Episode 48 Homes Under the Hammer

As property investors, we know that what goes up may come down.

Everybody knows the property market has taken a tumble.

-But it's not all that bad.

-No, if you do your research, you can still bag a bargain at the auctions.

Auctions are not everybody's cup of tea, but for many, it's the only way they'll buy.

Yes, because at least you know when the hammer falls, the property will be yours within a few weeks.

Let's see what's lurking in the auction catalogue in today's show.

Is the profit margin of this Derby house going to be a squeeze?

Horrible head height. It's really narrow and cramped.

There's a large two-bed flat in Southampton where the entrance alone adds value.

Just look at this wonderful landing area.

And in Harlesden, North West London, a flat that certainly has handy transport links.

Bus stop, property.

All these properties have gone to auction.

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

I'm in Sponden, once a farming community, now more of a suburb of Derby with a village feel.

It's actually split in half by the A52, which was re-named Brian Clough Way

after the famous manager of Derby County and Nottingham Forest football teams.

These towns are linked by the highway.

The name is apt as he did normally get his own way.

So, will today's property be Premier League or Sunday League?

Well, this is Moore Street, pretty much in the centre of the village.

Up for auction was a two-bedroomed end-of-terrace.

It had a guide price of £50,000.

End-of-terraces, a lot of people like.

They are often a little bit larger. You maybe get an extra set of windows.

Of course, you only have one set of neighbours.

On the other side is a car park.

Not great for kerb appeal. Add a run-down roof, some dodgy brickwork and the fact you are on a busy road,

and I think it would be safe to say that Cloughy would be "sick as a parrot" with the game so far.

Obviously, one of the big things here is going to be keeping noise from that road out of the house.

It's good there's a little porch there. Also that the property's been double-glazed.

Straightaway, big issues - this bay window.

Wow. Lots and lots of damp.

I think, judging by the way this is all laid out, that's actually coming down, rather than going up.

Probably, this roof here wants to be checked out.

Maybe the guttering's leaking. It needs sorted. The problem is,

the water will get into the floorboards and also the joists and rot them.

You'll have all sorts of problems.

Look at this, though.

Absolutely fantastic!

Part-Victorian, part-1960s fireplace.

This electric thing in there.

Absolutely brilliant. Probably wants to be replaced.

Moving on, the whole house in general needs sorting out.

Into the rear room, lots of light pouring in from one of the side windows I talked about.

Yes, there's a gas fire in here that needs sorting.

Not a bad-sized room. Then through into the kitchen.

Well, only just.

I mean, there's this very strange hatchway thing going on for a start.

The kitchen itself is absolutely tiny.

In total need of refurbishment.

But it gets a lot weirder, because this is the original rear door of the property.

It leads into what I imagine was some kind of a courtyard.

It's been covered in, very, very badly.

Look at the head height here. You have a downstairs loo.

Like a storage area there.

Another area here. Like another courtyard.

I really can't figure out what's going on, for the life of me.

The only thing to do is to go outside and take a good look.

From the outside, it's clear

that someone has tried to turn the courtyard into an indoor space by using sheets of plastic as a roof.

You don't need to be a structural engineer to see this is substandard and needs to go.

It's a shame because these mushrooms aren't going to have MUSH room, ha-ha, soon.

But, on the plus side, the garden does have plenty of space and there's access for car parking.

So, downstairs then, pretty darn weird.

How odd can upstairs be? Well, on the face of it, not too bad.

Staircase coming up. Bedroom on that side.

A bedroom here. OK so far, until you come to the bedroom cupboard.

It's not a cupboard at all. It's a dark, dingy corridor.

To where does it lead? Follow me, explorers.

Look at this, horrible head height.

Narrow and cramped.

At the end, ta-da!

The bathroom and loo. I guess the good news is, at least it's upstairs.

It really is... I mean, that corridor is terrible.

The bathroom itself needs completely refurbishing.

Then through here...

..you are back to the bedroom.

Now, clearly, that is a disastrous layout.

The expensive option to sort this out, but I reckon the desired one,

is to change the stairs around. That would give much easier access.

The simpler thing to do would be to try and sort out that corridor. Increase the ceiling height,

make it wider. You've still got access to the loo for the bedrooms.

Which is, obviously, why it was put in. But right now, it is disastrous.

Disastrous or unusual.

This house is confused and crying out for some care.

But don't forget that the quirks aren't the only thing that need to be fixed.

From top to bottom, wall to wall, this place needs a general overhaul to make it liveable.

But for all its negatives, it's a good size.

That guide price of £50,000 is appealing.

I asked along the auctioneer who sold it

to see what he thought of the place.

I know it's a property that has been in the same occupation for many years.

So it really wants all taking apart and starting again.

The more you look at it, the more you realise that there is a lot of work.

You've got to start with rising damp. You've got to start with

timber treatment. There's water ingress. There's wiring.

The list is almost endless.

So, with so much work needed, what sort of renovation budget would be needed?

If you're going to do the basics, renovate what is here,

I think you would need to spend at least £15,000 on it.

If you are going to extend it, I think that could easily become £25,000.

With the house guided at £50,000, how would the investment figures stack up?

Once renovated, on today's market obviously, I would estimate the value of this property to be about £85,000.

If the kitchen was extended, that would probably improve to about £95,000.

