Property series. Martin Roberts and Lucy Alexander visit a flat in Preston with a low guide price, a house in Wiltshire with a surprise, and an old terraced house in Staffordshire.
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Hello! Buying your first house is a life-defining moment
-and one you'll remember forever.
-Yes, but whether you're buying
your first property or your 50th, buying at auction is still really exciting.
And it really can be a heart-stopping moment, so join us for Homes Under The Hammer.
Everyone knows that appearances can be deceptive, and auction properties can sometimes be difficult to read.
Yes, the house may appear to just need a quick make-over, but really drastic surgery is needed.
So, today, will it be just a case of a bit of filler in the cracks or a full renovation for our properties?
The guide price is low, but the inside of this Preston flat looks absolutely fine.
But you know what?
There's a catch.
There's a surprise in Wiltshire. This house has all the fittings but no occupants.
It's all luxury! I'm not used to this.
And, considering its age, you'd expect this Staffordshire
terrace to be in a sorry state, but there's one big problem.
It's those cracks that are really worrying me.
All these properties went to auction, and we'll find out who
bought them, and what they paid, when they went under the hammer.
I'm in Lancashire for the first property under the hammer today.
The canals here played a vital part in the Industrial Revolution.
Well, Preston not only enjoys its history -
the Lancaster Canal here - but its new-found city status.
I'm off to see a property just two miles away to find out
if this is a good place to invest in property too.
Preston was awarded city status by the Queen in April 2002 to celebrate her Golden Jubilee.
With over 32,000 students living here, it's certainly
a vibrant place to be, so there is potential for student lets here.
So how much do you reckon for a reasonably well-located, one-bedroomed flat?
70 grand? 60 grand?
How about 10 grand?
Well, that was the guide price, and, no, it wasn't a misprint.
From the outside, the block does appear to be in decent order.
The windows look fine, and the paintwork seems new.
The grounds are well-maintained and there's parking, which is a huge benefit.
The communal areas are good too.
This internal stairwell is spick-and-span, so things bode well for this modestly priced lot.
Now, for that kind of guide price, clearly you've got to have your expectations set pretty low, but...
Oh, my word!
It doesn't smell, there's no...
Fine! What have we got? We've got a bathroom there.
OK, it's a bit old and tired and dated, but it's serviceable.
Decent-sized bedroom. That's your one bedroom. Some storage cupboards
here and then through to the main part of the flat. You know what?
I've been in a lot of flats that cost a lot more than this and were in a lot worse condition.
It's got storage radiators, so that's not ideal, but...it's not bad. Haven't found the kitchen yet.
Oh, yeah, here it is.
Again, look at it.
Perfectly serviceable. I mean, think about that guide price.
That was quite extraordinary, and it's a perfectly
decent flat that you could move into pretty much as it is.
But you know what?
There's a catch.
Of course, there would be.
And the issue is quite complicated, and this is where you really need to make sure you read the legal pack
at the auction, because it appears that there could be a bit of an issue regarding some work which
has been done on the whole building which you, as an owner of this flat, could be responsible for.
It's a bit of a potential issue, and, before you buy, you absolutely need to get the issues resolved.
The problems stem from external rendering that
was carried out to the block at a cost of 9,000 quid per tenant on top
of the existing management charge, so, for any buyer, the first job must be to check out the legal pack.
The next priority would be to do something about the colour of this kitchen.
-# They call me mellow yellow
-Quite rightly... #
In such a confined space, this yellow is not making me feel at all mellow.
And new doors on the units wouldn't go amiss either.
The carcasses look to be in good order, though, so I wouldn't go for a new kitchen here.
The bathroom is OK, and the suite could stay if you were looking to save money.
It may only need a lick of paint.
However, I do think you should change the heating system.
Storage heaters aren't for everyone, so a new gas central heating system would really set this flat apart.
I've invited a local estate agent to take a look at the flat
and give us some more information about the exterior of the block.
There's been a big issue with the structure of the blocks.
There's been a lot of work carried out, so, really, selling
has stopped for probably about two and a half, three years.
That explains the low guide price, because the rendering problem has created a bit of a stigma -
not what you need if you want to sell the flat on.
The new owner will have to investigate this thoroughly.
What does this place need if it's to entice a buyer or tenant?
The property's dated.
I suggest a new kitchen and bathroom, new carpets and just paint it throughout.
If the flat did sell for anywhere near the guide price of 10,000 quid,
that would certainly leave scope in the budget for some decorating.
Talking of figures, how much could someone stand to make here?
When renovated, I suggest you market this property in the region of £28,000 to £30,000.
Per calendar month, I suggest a rental of around £300 a month.
I reckon that with a guide price of 10,000 and a potential resale value of 30, no investor should
let the colour of this kitchen jaundice their opinion of this flat.
So a decent enough flat, but the big issue here, of course,
is who is liable for those costs associated with recent renovations.
There does seem to be a bit of uncertainty, and one thing's for sure - if you're going to bid on
this, you've got to be absolutely clear before the hammer goes down,
cos, once it goes down, your position is decidedly weaker.
Let's find out who went for it at the auction.
So we go to lot 131 which is flat 7, Edleston Lodge,
Grange Avenue, Preston,
on behalf of the mortgagees.
It's a vacant, one-bedroom, first-floor apartment.
