0:00:02 > 0:00:04Hello! Buying your first house is a life-defining moment
0:00:04 > 0:00:06- and one you'll remember forever. - Yes, but whether you're buying
0:00:06 > 0:00:11your first property or your 50th, buying at auction is still really exciting.
0:00:11 > 0:00:16And it really can be a heart-stopping moment, so join us for Homes Under The Hammer.
0:00:42 > 0:00:49Everyone knows that appearances can be deceptive, and auction properties can sometimes be difficult to read.
0:00:49 > 0:00:54Yes, the house may appear to just need a quick make-over, but really drastic surgery is needed.
0:00:54 > 0:01:01So, today, will it be just a case of a bit of filler in the cracks or a full renovation for our properties?
0:01:01 > 0:01:07The guide price is low, but the inside of this Preston flat looks absolutely fine.
0:01:07 > 0:01:09But you know what?
0:01:09 > 0:01:11There's a catch.
0:01:11 > 0:01:17There's a surprise in Wiltshire. This house has all the fittings but no occupants.
0:01:17 > 0:01:21It's all luxury! I'm not used to this.
0:01:23 > 0:01:26And, considering its age, you'd expect this Staffordshire
0:01:26 > 0:01:29terrace to be in a sorry state, but there's one big problem.
0:01:29 > 0:01:32It's those cracks that are really worrying me.
0:01:32 > 0:01:35All these properties went to auction, and we'll find out who
0:01:35 > 0:01:40bought them, and what they paid, when they went under the hammer.
0:01:44 > 0:01:47I'm in Lancashire for the first property under the hammer today.
0:01:47 > 0:01:52The canals here played a vital part in the Industrial Revolution.
0:01:52 > 0:01:55Well, Preston not only enjoys its history -
0:01:55 > 0:02:00the Lancaster Canal here - but its new-found city status.
0:02:00 > 0:02:04I'm off to see a property just two miles away to find out
0:02:04 > 0:02:06if this is a good place to invest in property too.
0:02:06 > 0:02:13Preston was awarded city status by the Queen in April 2002 to celebrate her Golden Jubilee.
0:02:13 > 0:02:18With over 32,000 students living here, it's certainly
0:02:18 > 0:02:22a vibrant place to be, so there is potential for student lets here.
0:02:24 > 0:02:30So how much do you reckon for a reasonably well-located, one-bedroomed flat?
0:02:30 > 0:02:3270 grand? 60 grand?
0:02:32 > 0:02:3550 grand?
0:02:35 > 0:02:38How about 10 grand?
0:02:38 > 0:02:42Well, that was the guide price, and, no, it wasn't a misprint.
0:02:42 > 0:02:47From the outside, the block does appear to be in decent order.
0:02:47 > 0:02:50The windows look fine, and the paintwork seems new.
0:02:50 > 0:02:55The grounds are well-maintained and there's parking, which is a huge benefit.
0:02:55 > 0:02:57The communal areas are good too.
0:02:57 > 0:03:05This internal stairwell is spick-and-span, so things bode well for this modestly priced lot.
0:03:07 > 0:03:13Now, for that kind of guide price, clearly you've got to have your expectations set pretty low, but...
0:03:13 > 0:03:16Oh, my word!
0:03:16 > 0:03:17..it's actually
0:03:17 > 0:03:19really OK.
0:03:19 > 0:03:21It doesn't smell, there's no...
0:03:21 > 0:03:24Fine! What have we got? We've got a bathroom there.
0:03:24 > 0:03:28OK, it's a bit old and tired and dated, but it's serviceable.
0:03:28 > 0:03:31Decent-sized bedroom. That's your one bedroom. Some storage cupboards
0:03:31 > 0:03:36here and then through to the main part of the flat. You know what?
0:03:36 > 0:03:42I've been in a lot of flats that cost a lot more than this and were in a lot worse condition.
0:03:42 > 0:03:48It's got storage radiators, so that's not ideal, but...it's not bad. Haven't found the kitchen yet.
0:03:50 > 0:03:52Oh, yeah, here it is.
0:03:52 > 0:03:55Again, look at it.
0:03:55 > 0:03:58Perfectly serviceable. I mean, think about that guide price.
0:03:58 > 0:04:00That was quite extraordinary, and it's a perfectly
0:04:00 > 0:04:04decent flat that you could move into pretty much as it is.
0:04:04 > 0:04:06But you know what?
0:04:06 > 0:04:08There's a catch.
0:04:08 > 0:04:10Of course, there would be.
0:04:10 > 0:04:14And the issue is quite complicated, and this is where you really need to make sure you read the legal pack
0:04:14 > 0:04:19at the auction, because it appears that there could be a bit of an issue regarding some work which
0:04:19 > 0:04:26has been done on the whole building which you, as an owner of this flat, could be responsible for.
0:04:26 > 0:04:32It's a bit of a potential issue, and, before you buy, you absolutely need to get the issues resolved.
0:04:34 > 0:04:37The problems stem from external rendering that
0:04:37 > 0:04:41was carried out to the block at a cost of 9,000 quid per tenant on top
0:04:41 > 0:04:48of the existing management charge, so, for any buyer, the first job must be to check out the legal pack.
0:04:48 > 0:04:51The next priority would be to do something about the colour of this kitchen.
0:04:51 > 0:04:56- # They call me mellow yellow - Quite rightly... #
0:04:56 > 0:05:02In such a confined space, this yellow is not making me feel at all mellow.
0:05:02 > 0:05:05And new doors on the units wouldn't go amiss either.
0:05:05 > 0:05:10The carcasses look to be in good order, though, so I wouldn't go for a new kitchen here.
0:05:10 > 0:05:15The bathroom is OK, and the suite could stay if you were looking to save money.
0:05:15 > 0:05:17It may only need a lick of paint.
0:05:17 > 0:05:20However, I do think you should change the heating system.
0:05:20 > 0:05:27Storage heaters aren't for everyone, so a new gas central heating system would really set this flat apart.
0:05:30 > 0:05:33I've invited a local estate agent to take a look at the flat
0:05:33 > 0:05:38and give us some more information about the exterior of the block.
0:05:40 > 0:05:44There's been a big issue with the structure of the blocks.
0:05:44 > 0:05:48There's been a lot of work carried out, so, really, selling
0:05:48 > 0:05:51has stopped for probably about two and a half, three years.
0:05:51 > 0:05:57That explains the low guide price, because the rendering problem has created a bit of a stigma -
0:05:57 > 0:06:00not what you need if you want to sell the flat on.
0:06:00 > 0:06:03The new owner will have to investigate this thoroughly.
0:06:03 > 0:06:07What does this place need if it's to entice a buyer or tenant?
0:06:07 > 0:06:08The property's dated.
0:06:08 > 0:06:14I suggest a new kitchen and bathroom, new carpets and just paint it throughout.
0:06:15 > 0:06:20If the flat did sell for anywhere near the guide price of 10,000 quid,
0:06:20 > 0:06:23that would certainly leave scope in the budget for some decorating.
0:06:23 > 0:06:27Talking of figures, how much could someone stand to make here?
0:06:28 > 0:06:34When renovated, I suggest you market this property in the region of £28,000 to £30,000.
0:06:34 > 0:06:39Per calendar month, I suggest a rental of around £300 a month.
0:06:39 > 0:06:45I reckon that with a guide price of 10,000 and a potential resale value of 30, no investor should
0:06:45 > 0:06:49let the colour of this kitchen jaundice their opinion of this flat.
0:06:52 > 0:06:57So a decent enough flat, but the big issue here, of course,
0:06:57 > 0:07:03is who is liable for those costs associated with recent renovations.
0:07:03 > 0:07:06There does seem to be a bit of uncertainty, and one thing's for sure - if you're going to bid on
0:07:06 > 0:07:09this, you've got to be absolutely clear before the hammer goes down,
0:07:09 > 0:07:13cos, once it goes down, your position is decidedly weaker.
0:07:13 > 0:07:16Let's find out who went for it at the auction.
0:07:16 > 0:07:19So we go to lot 131 which is flat 7, Edleston Lodge,
0:07:19 > 0:07:22Grange Avenue, Preston,
0:07:22 > 0:07:25on behalf of the mortgagees.
0:07:25 > 0:07:28It's a vacant, one-bedroom, first-floor apartment.
0:07:28 > 0:07:31Make it nice and easy - someone give me 10,000 for it.
0:07:31 > 0:07:3510 there. Say 12?
0:07:35 > 0:07:3912, 14...
0:07:39 > 0:07:42Who are you pointing at? Sorry, I didn't see you there. 14,
0:07:42 > 0:07:4416, 18...
0:07:44 > 0:07:4717, then?
0:07:47 > 0:07:5017 here, new bidder. Will you give me 18, sir?