Once renovated, this would have a rental value of between £450 and £475 a calendar month.

Well, topsy-turvy, higgledy piggeldy, basically all over the place.

This house doesn't know whether it's coming or going.

But for a £50,000 guide price, I reckon

whoever can spot the potential could be in for a bit of a profit.

Because, done up, there's money to be made on this one.

Let's find out what happened at auction.

Lot No 2, 16 Moore Street in Sponden.

Where do you want to be on this?

Start me on this one at 55.

£55,000. Start me at £50,000, if you will?

£50,000.

Who's got 45?

45 is bid. Thank you. At £45,000.

At £45,000. 46, I'm looking for.

46 is bid. 46.

47. 47, 48. 48, 49.

At £49,000.

£50,000. At £50,000.

51. 52 is bid. 52, 53. At 53. 54?

At £53,000. 54, either of you quickly? At £53,000. All done with it.

For the first time. For the second time.

For the third and last time.

Any higher bid anywhere? At £53,000. Sold to you, sir, at 53,000. Thank you.

The winning bidder was Phillip.

An IT project manager by day, father and air cadet by the evening.

He can now add property developer to his busy schedule.

Phillip plans to renovate and rent out this odd little house.

I wanted to know more about that and the man who was brave enough to take on this tricky project.

Phillip, congratulations.

Why did you want to buy the house?

Investment, really.

I've got a four-year-old daughter. In a few years' time I'm going to need to pay for her

to go to university and so on. It's for my daughter's future.

-Wow. You are planning ahead, then.

-Certainly am.

-Why property?

Over the past few months, we've seen interest rates plummet. Money in the bank's not going to do anything.

Stock market's a little bit dicey.

I wanted to see something tangible. That's why I chose property.

-What does your daughter think about all this?

-Actually, I bought the house on her birthday.

Aw!

She wasn't too impressed when she came to look around it.

-She said it was dirty.

-And it's not pink!

-Exactly. Hopefully, one day, she'll appreciate it.

I'm sure daughter Lily will be grateful once her dad has removed the fungus from the walls,

sorted the damp,

got rid of the lean-to disaster and basically make it a completely new house.

While Lily played with her mum, I asked Phillip what exactly appealed to him about the property.

Price really. It was an awesome price I got it for.

Like I say, I think I can add value and make money out of it over the next few years.

A lot of people were put off by the internal layout and the state it was in, weren't they?

That doesn't scare me. The house I live in now, I've spent three years doing up.

I know what I'm letting myself in for.

I'll take a hands-off approach in this one and get people in to do it.

-Talk me through what you're going to do.

-I'll start off by ripping everything out, gut the place.

Then I've got a blank canvas to work from. The outbuildings are going, basically.

So, I want a garden there for people to have a bit more enjoyment out of the house.

I'm going to stick to the layout upstairs...

-What, with the corridor?

-Yes. It's going to have to stay like that.

Because if there's going to be two people sharing, then you need direct access to the bathroom.

'Phillip does plan to widen the corridor.

'But it's a shame because if he ever decides to sell, keeping that layout will put potential buyers off.

'The aim is to modernise and rent the house out. To do that, he's drawn up a battle-plan.'

Explain this. These are all the jobs.

I've broken down the whole project into individual tasks, on a room-by-room basis.

It's grouped according to the type of work it is - for example, plumbing, joinery, electrics.

-And then I know which order to do them in.

-Right, so this is the timescale across the top here,

split out into months and weeks.

No, days in fact. I mean, what, are you saying to me that on Wednesday, March 31st, or whatever it is,

-you are going to put in new taps in the bathroom?

-Exactly, yes. That's how detailed I'm working this to.

Wow! This is the most detailed plan I've ever seen! How likely is it you will be able to stick to this?

Very unlikely, to be fair. But it's a starting point.

'I hope Phillip's built some flexibility into his timeline.

'There will be problems. He has a three-month turnaround on the renovation

'and a budget as detailed as the schedule.'

So, you think it will cost £12,765?

Exactly.

Joking aside, this kind of thing is very, very useful, isn't it?

Yes, it certainly gives something for my builder to work from.

-Has he seen that yet?

-Yes.

-What did he say?

He filed it in an appropriate place.

Yeah.

Exactly, yeah.

Well, Phillip has certainly done his sums on this place.

But has he come up with the right plan?

Leaving those stairs there might add up financially, but does it equal the right results for this property?

I don't know. You can find out how he gets on later in the show.

When there's a storm breaking it's always good to have a port to escape to.

The bustling city of Southampton seems to be weathering the current property crisis.

While some parts of the country have seen a 29% fall in prices,

Southampton has only suffered a 9% drop.

Things here seem buoyant.

The property I'm here to see is just two miles away from all that Southampton has to offer.

It's definitely - how can I say this? - unusual.

It's a two-bedroomed flat with off-road parking.

It had a guide price of just £125,000. So, why unusual?

Well, it's a flat and a detached property and it takes up the entire first floor.

Look at all that space!

You know, I can't wait to get in there and check this one out.

But just look at the exterior.

There's a beautiful well-preserved stained-glass door that creates a very good impression.

There are large bay windows. The roof looks tired

and the paintwork needs refreshing,

but it's nothing to set any alarm bells ringing.

This space here is so impressive.