Make it nice and easy - someone give me 10,000 for it.
10 there. Say 12?
Who are you pointing at? Sorry, I didn't see you there. 14,
17 here, new bidder. Will you give me 18, sir?
No? Then it's with you, sir, at 17,000.
Are we all finished at 17?
No, we're not. 18 there.
20? Looking for 20.
20 here. 21...
22, 23, 24...
23 on my left.
Are we all finished at 23?
I'll take 23 and a half.
First time at 23, second time at £23,000...
It's yours, sir, well done.
The winning bidder who paid £23,000 is Phil.
He's bought a flat in this block that's desperate for someone to save it.
It was a controversial auction lot with a bit of a murky past, but has Phil unlocked all the secrets?
I went to meet him at the property to find out more.
-Phil, good to meet you.
-Didn't quite get it for the ten grand!
No, I wasn't really expecting to.
It was quite a low reserve, but it would've been nice to get it for ten, but, in the end, it was 23.
Why do you think they put it at that kind of price? Was it just to attract attention?
Yeah, there's been a few issues on the estate as well over the last two
years, with external rendering and the maintenance issue, so I think
it's putting a lot of people off buying into the area,
-so I think that was maybe the crux of it.
This thing with the maintenance of the outside and the re-rendering -
-that's something which covers a lot of the properties around here?
-It does, yeah.
On this estate, they've basically asked for £9,000 off everybody
who's got a flat on the development last year, to pay it on top of the management to cover the rendering.
Now, there was a lot of grey areas in the legal pack, which was basically looking like whoever bought
the property was going to have to pay that £9,000, but I looked into considerably, ran it by the
solicitor, and we found a loophole that the previous person who had the mortgage was liable for it still.
So, when we've bought it for 23, that's the price we've paid, 23,
and the other party has to pay the £9,000.
Phil is a lucky guy.
# Some guys have all the luck... #
Thanks to his thorough research before the auction,
he knew he wouldn't have to pick up that £9,000 bill, so he bought when others were having doubts.
-Why were you so keen to buy it?
-Just as an investment.
We're coming up to year-end. I own a construction company. We're coming up to year-end with some surplus cash.
Rather than it sat in an interest-bearing account paying 1%, we'll go and buy
another property, and hopefully it turns it round in a couple of years, and we'll make a bigger percentage.
So you're a developer, are you saying?
We own a construction company, but we've got a development arm
-to the company that does smaller stuff and one-off houses.
-So we've bought a few, sold a few on.
-At the moment, it's the right time for buying to rent.
-Tell me more about that.
Er...we've probably done about a dozen properties over the last two, three years.
Generally, for the first two years, it's buying it, refurb
as quick as we can, and sell them on and making a nice, tidy profit.
But we found that the profit margin then was going and going with the
market changing, so we've got three or four now that we just rent.
We'll look again in another two years. If it's the time to sell, we'll sell in a couple of years.
As property prices are depressed but rent's holding up fairly strongly in
Preston, Phil thinks this is a great time to buy, but why THIS flat?
What won him over about this particular property?
Nothing in particular. The price!
-I never actually saw the property before the auction.
I know the area cos I'm from Preston, but I didn't actually come and look in the property.
It was just the right price and I know the area for renting,
-so I took a risk.
-You must've been delighted when you walked through the door.
it's very tidy, and I'll get away with spending not a lot of money on it, so it's going to be good.
-So what are you planning to do to it?
the kitchen is going to be changed - just a basic kitchen going back in.
The bathroom - a basic bathroom suite to go in. And decorate throughout.
If I spend any more than £6,000, I'll be upset.
We don't want to see a grown man cry, but we may see tears of joy,
because Phil has had a stroke of luck since buying the flat.
We've got a database of tenants through the previous properties.
We've rung round a couple that are on our list, and I've actually got a tenant geared up for it
-who wants to be in in a month's time.
-So we've got a reasonable rent.
-We're looking at about a 9.5% return on it straightaway.
-What kind of rent are you getting?
We're getting 350. We've agreed on 350 a month.
-And obviously we'll have to pay the maintenance fee out of that.
Now, the maintenance charges are quite high, aren't they? Is that something that concerned you?
They have over the last two years, cos they've been paying for this work,
but I've spoken to the people who have the lease of the whole estate, and basically they've paid for all
the work now, so the maintenance charges from this year on should drop back down to where they were
three years ago, which is maximum £1,000 a year. And that covers the leasehold and the maintenance.
Are you bothered about the value, because the values that we were given done up...
-you're just on the cusp there, what you paid.
-It is, yeah.
I'm not particularly bothered with it,
cos I think it's still rumbling on with this scenario with the render. In two years' time,
that'll be gone, forgotten about. It looks fresh, the estate.
It's 16 years old, the property, but to first come up, it looks reasonably fresh.
I think, in two years' time, the headaches of what's gone by
-is forgotten about, and the prices will go up.
-So what could've been a headache is actually...
-It's quite easy.
So he did his research, and the maintenance issues that scared some buyers away look resolved.
There's even a tenant waiting in the wings for Phil's flat.
Well, he didn't get it for that ridiculously low guide price,
but I think Phil still realises that he got himself a bit of a bargain here.
So how is he going to get on?
Well, he's already got himself a tenant lined up, everything should go to plan, but you never know.
