh, wow.

Part-time working on the farm with children and animals.

-And in terms of property renovation, have you ever done any?

-No, none.

-Are you going to get involved with the actual renovation?

-Oh, yeah, definitely.

With Richard working long hours, I'll have to do things when he can't, and then when I'm busy, he can.

-Any DIY experience at all?

-I can paint. HE LAUGHS

Well, that's a good start. And presumably stripping wallpaper.

-Yes.

-And taking things to pieces.

-Mm-hm.

-Doesn't requite too much skill.

-No, not really. Don't think so.

-Well, listen, congratulations.

-Thank you.

-Good luck. We'll look forward to seeing how you get on.

-OK. Thank you very much.

Well, it seems this place is absolutely ideal for Nicole and her partner.

Bit of work to do to sort it out, but just as well there isn't too much

when you haven't got any budget whatsoever.

Will she manage to turn this slightly ugly duckling into a beautiful swan?

Hopefully not a turkey. You can find out later in the show.

'Coming up, there are plenty of shocks at this Stoke property.'

What a surprise this place is turning out to be.

'Back in County Durham, it's been hard work for Nicole's boyfriend, Richard.'

Scrambling about under these floorboards for days on end isn't a great deal of fun.

'But first, nothing was safe when Moheet got going.'

We stripped the whole place out and we've had a complete renovation.

'Time to return to sunny Sydenham in Southeast London

'and this one-bedroom ground-floor townhouse conversion

'which had a guide price of £80,000 at auction.

'While it was certainly small, it was far from perfectly formed.

'Poorly converted and maintained, its dark corners were crying out for a face-lift.

'The flat was purchased at auction by Moheet for £100,000.

'He's a solicitor and part-time property developer.

'He planned to transform the place from small and dingy to compact and desirable.'

What are you going to do with this flat? Because it is very small.

It needs a major renovation.

I intend to put in a new bathroom, new kitchen.

Look at this. That's a waste of space.

Yes. I'd like to take that wall down.

I don't think it serves any particular purpose whatsoever.

'So nine weeks later, we're back.

'Has Moheet made the most of this auction lot?'

# Making the most of what we have got

# I know that it's not a lot

# Making the most of what we have got

# I know that it's not a lot

# But it's gonna have to do

'It's evident that work is still underway,

'but just as evident that Moheet is close to completing

'the cosy, comfortable and modern flat he'd envisaged.'

# Making the most of what we have got

The first thing we did was get a skip and throw everything out.

And we've done a complete renovation, so we've renovated the bathroom,

we've moved the kitchen from the window along the wall

and we've taken the skirtings out, we've taken the flooring out, taken the doors out and replaced them all.

'Moheet has made the most out of the compact kitchen and living space.

'He has opened up the area around the window, just as I'd hoped he would.

That allows the window to become a feature of the room.

'And by removing the partition wall,

'he has maximised the floor space available.'

What we have done is, there was a partition wall between the kitchen and the hallway.

That's come out. Removing the wall in the kitchen has made a big difference to the space

and it makes the flat feel a lot bigger.

'The flat now has a smoother flow from one room to the next.

'By opening it up, Moheet has allowed natural light

'to eliminate the dark corners.

'And his transformation of the bathroom

'has added a touch of the wow factor.'

The bathroom was a complete mess when we bought it,

so we stripped everything out,

we've put in a new toilet, a new sink, new bath, new flooring

and retiling, done a small feature wall, as well.

'It's lovely little touches like this and the refurbished sash windows

'which have helped to elevate this renovation.

'Moheet has also installed a new boiler and central heating system.

'The electrics have been serviced and certified

'and the walls and ceilings have been replastered.

'He had a £10,000 budget with a two grand contingency.

'Did he manage to stay on track?'

I've come on budget. I don't know the exact figures,

but I know that I haven't spent more than ten.

'Moheet is confident he will be on budget when the work is finished here.

'Added to his purchase price of £100,000,

'that will mean a total outlay of 110 grand.

'He is a bit behind schedule, though, having hoped to have the renovation completed in eight weeks.

'But is he happy with the development?'

I think the overall renovation has gone very well.

It's nice and a light space to live in

and I think there's been some good changes to the place.

'We asked two local estate agents to give us their opinion

'on Moheet's renovation.'

Looks nice and cool and fresh. Little bit on the small side.

The bathroom's very high spec, very boutique.

Very nice indeed.

I believe the property has been nicely presented, good location.