You can see the ground floor right the way up to the top here.

Just look at this wonderful landing area.

Now, you've got stunning cornicing up here. You've got that oversized big sash window behind me.

Just look at these door architraves everywhere.

Through here, this is bedroom one, and what a bedroom!

You've got this big old bay window over here.

It does look fabulous but it's single glazed.

It lets the road noise in and the heat out.

Not great for your heating bills.

Saying that, though, I would hate to the see these replaced with uPVC.

'These windows are an important part of the character of this property.

'And this flat has that in abundance.

'There's a good-sized second bedroom, a huge living room,

'a spacious kitchen, a boxroom and at the top of the stairs, a bathroom and separate toilet.

'There's an incredible amount of space here but if you want more...'

Whenever I look around a property, I'm always looking for ways to add value.

Today, I think I've found a way.

Everything is subject to planning and securing the freeholder's permission.

But you could go up into the loft here to create further space.

With the square footage on this level, you could add a further two rooms,

bringing this from a two-bed flat to a four-bed flat.

That would definitely be the luxury option.

A more financially-rewarding one would see someone reconfiguring this to create two separate flats.

For that, you would need to employ an architect.

From looking at this property today, I think there may be access issues to overcome first.

You'd need to install some kind of side access but there's one big drawback about the flat -

there's no garden.

Some people might see that as a negative.

But there is that off-road parking and this garage, handy for storage.

I reckon there's all the space you could want up here.

I would love to see the property stay as it is,

with its lovely character features and big rooms.

It needs a new kitchen and bathroom, plus central heating,

but at a guide price of £125,000,

I'd say this place has the potential to be a good investment.

I asked a local estate agent to come and have a look at the flat

and see what he thought it needed to get it up to speed.

This flat needs a fair bit of upgrading.

Firstly, I think there's possibly between 16 and 20 windows,

some of which are a good size.

It could be expensive. That's the first port of call.

Central heating. The cheap option would be electric.

Other than that, it'd be gas central heating. I'd check the wiring.

New kitchen, new bathroom.

Redec, that's the initial things that I've seen. There could be further issues.

An extensive refurbishment could affect your budget on a place this size.

So what about reconfiguring the layout?

Getting access to the flat itself, obviously you'd need to hire an architect to look into this,

ie, planning consultant, and get freeholder consent to do it.

I think there could be problems with it, personally.

'I agree. It's worth a try if you really want to.

'But if someone did a simple refurbishment, how much could they make?'

Once renovated, I'd put the property on the market at around £145,000 to £150,000.

'And for rental?'

A two-bedroomed flat, I'd rent this property out for £700 per calendar month.

In the history of Homes Under The Hammer,

that has got to go down as being one of the largest flats I've ever seen.

And it's got the potential to make it even larger.

There's a lot of property for the money here. I think it's a great one to bid for.

Let's see who went for it as we go to auction.

Lot number two is 123A Upper Shirley Avenue,

Upper Shirley, Southampton, Hampshire. Who will start at just £110,000?

Looking for a bid of 110,000 on 123?

110,000 on my left. Gentleman seated.

115 on the telephone table.

120. 120 on my left-hand side.

125, Peter. 125 we do have. 130, sir.

130 is bid.

131,000 on my right.

No, shaking his head at me. A half, sir, do you want to come in at 131,500? No. Firm shake of the head.

New bid, madam, 131,500.

132, I have got.

132,500?

132,500. 133?

133. Another 500? Shake of the head.

I have 133,000, then, for the first.

At 133,000 for the second.

£133,000 for the third and the final time.

Sold to your client, Peter. 133,000.

'The actual bidder was Steve, who bagged it for £133,000, eight grand over the guide price.

'He wasn't at the auction, as he was otherwise engaged but he came to the flat

'with his daughters, Claire and Becks.'

Steve, congratulations. I didn't see you at the auction. Where were you?

I was at the races. I had a proxy bidder.

They rang me up a couple of hours after the auction, and said, "You've got the property,"

-so it made up for what I lost at the horses.

-What did you do? "OK, thanks!"

-and then carried on watching the horses?

-Yeah.

-It didn't interrupt your day at all?

-Not at all.

-The beauty for you of being a proxy bidder is that you didn't overspend on the day, did you?

-No.

Had I been there and it had got to my limit, I might well have gone over because I did like the property.

This way, I had my inbuilt self-control.

'So Steve is the cautious gambling type, then.

'Picking it up for 133,000 meant he was definitely in the winners' enclosure that day.

'He would've gone up to £136,500.

'That means he saved himself £3,500.

'I hope he didn't spend that at the races!'

Why did you want to buy this property? What was it that appealed to you?

It'd be a good start for my daughter if she wanted to do a flat share.

Her mum lives down the road. I live ten minutes away.

It's an opportunity for her if she wants to come and move in here.

At the moment, she doesn't want to share, so I'll probably just rent it out.

'Steve has a history of renovating properties and renting them out.

'The main aim here is to have a pension in bricks and mortar

'and provide financial security for his daughters.'

-So would you call yourself a property developer?

-Er, property speculator as opposed to developer.

I like restoring properties rather than knocking them down and building flats.

I hate big properties being destroyed.

Go around Southampton, you've got fantastic properties that have been knocked around

and now there's horrible flats there with no parking.