0:07:50 > 0:07:52No? Then it's with you, sir, at 17,000.
0:07:52 > 0:07:54Are we all finished at 17?
0:07:54 > 0:07:56No, we're not. 18 there.
0:07:56 > 0:07:5819, sir?
0:07:58 > 0:08:0020? Looking for 20.
0:08:00 > 0:08:0320 here. 21...
0:08:03 > 0:08:0722, 23, 24...
0:08:07 > 0:08:0923 on my left.
0:08:09 > 0:08:12Are we all finished at 23?
0:08:12 > 0:08:13I'll take 23 and a half.
0:08:13 > 0:08:17First time at 23, second time at £23,000...
0:08:19 > 0:08:21It's yours, sir, well done.
0:08:21 > 0:08:26The winning bidder who paid £23,000 is Phil.
0:08:26 > 0:08:30He's bought a flat in this block that's desperate for someone to save it.
0:08:30 > 0:08:37It was a controversial auction lot with a bit of a murky past, but has Phil unlocked all the secrets?
0:08:37 > 0:08:41I went to meet him at the property to find out more.
0:08:41 > 0:08:44- Phil, good to meet you. - Hello.- Congratulations.
0:08:44 > 0:08:46- Thank you.- Didn't quite get it for the ten grand!
0:08:46 > 0:08:49No, I wasn't really expecting to.
0:08:49 > 0:08:54It was quite a low reserve, but it would've been nice to get it for ten, but, in the end, it was 23.
0:08:54 > 0:08:58Why do you think they put it at that kind of price? Was it just to attract attention?
0:08:58 > 0:09:01Yeah, there's been a few issues on the estate as well over the last two
0:09:01 > 0:09:04years, with external rendering and the maintenance issue, so I think
0:09:04 > 0:09:07it's putting a lot of people off buying into the area,
0:09:07 > 0:09:10- so I think that was maybe the crux of it.- Right.
0:09:10 > 0:09:13This thing with the maintenance of the outside and the re-rendering -
0:09:13 > 0:09:16- that's something which covers a lot of the properties around here? - It does, yeah.
0:09:16 > 0:09:20On this estate, they've basically asked for £9,000 off everybody
0:09:20 > 0:09:25who's got a flat on the development last year, to pay it on top of the management to cover the rendering.
0:09:25 > 0:09:32Now, there was a lot of grey areas in the legal pack, which was basically looking like whoever bought
0:09:32 > 0:09:36the property was going to have to pay that £9,000, but I looked into considerably, ran it by the
0:09:36 > 0:09:43solicitor, and we found a loophole that the previous person who had the mortgage was liable for it still.
0:09:43 > 0:09:47So, when we've bought it for 23, that's the price we've paid, 23,
0:09:47 > 0:09:49and the other party has to pay the £9,000.
0:09:49 > 0:09:52Phil is a lucky guy.
0:09:52 > 0:09:54# Some guys have all the luck... #
0:09:54 > 0:09:57Thanks to his thorough research before the auction,
0:09:57 > 0:10:03he knew he wouldn't have to pick up that £9,000 bill, so he bought when others were having doubts.
0:10:03 > 0:10:06- Why were you so keen to buy it? - Just as an investment.
0:10:06 > 0:10:11We're coming up to year-end. I own a construction company. We're coming up to year-end with some surplus cash.
0:10:11 > 0:10:16Rather than it sat in an interest-bearing account paying 1%, we'll go and buy
0:10:16 > 0:10:20another property, and hopefully it turns it round in a couple of years, and we'll make a bigger percentage.
0:10:20 > 0:10:22So you're a developer, are you saying?
0:10:22 > 0:10:25We own a construction company, but we've got a development arm
0:10:25 > 0:10:30- to the company that does smaller stuff and one-off houses.- Right.- So we've bought a few, sold a few on.
0:10:30 > 0:10:34- At the moment, it's the right time for buying to rent. - Tell me more about that.
0:10:34 > 0:10:39Er...we've probably done about a dozen properties over the last two, three years.
0:10:39 > 0:10:43Generally, for the first two years, it's buying it, refurb
0:10:43 > 0:10:46as quick as we can, and sell them on and making a nice, tidy profit.
0:10:46 > 0:10:49But we found that the profit margin then was going and going with the
0:10:49 > 0:10:53market changing, so we've got three or four now that we just rent.
0:10:53 > 0:10:56We'll look again in another two years. If it's the time to sell, we'll sell in a couple of years.
0:10:56 > 0:11:01As property prices are depressed but rent's holding up fairly strongly in
0:11:01 > 0:11:06Preston, Phil thinks this is a great time to buy, but why THIS flat?
0:11:06 > 0:11:09What won him over about this particular property?
0:11:09 > 0:11:11Nothing in particular. The price!
0:11:11 > 0:11:14- That's honest.- I never actually saw the property before the auction.
0:11:14 > 0:11:18I know the area cos I'm from Preston, but I didn't actually come and look in the property.
0:11:18 > 0:11:21It was just the right price and I know the area for renting,
0:11:21 > 0:11:25- so I took a risk.- You must've been delighted when you walked through the door.- Yes,
0:11:25 > 0:11:29it's very tidy, and I'll get away with spending not a lot of money on it, so it's going to be good.
0:11:29 > 0:11:32- So what are you planning to do to it?- Er...
0:11:32 > 0:11:35the kitchen is going to be changed - just a basic kitchen going back in.
0:11:35 > 0:11:39The bathroom - a basic bathroom suite to go in. And decorate throughout.
0:11:39 > 0:11:42If I spend any more than £6,000, I'll be upset.
0:11:44 > 0:11:48We don't want to see a grown man cry, but we may see tears of joy,
0:11:48 > 0:11:53because Phil has had a stroke of luck since buying the flat.
0:11:53 > 0:11:56We've got a database of tenants through the previous properties.
0:11:56 > 0:12:00We've rung round a couple that are on our list, and I've actually got a tenant geared up for it
0:12:00 > 0:12:04- who wants to be in in a month's time. - Really? - So we've got a reasonable rent.
0:12:04 > 0:12:08- We're looking at about a 9.5% return on it straightaway. - What kind of rent are you getting?
0:12:08 > 0:12:10We're getting 350. We've agreed on 350 a month.
0:12:10 > 0:12:14- Right.- And obviously we'll have to pay the maintenance fee out of that.
0:12:14 > 0:12:17Now, the maintenance charges are quite high, aren't they? Is that something that concerned you?
0:12:17 > 0:12:21They have over the last two years, cos they've been paying for this work,
0:12:21 > 0:12:26but I've spoken to the people who have the lease of the whole estate, and basically they've paid for all
0:12:26 > 0:12:31the work now, so the maintenance charges from this year on should drop back down to where they were
0:12:31 > 0:12:37three years ago, which is maximum £1,000 a year. And that covers the leasehold and the maintenance.
0:12:37 > 0:12:40Are you bothered about the value, because the values that we were given done up...
0:12:40 > 0:12:43- you're just on the cusp there, what you paid.- It is, yeah.
0:12:43 > 0:12:46I'm not particularly bothered with it,
0:12:46 > 0:12:49cos I think it's still rumbling on with this scenario with the render. In two years' time,
0:12:49 > 0:12:52that'll be gone, forgotten about. It looks fresh, the estate.
0:12:52 > 0:12:57It's 16 years old, the property, but to first come up, it looks reasonably fresh.
0:12:57 > 0:13:00I think, in two years' time, the headaches of what's gone by
0:13:00 > 0:13:03- is forgotten about, and the prices will go up.- So what could've been a headache is actually...
0:13:03 > 0:13:06- It's quite easy.- Yeah.
0:13:06 > 0:13:12So he did his research, and the maintenance issues that scared some buyers away look resolved.
0:13:12 > 0:13:17There's even a tenant waiting in the wings for Phil's flat.
0:13:18 > 0:13:22Well, he didn't get it for that ridiculously low guide price,
0:13:22 > 0:13:26but I think Phil still realises that he got himself a bit of a bargain here.
0:13:26 > 0:13:27So how is he going to get on?
0:13:27 > 0:13:31Well, he's already got himself a tenant lined up, everything should go to plan, but you never know.
0:13:31 > 0:13:34Join us later in the show to find out how he gets on.
0:13:39 > 0:13:44As pretty as a picture and postcard perfect, Redlynch near Salisbury
0:13:44 > 0:13:47is a village on the fringes of the New Forest National Park.
0:13:47 > 0:13:49It's not just its setting that makes it popular -
0:13:49 > 0:13:55good schools and three pubs make this a hit with renters and buyers alike.
0:13:57 > 0:14:02I'm here to see a property that was on the market for 265,000.
0:14:02 > 0:14:08Now, the guide at auction was set at just £165,000, so what's the catch?
