Episode 1 Homes Under the Hammer

Hello, and welcome. When you're thinking about buying property,

the choices can sometimes be overwhelming.

Yeah, don't get bogged down.

Get yourself a clear head and get your priorities right.

Yes, find an area, set a budget, and of course, do your research.

And of course,

you might find just what you're looking for under the hammer.

Many different properties go under the hammer every week.

Yes, some are ready to move into,

others require just a little bit more tender loving care.

Those are the ones we love.

So, let's see how our buyers got on on today's programme.

In Tilton on the Hill,

the kitchen in this charming stone cottage is in need of a rethink.

I'd be inclined to knock it out, give yourself a bit of an extension.

While in Croydon, south London,

some legal complications with this end terrace need investigating.

It's definitely something that your solicitor should check out.

And in the town of Rainham in Kent, this bungalow needs paint,

and lots of it.

It's very marshmallow-like everywhere, soft powder pink.

All these properties were bought at auction.

We find out who got them and how much they paid

-when these homes went under the hammer.

-Sold. Well bought.

Don't you just sometimes crave the quiet life?

The chocolate-box cottage, the village green?

Well, you could always move to Tilton on the Hill.

It's convenient for pork pies,

being just eight miles from Melton Mowbray.

What a beautiful day in a really nice village on

the outskirts of Leicester.

It's this building I'm here to see -

a stone-built cottage with a guide price of £220,000.

It has three bedrooms, and it is beautiful on the inside.

But is it beautiful on the inside? Let's have a look.

OK, we've got a small porch-way area, and right in front

we've got a shower sort of wet room there and a toilet.

They are a bit of a strange shape because they are on the corner.

How you'd reconfigure that, I'm not sure.

And it does say to me that if there is a toilet downstairs,

there may not be one upstairs.

Up a step into the kitchen, which is a little tight.

But not too bad.

You'd have to start again in here.

Got the old-fashioned cooker there.

Stairs up to the bedrooms.

A little bit of storage.

I'm thinking to myself you need some more space.

I'd be inclined to knock it out and give yourself a bit of an extension.

Get that extra needed space in and around the kitchen,

and a bit of a family room as well. Let's see what else there is.

So, as I'm coming through,

I can see there is this small lean-to just there

looking out onto the back garden.

You can actually feel the heat coming in off that.

Into the lounge living area, with a real fireplace there -

what I expected in a village cottage.

A little bit of central heating as well.

And I can see through that window, that's the road,

which is the front of the house, so if you were looking to extend,

your only option would be to go into the back garden.

Sometimes extending into the garden

can really compromise the outside space.

But in this case, there is plenty of land with this cottage.

This is a conservation area, so by definition,

development will be restricted.

However, there is an old outbuilding

that is currently being used as a bin store.

I think this could be developed to be part of the downstairs space.

# Standing in the garden

# Your little garden... #

And there is more to explore back inside.

Upstairs we have got three bedrooms.

Bedroom one there, which is a really big bedroom, actually.

Wasn't expecting that.

Across the hall, we've got bedroom two, which is quite small.

Along a long corridor, wasted space there.

In the bedroom three, which is not only small,

it's a strange shape as well.

Now, there is no bathroom, no toilet upstairs.

So, for me, it's crying out,

"Turn this into your family bathroom up here,"

and if you are thinking of doing that extension,

don't just extend the kitchen - maybe extend above as well,

which will give you your bedroom back

so you can have three bedrooms,

bathroom upstairs and extra living space.

So, odd-shaped rooms are everywhere here,

but some space could definitely be put to better use.

# But I've got a blank space, baby

# And I'll write your name. #

We called in a property expert from the auction house which sold the

property to get his valuations

and opinions on extending.

It's a good-sized plot, so there's plenty of scope for extension.

However, it is in a conservation area,

so you would have to be a little bit careful on the materials

that are used to extend the property. It would probably

have to be in keeping with the surrounding area of local stone

and possibly slate roofs.

With a guide price of £220,000,

what scope is there to modernise and make a profit?

If it was modernised,

I'd expect the valuation to be somewhere in the region of 325,000.

However, if it was extended as well to probably make

a four-bedroom property, then the valuation probably would be

somewhere in the region of £450,000.

So, with a guide price of £220,000, extension or not,

there is certainly money to be made here.

But I reckon a house like this in a conservation area

could eat away at any potential profit

and this might become a money pit.

What could it fetch on the rental market?

Once the property is fully modernised,

I'd expect the rental to be in the region of £900 per calendar month.

If the property was extended to provide four bedrooms,

then I would expect that rental income to increase

to around £1,200 per calendar month.

This could be a beautiful family home in some amazing surroundings,

but it's just a little too small inside.

If it were mine, I'd look to extend,

which would give you that much needed extra space.

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

Lot number six.

Beautiful stone three-bedroom character property.

Who will start me off on the guide at 220, may I say?

218. 216. 216 is bid.

We're away at 216,000. 218, sir.

And 20, on my right.

'Having reached the guide price, the bids continue in £1,000 steps.

'We rejoin at £275,000.'

275. 276. 277.

Shakes his head. For the first time at £276,000.

The second time at £276,000.

Third and final time, if we are all done with it?

Sold. It's yours, sir. Well bought.

'Paying a whopping 56 grand over the guide price was Toby.

'He's the financial brains of a company with Paul,

'also at the auction.

'Their 276 grand bid secured the cottage,

'and it was the building brains of the company Paul

'who met me back at the property to tell me his plans.'

-Paul, nice to meet you. How are you? And congratulations.

-Thank you.

-So tell us about the auction. How was it?

-Expensive.

Didn't go our way. We were hoping to bag a bargain.

And we had somebody who really wanted it the same as us,

and that has pushed us up a bit.

So it puts pressure on us now for

the budget in the construction costs,

to try and keep that under control.