It's slightly on the small side.

It's got a quirky layout, which will deter some but will be attractive to others.

Generally, I think it's a nice first-time purchase, nice one-bed flat.

'Moheet is undecided whether to sell up or rent out.

'Perhaps the estate agents' valuations will help him decide.'

On the rental market, I believe it would achieve

somewhere between £750 and £800 per calendar month.

On the rental side, I believe it would achieve £800 per calendar month.

'£800 per calendar month would earn Moheet a yield

'of just over 8.5 percent. Is he happy with that?'

I was expecting more around the £900 a month figure.

But it's OK.

'Perhaps the sell-on valuations will be more to Moheet's liking,

'bearing in mind his total spend of around £110,000.'

If I was to put the property up for sale,

we would expect to achieve in the region of £150,000.

I would value the property at between £165,000 and £170,000.

'Those valuations, if achieved, would give Moheet a profit

'of between £40,000 to £60,000, minus tax and expenses.

'Is resale a more attractive proposition?'

That's within my expectation. The 150 mark was what I was expecting.

So anything above that is great.

# Making the most of what we have got

# I know that it's not a lot

'Well, they say the best things come in small packages

'and this one could deliver Moheet a big profit.

'So, is it enough to tempt him back to another auction?'

Definitely, yes, I will be doing this again.

'I'm in Staffordshire, where the potteries industry all started,

'and you can still see its legacy all around.'

# China in your hand

Well, it's lovely to see the old potteries integrated into the regeneration of the area.

This one is 200 years old and Grade II listed.

And since it closed as a pottery, it's been used as a brush factory,

a restaurant, and now it's a design studio.

Before that, though, it was a jazz club.

I wonder if the property I'm here to see will be modern or traditional.

'The auction lot I'm viewing is located in the Stoke suburb of Shelton,

'home to the main Staffordshire University campus.

'So, not surprisingly, Shelton has a large student population.'

Well, the property I'm here to see is a house which has already been converted into two flats.

Guide price was £45,000.

This is it. It looks a little bit grubby from the outside,

but one thing you've got to say, it's huge!

So for that money, it's looking good already.

Definitely one of those properties that I don't know what I'm going to find

until I step through the front door.

But what have we got? Well, as I said, it's been converted into two flats,

upstairs there and downstairs here. Before I go any further,

one thing when you are converting it's worth considering the cost of is splitting the electricity.

If you have a house, it normally has one supply of electricity coming into it.

Converting it into flats, you have to have those electricity supplies split into two

and that can be terribly expensive.

In this case, there are two meters, so the good news is that all that's been done.

Obviously, it has been operated as two flats.

Into the ground floor one and doesn't look too bad.

A bit shabby around the edges and in need of renovation.

But in terms of space, what a lovely surprise.

This room here, two bay windows, absolutely great.

No obvious signs of structural problems. A bit of damp here and there but nothing too worrying.

What does cause me a little bit of concern is the blindingly obvious,

which is the fact that there are these security shutters on the windows

and the glass in most of the windows, as it turns out, has been broken, probably vandalised.

You do have to factor that into your thought processes.

Why has that happened? Is it something which happens a lot around this area? I don't know.

I'd want to talk to the neighbours and maybe chat to the police,

find out what the situation is.

And then, when you come to do renovations,

just be aware that security might be a bit of an issue.

# I want security, yeah

# And I want it at any cost

'Also in the ground-floor flat, next to the front door,

'there's a very large bedroom with this bay window.

'Then down a long corridor at the back, there's a second, much smaller bedroom,

'plus a small, very dusty and grubby-looking bathroom, although the suite may be salvageable.

'But the kitchen's been totally stripped out.

'The boiler remains, but if this property has been vandalised,

'there could be lots of pipe work missing.

'However, this auction lot certainly has a lot of square-footage for that guide price for £45,000.

'Let's see if the flat on the first floor is as spacious and as damaged.'

So, into the upstairs flat, and round that way you've got your living area,

a tiny little room and your first bedroom,

but then, once again, the TARDIS-like qualities of this place

just come brimming to the fore.

Down this corridor, a second bedroom, a bit smaller.

A little area for your boiler. A bathroom and loo. I think that's pretty serviceable.

But then through into the kitchen.

Not a bad size space, but again, lots of work required.

But, you know, what a surprise this place is turning out to be.

Yes, there's work to be done, but boy, oh, boy, have you got the space to do it in!