Join us later in the show to find out how he gets on.
As pretty as a picture and postcard perfect, Redlynch near Salisbury
is a village on the fringes of the New Forest National Park.
It's not just its setting that makes it popular -
good schools and three pubs make this a hit with renters and buyers alike.
I'm here to see a property that was on the market for 265,000.
Now, the guide at auction was set at just £165,000, so what's the catch?
Well, there isn't one. This was built a year ago and it hasn't even been lived in.
Let's have a look around.
Brand spanking new, but it's already got a name - Plum Tree Cottage.
Although there aren't any fruit trees in the vicinity,
this cottage certainly looks ripe for investment.
Now, this is not a typical Homes Under The Hammer property for me.
It's got luxury. New thick carpet here - look at this!
And the front door - it's gorgeous and heavy.
Now, I know this house was developed to a really high spec.
For instance, these wooden frames here are made from wind-felled, locally sourced oak.
All these appliances - the dishwasher, cooker, fridge-freezer - are all really good quality.
There's also zinc-galvanised drains and down pipes and, if that
wasn't enough for you, there's under-floor heating down here.
It's all luxury! I'm not used to this.
Cracked sinks, damp walls and subsidence are the norm for auction lots,
so coming here feels more like one of our second visits to a revamped property.
It's really rather unusual.
Upstairs, there are three good-sized bedrooms and a shiny new bathroom, with a bath and separate shower.
I am so excited by these here -
modern bi-folding doors that open right the way back.
They give more of a contemporary feel than the traditional French doors,
and it just allows that sense of flow from the lounge out to the garden.
I am all for them.
It's all about bringing the outside in,
and this house has lots of outdoor space, which is a huge bonus.
It just needs someone to stamp their personality on the place.
And I've made a discovery on the other side of the fence.
Now, here's a bit of gossip. There were rumours of a proposed pub being built right here on this plot.
Now, I imagine that would have put a lot of potential buyers off -
the noise, the parking issues.
Now, luckily, they were just rumours because the real truth is
there's actually planning permission in place for five new houses to go up here,
turning this bit of wasteland into something much, much more desirable.
There are also another three new-builds nearing completion, plus Plum Cottage, so,
with those five proposed new houses,
you'll soon be spoilt for choice for new properties in the village.
What will a local estate agent make of this one?
I started by about asking about the setting.
Very good village, very popular village.
The local junior school is two minutes' walk down the road,
and quite a lot of amenities.
We're also close to the cathedral city of Salisbury
for employment and rail links to London and the country.
It's very peaceful and you've got an awful lot of local wildlife as well.
Plus Plum Cottage for any Little Jack Horner developers looking to stick their finger
into the local property market. So let's talk numbers.
If the property was coming onto the rental market currently,
I would expect to reach between £800 and £825 per calendar month.
If I was to bring this property to the open residential sales market today,
I would look to put this property on the market
for between £190,000 and £200,000.
There's nothing to do in this house and it went to auction guided at £165,000.
Considering you could sell this on for just under 200,000 as it is,
I think there's a margin to be had here.
Let's see who spotted this fantastic opportunity at the auction.
Lot 18 is the property known as Plum Tree Cottage,
an ideal investment being offered at a very sensible price today,
ladies and gentlemen.
Does somebody wish to get me under way at a very sensible £150,000?
I need an opening bid.
Thank you, sir. 150,000 I have got. I have an opening bid of 150.
Now I need 151,000.
Right down here in the front. 151. I have the two bids. 152, sir.
153. 153 from the lady.
154. 155? 155.
And 6? 156, sir, thank you.
157,000 clearly here in the front.
159? 159 here in the front.
160, sir? 160,000 we have.
161. Back to you, sir.
Thank you. 162. Nice and quick. 163?
163 we have here in the front.
Gentleman says 164. 164. 165?
No, lady's shaking her head. Half?
164 and a half. She's back in.
Back to you, sir. 165?
165 I have got. Thank you.
Saying 500, madam?
No, she's shaking her head at me.
She's out of the running. £165,000 then I have.
Make no mistake, I shall sell it.
£165,000 then to you, sir, once...
£165,000 for the third and final time.
That final successful bid of £165,000 was made by Ken.
I met up with him and his wife Tina at Plum Tree Cottage to find out more about their plans
for this property that they've just acquired for their portfolio.
Now, this is not a typical house I would view on Homes Under The Hammer, I have to say.
How did you end up buying this, guys?
Well, I was playing golf.
I knew nothing. He just sort of came home and I said, "Had a nice day?" "Yes, I've bought a house."
-Over to you.
-So you'd been up to all sorts of mischief!
Yup, I had.
I was getting emails every day about distressed properties,
auction sales, that sort of thing,
and I was going through all the catalogues, and this one just stuck out at me.
So I consulted my partner, and we came and had a look at it,
and then got the information pack, the legal pack and that sort of thing,
gave it to our solicitors and they checked it over.
We've got partners, you see.
We have another couple and this is our pension plan.
-We began this, what...?
Quite a while ago. And it was at that time when houses were so cheap.
Our first two-up, two-down was 47?
47. Something in that order, yes.
And we didn't take the rent, and the rent paid for the mortgage
or the loan, and we just gradually sort of built up our portfolio.