Where this, if I restore it, will be a nice family flat or a good flat-share for somebody.

The flat seems to have got the right owner to restore it to its former glory.

Unfortunately, despite Steve's enthusiasm for the place, some things will have to go.

Big decision about the windows.

I've got a quote in at the moment to have it completely re-double glazed,

matching what we've got here at the moment.

With double glazing, you mean white uPVC windows?

It will be but it will be an exact copy of what we've got here at the moment.

-Can you see the disappointment in my face?

-Well...

I know, I hear you. You're a landlord.

You need to think about saving a few pennies here and there.

It does look traditional with the original sash windows in, doesn't it?

If you put tenants in here, they've got to pay for the heating, not me.

If it's double glazed, then it will be cheaper for them long-term.

'Sad, but true. On that subject, Steve wants to install gas central heating plus a bigger addition.

'A third bedroom with an en-suite in the loft. What budget does he have?'

If I don't double-glaze it and don't do too much to the ceilings, then around £15,000.

If I mess with the ceilings and reinforce the joists,

then the budget will go up to between £25,000 and £30,000.

'Whatever renovation Steve decides on will affect the turnaround, which ranges from eight to 15 weeks.

'He'll project manage, supervising those who worked for him before.

'But that won't fill his day, so what else does he do when he's not at the races?'

My main job is an independent financial advisor, so pensions and investments. Also I'm a landlord.

Eight years ago, I started skydiving so nearly every weekend of the year,

I work at a skydive centre, filming people when they jump out of aeroplanes.

You crazy guy! What was it about skydiving you loved so much?

Absolutely petrified at the start.

Found it very, very difficult when I started skydiving.

I was 37 when I started.

But persevered and now I just love it. It gets rid of all my energies at weekends.

That must be the most incredible feeling.

The adrenaline rush must be like nothing else.

The adrenaline rush is awesome.

'It's not just Steve who enjoys it.

'Both his daughters do too.

'16-year-old Claire is the youngest person in the UK to complete an incredible 50 jumps so far.

'But getting her into this flat without an en-suite might be an even bigger challenge.'

I'd like to think that she will like the property when I finish doing the work

and that she will reconsider and say, "Dad, yes, I will do a flat-share."

That was one of the special reasons I bought this property because it's very close to me and her mum.

So, we'll see when I finish it what she says.

-Steve, it's an exciting time for you. Well done.

-Thank you very much indeed.

Steve is a real daredevil but is he daring enough to take on his daughter and refuse her an en-suite?

She may decide not to move in, of course. Will she or won't she?

Will Steve get all this work done in just eight weeks?

You can find out later in the programme.

Coming up, there's a way to gain precious space

in this two-bedroomed flat in Harlesden, North West London.

Increase the size of this room quite dramatically.

In Southampton, did Steve make his restoration too personal?

As I started doing the work, I thought it's too nice a property just to dress up.

But first in Derby, did Phillip get his renovation done on the hour, every hour?

'Earlier we met Phillip, an IT project manager,

'who bought this two-bedroomed end-of-terrace in Sponden near Derby for £53,000.

'It was to be a long-term investment for his daughter's education.

'She's only four now but in order to be prepared, he'd already mapped out a very detailed schedule.'

So, I mean, you're saying that on Wednesday March 31st, or whatever it is,

you're going to put in new taps in the bathroom?

Exactly, yes. That's how detailed I'm working this to.

'Well, that was five months ago.

'So, let's see if those taps went in on that date

'or if daughter Lily's university fund is still awaiting its first payment.

'Well, it seems the house is still being renovated.

'But you can already see where it's heading.

'Exposing that period fireplace adds character to the room.

'But I'm keen to see what Phillip has done to that other feature, the narrow corridor upstairs.'

I'm stood where the ugly corridor was last time you were here.

As you can see, that's now gone, which makes this room a lot bigger,

and leads through to what is now an en-suite bathroom.

That layout works particularly well with the shower room downstairs for the other bedroom.

'The original plan was to widen the corridor,

'but losing it completely has done this room the world of good.

'Unfortunately, that doesn't help the front bedroom, which now has no easy access to a loo.

'That's downstairs in the old kitchen and will definitely put potential buyers off.

'So, where is the kitchen now?'

Remember last time you were here that was the kitchen?

Obviously it was a bit on the small side.

So I've turned the dining room into a kitchen-diner, which is far better.

It's a lot bigger room. Better use of space.

I'm very happy with the result.

'I reckon Phillip's done the right thing, making the kitchen area far more appealing.

'But that's not the only big change down here.'

I did want to keep the outbuildings. But when I looked into it further, they were in a very bad state.

You just had to push the walls and it would fall over.

The easiest thing was to completely get rid of them.

That's made the garden bigger and it would be ideal for someone living here.

'Not only does it look much better, it's also the perfect place for summer barbecues.

'But the whole renovation is still in progress.

'You get the feeling Phillip's detailed timetable has got slightly derailed.'

My project plan was blown out of the water by week two,

when the house was stripped back and we could see what the bigger issues were.

For example, the outbuildings needed to be completely demolished.

Also the whole house needed to be replastered.

That added more time and cost.

The key to a good project is keeping your plans flexible, which is what I did.

The end result I'm very happy with.

'This is Phillip's first investment project.