0:14:08 > 0:14:13Well, there isn't one. This was built a year ago and it hasn't even been lived in.
0:14:13 > 0:14:16Let's have a look around.
0:14:16 > 0:14:21Brand spanking new, but it's already got a name - Plum Tree Cottage.
0:14:21 > 0:14:23Although there aren't any fruit trees in the vicinity,
0:14:23 > 0:14:27this cottage certainly looks ripe for investment.
0:14:29 > 0:14:32Now, this is not a typical Homes Under The Hammer property for me.
0:14:32 > 0:14:36It's got luxury. New thick carpet here - look at this!
0:14:36 > 0:14:40And the front door - it's gorgeous and heavy.
0:14:40 > 0:14:42Now, I know this house was developed to a really high spec.
0:14:42 > 0:14:48For instance, these wooden frames here are made from wind-felled, locally sourced oak.
0:14:48 > 0:14:53All these appliances - the dishwasher, cooker, fridge-freezer - are all really good quality.
0:14:53 > 0:14:57There's also zinc-galvanised drains and down pipes and, if that
0:14:57 > 0:15:00wasn't enough for you, there's under-floor heating down here.
0:15:00 > 0:15:03It's all luxury! I'm not used to this.
0:15:03 > 0:15:08Cracked sinks, damp walls and subsidence are the norm for auction lots,
0:15:08 > 0:15:13so coming here feels more like one of our second visits to a revamped property.
0:15:13 > 0:15:15It's really rather unusual.
0:15:15 > 0:15:22Upstairs, there are three good-sized bedrooms and a shiny new bathroom, with a bath and separate shower.
0:15:22 > 0:15:25Everything's new!
0:15:26 > 0:15:29I am so excited by these here -
0:15:29 > 0:15:33modern bi-folding doors that open right the way back.
0:15:33 > 0:15:37They give more of a contemporary feel than the traditional French doors,
0:15:37 > 0:15:42and it just allows that sense of flow from the lounge out to the garden.
0:15:42 > 0:15:43I am all for them.
0:15:45 > 0:15:46It's all about bringing the outside in,
0:15:46 > 0:15:51and this house has lots of outdoor space, which is a huge bonus.
0:15:52 > 0:15:55It just needs someone to stamp their personality on the place.
0:15:55 > 0:15:59And I've made a discovery on the other side of the fence.
0:15:59 > 0:16:06Now, here's a bit of gossip. There were rumours of a proposed pub being built right here on this plot.
0:16:06 > 0:16:10Now, I imagine that would have put a lot of potential buyers off -
0:16:10 > 0:16:11the noise, the parking issues.
0:16:11 > 0:16:15Now, luckily, they were just rumours because the real truth is
0:16:15 > 0:16:19there's actually planning permission in place for five new houses to go up here,
0:16:19 > 0:16:23turning this bit of wasteland into something much, much more desirable.
0:16:23 > 0:16:30There are also another three new-builds nearing completion, plus Plum Cottage, so,
0:16:30 > 0:16:32with those five proposed new houses,
0:16:32 > 0:16:35you'll soon be spoilt for choice for new properties in the village.
0:16:37 > 0:16:40What will a local estate agent make of this one?
0:16:40 > 0:16:43I started by about asking about the setting.
0:16:45 > 0:16:47Very good village, very popular village.
0:16:47 > 0:16:50The local junior school is two minutes' walk down the road,
0:16:50 > 0:16:52and quite a lot of amenities.
0:16:52 > 0:16:55We're also close to the cathedral city of Salisbury
0:16:55 > 0:16:59for employment and rail links to London and the country.
0:16:59 > 0:17:03It's very peaceful and you've got an awful lot of local wildlife as well.
0:17:03 > 0:17:08Plus Plum Cottage for any Little Jack Horner developers looking to stick their finger
0:17:08 > 0:17:12into the local property market. So let's talk numbers.
0:17:12 > 0:17:15If the property was coming onto the rental market currently,
0:17:15 > 0:17:22I would expect to reach between £800 and £825 per calendar month.
0:17:22 > 0:17:26If I was to bring this property to the open residential sales market today,
0:17:26 > 0:17:29I would look to put this property on the market
0:17:29 > 0:17:31for between £190,000 and £200,000.
0:17:31 > 0:17:33Hang on!
0:17:33 > 0:17:39There's nothing to do in this house and it went to auction guided at £165,000.
0:17:39 > 0:17:44Considering you could sell this on for just under 200,000 as it is,
0:17:44 > 0:17:46I think there's a margin to be had here.
0:17:46 > 0:17:50Let's see who spotted this fantastic opportunity at the auction.
0:17:50 > 0:17:54Lot 18 is the property known as Plum Tree Cottage,
0:17:54 > 0:17:57an ideal investment being offered at a very sensible price today,
0:17:57 > 0:17:59ladies and gentlemen.
0:17:59 > 0:18:05Does somebody wish to get me under way at a very sensible £150,000?
0:18:05 > 0:18:07I need an opening bid.
0:18:07 > 0:18:13Thank you, sir. 150,000 I have got. I have an opening bid of 150.
0:18:13 > 0:18:15Now I need 151,000.
0:18:15 > 0:18:17151,000, madam.
0:18:17 > 0:18:22Right down here in the front. 151. I have the two bids. 152, sir.
0:18:22 > 0:18:25153. 153 from the lady.
0:18:25 > 0:18:28154. 155? 155.
0:18:28 > 0:18:32And 6? 156, sir, thank you.
0:18:32 > 0:18:34157, madam?
0:18:34 > 0:18:36157,000 clearly here in the front.
0:18:36 > 0:18:38158.
0:18:38 > 0:18:41159? 159 here in the front.
0:18:41 > 0:18:45160, sir? 160,000 we have.
0:18:45 > 0:18:47161. Back to you, sir.
0:18:47 > 0:18:51Thank you. 162. Nice and quick. 163?
0:18:51 > 0:18:53163 we have here in the front.
0:18:53 > 0:18:57Gentleman says 164. 164. 165?
0:18:57 > 0:19:00No, lady's shaking her head. Half?
0:19:00 > 0:19:02164 and a half. She's back in.
0:19:02 > 0:19:04Back to you, sir. 165?
0:19:04 > 0:19:06165 I have got. Thank you.
0:19:06 > 0:19:09Saying 500, madam?
0:19:09 > 0:19:10No, she's shaking her head at me.
0:19:10 > 0:19:14She's out of the running. £165,000 then I have.
0:19:14 > 0:19:16Make no mistake, I shall sell it.
0:19:16 > 0:19:20£165,000 then to you, sir, once...
0:19:20 > 0:19:23£165,000 twice...
0:19:23 > 0:19:28£165,000 for the third and final time.
0:19:28 > 0:19:35That final successful bid of £165,000 was made by Ken.
0:19:35 > 0:19:40I met up with him and his wife Tina at Plum Tree Cottage to find out more about their plans
0:19:40 > 0:19:43for this property that they've just acquired for their portfolio.
0:19:46 > 0:19:48- Congratulations.- Thank you.
0:19:48 > 0:19:53Now, this is not a typical house I would view on Homes Under The Hammer, I have to say.
0:19:53 > 0:19:55How did you end up buying this, guys?
0:19:55 > 0:19:57Well, I was playing golf.
0:19:57 > 0:20:02I knew nothing. He just sort of came home and I said, "Had a nice day?" "Yes, I've bought a house."
0:20:02 > 0:20:05- Over to you.- So you'd been up to all sorts of mischief!
0:20:05 > 0:20:06Yup, I had.
0:20:06 > 0:20:10I was getting emails every day about distressed properties,
0:20:10 > 0:20:12auction sales, that sort of thing,
0:20:12 > 0:20:16and I was going through all the catalogues, and this one just stuck out at me.
0:20:16 > 0:20:19So I consulted my partner, and we came and had a look at it,
0:20:19 > 0:20:23and then got the information pack, the legal pack and that sort of thing,
0:20:23 > 0:20:27gave it to our solicitors and they checked it over.
0:20:27 > 0:20:29We've got partners, you see.
0:20:29 > 0:20:33We have another couple and this is our pension plan.
0:20:33 > 0:20:36- We began this, what...?- In 1989.
0:20:36 > 0:20:40Quite a while ago. And it was at that time when houses were so cheap.
0:20:40 > 0:20:43Our first two-up, two-down was 47?
0:20:43 > 0:20:4647. Something in that order, yes.
0:20:46 > 0:20:49And we didn't take the rent, and the rent paid for the mortgage
0:20:49 > 0:20:53or the loan, and we just gradually sort of built up our portfolio.
0:20:54 > 0:20:58Now they've added Plum Tree Cottage to the other eight rental properties that they own.