Now they've added Plum Tree Cottage to the other eight rental properties that they own.
Ken used to be a poultry farmer and Tina ran a company
providing garments for burn victims,
but then she got stuck into life on the farm.
Well, I came...
You know, I was a sort of secretary sort of background,
and then I met Woody and, suddenly, there I am harvesting eggs and chickens and things.
This is confusing me because you keep making reference to your husband as Woody.
Oh, yes. Yes, well, everybody calls him Ken except me.
It goes back to... I mean, Woody...
Well, he said, "Come and meet my parents,"
and off I went to meet his parents, and they all said, "Hello, John."
And it turns out that both his father and he are using their second names so they're both called Ken.
-But his real name's John?
-But his real name's John.
-But you call him Woody.
-Every time I said "Ken", his father would say "yes?",
and I just wanted to stop that confusion so I called him Woody.
Right. Thank goodness that's all cleared up, then.
So Ken...sorry, Woody and Tina have given up
poultry farming to concentrate on...well, golf and work.
So how long ago did you retire, guys?
-Three years ago.
-Has he not stopped working?
-No, these properties keep him busy.
We were supposed to play golf together.
He said, "Learn to golf so we can do it in our retirement."
-And there you are, playing golf...
-I'm playing golf with all the girls and he's working.
Sneaking off buying houses!
Sounds a fair way to make their pension pot grow, though.
It looks a pretty good bargain at £165,000 for a brand-new house that's never been lived in.
Ken, I know this house was on the market last year for £285,000, no takers.
You've bought it for a lot less.
Why do you think that is?
I think they overpriced it. I think they were being a little bit greedy.
No-one bought it so they were forced, as the market dropped, to auction it.
And we were lucky to pick it up for that money.
Now, I've heard a rumour that there was a proposed pub going to be built next door.
Do you think that would've put would-be buyers off?
There was a pub next door originally and it was burnt down.
A 16th-century little old pub and it got burnt down, and there's been five years
of controversy cos they want it rebuilt,
but the council have finally decided that's not going to happen.
It's going to be housing.
Maybe it was concern about the neighbouring property
that put other investors off, but Tina's confident that it's no longer an issue.
With no work required, they've planned their own quick marketing campaign.
I mean, this is ready to go. Have you marketed this at all?
It's going in the paper tomorrow.
-For rent or for sale?
-So do you guys set up all the interviews?
One every 20 minutes is the ideal.
-1 in, 1 out.
-We know what we're looking for.
How much do you think you're looking to market this for?
The agent gave us a good idea that, in this area, it should go for £800-£850,
and we've seen others go for that sort of money in the area
in previous weeks, while we've been waiting to complete.
We've had a look at them.
Some are older, a bit bigger, but nothing of this quality.
No surprise, really, because this is a show-home finish, perfect to move straight into.
This is a question I always ask people on Homes Under The Hammer. What's your budget?
Basically, it's almost nothing.
I mean, I used to make all the curtains so that would be, for here, probably £100
or so for the materials, but now I buy them all because I'm retired. So it's cost about £350.
So your budget is just the curtains, isn't it?
-Yeah, nothing else.
-No, no. The tenants can make up their own minds what they would like to do to the garden.
So £350, that's it.
And maybe dusted, because there's nothing else to do.
Ken and Tina have made a fantastic purchase here.
They've bought at a depressed time in the market
and their rental income will cover their mortgage.
I think it's a great low-maintenance property to add to their portfolio,
but the question is - can Tina drag herself away from the golf course long enough
to secure some tenants for this house?
You can find out what happens later on in the show.
Coming up, with these cracks, getting a loan
for this Staffordshire property won't be easy.
Because the mortgage company would basically say, "No."
We return to Wiltshire where there's been a bit of a battle.
There's a rental war on at the moment, and I felt certain
we would rent the house as long as people came and looked at it.
But first, in Lancashire, size isn't everything.
It's not massive by any stretch of the imagination,
but there is a bit of space in there.
We're back in Preston, where Phil paid £23,000 for this first-floor flat.
It had been guided at a very intriguing £10,000,
but a lot of buyers were put off because of an issue with the outside rendering of the block
and a potential extra bill of 9,000 quid.
But sensibly, Phil, who owns a construction company, did his homework and discovered
the matter had been resolved, Now, two months later, we're back to see what's been achieved.
Well, the first impression you now get as you walk into the hallway is of a modern, light flat.
New hard-wearing carpet's been laid and the living room decorated,
using the chocolate and beige sections of the colour charts.
That dated sliding door to the kitchen has been removed.
The bedroom feels much more spacious.
I reckon that's thanks to the colour scheme as well as the fact the wardrobe's been removed.
But where will the clothes go?
So who's been busy here? Is it all down to Phil?
All the work throughout the property has actually been carried out by the lads who work for me.
I visited two or three times a week to keep an eye on what they're doing,
but all the work has been carried out by my own employees.
# They call me mellow yellow... #
In the kitchen, we've taken it back to bare plaster.
We've put nice light units in, nice light tiles, we've made the most of the small space that we possibly can.
We've integrated the fridges, we've integrated the washing machines, we've put in a nice ceramic hob
and a nice-quality oven with an extractor above,
and I think we've made the best of the small space that we possibly can.
It feels a lot bigger than what it is, and it's a nice, workable kitchen.