'It's good to see that the setbacks aren't affecting his practical approach.

'What I need to know is, did those taps go in when planned?'

The bathroom taps didn't make it on time because I got a completely new bathroom suite.

So Martin, I'm afraid, I missed that target!

'Phillip's schedule may have bitten the dust quicker than anticipated

'but did he at least get his sums right?'

I worked out I'd be spending £12,760.

However, the extra work that I've had to do has pushed that up a bit,

so I'll be spending £15,000 by the time it's finished, which I'm still happy with.

The house cost £53,000,

so that would push Phillip's spend this far to £68,000.

Time to ask two local estate agents if they think he's given the house a new lease of life.

When you come into the place again, you see a lot of hard work.

It's a transformation. Everything that was wrong about it has been put right.

Particularly, the lean-to area at the back.

That's been cleared. We've had some changes upstairs, apart from refitting the whole house.

I think the property's been done quite tastefully in general.

The things that I really like, the first one is the kitchen floor, which might sound strange.

You don't normally see a stone-flagged floor in a property like this. I think it's fantastic.

The other thing is that you've got parking at the back off a quiet

service road, which kind of makes up for the busy road at the front.

Positive feedback, there.

But has the decision to close the corridor upstairs enhanced the property's appeal?

I'm slightly surprised that's been taken out altogether because while we've got a shower room downstairs,

it means effectively the rear bedroom's got its own en-suite bathroom. That's good.

But your front bedroom relies on the facility downstairs and that may not be quite so user-friendly.

Remember, Phillip's spend so far is 68 grand, so what could he achieve on a resale?

I would put this property on the market

at an asking price of around £87,950, in the hope and expectation that you might achieve about 85.

If I was to put this property on the market, I would begin marketing at £99,950.

I would expect to achieve an offer of about around 90 to £95,000.

£95,000 would still give a profit of some £30,000 if I choose to sell the house, so I'm happy with that.

But he has always intended this to be a long-term investment, so what can he expect in rental?

This would rent out very readily indeed and I would guess

you'd get between 475 and £500 a calendar month for it.

With a property like this I would expect to achieve

at least £400 per calendar month. Maybe a little bit more. 425.

Yeah, I'm very happy with those figures.

I based all my calculations on a rental of £400 per calendar month so anything extra than that's a bonus.

Hopefully, those figures won't develop the hiccups his schedule and budget did.

But is the plan to get another property and start on a new detailed timeline?

I've been extremely busy at work over the past three months, as well as having this on,

so it's time for a holiday before I weigh up my options about doing it again.

I'm in northwest London between fashionable Kensal Rise

and busy Harrow Road in an area known as Harlesden. Confused?

I'm under a mile from Willesden junction with its tube station

and this is Wrottesley Road, where the property is situated.

It's quite busy. Now, when it comes to buying properties in London, transport links are very important.

But this could be taking it a bit too far.

Bus stop. Property.

Yeah. Very convenient after a night out

but I'm not so sure it's a good thing and it would certainly put some people off.

But what we've got here is a two-bedroom ground-floor flat at a guide price of 170,000 quid.

Not quite as noisy as having a train line at the end of your garden

but it's not everyone's idea of kerb appeal.

Still, you can't argue with the convenience.

And, better still, from the outside, the property looks in fairly good condition.

That bodes well.

That hall in very nice condition so probably the structure of the building has been well maintained.

Flat itself, in through the door, you've got bedroom down there and another bedroom there. A good size.

I'm interested in the layout of flats and how you make the most of it, and I think this one

is doing a really nice job. Through to the kitchen.

It's not huge but this is only a two-bedroom flat. I think it's perfectly serviceable

and if you were renting this out, leave it as it is.

Down this little extra corridor, fairly sensible, you've got the loo,

bathroom there and then through into a really lovely lounge.

I mean, look at the size.

High ceilings, well, reasonably high ceilings.

Big bay window here. Double-glazing so you don't get too much road noise

and all in all, I mean, for a flat like this, this is a really nice space. Love it.

It feels like a big flat, possibly bigger than you might expect from a London two-bed,

where so often the second bedroom is a little more than a large closet.

But here it's actually a really good size

and while the general condition is tidy if a bit outdated, it would only take

some small changes to make a considerable difference.

So down the corridor to the main bedroom and some interesting opportunities spring to mind.

There's a cupboard in the corridor which serves no useful purpose

other than putting rubbish in.

But link it up with the fact that in the bedroom here there is this a massive wardrobe -

so massive you could almost call it a walk-in wardrobe.

Yep, look at this.

This is a stud-partition wall. This is a stud-partition wall.

Take those out, you'd increase the size of this room quite dramatically.

Yes, you've lost a bit of wardrobe space but get a stand-alone wardrobe. Fantastic.

Where the window is, you could put in French doors leading out to the garden.

Then this bedroom would really have a definite wow factor.

But what doesn't wow me is that the purchaser

will have to pay an additional fee of 2% of the amount paid for the property.

It's to cover the seller's costs but with a guide price of 170,000, that could be just under £4,000.

That could sink the plans of anyone on a tight budget.

So, is there any way to add value here?

Well, with flats like this, especially in London, you're always looking at opportunities to extend.

So that's the kitchen there. Could we do something?

Well, maybe put a little bit of a conservatory on there or something,

although you would block light and ventilation into that bedroom, so I don't think that's ideal.