Why this particular property in this area?

It's... We've got a background more in new build.

We are trying to pick up a single...

We're a building company - a single building plot.

Couldn't find any. At the moment they are all overpriced.

And so we've looked for a bit of a doer-upper.

It's a new venture for you?

It is. I mean, I've done a lot of work for people in this kind of

environment, working for somebody.

Could be working for you on a refurb, barn conversion, extension, whatever.

But this is the first time as a company

-we've taken on this kind of job.

-If you're buying land,

-do you build on that land to rent or to sell again?

-For sales.

No, we can't afford to rent. We have to shift it on,

and we'll try and shift this on as quickly as we can.

How are you going to change it?

This is going to be a subtle renovation of the original cottage.

The stonework needs restoration. We'll put back timber windows.

To get our money back because, you know,

we've got to get the money back.

We're going to have to put a modest extension

to gain some extra bedrooms

and some extra accommodation space on the ground floor.

Big living kitchen with French doors overlooking the garden

and then hopefully another one/two bedrooms upstairs.

Assuming the planning permission goes through, which is always...

-Planning is always an issue.

-And takes time. Puts time on your...

Yes, takes a lot of time. It does. We've got an existing garage -

we don't know whether to convert that into another room. Again, budget depending,

that'll give us a bit more space on the ground floor as well.

-Yeah, of course.

-Possibly an oak frame garage if we can afford it,

but that isn't... That's looking doubtful at the moment.

-Talking of purse strings...

-Yeah.

-What is your budget, sir?

Well, we always talk ex-VAT, builders,

and I've done deed sale costs,

and we're looking at something around 112 plus vat.

-So we are looking about 130 grand.

-Yes, and that's...

Which is a lot of money. It's the VAT that kills us.

On the new build, you don't pay VAT.

Yeah. So the taxman will be happy on this one.

As well as no VAT on new houses,

VAT is zero-rated on flats

if they are new build or on alterations to suit people

with disabilities, or buildings used for charitable purposes.

But none of those criteria apply here.

The whole building - plumbing, electrics, re-plastering -

it's a complete shell rebuild, really.

-It is, isn't it? Complete overhaul.

-Yeah.

And how long is that going to take you, fingers crossed?

Well, that depends whether it's my decision

or the planning office's decision.

If we were just able to crack on,

we'd turn it round in five, six months.

But we're going to be waiting for planning permission. It's a conservation area.

I've got the conservation officer

who is going to have to sign off things like the way we are doing

the stonework and the restoring of the outside of the building,

so that will slow us right down.

What's the best scenario, do you think,

if you're having to wait for planning and...

-Within a year. That much difference.

-That long?

We could take three months trying to get planning permission.

So, I'm going to have to drop away and go and get a job.

-So, if you want anything doing...

-I might be looking for a job as well.

Pretty soon.

Work or lack of it might be a laughing matter now,

but when the recession hit,

it was far from humorous for Paul and the company.

We had a couple of big houses we'd built, lovely houses,

and nobody could get a mortgage. The bank wanted their money back.

You know, it's a story that's been heard a lot in recent years.

-Yeah. Of course.

-So, this is us.

It's been a hard five years, six years, coming back, really.

-It is.

-So, this is an important job for us.

The past experience of Toby and Paul demonstrates only too well problems

that can hit any kind of property development.

And even in this more buoyant market, there are issues.

The shortage of affordable land forcing them to change their plans.

There is a lot at stake for Toby and Paul, so what's the biggest worry?

The budget, obviously, is the big issue.

Whether we can get the specification that we need at

the high-end to get back what we need.

So, it's mainly the constraints of the budget.

The construction doesn't bother me in the slightest.

-I wish you all the best.

-Thank you.

-Good luck.

-Cheers.

-Good luck.

Paul's found himself a lovely cottage in a really nice village,

and I can understand why he stuck to his guns at auction.

But there are a few problems he has to overcome.

Planning permission - it's in a conservation area,

which may throw up a few problems.

And that budget of £130,000 - will it be enough?

You can find out later on in the programme.

Today I'm in Croydon, south London,

home to the Brit School for Performing Arts and Technology.

Notable alumni include Adele, Jessie J and the late Amy Winehouse.

# And in your way

# In this blue shade

# My tears dry on their own. #

With the Brit School close by,

many people have come to Croydon seeking fame and fortune.

When it comes to property,

it seems that people are coming here just seeking the fortune bit.

Croydon is widely tipped to be a real property hotspot,

with lots of redevelopment, including a new shopping centre.

So, £180,000 for this could be a really interesting opportunity.

Before I get into the house -

although I am actually into the house already -

I think it's worth noting that I don't think this is what they call

a standard construction house.

It's not made of brick, and it just looks wrong from the outside.

So, definitely some investigation needs to be required.

My guess is it's a wooden construction

or possibly concrete slab construction.

And that throws up issues when it comes to getting mortgages

and things like that,

which means it could just be a cash buyer purchase. Anyway, moving on to

what you actually find when you walk through the door,

standard construction or not - a kitchen.

Well, actually, this isn't bad.

Looks like it's been relatively recently refurbished,

and at first glance it looks a bit tatty,

but I think you could sort this out.

And it's quite a nice sized space for the house,

compared to what it looks like from the outside.

Through this little archway into your rear living room, and again,

not a bad size.

And be benefited by patio doors out there, out into the garden,

which would be quite nice.

Something slightly easier to replace - the wallpaper.

Not to everyone's taste.

It sort of comes in and out of fashion.

It pops in for a few months and then it's out again, thank goodness.

Something a little less garish, I think.

Well, a good sized house, and only in need of some cosmetic work.

# A poor man's roses

# Are a rich man's gold. #

So, what about the upstairs?

Well, upstairs, and again, not in bad condition.