0:21:00 > 0:21:03Ken used to be a poultry farmer and Tina ran a company
0:21:03 > 0:21:06providing garments for burn victims,
0:21:06 > 0:21:09but then she got stuck into life on the farm.
0:21:10 > 0:21:12Well, I came...
0:21:12 > 0:21:15You know, I was a sort of secretary sort of background,
0:21:15 > 0:21:21and then I met Woody and, suddenly, there I am harvesting eggs and chickens and things.
0:21:21 > 0:21:25This is confusing me because you keep making reference to your husband as Woody.
0:21:25 > 0:21:28Oh, yes. Yes, well, everybody calls him Ken except me.
0:21:28 > 0:21:31It goes back to... I mean, Woody...
0:21:31 > 0:21:34Well, he said, "Come and meet my parents,"
0:21:34 > 0:21:38and off I went to meet his parents, and they all said, "Hello, John."
0:21:38 > 0:21:43And it turns out that both his father and he are using their second names so they're both called Ken.
0:21:43 > 0:21:46- But his real name's John? - But his real name's John.
0:21:46 > 0:21:51- But you call him Woody. - Every time I said "Ken", his father would say "yes?",
0:21:51 > 0:21:54and I just wanted to stop that confusion so I called him Woody.
0:21:54 > 0:21:58Right. Thank goodness that's all cleared up, then.
0:21:58 > 0:22:01So Ken...sorry, Woody and Tina have given up
0:22:01 > 0:22:05poultry farming to concentrate on...well, golf and work.
0:22:08 > 0:22:10So how long ago did you retire, guys?
0:22:10 > 0:22:12- Ohh...- Three years ago.- Three years?
0:22:12 > 0:22:15- Has he not stopped working? - No, these properties keep him busy.
0:22:15 > 0:22:18We were supposed to play golf together.
0:22:18 > 0:22:21He said, "Learn to golf so we can do it in our retirement."
0:22:21 > 0:22:26- And there you are, playing golf... - I'm playing golf with all the girls and he's working.
0:22:26 > 0:22:27Sneaking off buying houses!
0:22:27 > 0:22:32Sounds a fair way to make their pension pot grow, though.
0:22:34 > 0:22:41It looks a pretty good bargain at £165,000 for a brand-new house that's never been lived in.
0:22:43 > 0:22:48Ken, I know this house was on the market last year for £285,000, no takers.
0:22:48 > 0:22:51You've bought it for a lot less.
0:22:51 > 0:22:53Why do you think that is?
0:22:53 > 0:22:57I think they overpriced it. I think they were being a little bit greedy.
0:22:57 > 0:23:01No-one bought it so they were forced, as the market dropped, to auction it.
0:23:01 > 0:23:03And we were lucky to pick it up for that money.
0:23:03 > 0:23:09Now, I've heard a rumour that there was a proposed pub going to be built next door.
0:23:09 > 0:23:12Do you think that would've put would-be buyers off?
0:23:12 > 0:23:15There was a pub next door originally and it was burnt down.
0:23:15 > 0:23:19A 16th-century little old pub and it got burnt down, and there's been five years
0:23:19 > 0:23:21of controversy cos they want it rebuilt,
0:23:21 > 0:23:25but the council have finally decided that's not going to happen.
0:23:25 > 0:23:27It's going to be housing.
0:23:27 > 0:23:30Maybe it was concern about the neighbouring property
0:23:30 > 0:23:34that put other investors off, but Tina's confident that it's no longer an issue.
0:23:34 > 0:23:41With no work required, they've planned their own quick marketing campaign.
0:23:41 > 0:23:44I mean, this is ready to go. Have you marketed this at all?
0:23:44 > 0:23:46It's going in the paper tomorrow.
0:23:46 > 0:23:48- For rent or for sale?- For rent.
0:23:48 > 0:23:51- So do you guys set up all the interviews?- Mmm.
0:23:51 > 0:23:54One every 20 minutes is the ideal.
0:23:54 > 0:23:56- 1 in, 1 out. - Yeah.- We know what we're looking for.
0:23:56 > 0:24:00How much do you think you're looking to market this for?
0:24:00 > 0:24:04The agent gave us a good idea that, in this area, it should go for £800-£850,
0:24:04 > 0:24:09and we've seen others go for that sort of money in the area
0:24:09 > 0:24:12in previous weeks, while we've been waiting to complete.
0:24:12 > 0:24:14We've had a look at them.
0:24:14 > 0:24:19Some are older, a bit bigger, but nothing of this quality.
0:24:19 > 0:24:25No surprise, really, because this is a show-home finish, perfect to move straight into.
0:24:27 > 0:24:31This is a question I always ask people on Homes Under The Hammer. What's your budget?
0:24:31 > 0:24:33Basically, it's almost nothing.
0:24:33 > 0:24:38I mean, I used to make all the curtains so that would be, for here, probably £100
0:24:38 > 0:24:44or so for the materials, but now I buy them all because I'm retired. So it's cost about £350.
0:24:44 > 0:24:47So your budget is just the curtains, isn't it?
0:24:47 > 0:24:48- Yeah, nothing else.- Nothing else.
0:24:48 > 0:24:51- Carpet's beautiful.- The garden?
0:24:51 > 0:24:56- No.- No, no. The tenants can make up their own minds what they would like to do to the garden.
0:24:56 > 0:24:58So £350, that's it.
0:24:58 > 0:25:00- That's it.- Done.
0:25:00 > 0:25:04And maybe dusted, because there's nothing else to do.
0:25:04 > 0:25:08Ken and Tina have made a fantastic purchase here.
0:25:08 > 0:25:11They've bought at a depressed time in the market
0:25:11 > 0:25:14and their rental income will cover their mortgage.
0:25:14 > 0:25:18I think it's a great low-maintenance property to add to their portfolio,
0:25:18 > 0:25:22but the question is - can Tina drag herself away from the golf course long enough
0:25:22 > 0:25:24to secure some tenants for this house?
0:25:24 > 0:25:28You can find out what happens later on in the show.
0:25:28 > 0:25:31Coming up, with these cracks, getting a loan
0:25:31 > 0:25:34for this Staffordshire property won't be easy.
0:25:34 > 0:25:38Because the mortgage company would basically say, "No."
0:25:38 > 0:25:43We return to Wiltshire where there's been a bit of a battle.
0:25:43 > 0:25:46There's a rental war on at the moment, and I felt certain
0:25:46 > 0:25:49we would rent the house as long as people came and looked at it.
0:25:49 > 0:25:53But first, in Lancashire, size isn't everything.
0:25:53 > 0:25:56It's not massive by any stretch of the imagination,
0:25:56 > 0:25:58but there is a bit of space in there.
0:26:00 > 0:26:06We're back in Preston, where Phil paid £23,000 for this first-floor flat.
0:26:06 > 0:26:10It had been guided at a very intriguing £10,000,
0:26:10 > 0:26:16but a lot of buyers were put off because of an issue with the outside rendering of the block
0:26:16 > 0:26:19and a potential extra bill of 9,000 quid.
0:26:19 > 0:26:23But sensibly, Phil, who owns a construction company, did his homework and discovered
0:26:23 > 0:26:29the matter had been resolved, Now, two months later, we're back to see what's been achieved.
0:26:33 > 0:26:39Well, the first impression you now get as you walk into the hallway is of a modern, light flat.
0:26:39 > 0:26:43New hard-wearing carpet's been laid and the living room decorated,
0:26:43 > 0:26:47using the chocolate and beige sections of the colour charts.
0:26:47 > 0:26:52That dated sliding door to the kitchen has been removed.
0:26:52 > 0:26:55The bedroom feels much more spacious.
0:26:55 > 0:27:00I reckon that's thanks to the colour scheme as well as the fact the wardrobe's been removed.
0:27:01 > 0:27:04But where will the clothes go?
0:27:04 > 0:27:07So who's been busy here? Is it all down to Phil?
0:27:08 > 0:27:13All the work throughout the property has actually been carried out by the lads who work for me.
0:27:13 > 0:27:17I visited two or three times a week to keep an eye on what they're doing,
0:27:17 > 0:27:20but all the work has been carried out by my own employees.
0:27:20 > 0:27:23# They call me mellow yellow... #
0:27:24 > 0:27:28In the kitchen, we've taken it back to bare plaster.
0:27:28 > 0:27:34We've put nice light units in, nice light tiles, we've made the most of the small space that we possibly can.
0:27:34 > 0:27:40We've integrated the fridges, we've integrated the washing machines, we've put in a nice ceramic hob
0:27:40 > 0:27:42and a nice-quality oven with an extractor above,
0:27:42 > 0:27:46and I think we've made the best of the small space that we possibly can.
0:27:46 > 0:27:50It feels a lot bigger than what it is, and it's a nice, workable kitchen.