You've got this six-foot-wide gap at the side of the property and you sort of think,

"Should I be using that?" Actually, you know what, in this instance, I'd leave it pretty much as it is.

There's a good-sized garden. This gives the whole flat a kind of open feel and I really like it for that.

The generous space in the flat creates a sense of room to breathe.

In the city, where people and buildings are squeezed into every corner, that's a great asset.

Apart from some cosmetic improvements, like whipping off

woodchip wallpaper and fitting a new kitchen, there's not a lot to do.

So a good property with great potential.

At a guide price of 170,000, it's time to ask a local estate agent

what he thinks of this spacious two-bed in Harlesden.

First impression of the flat actually, it's quite well proportioned

for a flat in this area. It is in surprisingly quite reasonable condition as well.

It's got... The kitchen's quite good.

It's got good central heating and benefits from double-glazing.

With all those plus points and that guide price of 170 grand, could this flat be a money-maker?

When it's spruced-up or refurbished, depending on

what sort of spec you go for,

I would suggest you could be looking 285,000 to £290,000.

What would be the rental return?

You should be able to achieve in the rental market somewhere in the region of £1,200 a month.

So let's add it up.

The place is kind of tired but structurally sound.

You have got to factor in that 2% buyer's fee that you're going to have to pay

and, of course, the market is a bit sticky at the moment.

But I reckon it still makes sense. Let's find out who did their sums and went for it at the auction.

Lot 94. Looking for 180. £180,000.

What about 150?

Give it a bit of a start.

150, I've got.

Anybody else? Got £150,000.

How much? 155? Yeah, 155.

160. 165. 170. 175.

180. 185. 190?

186?

Give you a hand?

OK, 186.

187? 187. 188? No?

If not, to the gentleman in the middle on my left. It's £187,000.

188, new place. 189, sir?

190 at the back. 191?

Cheap under 200. 191. 192.

193. 194. 195.

196. 197. 198. 199.

200,000 at the back. 201.

202. 203. 204. 205. 206.

207? 207. 208.

209. 210. 211.

212. 213? No?

One more? OK, leave you to it.

Bid's at the back of the room on my right from the lady who bids at £212,000 against you on my left.

212 for the first.

212 for the second. 213? Back in. Nearly. 214?

214. 215? 215?

There, there, don't worry. 215.

216, 217. No? Go through it again.

The lady at the back.

216 for the first. 216 for the second.

216 for the third and final time.

We're all done. Sold, 216. Well bought.

Wow. The winner of that fight was Suzanne.

She bought her last three flats at auction,

so was prepared for the fast and furious pace on the day.

-Suzanne, good to meet you.

-Nice to meet you.

-Congratulations. That was a battle!

-It was.

It was indeed, yeah. I competition hard.

-Now, you were obviously very keen to get the property.

-I was, yes.

-Why?

I wanted a property near to my sister.

She lives in Kensal Rise and it's the nearest I found.

That is why I had my eye on this property.

-It went quite a lot over its guide price?

-Yes, it did.

But I was very keen to get it and I was prepared to pay a little over the odds, because it was for me.

-Had I been doing this as an investment, I wouldn't have paid that much.

-Had you set yourself a budget?

-My budget was 215, absolute tops.

-Right.

But I did go over it. MARTIN CHUCKLES

-So, the absolutely tops bit...?

-I was expecting it to be a lot less.

But my absolute tops was 215 and he bid once more and I said, "Just one more time!"

-Are you glad, at the end of the day, that you paid that bit extra?

-Yeah, I am.

Suzanne feels she got the house at a good price,

but then realised she was going to have to part with more money.

There was this thing of paying the seller's fees at the auction. What did you feel about that?

-I didn't know about it until after the auction.

-You didn't?

-No.

-I know that was a bit naive of me.

-That cost you how much?

About £4,000.

-That you weren't expecting?

-That I wasn't expecting.

-Ouch.

-Yes, it was an ouch. But maybe it's a good thing.

Maybe I wouldn't have gone as far as I did had I have known about it.

Probably wouldn't have, actually.

The seller's fee information was in the legal pack, but it often catches buyers out. So always beware.

For Suzanne, that means her absolutely top price of 215,000 had increased to £220,000.

But because there's so little work needed, she hopes to get it refurbished

for three to four grand and in three weeks.

Tell me more about you. What do you do when you're not buying houses at auction?

I'm a social worker and foster carer. Hopefully, with a spare room, I'll be able to take another child in.

-One at a time, or sometimes more than that?

-No, I'll be doing one at a time.

I have done more than that, but it's very hard for a single person.

Suzanne has looked after ten children,

so she's obviously a determined woman, not to be put off

by a small challenge like renovating this flat.

She's considering adding an extension to the kitchen and moving the bedroom window.

It would make the flat a lot bigger

and I think it would improve on its value, as well. If I do want to move on, I wouldn't lose.

If you don't do an extension, what plans do you have for doing it up?

Keep it contemporary. Cosy contemporary, that is what I call it.

-Cosy contemporary? I like that.

-Yeah.

-And in the main bedroom I would take out all those cupboards and make the room a lot larger.

-That's great.

-I thought about that.

-And put probably a cupboard in the alcove and dresser on the side.