Toilet and bathroom there. It's pretty serviceable,

especially if you're going to try and rent this place out.

And then three bedrooms.

I mean, I say three bedrooms,

two of them have been knocked through

to create this sort of open-plan bedroom design.

Maybe at some stage this was a master bedroom

and somebody had a baby or something,

and this is like the baby's room, so they could at least access that.

Not to worry, really, in terms of the layout,

because it's only a stud partition wall, so you can easily change that.

What is slightly more significant is something I haven't told you about

the property yet, and that is that it's a probate property,

as it formed part of the estate of a deceased person.

Now, that's not necessarily a bad thing, not necessarily a good thing.

There are complications, perhaps.

And it's really important that you know exactly what

the legal circumstances of that probate situation are.

It's probably detailed in the legal pack.

It's definitely something that your solicitor should check out,

so that at least you know one way or the other what's going on.

Probate, or confirmation as it is known in Scotland,

means that an executor is sorting out the deceased's affairs,

and the process can sometimes be fraught and lengthy.

So, despite the fact that on the face of it

it looks like a pretty easy doer upper,

you still need to do your homework.

Let's take a look outside.

Well, at the back of the property, a little garden and a garden shed.

But actually, here you can really see clearly that whole

non standard construction issue. You need to take a look at that.

It's not what you expect a house to look like, is it?

With this sort of fascia board and the pebbledash and...

Well, if you weren't sure before now,

then that certainly convinces you.

So, that is an issue, and all the other ones we talked about.

But let's come back to this whole thing

of what's going on in this area.

And when you're buying property as an investment, what is happening

around it is clearly one of the most important things,

and it doesn't get much better than here.

We've got masses of infrastructure being redeveloped.

We've got the huge great shopping centre going in.

You're ten minutes walk from a train station which is 20 minutes into

the centre of London. It's ticking a lot of investment property boxes.

So, I'm impressed with the potential of the place.

But we invited along a local estate agent to get his opinion.

I believe this is a good property.

It's got potential, and it's in a very good area.

If this was my property, I would keep the living room the way it is -

just change the way the living room looks.

I would update the kitchen.

In the upstairs bedroom,

I would probably block the archway or put a sliding door

to give the other room some more privacy.

'And how much would he expect renovations to cost?'

To get this property up to a good standard,

I would say you need to spend between £10-£15,000.

'And once renovation is complete,

'what does he think the resale value will be?'

After renovating this property,

I believe you'll be looking to achieve around

the £340,000-£350,000 mark.

'And what does he think you can make in rent?'

I believe it'll be able to achieve a rental figure of

£1,300-£1,400 a month, excluding bills.

Well, it's certainly an interesting opportunity,

but not without its potential problems.

The probate being one and the construction being the other.

Still, with prices going up round here, as they are,

I'm sure someone took a punt on it when it went under the hammer.

Three-bed end of terraced house.

Cheap lot, this.

I don't know, start 170, go from there?

170 with you.

175. 175. 180.

185. 190. 195.

'This was a popular lot, and bidding was fierce.

'We rejoin as bidding reached 262,000.'

262, madam.

264. 264, sir.

264. 266. 265?

Try and help, might be a psychological barrier.

265. 266?

267. 267, elsewhere?

266, first time, second time, third and last time, if you're all done.

Sold, 266.

'And with the successful bid of £266,000

'were couple Kavita and Kevin.

'I met up with them back at the house to find out

'what they had in store for the place.'

Kavita, Kevin, great to meet you both.

-Hi, great to meet you too.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this house.

We want it for investment purposes, as houses are scarce these days,

so we wanted to bag one as, you know, the prices are still low.

Is this something you've done before?

Yes, this is our second now, buy to let property.

But the first one in auction.

Right. So why Croydon, then?

Croydon, it's a lot of improvements, so big shopping centre coming,

the prices are going to go up soon.

Right. Now, what do you know about the construction of this house,

because I'm not so sure.

It's not...a conventional brick wall.

-I think it's timber frame, or I was told.

-Yeah.

This house wouldn't fetch as much as a brick house would.

-Yeah.

-Yeah. But still, if we make a profit, we make a profit.

Yeah, for sure.

Hm, I've been told this isn't a timber-framed house.

It's a concrete house with timber cladding,

which unfortunately can be more of an issue.

This means if they want to sell this on in the future, the likelihood is

they'll have to find a cash buyer.

However, the real problem for Kavita and Kevin

lies with that probate issue,

in that the deceased person's name was still on the title deeds

and not the person who had undertaken the selling of it.

The property is not really

registered in the people who are selling, their name, yet,

so it's a bit of problem getting a mortgage.

-Yeah.

-Ah.

So, we had to cash-buy the house.

-Cash buy.

-Oh, wow, that could have been a problem.

-Yeah.

-Yeah, well, we managed between the two of us.

So, did you read the legal pack before the auction?

-No.

-Oh, right.

-It's a learning curve.

Quite a steep one, in this instance,

because had you not been able to raise the cash,

-you would have been in deep doo-doo.

-Yes, we would be. Yeah.

That could have been an absolute disaster

had they not been able to buy the house outright.

A firm reminder that you should always read the legal pack.

But now that potential headache is out of the way,

I was curious to find out what they had planned for the house.

So, tell me what you're going to do to it.

Most probably, we change the flooring everywhere.

And then painting and decorating, do the garden.

Yeah, do all the tests, electric tests.

What about the kitchen and the bathroom?

Are they going to stay the same?

Looks like it, yes. Because I think the kitchen is not too bad.

Yeah, so we'll most probably leave it.

-OK. And then get it on the rental market?

-Yes, yes.

-And wallpaper?

-Er, a debate about the wallpaper!

-This one...

There had been a debate, so we'll see.

Yeah, divides opinion, doesn't it?