# Boy, oh, boy

# Boy, oh, boy

'So, as with the ground floor, there's a double-aspect living room on the corner of the property

'and a large bedroom at the front, plus a selection of rooms off the corridor.

'But all the bedrooms are different shapes and sizes.

'Outside, there's another downside to this lot, that went to auction

'with a guide price of £45,000.'

So, the internal space is a real delight.

Sadly, you can't say the same for the outside.

What, no garden? No, there isn't, actually.

All there is is this little bit of concrete at the front here.

Now, that needn't necessarily be a bad thing,

because if you are looking to rent this place out, one thing tenants don't generally do

is look after gardens, so the fact that there isn't one could actually be a bonus.

'We asked a local estate agent for his thoughts

'on what could be done to this property.

There is a possibility to turn the house into one large family house

or possibly to rent the rooms individually to students.

But I see the more likely option

to keep the property in its current layout

and just get the return for two flats.

'How much rental income could be earned here?'

Once renovated, I would anticipate a rental return

in the region of £400 per calendar month per flat,

which would be a very good return.

'What about the resale value if the property was sold on as one unit with both flats together?'

I would anticipate for the resale value of the properties,

the properties would be resold as one lot

and I would anticipate the value in the region of £90,000.

I know it doesn't look much, but this place could actually turn out to be a financial gem.

Get the numbers right and the yields could be phenomenal.

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

We move on. Lot 43.

A substantial double-fronted end-of-terrace house.

Shall we say 40 to start it? 40 bid, standing left.

£40,000. At 40.

41. 41.

42. 43. 44.

'There were several interested bidders and we rejoin the auction at £49,000.'

49,000, seated left. Another 500 anywhere else?

49,500. 50? 50.

Another 500? 50,500.

51? 51.

No?

At £51,000, then, seated left. All done?

51, then, first time.

51 second time. You're together, aren't you?

You're not? Well, I saw him first. 51. 52, sir?

52.

53.

53 and a half. 54.

54 and a half.

55. 55 and a half.

No? 55 and a half, seated left.

Somebody want to come in at the back?

At 55,500, seated left. Gentleman's bid, no mistake.

55,500 for the first time.

55,500 for the second time.

-Third and final time at 55,500.

-HAMMER BANGS

You bought it, sir, well done. You've got to be quick, madam.

'Unfortunately there's little time for hesitation in an auction.

'Although it might be a bit unnerving sitting right next to a rival bidder.

'But it looks like there weren't any hard feelings.'

# You can come first after me

# Don't you worry about the way it could be

'It was local businessman Martin

'who paid £55,500 for these two flats.

'I met up with him and his wife, Kara, to find out more.'

Martin, Kara, great to meet you both. Congratulations. Right then, you bought this place. Why?

Well, we wanted another rental property, really.

So that we could... This is already converted into two apartments.

It's readily split, so minimal cost and hopefully a reasonable return.

So this is something you do as a business or part-time?

-Just in our spare time. Yes.

-What do you do when you're not doing this?

-Well, I work at my local hospital as an NHS manager.

-Oh, great.

-Yeah.

-And what do you do, Martin?

-I run a design and marketing company just around the corner.

-OK, that's convenient.

-Why this house particularly?

-It's cheap.

Secondly, its location. It's ideal for student lets because there's the university just down the road.

As well as the location and the price, what was it about the house that you like, Kara?

Well, I'd never actually seen it before Martin went to the auction and bought it,

so I can't actually say I liked anything at that point.

What did you think when you walked through the door?

-It's better than the last one we bought because it's actually got walls.

-What?

-SHE LAUGHS

-It's an improvement.

-Tell me more!

-Well, it had been used for all sorts of things.

So the previous owner had knocked down the walls, taken out the ceilings.

So, yeah, this one has at least got windows and doors and walls.

'It's all relative, I guess.

'Martin and Kara have obviously dealt with bigger projects than these two flats before.

'And although they're property part-timers, they do seem quite busy,

'with one house currently undergoing refurbishment

'and another ready and up for sale.

'This property is one they're hoping to hang on to and let out.

'I wonder what their plans are here. Will they change the layout?'

First of all, I'm not sure about this floor having three bedrooms or two.

The third one is tiny, to say the least. If not, it's going to be a study.

All the electrics and plumbing are already separated, so there's no cost with doing that.

The upstairs kitchen, we'd like to keep the carcasses, possibly the doors, we're not sure yet. We'll see.

The downstairs kitchen is going to be completely, you know, start again with it, really.