It would give a feeling of much more space, instead of having those ugly cupboards there.

-Apart from that I think it is mainly cosmetic, all the work here. So, that's it.

-Congratulations.

-Good luck with it and the foster care.

-Thank you.

-And we look forward to seeing how you get on.

-Thank you.

Well, despite going over her budget and those unexpected charges,

I think Suzanne has still got a great flat here.

Not so sure about the extension, but it is a different equation when it's a property you're buying to live in.

That damp, hopefully not too much of problem either.

You can find out how she gets on later in the show.

Time and tide wait for no man and we can't wait a moment longer.

We've given our developers plenty of time.

But have they achieved what they wanted?

Let's go back and find out.

Earlier we were in Southampton, where we met sky-diving property speculator Steve.

He'd bought this fabulous two-bed flat for £133,000.

He was planning a modest makeover, but the flat had amazing potential.

I could see the adrenaline rush of freefalling might be replaced by the thrill of a great renovation.

Five months on, and from the outside a big skip and building equipment shows there are still men at work.

But step inside...

and there's one amazing transformation in progress.

This formerly tired living room is now a wonderful combination

of clean contemporary lines and the period details that Steve was so keen to retain.

Originally I was going to come in, clean it up, paint and decorate, kitchen, bathroom and leave.

But as I started doing the work, I thought it was too nice a property just to dress up.

So I thought I'd restore it.

This has turned from a renovation to a restoration.

The style of the living room continues

into the two bedrooms and both still retain their wonderful spacious splendour.

But it doesn't mean Steve has been completely faithful to the original design. Because, up above...

When I bought the flat, I realised we had such large attic space

it was trying to find a way of getting a staircase into the attic

to maximise the space.

So we lost a room downstairs, which was only about 49 square feet, seven by seven.

And we've gained a space up here of around 450 square feet,

giving us an advantage to put a landing in, our own separate boiler room.

And this room's going to be quite spectacular

with an en suite, picture windows and a big dormer window behind me.

And that's the next project over the next two months.

It's a fantastic idea, with this loft intended to be the massive master bedroom, bathed in light.

Ironically, this huge room has been created by losing the smallest room downstairs and it wasn't easy.

One of the most pleasing parts of the job was the hallway.

We had a lot of difficulties with the staircase,

especially the cappings because the original wood we were using was a soft pine and it was splitting.

So we had to have them remade in a slightly harder wood.

Why I'm so pleased about it, it looks like it's been here all the time and not just an addition by me.

And that, with the coving all being replaced, exact copy of the original stuff,

then it just makes it a very grand hallway.

And I think it's the nicest part of the house, really.

That sense of style continues at the other end of hallway.

A new WC and bathroom suite has been installed,

again retaining the look of the flat but with a modern twist.

# Looks, looks, looks You had sense

# You had style You had cash galore

# Looks, looks, looks. #

Everything about this place is pleasing to the eye, but that doesn't come cheap.

Replacing all the ceiling joists from four-by-twos to nine-by-twos, timber's not cheap.

That was a very expensive thing. Because we'd applied for planning permission to make an attic room

then it had to be done with fire boarding, acoustic boarding.

And, once we'd done that, we had these lovely freshly plastered ceilings. It was then the decision

to replace all the cornice.

Just the cornice alone was over £3,000

but it's made that bit of difference to the property.

When you walk in through the hallway, I think it looks spectacular and original.

Let's not forget the usual suspects on a developer's list - new central heating,

rewiring, flooring, replastering and those new windows.

Steve's obviously a bit of a perfectionist and something told me

that original budget was never going to cut the mustard.

My original come in here, paint and decorate it,

and a quick job of £15,000, I think has ended up more like £65,000-£70,000.

Steve bought the flat for £133,000.

So that big restoration has put his current outlay to £203,000.

But this financial advisor has not lost sight of the bottom line.

I would like to do a little bit more here.

And when I do the attic room, then I'll decide if I'm going to put an en suite and stuff like that in there.

But I've got to be very careful that I don't price it out of its market area.

There's no point me spending all this time

working on it and then walking away with only having paid the builders and materials and nothing for me.

It looks like Steve will be the first resident to enjoy his hard work, as daughter Claire

has changed her plans about moving in.

'My eldest daughter was thinking of moving in here,

'but that was on the basis of that it was a flat share, because it's such a big property.

'But she's moved into one of my other flats now.

'So as an interim one, while I'm doing up my house,

'I'll move in here, finish my other property'

and then see how the market goes. I'll make a decision then whether to rent it out or sell it.

To find out what Steve could achieve on his investment,

we invited two local estate agents to give a verdict on his efforts.

The property's gone through a complete transformation.

Previously, it was a good-sized property.

Obviously it's actually got bigger.

What the current owner has done is accentuated it, put loads of character into it.

He's done a very good job.

This property definitely has the wow factor.

The overall standard of finish is absolutely fantastic. The main things I like about this property

is the overall finish, but also the way in which

the actual the owner has kept some original features.

The coved ceilings, the natural fireplaces which are here and also the solid wood flooring as well

just gives an overall good finish. The only negatives I would say is a property of this size

would want to have a garden. And obviously that will be a downfall.

Let's face it, with all that space inside, maybe the lack of garden might not be an issue.

But did Steve get his sums right?

Remember, he spent £203,000 on this flat so far.