Well, regardless of what happens to that wallpaper, the place is going

to be getting a face-lift to appeal to prospective renters.

-So, who is going to be doing the work?

-Not me. Kevin.

I'm going to do the work, and we'll just get some professionals as well.

OK, what kind of jobs can you do?

Well, do the floorings, do the decorating.

So, what is the budget that you've set aside?

I would say around £5,000 should be enough, for painting

-and flooring.

-And you've got your free labour here, so that's fine.

-Yeah.

-What kind of timescale?

Because presumably if you want to rent it out, time is money.

-I think we should be... Very soon.

-Very soon.

-If I say a week?

-No! A week?! I think you're being...

No, I think we would say three to four weeks.

-Three to four weeks, OK.

-A week!

-You'd need to start now!

-He's got his overall in the car.

Oh, yeah, good. Right, well,

we better get the interview done and you can get on with it.

Well, listen, congratulations. Good luck with it.

-Look forward to seeing how you get on.

-Thank you.

-Thank you.

Well, Kavita and Kevin have clearly spotted

the investment opportunity of this property in Croydon.

However, they did break one of the Hammer golden rules

by not reading the legal pack,

and that could, and in fact probably did,

get them into all sorts of trouble.

How will they get on? You can find out later in the show.

Coming up, in Rainham, Kent,

Simon and Stephen are in the dark

as to how their kitchen renovation will turn out.

That's going to be a mystery to all of us until it happens.

While in Croydon,

Kavita and Kevin have learnt a valuable lesson for next time.

Make sure that we have the legal pack checked over by a solicitor.

Back now to the Leicestershire countryside

and the village of Tilton on the Hill,

where, if you're Hank Marvin,

a fish and chip van calls twice a week.

Across the road from St Peter's Church,

which dates back to 13th century,

I looked around this three-bed stone built cottage

sold at auction for £276,000,

which was a massive 56 grand more than the guide price.

Up a step into the kitchen, which is a little tight, but not too bad.

You'd have to start again in here.

I'm thinking to myself, "You need some more space."

I'd be inclined to knock it out, give yourself a bit of an extension.

Get that extra needed space in and around the kitchen,

and a bit of a family room as well.

'Business partners Toby and Paul made the highest bid on the day.

'Usually they focus on new build developments,

'but the high cost of land forced them to move on

'and try renovation instead.

'I met builder Paul to find out their plan

'for this cottage in a conservation area.'

There's going to be a subtle renovation of the original cottage.

The stonework needs some restoration.

We'll put back timber windows.

And to get the floor area up, to get our money back, because you know,

we've got to get the money back,

we're going to have to put a modest extension

to gain some extra bedrooms

and some extra accommodation space on the ground floor.

Big living kitchen with French doors overlooking the garden,

and then hopefully another one/two bedrooms upstairs.

Assuming the planning permission goes through, which is always...

-Planning is always an issue.

-And takes time. Puts time on your...

Yes, takes a lot of time. It does.

Paul's estimated budget with a two-storey extension was 130 grand

and a planning-dependent timescale of up to a year.

We're back six months later to see if there is a two-storey extension.

No, but there is substantial additional accommodation

thanks to permitted development. As feared,

the planning process was taking too long for Toby and Paul,

so they found another way.

# One way or another I'm going to see you... #

I knew that extending to make the kitchen bigger

was the way to go here. It is fabulous.

With limestone tiles, oak worktops, bespoke carpentry windows and doors.

The other obvious layout change is

the transformation of the former bin store.

It's become an integrated study.

Paul uncovered an original doorway from the house,

complete with oak lintel that had been walled up.

Other dramatic changes have happened upstairs.

Paul was determined to make way for a bathroom up here.

# One way or another I'm going to see you... #

A small amount of space has been taken from bedroom two to create

a family bathroom, leaving a good-sized single.

Bedroom one has also seen a change of floor plan.

An en-suite shower room has been added.

And like the family bathroom, there is a new roof window to illuminate.

The third bedroom still has some unusual corner angles,

but everywhere has been replastered.

Heading back downstairs, where the old kitchen was is a new hallway.

Which all goes to prove,

if you can't get the planning permission you want,

there is always plenty you can still do.

# One way or another. #

This is not the fireplace that you guys last saw when you were here.

Behind the 1940s or '50s fireplace,

we found this lovely original Georgian fireplace.

We haven't touched that.

That is exactly how it was the day it was built.

The only thing we have changed is we put a new fire basket in

and a new hearth. Think it's a lovely feature.

We are really glad we did it, and everybody loves an open fire.

Regarding some of the features, we've actually managed to bring

a lot of them back that were completely hidden,

that had been patched up and covered over the years. For example,

a lot of lovely beams, timber beams, that we've brought back.

A lot of exposed stonework that was covered over that we've brought back

into the building that is now on show that wasn't on show before.

I'm very pleased with the way the cottage looks.

It's a very subtle renovation. I don't like bling.

I think what we've done is brought back a lot of the original character

of the old building while adding to it in a very subtle way.

Latterly, Paul has been working on a property in Islington

for two days a week,

making the transformation here in just five and a half months

all the more impressive.

I could have done it quicker if we'd thrown more labour at the job,

but I've done a lot myself in terms of the dirty work,

the ripping out. So, to keep the cost down,

it actually made the job take a little bit longer.

I suppose that's one of the benefits of working for yourself.

The budget was going to be £130,000,

but that was for a two-storey extension.

How did it all work out in the end?

We've spent in total £78,500.

That includes legal fees, VAT and everything to date.

Paul usually works on new builds, where houses are zero rated.

But in the case of a conversion like this one,

he can't claim back any of the VAT spent on it.

The plan for the cottage originally was

always to sell it as soon as possible

to try and get the funds back,

so that we can carry on and try and do it again,

and that is still the plan.