The narrow, galley-style kitchen works fine here,
and Phil's concentrated on the two main areas in any property - the kitchen and bathroom.
We've completely ripped out the bathroom, gone back to plasterboard,
we've put white tiles on two elevations and a new white suite.
We've introduced an electric shower that it didn't have.
We've changed the extractor from the noisy one that we had,
and we've basically just left it clean and nice, neat lines.
Remember, Phil paid £23,000 for the flat and had set himself a budget of around £7,000.
Did he manage to stick to it?
The budget for the whole renovation was £7,000 ceiling.
We were going to be disappointed if we spent more than £6,000,
but we've actually spent £50 more than the £6,000,
but we've come in considerably less than the £7,000.
So I'm more than happy with what we've spent.
Yes, £950 under budget on a flat that cost just £23,000.
We've had the electrician test all the electrics,
we put in a wired-in smoke alarm system
and generally just checked over the electrics.
We've also taken out a storage heater which was protruding into the walkway,
so we've taken that out and put in a modern panel heater.
In the walk-through corridor, there is actually two wardrobes,
so we're going to utilise one of those for the wardrobe for the bedroom now.
So there is somewhere to hang clothes after all.
I wonder Phil had unearthed any more issues about the maintenance charges
for the block that had scared away other bidders on auction day.
The legal issues and the service charge that was on the properties
that was in the legal pack has been no issue at all.
We've done our homework, everything's been fine, not a problem at all.
The service charge for this year has been estimated at £1200,
so it's a couple of hundred pounds more than last year,
but we're still quite happy with that.
Remember, Phil had a tenant in the pipeline, so is his plan still to rent for a year or two?
Our original intention was to rent the flat for at least a couple of years.
We've got a tenant that's due to move in next week.
We've not actually signed him up cos we are toying with the idea
of selling to get some cash back and hopefully get some more.
Let's see how much two local estate agents will value the flat at.
It could alter Phil's game plan.
It's been very nicely decorated, certainly nice neutral colours,
and the proportions of the flat are very nice indeed.
Good choice of colour of bathroom and kitchen, all very neutral, new carpets.
I like the way they've taken the wardrobes
out of the master bedroom to give it a feel of space.
Oh, it's excellent.
I particularly like the kitchen in the flat
which I think has been done to a very nice standard and is in fact also well proportioned.
The standard of finish is pretty good.
I think somebody will move in and, because it's done to a nice standard,
will look after it.
Clearly, Phil's at a crossroads - will he rent or sell?
Let's investigate the financial merits of each.
I would suggest a rental value of approximately £325 per calendar month.
This property would rent currently for £375 per calendar month.
The two figures are either side of where we expected it to be.
We were expecting 350 and that's the figure we've agreed with the tenant,
so more than happy with both of those.
OK, renting's not ruled out. But how much could the flat now sell for?
Remember, Phil spent £29,050 buying and renovating it.
In the current market, I would suggest an asking price of £28,950
and I'm sure they'd get a lot of interest at that price.
I think the resale price of this property, in the current market, would be in the region of £40,000.
So either pretty much breaking even or a nice £10,000-£11,000 profit.
Well, the first value seems a lot lower than what we're expecting
and I'm sure we'll sell it for a lot more than that.
We've already had an agent of our own out
who's sort of around the second figure,
so we're expecting between 40 and 45.
I'd be very happy if we can make that sort of profit in a month's work.
So is the flat likely to be sold now?
I'd consider selling at 40,000, definitely.
Phil could well be on the lookout for more properties,
but what about the person he'd lined up for the place?
I will look for another property quickly for the tenant that we had for this one.
We've looked at lots of properties, but I think the one-bedroom flats, if we can make a good return
like it looks like we're going to on this one,
we will look at one-bedroom smaller stuff, especially in the current climate.
And judging from this purchase, I'm sure Phil will do his homework thoroughly again.
Staffordshire is often thought of in terms of its towns,
such as Stoke-on-Trent, but don't forget it's got fantastic countryside too.
So this is Brown Lees in Staffordshire, and surrounded by beautiful countryside it is...
he says in a Yoda from Star Wars kind of way.
Well, this is what I'm here to see. It's a two-bedroom mid-terrace at a guide price of 50,000 quid.
The question is - will the force be with whoever buys it?
MUSIC: "Star Wars Main Theme" by John Williams
Well, it might not be light years off a busy road, but it is set back far enough back not to be an issue
and, with these country views, this terrace has more going for it than most.
But on closer inspection, I can't help getting a bit of a sinking feeling.
Looking along this row of houses, I think I've managed to come to one of the worst.
Oh, well, onwards and upwards.
So what surprises are in store?
Well, fairly standard sort of front living room area here.
Fireplace - I don't know, I like that. 1920s probably.
But if you get rid of the thing on the front, the gas fire,
if that was an open fire I think that's actually quite pretty.
However, that isn't.
Look at that crack. Absolutely horrendous,
so we're going to be on the lookout for more indications of subsidence as we go through the house.
Through here into the rear sitting room, again not a bad-sized space.
Another open fire there, which is really lovely, and then here you go - classic design.
Through to the kitchen, very small
it needs to be sorted out, then on into the bathroom.
Now, not ideal but I think, in this kind of property, you expect it.
It's those cracks that are really worrying me.