So, what could he get if he sold it?

I would value this property at 174,995.

Current price for the property, as it is, probably looking around 170.

Once you bring into play a three-bedroomed apartment, you could advertise it around 200.

If he was to extend upstairs, I would value this property around 209,995.

I've already had it valued by a professional chartered surveyor for the bank.

In the condition it was,

worse than this, a few weeks ago, without the floors even being done, it was valued at 210

with an estimate of around 245 finished. And I think that's much more realistic.

I hope that Steve's right.

But what he's achieved here has all the makings of a modern home,

yet with the character features of a period property.

With Steve's obvious passion for old buildings, is he planning to drop in on more auctions?

I'd rather be sky diving than going to an action.

But, at the end of the day, I've got to be able to pay for my hobby and if I can do it

by buying properties and selling them, and it keeps me sky diving, then that's the way it will be.

Seasoned auction buyer Suzanne, a social worker,

bought this two-bedroomed ground floor flat in Harlesden, northwest London, for £216,000.

The property was in great condition and just needed to be brought up to scratch.

Since this was to be Suzanne's home, she was going to give it the personal touch.

Keep it contemporary.

-Cosy contemporary, that's what I call it.

-Cosy contemporary?

I like that. Well, it's been four months since the auction.

So time to see what Suzanne has achieved.

That dowdy, tired living room has now been given a new lease of life.

New flooring and fresh decoration now makes this a relaxing lounge.

And it seems that Suzanne's trying to forget the way the old flat was.

Well, I can't really remember how it looked before because it's been like this for while now.

But I do remember it looking dull, having a bright red carpet on the floor which I didn't like.

That went straightaway. And I think that was it, basically.

This room was more or less OK.

The other rooms had a lot more work to do in them.

Well, this is the major change in the flat that I carried out, taking out

a big cupboard that took up practically half the room.

Well, it was at least a metre in width.

And we've removed that, we've put the cupboard over here,

we've moved the door back and given the bedroom a much bigger space.

And that's what I intended to do, give more space.

The place may appear as though it's undergone a radical transformation

but things aren't that different.

In the kitchen, the cupboards are the same - only the worktop and the flooring have been changed.

And it's the same story in the bathroom.

Just a new toilet and floor.

The second bedroom has also had the simplest of makeovers,

but it's the individual touch that gives this flat character.

Well, cosy contemporary means homely, modern. It's slightly modern.

I like some old bits as well because I've bought a few pieces here.

I like to mix a bit of old with new.

But I think, all in all, it's is a very comfy, cosy place. Well, I like it, anyway.

With such a simple renovation, Suzanne kept within her budget and spent three grand.

Added to £216,000 cost of the flat, plus a seller's fee of four grand,

that makes a total of around £223,000.

With the help of her workmen, she did the makeover in one-and-a-half weeks.

-so, job well done. Well, not quite.

-Well, here we are.

This is the last part of the changes that I'm going to make here.

We were supposed to do the turfing last Saturday, but we didn't make it.

My sister had another job and she couldn't help me. So you can't rely on family, can you?

What I am going to do here is I'm going to be putting tiles down the whole length of this

and this side here, to spruce it up a bit and re-turf it.

So that should make it look a lot bigger and nicer, more pleasant

cos this stone is not very nice.

And put more plants and shrubs around to make it look a bit more gardenified.

Three months after buying the flat, Suzanne is already planning to move on.

What does she plan to do with the property?

If I could sell it at good price, I would and then buy something when I get back.

But if not I'll rent it out because I like this place, it's nice.

# And soon you will find that there comes a time

# For making your mind up. #

Holding on to the flat could give time for Suzanne's investment to mature, if the property market

takes a turn for the better.

But the decision to travel is not recent.

I wanted to take a year off and travel a bit.

So this the best time for me at the moment to do that.

So I want to take advantage of it and just hop off somewhere.

What will Suzanne do, sell or rent?

To help her make that all-important decision,

we invited two local estate agents along to the finished flat.

Impressions of the property is that it has been brightened, lightened.

Really done what the area commands, or really dictates.

I think it's been very well done. I think that the clear, white paint

is always good, opens it up and makes it feel nice, bright and spacious.

This is easily for sale or for rental.

It wouldn't be a problem in either market at the moment.

Good news for Suzanne. But remember, she's spent around £223,000 so far.

What could she sell the flat for?

I feel this property you should be able to achieve, in this market, between £290,000 and £295,000.

I would envisage you'll be looking in the region of £290,000.

Wow, that's really good.

I'm surprised.

Pleasantly surprised.

No wonder. In just three months,

Suzanne could make a potential £67,000 pre-tax profit. What about rent?

Per calendar month, excluding utility bills, I would expect about £1,200 a month.

I would say that you would be looking in the region of about £1,100 to £1,200 a month.

Very nice.

Excellent. They're both good.

That would give Suzanne a 6.5% gross yield.

So, with a late gap year beckoning, have those valuations helped with her decision?

My feeling is that I should sell,

seeing as the prices are quite good.

So it might be a good time now.

I don't know about you, but I never know what to expect on properties that we feature on this show.

Sometimes they're just are full of surprises and we'll have more next time on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

For more information about Homes Under The Hammer,

including how the programme was made,

visit the website at bbc.co.uk

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