We called in two property experts to cast their eye over the conversion

and give us some valuations.

Paul's company have spent £354,500 in total on this project.

Was that wise?

Yeah, the second time inside the property for myself.

I really like the property.

A lot of renovation work has been carried out.

It also been extended and finished to a really, really high standard.

The house itself has been done very, very well, to a high standard,

so any buyer moving in here

has got nothing to do at all.

They are as impressed with this place as I am,

but will Paul and Toby have made a profit on their investment of

£354,500?

If the property was placed on the open market for sale

I would suggest an asking price of £435,000,

with hopefully a sale price close to that figure.

Currently, if it was to be put on the open market,

I would expect you to achieve around £440,000.

That would be fabulous. If we can achieve something close to that,

that would be a good job for us.

That's a potential growth of £85,500 before taxes and expenses.

So, are there any final thoughts?

If I could have my time again,

I would probably work harder at school,

go to university and become a dentist.

Well, there's been a good job done

in filling in the cracks in this mortar.

Today, I'm in the town of Rainham, Kent.

It's a small town with a population of just over 6,000,

but, with good commuter links to London, it is fast becoming

a great option if you are looking for some peace and quiet from

the hustle and bustle of the capital.

The house I'm here to see is in the Parkwood estate.

The most recent property explosion in the town came in the 1960s,

when this very large estate was built and, at the time,

it was the largest in Europe.

Well, this is where I'm going to find a three-bed bungalow,

which went to auction with a guide price of 165,000 to 175,000.

It's quite leafy here, but that is a big tree, for sure.

I think I'd want to get some advice from a tree surgeon and check out

if there isn't a Tree Preservation Order on it.

That can mean it's a criminal offence to damage it in any way.

Now, I've got a feeling this bungalow

is going to be incredibly dated. Oh, or incredibly pink.

It's very marshmallow-like everywhere, soft powder pink,

but we've got some great space, a rather large kitchen.

Quite a lot of units in there.

Maybe think about taking some of those out,

because I don't think you need them all.

We've got a dining room, which could be bedroom three.

That's what it says in the catalogue.

Really nice-sized lounge through there

and then through into this unusual,

sort of, partitioned corridor bit, with another pink door,

and you've got a separate loo, separate bathroom.

Great big bedroom here,

which is really nice to see, with loads of light,

and another bedroom here.

So, what would I do to really improve this place?

Well, for starters,

I'd have to sort out this rather awkward corridor area.

Take out the partition bit at the top, get rid of the door,

just to open up the corridor.

I would also think about taking this wall out here between

the loo and the bathroom, to have one really nice big space,

because I think that would work well. And also, get rid of

some of those kitchen units to have a kitchen-diner,

and I would definitely call the dining room bedroom number three.

Oh, yeah, and paint the place. It's just too pink for me!

# Pink it's my new obsession

# Yeah

# Pink it's not even a question... #

My obsession isn't pink, though.

Mine is knocking walls down, and I think changing

the configurations and updating the kitchen and bathroom

would make this popular with a wide range of buyers and renters.

After that, it's just about the decoration, really.

Now, in the 1970s and '80s, textured ceilings were all the rage.

Oh, yes, they were so popular. But then in the 21st century...

Well, they've fallen well and truly out of favour, out of fashion.

But it's not just about their look, but unfortunately,

they can actually be dangerous too.

This is because their coating

sometimes can contain white asbestos to strengthen it and,

if the asbestos is disturbed,

it can be hazardous to your health,

so no trying to sand it down and making it flat.

Sanding it down, hanging up light fittings and so on

could release the dangerous asbestos fibres.

-# Said enough is enough

-Enough is enough

# Oh, buddy and I'm rough stuff... #

It's the textured plaster made before the mid-'80s

that may contain asbestos.

You can have a sample tested to be sure, but if asbestos is present

I recommend getting advice from

a plasterer accredited in asbestos awareness.

But something a little less treacherous is the garden.

Now, at the back there's a small but well-appointed little plot

that I'm sure would satisfy any green-fingered buyer.

So all in all, a great three-bed bungalow,

but would it be a sound investment?

We invited along a local estate agent to get his opinion.

Rainham's a good area. It's very popular at the moment.

We've got a lot of people working, moving out of London to the area.

You've got good schooling, easy access to shops, bus routes.

Very popular as well. Ticks a lot of boxes.

'Location is key, so that all sounds good, assuming this bungalow,

'guided between £165,000-£170,000, got a good update.

'So, would it be a hare or a tortoise on the open market?'

This bungalow could resell for in the region of anything from

£220,000-£225,000.

'And if rented out?'

Once renovated, this bungalow could achieve in the region of anything

up to about £850 per calendar month.

Well, if you like the colour pink, this bungalow is good to go,

but somehow I don't think it will be to everybody's taste. Saying that,

I don't think it'll take too much work to modernise it

and create a lovely home for someone.

So, who could see the wood for the trees?

Let's head to the auction and find out.

Lot 62. Detached bungalow for improvement.

Guide of 165 to 170.

Where are we starting on this one?

155, can I say?

Give me 150, then.

It's got to be worth 150 and I shan't go below that.

150. And two. 152.

152. And 154. 154 and 6.

'Well, this lot came up towards the end of auction day,

'and while interest seemed slow initially, it did pick up momentum,

'and we rejoin when the bids had reached £176,000.'

176. 178. 178.

To the gentlemen at the front. 178 for either of you?

178, I'm looking for. Are we all done, then, at...?

178. 180. 180.

I'll take one if it helps.

179. 179. 180. 180, may I say?

£179,000, I have.

Are we all done at 179,000?

I shall sell for the first time...

Second time... Third and final time, at £179,000...

Sold, sir, and the bidder's card number?

'And with the successful bid of 179,000

'was Simon on the right and Stephen on the left.