0:27:50 > 0:27:53The narrow, galley-style kitchen works fine here,
0:27:53 > 0:27:59and Phil's concentrated on the two main areas in any property - the kitchen and bathroom.
0:27:59 > 0:28:04We've completely ripped out the bathroom, gone back to plasterboard,
0:28:04 > 0:28:07we've put white tiles on two elevations and a new white suite.
0:28:07 > 0:28:11We've introduced an electric shower that it didn't have.
0:28:11 > 0:28:14We've changed the extractor from the noisy one that we had,
0:28:14 > 0:28:17and we've basically just left it clean and nice, neat lines.
0:28:17 > 0:28:24Remember, Phil paid £23,000 for the flat and had set himself a budget of around £7,000.
0:28:24 > 0:28:27Did he manage to stick to it?
0:28:27 > 0:28:31The budget for the whole renovation was £7,000 ceiling.
0:28:31 > 0:28:34We were going to be disappointed if we spent more than £6,000,
0:28:34 > 0:28:37but we've actually spent £50 more than the £6,000,
0:28:37 > 0:28:40but we've come in considerably less than the £7,000.
0:28:40 > 0:28:42So I'm more than happy with what we've spent.
0:28:42 > 0:28:50Yes, £950 under budget on a flat that cost just £23,000.
0:28:50 > 0:28:53We've had the electrician test all the electrics,
0:28:53 > 0:28:55we put in a wired-in smoke alarm system
0:28:55 > 0:28:58and generally just checked over the electrics.
0:28:58 > 0:29:02We've also taken out a storage heater which was protruding into the walkway,
0:29:02 > 0:29:05so we've taken that out and put in a modern panel heater.
0:29:05 > 0:29:09In the walk-through corridor, there is actually two wardrobes,
0:29:09 > 0:29:13so we're going to utilise one of those for the wardrobe for the bedroom now.
0:29:13 > 0:29:16So there is somewhere to hang clothes after all.
0:29:16 > 0:29:20I wonder Phil had unearthed any more issues about the maintenance charges
0:29:20 > 0:29:24for the block that had scared away other bidders on auction day.
0:29:24 > 0:29:27The legal issues and the service charge that was on the properties
0:29:27 > 0:29:30that was in the legal pack has been no issue at all.
0:29:30 > 0:29:34We've done our homework, everything's been fine, not a problem at all.
0:29:34 > 0:29:38The service charge for this year has been estimated at £1200,
0:29:38 > 0:29:41so it's a couple of hundred pounds more than last year,
0:29:41 > 0:29:44but we're still quite happy with that.
0:29:44 > 0:29:51Remember, Phil had a tenant in the pipeline, so is his plan still to rent for a year or two?
0:29:51 > 0:29:55Our original intention was to rent the flat for at least a couple of years.
0:29:55 > 0:29:58We've got a tenant that's due to move in next week.
0:29:58 > 0:30:01We've not actually signed him up cos we are toying with the idea
0:30:01 > 0:30:04of selling to get some cash back and hopefully get some more.
0:30:06 > 0:30:09Let's see how much two local estate agents will value the flat at.
0:30:09 > 0:30:12It could alter Phil's game plan.
0:30:15 > 0:30:19It's been very nicely decorated, certainly nice neutral colours,
0:30:19 > 0:30:22and the proportions of the flat are very nice indeed.
0:30:22 > 0:30:27Good choice of colour of bathroom and kitchen, all very neutral, new carpets.
0:30:27 > 0:30:30I like the way they've taken the wardrobes
0:30:30 > 0:30:34out of the master bedroom to give it a feel of space.
0:30:34 > 0:30:36Oh, it's excellent.
0:30:36 > 0:30:38I particularly like the kitchen in the flat
0:30:38 > 0:30:42which I think has been done to a very nice standard and is in fact also well proportioned.
0:30:42 > 0:30:45The standard of finish is pretty good.
0:30:45 > 0:30:49I think somebody will move in and, because it's done to a nice standard,
0:30:49 > 0:30:50will look after it.
0:30:50 > 0:30:54Clearly, Phil's at a crossroads - will he rent or sell?
0:30:54 > 0:30:58Let's investigate the financial merits of each.
0:30:58 > 0:31:03I would suggest a rental value of approximately £325 per calendar month.
0:31:03 > 0:31:08This property would rent currently for £375 per calendar month.
0:31:08 > 0:31:11The two figures are either side of where we expected it to be.
0:31:11 > 0:31:15We were expecting 350 and that's the figure we've agreed with the tenant,
0:31:15 > 0:31:17so more than happy with both of those.
0:31:17 > 0:31:22OK, renting's not ruled out. But how much could the flat now sell for?
0:31:22 > 0:31:28Remember, Phil spent £29,050 buying and renovating it.
0:31:30 > 0:31:34In the current market, I would suggest an asking price of £28,950
0:31:34 > 0:31:38and I'm sure they'd get a lot of interest at that price.
0:31:38 > 0:31:43I think the resale price of this property, in the current market, would be in the region of £40,000.
0:31:43 > 0:31:45Some difference.
0:31:45 > 0:31:51So either pretty much breaking even or a nice £10,000-£11,000 profit.
0:31:51 > 0:31:54Well, the first value seems a lot lower than what we're expecting
0:31:54 > 0:31:57and I'm sure we'll sell it for a lot more than that.
0:31:57 > 0:31:59We've already had an agent of our own out
0:31:59 > 0:32:01who's sort of around the second figure,
0:32:01 > 0:32:03so we're expecting between 40 and 45.
0:32:03 > 0:32:07I'd be very happy if we can make that sort of profit in a month's work.
0:32:07 > 0:32:11So is the flat likely to be sold now?
0:32:11 > 0:32:14I'd consider selling at 40,000, definitely.
0:32:14 > 0:32:18Phil could well be on the lookout for more properties,
0:32:18 > 0:32:21but what about the person he'd lined up for the place?
0:32:21 > 0:32:25I will look for another property quickly for the tenant that we had for this one.
0:32:25 > 0:32:31We've looked at lots of properties, but I think the one-bedroom flats, if we can make a good return
0:32:31 > 0:32:33like it looks like we're going to on this one,
0:32:33 > 0:32:37we will look at one-bedroom smaller stuff, especially in the current climate.
0:32:37 > 0:32:42And judging from this purchase, I'm sure Phil will do his homework thoroughly again.
0:32:46 > 0:32:51Staffordshire is often thought of in terms of its towns,
0:32:51 > 0:32:56such as Stoke-on-Trent, but don't forget it's got fantastic countryside too.
0:32:56 > 0:33:02So this is Brown Lees in Staffordshire, and surrounded by beautiful countryside it is...
0:33:02 > 0:33:05he says in a Yoda from Star Wars kind of way.
0:33:05 > 0:33:11Well, this is what I'm here to see. It's a two-bedroom mid-terrace at a guide price of 50,000 quid.
0:33:11 > 0:33:14The question is - will the force be with whoever buys it?
0:33:14 > 0:33:16MUSIC: "Star Wars Main Theme" by John Williams
0:33:16 > 0:33:22Well, it might not be light years off a busy road, but it is set back far enough back not to be an issue
0:33:22 > 0:33:27and, with these country views, this terrace has more going for it than most.
0:33:27 > 0:33:31But on closer inspection, I can't help getting a bit of a sinking feeling.
0:33:31 > 0:33:36Looking along this row of houses, I think I've managed to come to one of the worst.
0:33:36 > 0:33:39Oh, well, onwards and upwards.
0:33:41 > 0:33:44So what surprises are in store?
0:33:44 > 0:33:49Well, fairly standard sort of front living room area here.
0:33:49 > 0:33:52Fireplace - I don't know, I like that. 1920s probably.
0:33:52 > 0:33:55But if you get rid of the thing on the front, the gas fire,
0:33:55 > 0:33:58if that was an open fire I think that's actually quite pretty.
0:33:58 > 0:34:01However, that isn't.
0:34:01 > 0:34:05Look at that crack. Absolutely horrendous,
0:34:05 > 0:34:10so we're going to be on the lookout for more indications of subsidence as we go through the house.
0:34:10 > 0:34:13Through here into the rear sitting room, again not a bad-sized space.
0:34:13 > 0:34:18Another open fire there, which is really lovely, and then here you go - classic design.
0:34:18 > 0:34:20Through to the kitchen, very small
0:34:20 > 0:34:23it needs to be sorted out, then on into the bathroom.
0:34:23 > 0:34:28Now, not ideal but I think, in this kind of property, you expect it.
0:34:28 > 0:34:30It's those cracks that are really worrying me.
0:34:30 > 0:34:38Dirty bathrooms I can handle, poky kitchens can be fixed, and jungle wallpaper can be tamed,
0:34:38 > 0:34:40but the plaster's falling off in the back room
0:34:40 > 0:34:44and the outside space is a real mess.