Dirty bathrooms I can handle, poky kitchens can be fixed, and jungle wallpaper can be tamed,
but the plaster's falling off in the back room
and the outside space is a real mess.
# It's unbelievably hard to love you but I love you anyway... #
The kitchen and bathroom extension's almost falling down
and there are more signs of damp and, from out here,
the upstairs doesn't look much better.
So, upstairs, a fairly standard layout.
You've got two good-sized bedrooms, one at the back there and then another one at the front.
But, when you come up here, more indications of some really serious problems in this property.
Look at that. I can actually put my fingers inside that crack there.
Obviously, the house has serious subsidence.
That is an issue in itself, especially when it comes to getting a mortgage,
because the mortgage company would basically say, "No".
This house was guided at £50,000, and that crack looks like a graph plotting the fall in its value.
Apart from the cracks in the back bedroom, there are also signs
of worrying neglect in the plumbing department.
And, just when I thought it couldn't get any worse,
a local property expert has unearthed some more news
about this particular railway cottage.
It is a mining area.
The properties were actually built for the miners, not for the railway,
so there is sort of a history behind that there.
And where there are mines, there are big holes in the ground,
which do tend to make cracks appear in the houses.
A mining report is a must, and any buyer should also dig deeper.
It's not going to be for somebody to take light-heartedly.
Get a structural survey done. If you're worried at all
regarding any of the cracks or the structure, I would advise you to instruct a surveyor.
How much would that report cost?
It depends what level survey you go in for.
You could be looking at a couple of hundred pounds.
That would be money well spent for any investor brave enough to take on this cottage.
When it comes to the cost of general renovation, I don't think there's any need for a big budget.
It's a good location.
With it being an entry-level property, I think you could go
for the basics, really. A bathroom, kitchen, it needs replastering,
I just think to give it a good clean look.
It's certainly going to take a fair bit of elbow grease but, as it's most likely
to attract first-time buyers, there's no need for gold taps here.
But could you be looking at a gold-plated return for a buy-to-let investor?
With it being only two bedrooms, obviously I don't think it would be a family property.
I think, to be realistic, 425-450 per calendar month.
I don't think that would be too difficult.
It's a good location to buy as well - quiet, semi-rural.
I don't think you'd have a problem selling.
That could generate anywhere between £95,000 and £100,000.
But an investor should tread carefully when it comes to renovation costs.
So a nice enough property in a pleasant location, but those real issues with cracks and subsidence
means that this isn't something that you should take on lightly.
You are going to probably have to buy it with cash and set aside quite a wodge of money to sort it out.
Yes, it's going to take more than a Jedi Knight to fix this one.
Let's go to the auction.
Lot number 22 is 64 Railway Cottages, Brown Lees.
This is a house in need of complete modernising and updating.
Gardens to the front and a yard to the rear. Lot number 22.
Can we say 40 to start? Who'll give me 40 to start it?
40 I'm bid, thank you. £40,000 standing.
At £40,000, 45 can I say?
45, thank you. At £45,000... 50 is it?
Want to go one? You do, £46,000.
At £46,000. 47, one to you, sir? 47.
At £50,000... 51 can I say?
Right, are we all done?
At 50 for the first time...
At 50 for the second time, third and final time at 50... Are we all done?
-You bought it. Well done.
-The new owners of this
cracked cottage above a disused mine are Harold and his wife Sue.
They're part-time property developers and already have several rental properties in the area.
This run-down terrace seemed to be just what they were looking for.
Sue, Harold, nice to meet you both. Congratulations.
So why take on a project that needs a lot of work rather than one that doesn't?
I think it's location, really.
-You wouldn't get this now...
We've looked at new houses and you don't get this openness.
We know, with having the country walk where the railway line's been,
nobody's likely to build there, and it is a beautiful location, isn't it? It's really nice.
So it does have quite a lot of history, doesn't it?
Well, they were built, I believe, late 1800s,
probably by Robert Heath who owned the mines, and they were called Railway Cottages
because the railway ran just outside.
It's quite a pleasant walk now. If you like to keep fit,
you can get on a bike and I believe it goes for quite a number of miles now
in either direction.
Location was key to the purchase.
My concern is that renovating that house won't be freewheeling for Sue and Harold.
OK, so let's talk about the house, then.
There are some very serious cracks.
-What do you know about them?
-They're big cracks, yeah.
Um...it's all to do with the mining, I think, settling.
I've had an engineer in to have look at it
and it's the sort of thing you would expect in this area, although it does need putting right.
Probably underpinning one of the walls and new concrete floors need to be put in.
Underpinning and new floors are a big capital outlay
on top of all the general renovation required here.
Getting the house back on a sure footing is vital so it could get a mortgage in the future because,
whilst they were cash buyers, the next purchasers may not be.
Yeah, that is one of the problems.
You have to... If you wish to sell the property on,
you have to correct all the structural defects,
and it wants a damp coursing as well of course.
OK, so give me an idea of how much you've set aside to do all the work.
Original estimate was about maybe 15,000, 16,000, but I feel sure that will go to 20,000.
OK, Sue, talk me through what you're going to do inside the house.
Well, we've got quite a few ideas.
The good thing about this property is the fact that it is run-down and needs modernising.
It means that we can, you know, put a lot of ideas in, so it's toying with what we really do.