'Workmates in the IT industry,

'they've been friends for over 20 years and decided to join forces

'for their first property investment.'

-Stephen and Simon, congratulations.

-Thank you.

So, I want to know the story about who wanted to buy this

and who ended up bidding for it on the day?

Well, it's... It was all his idea and...

-My fault.

-And this is a better return on money, sort of thing,

and he says, "Put it into a house. Do it up, and push it on."

He's seen great TV programmes. He's seen how easy it is to do it.

-He's totally blaming you.

-Oh, absolutely.

Especially at the end when I said, "Don't bid any more."

-And he bid one more bid.

-Yes!

-So we actually got this.

So we tossed the coin and he bidded, because it was better, I thought.

With both of us bidding, it might be a bit of a mess, so we lumped it on him.

Well, you've got it in the film.

You'll see that just when we get around whatever the figure is at,

he is sort of going,

"I think we should cut it out." And I suddenly panic and I go,

"What did you say?"

And at this point the auctioneer's up there saying,

"Well, do you want to?" And I'm saying,

"What do you mean you want to stop? Yes, carry on!"

I go back to him and then he says, "Sold."

And the other person had folded out.

So, did you find it, you know, completely pressurising on the day?

-He did.

-Were you under pressure?

-He was...so much pressure.

I was a mess for days afterwards.

He was shaking. He was shaking really, really badly.

-I-I...

-Because he's spending my money.

Yes, he's... He's the major investor.

We are 60-40, so he spent more money than...

Yeah, I'll say he is a bit responsible.

OK, so, let's talk about the price you paid. Happy with that?

We were going to go to 180, and we got it for 179.

OK, so, you've got a spare £1,000,

and you ended up having to spend that spare £1,000, didn't you?

-What happened? Tell me what happened.

-We read the legal pack,

as instructed on Homes Under The Hammer,

but unfortunately we missed Section 18, Subsection 2, or something,

that said we had to pay the vendor's solicitor's fees.

-Which was?

-About £1,000.

So, there you go, there is your £1,000 snapped up straight away.

-Yeah.

-Well, they do get ten out of ten for reading the legal pack.

However, the packs can be very detailed and complex so, if you can,

it is safer to have your solicitor have a look at it

before the auction.

Luckily, in this instance, it hasn't broken the bank.

But while we're on the subject of money...

So, how much have you got to spend here?

-What's your budget?

-We reckon we've got £12,000

that we can actually spend on the place itself.

That will then leave us with the profit

that we expect to get from the place as well.

OK, so you want to spend £12,000 here.

-Yeah.

-Thinking about the profit you might want to make,

what do you think you can do for £12,000

that would really make this place sell quickly?

The biggest thing I think is the kitchen and bathroom.

-Yes.

-I think that sells all properties.

-Yeah.

-The bathroom at the moment is a separate bath and loo,

and we're going to take the wall in between and close off one of

the doors, cos it's got so many doors in this place,

so lose a door or two if we can, and then the kitchen.

We spent quite a lot of time looking at kitchens with various companies.

We're going to try and keep it looking fresh and not too modern,

cos round here most people we have seen are of an age...

-Yeah. Yeah.

-We don't want things that are all electronic and stuff.

-Yeah.

-So a nice, sensible kitchen.

Yeah, I'd go for something really classic.

-Yes.

-That's the word. Classic.

-Yes.

-Classic. Classic rather than fashionable.

-Yes.

-Absolutely.

At this point, I'd like to say, can we just look up?

-Ding!

-Yes, absolutely.

His... His sister doesn't believe we should change it.

-And why is that?

-Cos it's too much like hard work.

-OK, that's... That will definitely put some people off.

-Me too.

It reminds me of a sort of top of a wedding cake.

Meringue time, yes. And, interestingly,

every room has been done differently.

-Yes.

-There's a different pattern in every room so...

-Yes.

I hate it, to be honest.

'Simon and Stephen

'hope they can make the most of their £12,000 budget

'by doing most of the work here themselves,

'as well as support from family and friends,

'including Simon's brother-in-law, who is a builder by trade.

'Always helps when you've got a trade in the family.'

So, it seems like you guys are going to have lots of fun along the way.

-Am I right in saying that?

-Hopefully. Yes, we think so.

We're going to look after this project and think of it as

-another adventure that we've been on and enjoy it.

-Yes.

Guys, it's been lovely meeting you both today.

-And you, too.

-I'm really excited to see the outcome

-and to see what that kitchen looks like.

-So do I.

-How classic it's going to be.

-Yes.

-Yes.

Yeah, it's going to be a mystery to all of us until it happens.

-Thank you very much, indeed.

-Thank you.

-Thank you.

Thank you very much.

So, they've been friends for over 20 years, but how will Stephen

and Simon get on during their first renovation project together?

Now, it sounds like they've got a good support network around them,

but will this double act still be chums at the end of all the work?

Join me later on in the programme

and you can find out how they get on.

Well, one of our buyers has won the race.

Yeah, but will the other two cross the finishing line?

Yes, or will they come up short? Let's find out.

Let's head back now to up-and-coming Croydon in south London,

where I visited this three-bedroom end terrace property

with a guide price of £180,000.

Inside, it was a spacious family home,

and it wasn't in bad condition at all.

Downstairs looked fine, apart from the wallpaper.

I prefer my roses in the garden.

And upstairs, the bathroom is OK, but the three bedrooms...

Well, two of them have been knocked through

to create this open-plan bedroom design.

Open-plan bedrooms? Uh-uh, not for me.

But, all in all, nothing worrying, except, the devil, as ever,

is in the detail.

This house was of non-standard construction,

which can make getting a mortgage tricky,

but the real danger lay in the legal pack.

This house was a probate sale.

There are complications, perhaps.

It's really important that you know exactly what the legal circumstances

of that probate situation are.