Bathrooms, again, they may be all right.

If they are, I'll keep them. If not, we'll change them.

Have you worked out the numbers? The kind of returns you might expect?

Spoke to one estate agent and they were sort of saying,

"Oh, you might get £550 a month for one flat, and perhaps £450 for the other."

So if we take a conservative 400, 425, what kind of returns would that generate?

That would give you a yield of probably just under 15 percent.

# Good enough

# For you it's good enough

'Well, a 15 percent yield is definitely very healthy.

'Of course, the exact return will depend on what rent they achieve

'and how much they have to spend to get everything done.

'They intend to project-manage this refurbishment rather than do the work themselves.'

-What is the budget for this, then?

-Depending on what the bathrooms are like once we clean those up,

-I anticipate £8,000 to £10,000.

-What, for the whole thing?

-Mm.

-Including windows?

-Well, windows is just glazing. The actual frames are fine.

As long as you get the right size, they just pop straight back in.

Now, when you see a property that has been so badly vandalised,

that has got all the security things on the outside,

it must throw up a few questions.

I think we were concerned. It's got security shutters, you can't hide that, to keep it safe.

The area is OK and it's going under regeneration.

-So I think in the future, it will improve.

-And what kind of timescale?

We've got a property to finish at the moment which we're working on

and perhaps put a bit of contingency in for things we may find. So perhaps up to three months.

-Congratulations to both of you.

-Thank you.

-Good luck with it.

-Thank you.

-I look forward to seeing how you get on.

-Yes.

-Thank you.

Well, it seems that out of this ugly duckling

could grow a very beautiful swan. And a profitable one, too.

Martin and Kara clearly have got the expertise,

management and design to sort this place out.

And it could, if it goes to plan,

generate that magical 15 percent yield.

Can't argue with that. See how they get on later in the show.

"Time is money" is a much over-used phrase.

But you know what? It's true.

Yes, if your project runs over schedule

then your bank balance can take a hit.

So with that in mind, how have today's buyers been getting on?

'We head back now to County Durham

'and the former mining village of Murton.

'It was here that we met Nicole, a photography student,

'who'll be moving into this three-bedroom semidetached house with her boyfriend, Richard.

'He works on his parents' turkey farm nearby.

'It was bought for £56,000 as a family investment for the young couple to live in

'until Richard's parents retired from farming.

'It would then provide them with cash to build a new house.

'But for now, it was down to Nicole and Richard to turn this into their new home.

'While it was generally in a decent state,

'the bare kitchen and a small bathroom did need some attention.'

There is work to be done to it, but it's not loads.

We can just move in straight away and just do things as we can afford it, really.

Right. OK. So have you got a budget for what you're planning?

-No. We haven't.

-Right.

-Just as we can afford things, we're going to do it.

-So, at the moment, zero budget?

-Well, budget of how much we can afford out of our bank accounts.

'And that would apply to their timescale, as well, as they were planning to do

'whatever was necessary as and when they could afford to do it.

'When we returned, 19 months later,

'we caught up with not just Nicole but also Richard and their dog, Holly.

'So, had time and money helped them transform their new home?

'Well, it's a good start. The living room is bright and fresh and a new fireplace has been added.

'It's altogether far more homely.

'At the back, the couple now have a functioning kitchen with units installed.

'This is a far more practical space,

'and while there's still lots to be done on the ground floor,

'Nicole and Richard are pleased with what they've achieved so far.'

We love it. Absolutely love it.

It's been a bit of a challenge, but we've worked at it, haven't we?

And we've just took our time, as and when we can do things, do them.

-It's coming along nicely, isn't it? We got there in the end, yeah.

-Yeah.

'Using the wall at least saves buying a notice board.

'Upstairs, and while the main bedroom still has the green carpet,

'the room has been redecorated.

'The small box room at the front has become an office.

'While the formerly pine bedroom is now a storage space.

'But it's been enlarged, and that's because Nicole and Richard

'have dealt with that rather claustrophobic bathroom.'

So if you can remember, we had the toilet and the bathroom completely separate.

We've done a load of hard work to make it all into one bathroom. I'll show you how we've done it.

So, as you can remember, we had the toilet as a horrible puzzle shape.

Now, we've knocked down the wall, as you can see here, where it was.

We've made it a nice long bathroom now. And I'll show you it.

So, this is our lovely new bathroom.

As you can see, we've knocked down the wall between the toilet and the original bathroom,

which has made great use of the space.