We want to maybe have an inglenook fireplace in the front room, make that more of the living area.
Possibly, this will be the kitchen area where we want to keep a little bit of the character,
probably a countrified, fresh kitchen, but not lose too much of the character.
So what kind of experience do you have in the property world?
Over the years,
we've done one or two properties.
We started with some garages, a row of garages that we accidentally acquired.
We were selling our house and the guy who was buying the house was
a few thousand short, so he put the garages in.
And, eventually, we built two semi-detached houses on there.
Since then, we've bought a church, an abattoir and a small mill.
And did what with a church, an abattoir and a small mill?
The church is a factory, the abattoir is a factory now. We're turning that into a factory.
And the mill they're just knocking down to make way for a new supermarket.
By the sounds of it, these two are certainly up for the challenge of this little terrace.
It IS in a pretty bad state, with some very large cracks.
They plan to let it out once renovated, but then what?
Well, the long-term plan, really, is to...
We are getting to the age now where we're looking forward to retirement
and the rental of the properties
we're hoping will pay for our retirement.
It is charming, just a little bit rough around the edges.
You're being kind there!
Well, I certainly hope this house above an old mine won't be a rough diamond for too much longer.
Well, Harold and Sue clearly love this place, and quite rightly so.
They are aware of the cracks and the money it's going to cost
to put them right, so they're going into this with their eyes open.
However, I'm worried about the amount they're going to have to spend to put this place right,
and how much it will be worth when they've done all that hard work.
Shouldn't they have just bought somewhere that didn't need any of this?
Oh, well, you can find out how they get on later in the show.
Well, we've given them time to do the work, but has the work been done?
Will we return to bare plaster or a perfect finish? Let's find out.
Back in the Wiltshire village of Redlynch, retired couple Ken and his wife Tina paid £165,000
for this year-old house that had never been lived in.
They were going to add it to their portfolio of other buy-to-let properties
which they manage with another couple, but it came out of the blue for golfer Tina.
-He said, "Learn to play golf so we can do it in our retirement."
-And there you are, playing golf...
-I'm playing golf with all the girls and he's working.
There was nothing to do but pop up some curtains and advertise for tenants.
So I guess it's little surprise that, six weeks later,
the place is let and the new occupants' belongings have turned it into a home.
What a great find it must have been for the family,
as they're the first occupants of this house,
and getting it at the auction was pretty good news for Ken as well.
This house was obviously very attractive to us because we had no work to do, hardly at all.
In an older house, you tend to get all these little niggly problems which I go and have to sort out -
showers leaking and that sort of thing - so I prefer to have something as new as this.
So it was only the curtains to hang, a job Tina had done many times
before in their other properties, but this time there was a problem.
I had all these curtains to hang, and Woody brought me a stepladder
and it's not one I'm normally used to.
Most stepladders have a step and this one didn't.
It had some hooks or something.
So I just opened it, climbed up and it collapsed underneath me and I fell to the floor.
And I thought I'd landed really well.
I usually do a parachute roll but I must've had my hand underneath me
and I broke it about there.
Ooh, ouch! That meant Tina had to get Ken to put up the curtains.
I hope he checked the dodgy ladder.
Then the simple refurbishment took another turn for the worse.
We thought, when we bought this house, that all we'd have to actually do is hang up the curtains,
but we discovered after a little while that all the woodwork had only been primed and not top-coated.
So, with a friendly painter we know who's retired,
he did most of the painting
and I did the taking off the door handles and things like that to make the job easier.
Well, this threw the budget into turmoil.
Yes, they paid just 165,000 for the new house,
but now the gloss paint had taken the costs to £600.
There also had to be an ad in the local paper.
It took two weeks to find the tenants.
We put the advert in, I think my husband put it in at 795
and we actually rented it out two weeks later for 750.
From their experience of other buy-to-lets, they knew their ideal tenants.
The type of people we like to choose, if we've got that much choice,
is professional couples ideally, both working, because you've got two incomes to pay for one rent.
So who have they let Plum Cottage to?
It's a nice little couple.
Mother lives in the village so they were very keen to have it,
and two nice little children, so they'll be good tenants.
It's time for two local estate agents to have a look.
Should they have considered furnishing the house
before renting it out?
In my experience, the majority of tenants will have quite a bit
of their own furniture and items,
so we find letting properties unfurnished is more popular.
There is the odd tenant but the exception rather than the rule.
My experience of the rental market in this area,
properties rent better unfurnished and it's obviously worked well
for the owners because they've managed to rent the property.
The sitting room's got lots of light with the full-length windows doors across the back onto the deck -
very good. The kitchen is not the biggest.
The bedrooms, again, are limited in part.
My advice to the owners of the property would be definitely to hang onto it
for the long term, for the market to rebuild.
Could that affect the rental income? How much should they be charging?
I'm not sure what the owners are currently getting from their tenants,
but I would look to achieve around £800 per calendar month.
We'd recommend a rental to £750 to £775 per calendar month.
We started at 800 and dropped to 750.
-I thought 750 was...
-So we're in the right ball park, aren't we?
Of course, getting tenants in so quickly is just what they required to generate income immediately.
In its current state, I would look to value the property at between £175,000 and £185,000.
We'd recommend a value in the region of £185,000 to £190,000.