Researching this detail would have revealed that

the title deeds were not yet registered in the name of

the person overseeing the deceased person's affairs,

something buyers Kavita and Kevin were not aware of

when they paid £256,000 for the place.

-So, did you read the legal pack before the auction?

-No.

-Oh, right.

So, we had to cash-buy the house.

-Cash-buy the house.

-Oh, wow, that could have been a problem.

-Yeah.

-Yeah.

So, with a budget of £5,000

and setting themselves a timescale of three to four weeks,

would Kavita and Kevin have any more surprises?

We returned six weeks later to have a look.

# Bang bang into the room

# I know you want it... #

As you can see, the place has been freshened up a bit.

In the living room,

the tatty carpet has been ripped out

and replaced with contemporary laminate flooring.

Although, I can see that flowery wallpaper has survived.

They've also closed off the archway from the kitchen,

making the two spaces separate.

Through here, they've made a few minor changes,

but as the kitchen was in decent condition before,

Kavita and Kevin have chosen to give it a clean

and a fresh coat of paint.

In the hallway, the WC has had a similar treatment,

brightening the space up a bit.

Upstairs, the previous open-plan double bedroom has been closed off,

and this alcove created, giving the smaller bedroom more space.

Like the downstairs,

it's been freshly painted and new flooring laid -

simple changes but to good effect.

The bathroom, like the kitchen, was in good condition before,

so again they've only made simple alterations

with the addition of new flooring.

Out back, and the garden has been tidied up. As you can see,

there are still a few finishing touches to be done,

but once the slabbing is finished, it will be a low-maintenance space

appropriate for a rental property.

And speaking of which, Kavita and Kevin already have tenants lined up,

and they've been vocal during the renovation.

We decided to close the bit through the kitchen and lounge,

because the tenant wanted it this way.

I think it's easier for them, so as we require...

We are not living in there, so we closed it.

-Yeah.

-'So I wonder if keeping that wallpaper was their doing too.'

Yeah, the wallpaper stayed, I'm afraid,

because we showed it to the tenant when they came

and they seemed to like it,

so I said, "OK." They wanted it left so we left it.

'Each to their own, I guess.

'Kevin was responsible for project managing the renovation

'and did much of the work himself with the help of some builders,

'so how did he manage that budget of £5,000?'

Yeah, on the project we spent £5,000-£6,000.

'That takes their total spend on the property to around £272,000.

'But what about the timescale they set of three to four weeks?'

We went slightly over with the timescale, because, each time

we thought the work was done,

there was something else little, here and there, cropped up -

like we needed to move the boiler from where it was,

to be able to be certified.

The gas certificate wasn't good enough,

-so it took another two weeks. Yeah.

-Yeah.

'So, a little over their original estimate, but with tenants lined up

'the house will start generating money soon.

'But will Kavita and Kevin have turned a profit?

'We invited along two local estate agents to find out.

'Let's start with the one that visited last time.'

I think the property is looking good.

They could have spent a little bit more on the refurb,

however, they've still got a good potential for rent,

and they will be able to achieve a good rent.

The selling points of the property are that it's got a downstairs WC,

an upstairs bathroom, three good-sized bedrooms,

a good-sized garden and it's neutral throughout.

'With a property like this, because it is not the standard construction,

'we are looking at a reduced value, for the simple reason that

'it reduces the amount of buyers that are able to buy'

a property like this, because they can't get a mortgage and, also

cash buyers are looking for a reduced amount.

'Sounds like we'd better get those valuations

'and see if Kavita and Kevin

'can make a return on their £272,000 investment.

'Let's start with sales.'

If this property was of a standard construction,

you'd probably be looking at a value of around about 350,

around that sort of price range.

Because it is construction, and as I've said,

it's going to affect the value,

I would probably value the property at around that 250-270 mark.

I think it has a strong bearing on it.

Cash buyers are looking for a discounted rate.

'The other agent suggests a resale valuation of £290,000-£300,000,

'as he believes that, because of demand in the area,

'it could fetch that higher price regardless of the structure.'

Well, we were expecting it not to be very high,

because it's not a standard construction.

With the value of the house,

it's a bit lower than the other,

but we want to keep it for a couple of years, that's why...

-Yeah.

-For it to pick up in value.

And then we could...

Anyway, we're not losing out, so...

'Kavita seems happy that they are not losing out,

'as they always intended to rent, and they have tenants lined up.

'But what kind of rent should they expect?'

I believe, if this property was to be put on the market

for rental purposes, it would achieve in the region of

£1,350-£1,400 per calendar month.

There is a huge demand for rental properties like this.

It would probably fetch around £1,450 per calendar month.

-That is what we were expecting.

-Yeah, we were expecting that.

'Using that top figure of 1,450,

'that would be a yield of just over 6%.

'However, Kavita and Kevin

'bought this with an eye on regeneration of the area,

'and the eventual capital gains it might make them.

'And with the possible pitfalls this property had, they've done well.

'So, two properties under their belt,

'what would they do differently next time?'

We are going to make sure that we have

the legal pack checked over by a solicitor.

It's worthwhile paying a little bit of money

-just to not be in this position.

-Yeah.

Let's head back now to the town of Rainham, Kent,

where I visited this three-bedroom bungalow,

with a colour scheme that...

Well, it wasn't to everybody's taste.

It's very marshmallow-like everywhere, soft powder pink.

# Well, I'm tickled pink

# I'm tickled pink

# I'm feeling blue... #

I wasn't tickled by the pink, but that's easily sorted.

But less so the textured ceilings, which were everywhere.

It all needed modernising,

but with a guide price of £165,000-£170,000,

I thought it had bags full of investment potential.

Long-term friends Simon and Stephen thought so too,

buying up the bungalow at auction for £179,000 -

just £1,000 short of their budget on the day. Though, unfortunately,

that extra £1,000 didn't last very long.