Richard's done a brilliant job of the tiling. Still bits to be finished. But it's fantastic. A great job.

'Working to the tightest of budgets, in this case, none at all,

'the couple have renovated the property as and when the money became available.

'It was down to Richard to do the bulk of the heavy-duty jobs,

'fitting that bathroom, laying the new flooring and installing the new kitchen.'

We got the units second hand from a local man,

which I've then re-decked out in new worktop,

sink and tiled right round.

For roundabout the £400 spent, I think it's money well spent

and a very nice kitchen resulting.

'Richard has certainly been on a very steep learning curve,

'never having had any DIY experience before.

'He tackled the tough labouring jobs himself,

'but made sure he got certified tradesmen to do the skilled jobs.

'Richard has put in many hours on this project

'and had to do a bit of a balancing act with his full-time job on the farm,

'which has recently branched into rearing lambs.

'Nicole has also been busy studying for her final year in photography at university.

'The new office upstairs is now the focus of a new venture for her.'

I started my own little photography business up, which has been nice, you know,

just doing it as and when I can. Obviously funds helping the house.

So it's been good. Doing my own little photography business.

I go to events and have props and people get dressed up and get instant prints. It's been really good.

'Let's hope that business "develops" well.

'Sorry, photography just "lens" itself to some bad puns.

'Richard, Nicole and Holly still have some way to go before this house is exactly the way they want.

'But fortunately, time isn't really an issue here.'

The plan is still eventually to move up to the farmhouse.

But that's, kind of, upon retirement of my mum and dad.

Well, that could be five years, ten years, it's very much a case of play it by ear.

-So I think we'll be staying here for a while, won't we?

-Definitely.

'So far they've spent about £3,000.

'Add that to their purchase price of 56,000,

'and they've invested £59,000 here.

'We asked two estate agents what they thought of the improvements so far.'

The improvements made to the property so far are good.

The central heating has been replaced, which is a good point.

The bathroom and kitchen have been refurbished.

And it's certainly got the makings of a nice family home.

I think they've done very, very well. These types of refurbishments

do take a long period of time, certainly doing it themselves.

And from what they've done so far in a short period of time, they've really cracked the knot.

So at the end of the day, they're certainly onto very good things.

'Will it turn out to be the investment they wanted?

'Nicole, Richard and his parents have invested £59,000.

'They've got time in hand for the value to grow,

'but what price would the estate agents put on it if it was sold now?'

If the owners were to price the property in its current condition,

they should be looking at realising around about £70,000.

If they were to finish the project, they should realistically be looking at £90,000.

Currently, I would look to market it around about £65,000.

With works completed, I would look to market it at between £85,000 and £90,000.

'The couple reckon on another £2,000 to finish the property.

'But for now, those valuations would mean a profit of between £6,000 and £11,000.

'If that upper valuation stayed on track,

'the top profit on a refurbishment could be a whopping £29,000,

'minus tax and expenses, of course.'

-That's fantastic.

-I think that's brilliant!

-Never expected it to have lifted that much.

-No.

That's fantastic on what we've spent on it, as well. That's absolutely brilliant.

'It sounds like good news for Nicole, Richard and his parents.

'But for the foreseeable future, this will be their home.

'Despite their limited finances, the couple have at least got the renovation on the road.

'And although the finish date is some way off, Nicole's already looking forward to the next phase.'

I guess everyone's the same, they'll always have something to do.

They'll get everything done and go, "Right, we'll change that bathroom," or, "We'll change the kitchen."

Cos that's what you do, don't you? You want to keep changing it and making everything fresh and new.

-Oh.

-SHE LAUGHS

-I thought once I was finished, I was finished.

-HE LAUGHS

'Back now to Shelton in Stoke-on-Trent

'where, from the road, this property would deter many property developers.

'Judging by the outside, the two flats were clearly in need of attention

'and weren't any better on the inside.

'But for Martin, who runs a design and marketing company round the corner,

'and his wife, Kara, a manager at a local hospital,

'it was worth every penny of the £55,500 they paid at auction.

'The couple plan to refurbish the two flats and let them out.'

-What is the budget for this, then?

-Depending on what the bathrooms are like, once we clean those up,

-I anticipate £8,000 to £10,000.

-What, for the whole thing?

-Mm.

-Including windows?

-Well, windows is just glazing. The actual frames are fine.

As long as you get the right size, they just pop back in again.