0:34:44 > 0:34:49# It's unbelievably hard to love you but I love you anyway... #
0:34:49 > 0:34:53The kitchen and bathroom extension's almost falling down
0:34:53 > 0:34:56and there are more signs of damp and, from out here,
0:34:56 > 0:34:59the upstairs doesn't look much better.
0:34:59 > 0:35:02So, upstairs, a fairly standard layout.
0:35:02 > 0:35:07You've got two good-sized bedrooms, one at the back there and then another one at the front.
0:35:07 > 0:35:13But, when you come up here, more indications of some really serious problems in this property.
0:35:13 > 0:35:16Look at that. I can actually put my fingers inside that crack there.
0:35:16 > 0:35:20Obviously, the house has serious subsidence.
0:35:20 > 0:35:24That is an issue in itself, especially when it comes to getting a mortgage,
0:35:24 > 0:35:27because the mortgage company would basically say, "No".
0:35:30 > 0:35:38This house was guided at £50,000, and that crack looks like a graph plotting the fall in its value.
0:35:39 > 0:35:42Apart from the cracks in the back bedroom, there are also signs
0:35:42 > 0:35:46of worrying neglect in the plumbing department.
0:35:48 > 0:35:50And, just when I thought it couldn't get any worse,
0:35:50 > 0:35:53a local property expert has unearthed some more news
0:35:53 > 0:35:56about this particular railway cottage.
0:35:56 > 0:35:58It is a mining area.
0:35:58 > 0:36:02The properties were actually built for the miners, not for the railway,
0:36:02 > 0:36:05so there is sort of a history behind that there.
0:36:05 > 0:36:08And where there are mines, there are big holes in the ground,
0:36:08 > 0:36:11which do tend to make cracks appear in the houses.
0:36:11 > 0:36:16A mining report is a must, and any buyer should also dig deeper.
0:36:17 > 0:36:20It's not going to be for somebody to take light-heartedly.
0:36:20 > 0:36:23Get a structural survey done. If you're worried at all
0:36:23 > 0:36:28regarding any of the cracks or the structure, I would advise you to instruct a surveyor.
0:36:28 > 0:36:31How much would that report cost?
0:36:31 > 0:36:33It depends what level survey you go in for.
0:36:33 > 0:36:36You could be looking at a couple of hundred pounds.
0:36:36 > 0:36:43That would be money well spent for any investor brave enough to take on this cottage.
0:36:43 > 0:36:50When it comes to the cost of general renovation, I don't think there's any need for a big budget.
0:36:50 > 0:36:51It's a good location.
0:36:51 > 0:36:56With it being an entry-level property, I think you could go
0:36:56 > 0:37:00for the basics, really. A bathroom, kitchen, it needs replastering,
0:37:00 > 0:37:02I just think to give it a good clean look.
0:37:02 > 0:37:07It's certainly going to take a fair bit of elbow grease but, as it's most likely
0:37:07 > 0:37:11to attract first-time buyers, there's no need for gold taps here.
0:37:11 > 0:37:15But could you be looking at a gold-plated return for a buy-to-let investor?
0:37:15 > 0:37:20With it being only two bedrooms, obviously I don't think it would be a family property.
0:37:20 > 0:37:23I think, to be realistic, 425-450 per calendar month.
0:37:23 > 0:37:26I don't think that would be too difficult.
0:37:26 > 0:37:30It's a good location to buy as well - quiet, semi-rural.
0:37:30 > 0:37:32I don't think you'd have a problem selling.
0:37:32 > 0:37:38That could generate anywhere between £95,000 and £100,000.
0:37:38 > 0:37:42But an investor should tread carefully when it comes to renovation costs.
0:37:44 > 0:37:51So a nice enough property in a pleasant location, but those real issues with cracks and subsidence
0:37:51 > 0:37:55means that this isn't something that you should take on lightly.
0:37:55 > 0:38:01You are going to probably have to buy it with cash and set aside quite a wodge of money to sort it out.
0:38:01 > 0:38:05Yes, it's going to take more than a Jedi Knight to fix this one.
0:38:05 > 0:38:07Let's go to the auction.
0:38:07 > 0:38:12Lot number 22 is 64 Railway Cottages, Brown Lees.
0:38:12 > 0:38:16This is a house in need of complete modernising and updating.
0:38:16 > 0:38:22Gardens to the front and a yard to the rear. Lot number 22.
0:38:22 > 0:38:26Can we say 40 to start? Who'll give me 40 to start it?
0:38:26 > 0:38:2940 I'm bid, thank you. £40,000 standing.
0:38:29 > 0:38:32At £40,000, 45 can I say?
0:38:32 > 0:38:3845, thank you. At £45,000... 50 is it?
0:38:38 > 0:38:43Want to go one? You do, £46,000.
0:38:43 > 0:38:48At £46,000. 47, one to you, sir? 47.
0:38:48 > 0:38:5048? 48.
0:38:50 > 0:38:5249.
0:38:52 > 0:38:5450.
0:38:54 > 0:38:58At £50,000... 51 can I say?
0:38:58 > 0:39:00At £50,000.
0:39:00 > 0:39:03Right, are we all done?
0:39:03 > 0:39:04At 50 for the first time...
0:39:04 > 0:39:11At 50 for the second time, third and final time at 50... Are we all done?
0:39:13 > 0:39:15- You bought it. Well done. - The new owners of this
0:39:15 > 0:39:20cracked cottage above a disused mine are Harold and his wife Sue.
0:39:20 > 0:39:25They're part-time property developers and already have several rental properties in the area.
0:39:25 > 0:39:30This run-down terrace seemed to be just what they were looking for.
0:39:30 > 0:39:32Sue, Harold, nice to meet you both. Congratulations.
0:39:32 > 0:39:38So why take on a project that needs a lot of work rather than one that doesn't?
0:39:38 > 0:39:40I think it's location, really.
0:39:40 > 0:39:43- Yes.- There were... - You wouldn't get this now...
0:39:43 > 0:39:48We've looked at new houses and you don't get this openness.
0:39:48 > 0:39:52We know, with having the country walk where the railway line's been,
0:39:52 > 0:39:58nobody's likely to build there, and it is a beautiful location, isn't it? It's really nice.
0:39:58 > 0:40:01So it does have quite a lot of history, doesn't it?
0:40:01 > 0:40:05Well, they were built, I believe, late 1800s,
0:40:05 > 0:40:12probably by Robert Heath who owned the mines, and they were called Railway Cottages
0:40:12 > 0:40:15because the railway ran just outside.
0:40:15 > 0:40:18It's quite a pleasant walk now. If you like to keep fit,
0:40:18 > 0:40:22you can get on a bike and I believe it goes for quite a number of miles now
0:40:22 > 0:40:23in either direction.
0:40:23 > 0:40:25Location was key to the purchase.
0:40:25 > 0:40:31My concern is that renovating that house won't be freewheeling for Sue and Harold.
0:40:31 > 0:40:34OK, so let's talk about the house, then.
0:40:34 > 0:40:36There are some very serious cracks.
0:40:36 > 0:40:39- What do you know about them? - They're big cracks, yeah.
0:40:39 > 0:40:45Um...it's all to do with the mining, I think, settling.
0:40:45 > 0:40:48I've had an engineer in to have look at it
0:40:48 > 0:40:56and it's the sort of thing you would expect in this area, although it does need putting right.
0:40:56 > 0:41:00Probably underpinning one of the walls and new concrete floors need to be put in.
0:41:00 > 0:41:05Underpinning and new floors are a big capital outlay
0:41:05 > 0:41:09on top of all the general renovation required here.
0:41:09 > 0:41:14Getting the house back on a sure footing is vital so it could get a mortgage in the future because,
0:41:14 > 0:41:18whilst they were cash buyers, the next purchasers may not be.
0:41:18 > 0:41:20Yeah, that is one of the problems.
0:41:20 > 0:41:24You have to... If you wish to sell the property on,
0:41:24 > 0:41:28you have to correct all the structural defects,
0:41:28 > 0:41:32and it wants a damp coursing as well of course.
0:41:32 > 0:41:36OK, so give me an idea of how much you've set aside to do all the work.
0:41:36 > 0:41:44Original estimate was about maybe 15,000, 16,000, but I feel sure that will go to 20,000.
0:41:44 > 0:41:47OK, Sue, talk me through what you're going to do inside the house.
0:41:47 > 0:41:50Well, we've got quite a few ideas.
0:41:50 > 0:41:57The good thing about this property is the fact that it is run-down and needs modernising.
0:41:57 > 0:42:04It means that we can, you know, put a lot of ideas in, so it's toying with what we really do.
0:42:04 > 0:42:10We want to maybe have an inglenook fireplace in the front room, make that more of the living area.