-Tell me what happened.

-We read the legal pack,

as instructed on Homes Under The Hammer,

but, unfortunately, we missed

Section 18, Subsection 2 or something,

that said we had to pay the vendor's solicitor's fees.

-Which was?

-About £1,000.

-So, there you go, there's your £1,000 snapped up straightaway.

-Yeah.

But rather than lick their wounds, they plan to crack on with this,

their first property renovation.

-The biggest thing I think is the kitchen and bathroom.

-Yes.

We're going to try and keep it looking fresh

and not too modern, cos, round here,

most people we have seen are of an age.

-Yeah, I'd go for something really classic.

-Yes.

That's the word. Classic. Classic rather than fashionable.

-Yes.

-Absolutely.

So, setting themselves a budget of £12,000

and aiming to be complete in three months,

would Simon and Stephen achieve that classic look?

We returned five months later to see how they got on.

As you can see, Simon and Steve have ripped out that dated,

old kitchen and replaced it with these bright

new units and modern appliances.

Bang up-to-date, but classic-looking, I'd say.

As planned, the separate toilet has been knocked through

to create this generous bathroom.

They've obviously put a lot of thought into this room,

making the most of the space in here,

installing a bathtub and a shower unit.

Again, like the kitchen, it's been finished to a really high standard.

The only other structural change was in the hallway,

where the boys have removed the old partitioning door

giving this house a much better flow.

Through into the lounge,

it's goodbye marshmallow-pink and textured ceilings,

and hello to neutral colours and smooth surfaces,

thanks to the endeavours of an experienced plasterer.

It's more of the same in the three bedrooms -

replastered, repainted and new carpets.

The house was in great condition before,

but these decorative changes have had a dramatic effect.

Now, outside, the boys have been doing some investigation work.

They wanted to do a checkup for the towering tree in the front garden,

which, by the way, Stephen has named Jennifer.

After a consultation with the tree surgeon

and the local council's TPO officer,

they could see no wrong with her and,

at the grand old age of about 100 years,

she is actually in great health,

meaning she's no danger to the property.

This was Simon and Stephen's first project together

and, it's fair to say, it's been a steep learning curve.

Yeah, the bathroom was quite a big project,

because we had to convert two rooms into one room and, of course,

that meant the wall in the corridor had to come down.

So, for the first time ever, we built a stud wall, which was fun.

-Yup. That's...

-Nearly the right size.

'And the mishaps didn't stop there.'

Oh, that bath.

-Erm... Four, five?

-That, yeah... That bath has been fitted

fully fitted in there,

finished and out again - four times, so...

This song kept running through my mind - Nothing Is Easy.

# Nothing is easy

# Though time gets you worrying, my friend, it's OK... #

'There you go, Simon, just for you.

'So, was the kitchen any easier?'

The oven housing, this one over here...

-Four times.

-Four times,

fully in, fitted and then...

-Smug look on our faces and...

-Yeah.

-"Oh, Steve!"

-And then...

It was, "Oh, Simon!"

'Yeah, you see, I'm sensing a pattern, here.

'Never mind - practice does make perfect, as this shows.

'Simon and Stephen were also very fortunate to get lots of help

'from friends, family and professionals,

'so did keeping to that £12,000 budget

'fall into the "Nothing Is Easy" category?'

The budget, I think we got in...

Cos I did a calculation last night and it was about £12,500.

One of them was stupidity, which we mentioned earlier, which was the...

having to pay the seller's legal fees, which was a pain.

And the other over-budget thing was, we went to town on the bathroom,

so we didn't go for the cheapest bath we could have done.

-No.

-And we've gone for quite a quality bath and a quality shower,

and that's where the actual money went.

'That takes their total spend on the property to £191,500.

'Now, the boys originally set themselves

'a timescale of three months, but having to fit the renovation in

'around their busy work schedules,

'it ended up taking closer to five months,

'though, time well spent, I'd say.

'So, will they have made a profit?

'We invited along

'two local estate agents to find out.'

In comparison to how I saw the property before,

obviously it's a big improvement.

It needed everything doing to it when we saw it before,

so, yeah, everything looks brand-new.

It looks like it's been finished to a good standard.

In this location, bungalows are very popular,

on the basis that there is a shortage of them.

There's not too many about

where you do get a lot of developers normally go up

and build up on them, but they've kept this all on one level,

so it's going to be generally appealing to the older generation.

I think it does work for the modern living, this property,

and they've done the layout nicely.

They've got rid of some of the doors and, I think, you know,

it's easy to walk round,

which is what you really want it to be.

'The agents are impressed with the renovation and think, rental-wise,

'the bungalow could bring in between £800-£900 per calendar month.

'Now, that top figure giving a yield of just over 5.5%.

'But what could their £191,500 investment translate into for

'the resale market?'

This property, in the current market,

I believe will achieve anywhere between £280,000-£300,000.

I think this property, on the sales market,

will achieve in the region of £300,000.

-I need to hold him.

-I can buy a leopard!

'OK, well, the heart wants what the heart wants, I suppose.

'But will these two be changing their spots by becoming more serious

'property developers in the future?'

It has been surprising how we worked well as a double act,

where somebody comes up with a problem,

and the other person comes up with the solution,

and it has been surprising how well that has worked.

Surprising. Yeah, it's been good, and it...

-He's only sworn at me once.

-Yes.

-And it was my fault.

He deserved everything of it, yes.

So, yeah, we'll work together and another project is...

-As soon as we can.

-Yeah.

I hope these stories have given you something to think about.

Yeah, and I hope you're heading to your next auction right now.

If not, don't worry,

cos we'll be back with more Homes Under The Hammer for you next time.

-Goodbye.

-Bye-bye.

-Goodbye.