Well, £185,000 would be £20,000 more than they paid at auction.
Even allowing for the paint and curtains, that's not bad.
Ah, well, it's a profit on there, then.
So Ken's purchase could end up all it was cracked up to be,
but more importantly, when will Tina be back on the golf course?
The plaster comes off tomorrow.
11.25 I go to the fracture clinic and I would quite like to be on the fairway,
doing at least a little putting and chipping, by tomorrow afternoon.
Well, that could leave Ken free to find more properties to add to their pension pot.
We're heading back to Staffordshire now.
Were those gaping cracks in this mid-terrace the tell-tale signs
of subsidence that that Harold and his wife Sue suspected?
They paid £50,000 for the house.
They intended to renovate it in a country-cottage style and then rent it out.
Five months later, we've returned.
OK, the front garden is certainly a lot tidier,
but the main transformation is round the back.
The old yard has been paved over
and they've managed to create a parking space.
Inside, the front living room now has a new floor
and the cracked walls have been replastered.
And there's also been a major change in the back room.
Just as Sue promised,
they've created a fabulous country-style kitchen-diner.
The original kitchen is now a laundry room
with a refitted bathroom beyond it.
Upstairs, the cracks in the two bedrooms have been patched up.
Both are decorated, and there's even a bed in the front room.
It seems that Harold had been worrying unnecessarily about the possible subsidence.
I thought it was a bigger problem than what it was,
but we had some structural engineers in
and we managed to rectify all the cracks,
put a new concrete floor in, and it doesn't seem to be a problem at all.
It was quite a challenge, really, from the rough state it was in
to begin with, but it's been quite therapeutic in a way, really.
Quite pleased with the outcome.
Therapeutic for Susan, but it's been hard work for me.
I've been doing all the labouring.
Well, the hard graft has paid off.
Remember, Harold and Sue bought the house because of its location.
It overlooks a country park and a cycle route
that was once the railway the terrace is named after.
Well, we've changed this room completely round.
This was originally the, er...
I suppose you'd call it the lounge.
We made it into the kitchen-diner.
We've got a complete kitchen in, we've taken the whole fireplace out
and extract the fumes through what used to be the old chimney.
Generally speaking, it's worked out quite well.
I think there's enough room for a table in here, four chairs, and a useable kitchen area.
So the layout is basically the same.
It's just the rooms that have been rearranged.
We did think of having an inglenook fireplace
but we decided on this one,
which seems to fit it quite well and give it the country feel.
Also the laminate floors.
And it's been replastered which I think looks really good, really well.
And the curtains have been recycled.
They were from a cottage we had before.
Really opened it up really well.
Harold and Sue had toyed with putting the bathroom upstairs
but they decided to leave the two double bedrooms.
I think they could've made more of the bathroom.
I'm not sure they need such a big utility room.
They've still got a few jobs left.
There's painting to do and the front garden to finish.
And Sue's keen to get the flagstones in the kitchen back to a rich red colour.
So what has all this cost?
Um, we're up to about £14,500, with probably another 1,000 to go, so we're quite pleased.
I expected it to... We anticipated it going over budget
but we've put a few extras in and I don't think £15,500 is too bad, really.
Let's see if it was money well spent.
How will two local estate agents rate this refurbishment?
Those changes are fantastic.
I love how they've moved the kitchen
into the second reception room as it was.
I just think, as a whole, it brings the property together
as a more family home.
It's a nice property.
I don't know what it looked like in its original state,
but now it's been brought up to a nice standard.
Generally speaking, people do prefer the bathroom to be on the first floor, ideally, next to the bedrooms.
I don't think it matters too much.
With it being a cottage, it was unrealistic to move it upstairs
with it being just two double bedrooms.
A lot of people tend to be going down the road
of renting their properties out, just because of the economy at the moment, which is understandable,
so, yeah, as an investment it's a good rental property.
But just how good is good?
How much income could it generate?
I would say on a rental value of £450 per month.
I think if you're looking between 400, 425 per calendar month,
You'd be quite realistic to let it in a short period of time.
Mmm, that's good.
That's a good return.
Good return on the investment that is, yeah. Quite pleased with that.
Remember, they paid £50,000 for the house at auction and their budget
is heading towards £15,500,
so how much could the property now be worth?
I would market and value this property at £80,000.
I personally feel that they would achieve £100,000 to £110,000.
So at least £15,000 gross profit.
That works out well.
We're into a profit.
Even at the lower valuation, we're into a profit, so that's good.
Might those figures tempt them to sell and take a profit?
No, I think we'd stick with the renting. That was the plan.
It's nice to take a semi-derelict property
and turn it into a reasonably desirable property to live in.
Will they look for another challenging property to refurbish?
At the moment, we've been saying we're not going to do anything.
I don't think we'll do anything for a while.
If we saw the right type of property to renovate, we might have another try then.
But not for a while.
We're going to have a rest!
So we hope you've enjoyed the trials and tribulations of today's show.
-Join us next time for more Homes Under The Hammer.
-See you then.
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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Martin Roberts and Lucy Alexander visit a flat in Preston with a low guide price, a house in Wiltshire with a surprise and an old terraced house with a few cracks in Staffordshire.
All of these properties went to auction and Martin and Lucy find out who bought them and what they paid when they went under the hammer.