0:42:10 > 0:42:17Possibly, this will be the kitchen area where we want to keep a little bit of the character,
0:42:17 > 0:42:23probably a countrified, fresh kitchen, but not lose too much of the character.
0:42:23 > 0:42:26So what kind of experience do you have in the property world?
0:42:26 > 0:42:28Over the years,
0:42:28 > 0:42:31we've done one or two properties.
0:42:31 > 0:42:38We started with some garages, a row of garages that we accidentally acquired.
0:42:38 > 0:42:40Accidentally?!
0:42:40 > 0:42:45We were selling our house and the guy who was buying the house was
0:42:45 > 0:42:49a few thousand short, so he put the garages in.
0:42:51 > 0:42:55And, eventually, we built two semi-detached houses on there.
0:42:55 > 0:43:03Since then, we've bought a church, an abattoir and a small mill.
0:43:03 > 0:43:07And did what with a church, an abattoir and a small mill?
0:43:07 > 0:43:13The church is a factory, the abattoir is a factory now. We're turning that into a factory.
0:43:13 > 0:43:19And the mill they're just knocking down to make way for a new supermarket.
0:43:19 > 0:43:24By the sounds of it, these two are certainly up for the challenge of this little terrace.
0:43:24 > 0:43:29It IS in a pretty bad state, with some very large cracks.
0:43:29 > 0:43:34They plan to let it out once renovated, but then what?
0:43:34 > 0:43:37Well, the long-term plan, really, is to...
0:43:37 > 0:43:42We are getting to the age now where we're looking forward to retirement
0:43:42 > 0:43:45and the rental of the properties
0:43:45 > 0:43:48we're hoping will pay for our retirement.
0:43:48 > 0:43:51It is charming, just a little bit rough around the edges.
0:43:51 > 0:43:53You're being kind there!
0:43:54 > 0:44:01Well, I certainly hope this house above an old mine won't be a rough diamond for too much longer.
0:44:01 > 0:44:06Well, Harold and Sue clearly love this place, and quite rightly so.
0:44:06 > 0:44:09They are aware of the cracks and the money it's going to cost
0:44:09 > 0:44:13to put them right, so they're going into this with their eyes open.
0:44:13 > 0:44:18However, I'm worried about the amount they're going to have to spend to put this place right,
0:44:18 > 0:44:22and how much it will be worth when they've done all that hard work.
0:44:22 > 0:44:26Shouldn't they have just bought somewhere that didn't need any of this?
0:44:26 > 0:44:29Oh, well, you can find out how they get on later in the show.
0:44:32 > 0:44:36Well, we've given them time to do the work, but has the work been done?
0:44:36 > 0:44:41Will we return to bare plaster or a perfect finish? Let's find out.
0:44:43 > 0:44:49Back in the Wiltshire village of Redlynch, retired couple Ken and his wife Tina paid £165,000
0:44:49 > 0:44:52for this year-old house that had never been lived in.
0:44:52 > 0:44:56They were going to add it to their portfolio of other buy-to-let properties
0:44:56 > 0:45:00which they manage with another couple, but it came out of the blue for golfer Tina.
0:45:03 > 0:45:08- He said, "Learn to play golf so we can do it in our retirement." - And there you are, playing golf...
0:45:08 > 0:45:12- I'm playing golf with all the girls and he's working. - Buying houses!
0:45:13 > 0:45:18There was nothing to do but pop up some curtains and advertise for tenants.
0:45:20 > 0:45:24So I guess it's little surprise that, six weeks later,
0:45:24 > 0:45:29the place is let and the new occupants' belongings have turned it into a home.
0:45:29 > 0:45:32What a great find it must have been for the family,
0:45:32 > 0:45:35as they're the first occupants of this house,
0:45:35 > 0:45:40and getting it at the auction was pretty good news for Ken as well.
0:45:40 > 0:45:46This house was obviously very attractive to us because we had no work to do, hardly at all.
0:45:46 > 0:45:51In an older house, you tend to get all these little niggly problems which I go and have to sort out -
0:45:51 > 0:45:58showers leaking and that sort of thing - so I prefer to have something as new as this.
0:45:58 > 0:46:02So it was only the curtains to hang, a job Tina had done many times
0:46:02 > 0:46:07before in their other properties, but this time there was a problem.
0:46:07 > 0:46:12I had all these curtains to hang, and Woody brought me a stepladder
0:46:12 > 0:46:14and it's not one I'm normally used to.
0:46:14 > 0:46:17Most stepladders have a step and this one didn't.
0:46:17 > 0:46:19It had some hooks or something.
0:46:19 > 0:46:25So I just opened it, climbed up and it collapsed underneath me and I fell to the floor.
0:46:25 > 0:46:27And I thought I'd landed really well.
0:46:27 > 0:46:31I usually do a parachute roll but I must've had my hand underneath me
0:46:31 > 0:46:32and I broke it about there.
0:46:32 > 0:46:37Ooh, ouch! That meant Tina had to get Ken to put up the curtains.
0:46:37 > 0:46:39I hope he checked the dodgy ladder.
0:46:39 > 0:46:43Then the simple refurbishment took another turn for the worse.
0:46:44 > 0:46:50We thought, when we bought this house, that all we'd have to actually do is hang up the curtains,
0:46:50 > 0:46:56but we discovered after a little while that all the woodwork had only been primed and not top-coated.
0:46:56 > 0:47:01So, with a friendly painter we know who's retired,
0:47:01 > 0:47:03he did most of the painting
0:47:03 > 0:47:09and I did the taking off the door handles and things like that to make the job easier.
0:47:09 > 0:47:12Well, this threw the budget into turmoil.
0:47:12 > 0:47:16Yes, they paid just 165,000 for the new house,
0:47:16 > 0:47:20but now the gloss paint had taken the costs to £600.
0:47:20 > 0:47:25There also had to be an ad in the local paper.
0:47:25 > 0:47:27It took two weeks to find the tenants.
0:47:27 > 0:47:31We put the advert in, I think my husband put it in at 795
0:47:31 > 0:47:37and we actually rented it out two weeks later for 750.
0:47:37 > 0:47:41From their experience of other buy-to-lets, they knew their ideal tenants.
0:47:41 > 0:47:48The type of people we like to choose, if we've got that much choice,
0:47:48 > 0:47:55is professional couples ideally, both working, because you've got two incomes to pay for one rent.
0:47:55 > 0:47:58So who have they let Plum Cottage to?
0:47:58 > 0:48:00It's a nice little couple.
0:48:00 > 0:48:04Mother lives in the village so they were very keen to have it,
0:48:04 > 0:48:07and two nice little children, so they'll be good tenants.
0:48:09 > 0:48:12It's time for two local estate agents to have a look.
0:48:12 > 0:48:15Should they have considered furnishing the house
0:48:15 > 0:48:16before renting it out?
0:48:17 > 0:48:21In my experience, the majority of tenants will have quite a bit
0:48:21 > 0:48:23of their own furniture and items,
0:48:23 > 0:48:26so we find letting properties unfurnished is more popular.
0:48:26 > 0:48:29There is the odd tenant but the exception rather than the rule.
0:48:29 > 0:48:33My experience of the rental market in this area,
0:48:33 > 0:48:38properties rent better unfurnished and it's obviously worked well
0:48:38 > 0:48:41for the owners because they've managed to rent the property.
0:48:41 > 0:48:47The sitting room's got lots of light with the full-length windows doors across the back onto the deck -
0:48:47 > 0:48:49very good. The kitchen is not the biggest.
0:48:49 > 0:48:54The bedrooms, again, are limited in part.
0:48:54 > 0:48:59My advice to the owners of the property would be definitely to hang onto it
0:48:59 > 0:49:01for the long term, for the market to rebuild.
0:49:02 > 0:49:06Could that affect the rental income? How much should they be charging?
0:49:06 > 0:49:11I'm not sure what the owners are currently getting from their tenants,
0:49:11 > 0:49:15but I would look to achieve around £800 per calendar month.
0:49:15 > 0:49:22We'd recommend a rental to £750 to £775 per calendar month.
0:49:22 > 0:49:24We started at 800 and dropped to 750.
0:49:24 > 0:49:28- I thought 750 was...- So we're in the right ball park, aren't we?
0:49:28 > 0:49:34Of course, getting tenants in so quickly is just what they required to generate income immediately.
0:49:34 > 0:49:41In its current state, I would look to value the property at between £175,000 and £185,000.
0:49:41 > 0:49:46We'd recommend a value in the region of £185,000 to £190,000.
0:49:46 > 0:49:52Well, £185,000 would be £20,000 more than they paid at auction.
0:49:52 > 0:49:56Even allowing for the paint and curtains, that's not bad.
0:49:56 > 0:49:59Ah, well, it's a profit on there, then.