'The couple thought the work would take eight to ten weeks.

'But it's now seven months later.

'Martin, Kara and their dog, Ruby, are keen to show us the progress.

'We'll start in the upstairs flat.

'And just look at the change.

'The couple have gone for a neutral colour scheme.'

# Magnolia, you're sweet

# You're the best I ever had

'The work's taken longer than expected,

'so how is Martin feeling now?'

Relieved. It's not... it's not finished yet, but we're nearly there.

What should've been a sprint has actually turned out to be a marathon.

'Well, as any distance runner knows,

'you can hit a wall after several miles.

'But for Martin, there was a window early in the race.'

We took all the shutters off, changed all the double-glazed units,

and then three days later, they were all smashed.

Then the door was kicked in and it was vandalised inside.

So we repaired all that, and then a few months later, it was broken into again.

'Ouch! Double-glazed and double trouble.

'Undeterred, Martin and Kara raced on

'with a new alarm system to protect the property

'Downstairs, the entrance hall and double-aspect living room are now looking good,

'as is the bathroom.

'Little surprise that the kitchen down here had to be a complete refit.

'The whole property needed rewiring.

'The central heating's been sorted.

'The damp's been treated in the walls, which have been replastered.

'But this marathon's still got some distance to run.'

Originally we hoped to have the project finished in eight to ten weeks.

I think that was our original timescale.

And then with it getting broken into and vandalised, clearly that put the timescales back.

So it's taken probably around 10, 12 weeks.

So we've probably got about another two or three weeks' work in the property.

# Finish me off

# Finish me off

# And set me free

'And they faced another problem, as the builder they initially employed to project-manage the refurbishment

'left them halfway through.

'So Martin took over a lot of the work.'

With the builder leaving when he did, we had to employ tradesmen to come in.

We had to pay them by the hour because a lot of tradesmen don't like coming halfway through a project.

So, consequently, that's cost a lot more than what it originally should've done.

'Oh, dear. Where else has money been spent?'

The main expense is all the glazing. Two lots of glazing we had to put in.

'Well, the budget's gone over a bit.

'So, how much did all the work cost?'

I originally anticipated about £8,000.

That's what it should've cost. So we're now looking,

probably to finish it, probably just over £12,000.

'With the £55,500 Martin and Kara paid at auction,

'that takes their total outlay to £67,500.'

When we bought these, we wanted to rent these properties out.

This is really our retirement plan, if you like,

to make sure we've got some retirement income.

So I think we still want to go ahead and rent the properties out.

'To hear what rental income the two flats could generate,

'we asked two local estate agents for their opinions.

'How much do they think the refurbishments have increased the value here?'

It's been finished to a modern and neutral standard,

which should appeal to a wide range of buyers in the local area.

It's come a long way from its initial starting point.

The apartments are very clean, fresh and tidy.

And it's basically what you would expect from a refurbished property

possibly coming onto the rental market.

I think the majority of flats, certainly within the local vicinity, do tend to be purpose-built,

which means something like this, which is a conversion,

does add a little bit of character, and there is a shortage of that locally.

There's two bedrooms to both flats, which is also a good selling point or letting point.

And they are in a convenient location.

'Once both flats are finished,

'how much do the experts think the properties could achieve on the resale market?

'More than the £67,500 invested in them?'

Selling the whole property as a unit, you'd look to sell for

between £90,000 to £100,000.

I would anticipate the resale value for the total property

in the region of £100,000.

'Those valuations would produce a profit of between £22,500 and £32,500,

'before tax and expenses.

'It sounds like all the hard work's paid off.'

-I think that's really good news.

-Yes, it's almost exactly what I thought it would be, actually.

Yes, although the capital value is really irrelevant at the moment.

-We're more interested in the rental values.

-Yeah.

I would anticipate a rental income in the region of £400 per calendar month per flat.

Each flat would rent for in the region of £350 to £400 per calendar month.

'If Martin and Kara successfully let both flats,

'they're looking at a double-digit yield. Pretty useful for their pension pot.'

-I think that's about what we thought, wasn't it?

-Yes.

That'll probably give us, ooh, what?

Around about a 12 percent return, something like that, yeah.

I think that's where we wanted to be, really, in terms of the property.

So I think we're just going to finish them off now

and get them on the market for rental as soon as possible, really.

So there you go, you never know what stories you will hear on Homes Under The Hammer.

So join us next time for tales of subsidence and success.

-See you then.

-Goodbye.

-Goodbye.