0:49:59 > 0:50:03So Ken's purchase could end up all it was cracked up to be,
0:50:03 > 0:50:09but more importantly, when will Tina be back on the golf course?
0:50:09 > 0:50:11The plaster comes off tomorrow.
0:50:11 > 0:50:1711.25 I go to the fracture clinic and I would quite like to be on the fairway,
0:50:17 > 0:50:21doing at least a little putting and chipping, by tomorrow afternoon.
0:50:23 > 0:50:27Well, that could leave Ken free to find more properties to add to their pension pot.
0:50:32 > 0:50:35We're heading back to Staffordshire now.
0:50:35 > 0:50:38Were those gaping cracks in this mid-terrace the tell-tale signs
0:50:38 > 0:50:41of subsidence that that Harold and his wife Sue suspected?
0:50:41 > 0:50:45They paid £50,000 for the house.
0:50:45 > 0:50:49They intended to renovate it in a country-cottage style and then rent it out.
0:50:52 > 0:50:54Five months later, we've returned.
0:50:54 > 0:50:56OK, the front garden is certainly a lot tidier,
0:50:56 > 0:50:59but the main transformation is round the back.
0:51:01 > 0:51:03The old yard has been paved over
0:51:03 > 0:51:06and they've managed to create a parking space.
0:51:06 > 0:51:10Inside, the front living room now has a new floor
0:51:10 > 0:51:13and the cracked walls have been replastered.
0:51:13 > 0:51:17And there's also been a major change in the back room.
0:51:17 > 0:51:18Just as Sue promised,
0:51:18 > 0:51:22they've created a fabulous country-style kitchen-diner.
0:51:22 > 0:51:24The original kitchen is now a laundry room
0:51:24 > 0:51:26with a refitted bathroom beyond it.
0:51:30 > 0:51:34Upstairs, the cracks in the two bedrooms have been patched up.
0:51:34 > 0:51:37Both are decorated, and there's even a bed in the front room.
0:51:39 > 0:51:44It seems that Harold had been worrying unnecessarily about the possible subsidence.
0:51:46 > 0:51:50I thought it was a bigger problem than what it was,
0:51:50 > 0:51:52but we had some structural engineers in
0:51:52 > 0:51:55and we managed to rectify all the cracks,
0:51:55 > 0:52:01put a new concrete floor in, and it doesn't seem to be a problem at all.
0:52:01 > 0:52:06It was quite a challenge, really, from the rough state it was in
0:52:06 > 0:52:12to begin with, but it's been quite therapeutic in a way, really.
0:52:12 > 0:52:14Quite pleased with the outcome.
0:52:14 > 0:52:18Therapeutic for Susan, but it's been hard work for me.
0:52:18 > 0:52:20I've been doing all the labouring.
0:52:20 > 0:52:23Well, the hard graft has paid off.
0:52:23 > 0:52:27Remember, Harold and Sue bought the house because of its location.
0:52:27 > 0:52:29It overlooks a country park and a cycle route
0:52:29 > 0:52:32that was once the railway the terrace is named after.
0:52:34 > 0:52:38Well, we've changed this room completely round.
0:52:38 > 0:52:40This was originally the, er...
0:52:40 > 0:52:43I suppose you'd call it the lounge.
0:52:43 > 0:52:46We made it into the kitchen-diner.
0:52:46 > 0:52:50We've got a complete kitchen in, we've taken the whole fireplace out
0:52:50 > 0:52:55and extract the fumes through what used to be the old chimney.
0:52:55 > 0:52:58Generally speaking, it's worked out quite well.
0:52:58 > 0:53:04I think there's enough room for a table in here, four chairs, and a useable kitchen area.
0:53:04 > 0:53:08So the layout is basically the same.
0:53:08 > 0:53:10It's just the rooms that have been rearranged.
0:53:13 > 0:53:16We did think of having an inglenook fireplace
0:53:16 > 0:53:19but we decided on this one,
0:53:19 > 0:53:24which seems to fit it quite well and give it the country feel.
0:53:24 > 0:53:26Also the laminate floors.
0:53:26 > 0:53:31And it's been replastered which I think looks really good, really well.
0:53:31 > 0:53:33And the curtains have been recycled.
0:53:33 > 0:53:36They were from a cottage we had before.
0:53:36 > 0:53:38Really opened it up really well.
0:53:38 > 0:53:42Harold and Sue had toyed with putting the bathroom upstairs
0:53:42 > 0:53:44but they decided to leave the two double bedrooms.
0:53:44 > 0:53:47I think they could've made more of the bathroom.
0:53:47 > 0:53:51I'm not sure they need such a big utility room.
0:53:51 > 0:53:53They've still got a few jobs left.
0:53:53 > 0:53:56There's painting to do and the front garden to finish.
0:53:56 > 0:54:01And Sue's keen to get the flagstones in the kitchen back to a rich red colour.
0:54:01 > 0:54:06So what has all this cost?
0:54:06 > 0:54:13Um, we're up to about £14,500, with probably another 1,000 to go, so we're quite pleased.
0:54:13 > 0:54:17I expected it to... We anticipated it going over budget
0:54:17 > 0:54:23but we've put a few extras in and I don't think £15,500 is too bad, really.
0:54:23 > 0:54:27Let's see if it was money well spent.
0:54:27 > 0:54:31How will two local estate agents rate this refurbishment?
0:54:33 > 0:54:34Those changes are fantastic.
0:54:34 > 0:54:36I love how they've moved the kitchen
0:54:36 > 0:54:38into the second reception room as it was.
0:54:38 > 0:54:41I just think, as a whole, it brings the property together
0:54:41 > 0:54:43as a more family home.
0:54:43 > 0:54:45It's a nice property.
0:54:45 > 0:54:48I don't know what it looked like in its original state,
0:54:48 > 0:54:51but now it's been brought up to a nice standard.
0:54:51 > 0:54:56Generally speaking, people do prefer the bathroom to be on the first floor, ideally, next to the bedrooms.
0:54:56 > 0:54:57I don't think it matters too much.
0:54:57 > 0:55:01With it being a cottage, it was unrealistic to move it upstairs
0:55:01 > 0:55:03with it being just two double bedrooms.
0:55:04 > 0:55:06A lot of people tend to be going down the road
0:55:06 > 0:55:12of renting their properties out, just because of the economy at the moment, which is understandable,
0:55:12 > 0:55:15so, yeah, as an investment it's a good rental property.
0:55:15 > 0:55:18But just how good is good?
0:55:18 > 0:55:20How much income could it generate?
0:55:20 > 0:55:25I would say on a rental value of £450 per month.
0:55:25 > 0:55:29I think if you're looking between 400, 425 per calendar month,
0:55:29 > 0:55:32You'd be quite realistic to let it in a short period of time.
0:55:32 > 0:55:34Mmm, that's good.
0:55:34 > 0:55:35That's a good return.
0:55:35 > 0:55:39Good return on the investment that is, yeah. Quite pleased with that.
0:55:39 > 0:55:43Remember, they paid £50,000 for the house at auction and their budget
0:55:43 > 0:55:45is heading towards £15,500,
0:55:45 > 0:55:50so how much could the property now be worth?
0:55:50 > 0:55:53I would market and value this property at £80,000.
0:55:53 > 0:55:57I personally feel that they would achieve £100,000 to £110,000.
0:55:57 > 0:56:02So at least £15,000 gross profit.
0:56:02 > 0:56:04That works out well.
0:56:04 > 0:56:07We're into a profit.
0:56:07 > 0:56:11Even at the lower valuation, we're into a profit, so that's good.
0:56:11 > 0:56:14Might those figures tempt them to sell and take a profit?
0:56:14 > 0:56:18No, I think we'd stick with the renting. That was the plan.
0:56:18 > 0:56:23It's nice to take a semi-derelict property
0:56:23 > 0:56:28and turn it into a reasonably desirable property to live in.
0:56:28 > 0:56:33Will they look for another challenging property to refurbish?
0:56:33 > 0:56:37At the moment, we've been saying we're not going to do anything.
0:56:37 > 0:56:39I don't think we'll do anything for a while.
0:56:39 > 0:56:46If we saw the right type of property to renovate, we might have another try then.
0:56:46 > 0:56:48But not for a while.
0:56:48 > 0:56:50We're going to have a rest!
0:56:53 > 0:56:57So we hope you've enjoyed the trials and tribulations of today's show.
0:56:57 > 0:57:02- Join us next time for more Homes Under The Hammer. - See you then.- Goodbye.
0:57:02 > 0:57:05For more information about Homes Under The Hammer,
0:57:05 > 0:57:10including how the programme was made, visit the website at bbc.co.uk
0:57:19 > 0:57:22Subtitles by Red Bee Media Ltd
0:57:22 > 0:57:25E-mail subtitling@bbc.co.uk