Episode 60 Homes Under the Hammer

Hello. Looking for a do-er-upperer or a plot of land to build on?

Or an investment property or somewhere to live?

You can find them all at auction.

Now, there are some key things to remember when buying at auction.

Do your research and have your finances sorted out in advance.

So, did today's pupils get an A grade or did they fail?

I know exactly what this grand, but run-down, three-bedroom house in Cardiff needs...

A bit of TLC.

There's a three-bedroom property in Southampton where the value is at the back.

What I really like about this room is that cracking little view.

And in Maida Vale, north-west London, this flat has one thing wrong right from the start.

Straight into the flat and you're faced with the loo.

All these properties have gone to auction and we'll be finding out

who bought them and what they paid when they went under the hammer.

A glistening bay, peaceful parks and a castle in the city centre.

Where am I? That's right - Cardiff.

Now, 20 minutes' walk from the centre of the Welsh capital,

surely property is going to cost you an arm and a leg.

Not necessarily. Here I am in Roath, where up for auction was

a three-bedroomed end-of-terrace, which had a guide price of 65 grand.

Got to be worth a look.

And for that guide price it looks pretty impressive from the outside.

Wow.

Walk through the front door and you immediately get that feeling that this is a grand old house

that's been sadly neglected, but it's very impressive.

A big, high ceiling, some features still here.

Got this lovely staircase going up there, rooms towards the back.

And then, look at this, for a fantastic front reception room.

Absolutely huge and, again, high ceilings.

Obviously, this place is in a right old state.

It looks like it's been used, been abandoned, I don't know.

More importantly, we've got some serious issues with

damp on this chimney breast and my guess is something's going wrong with the flashing up on the roof.

But, as I said, the overall impression is a grand house that just needs a bit of TLC.

# Give me all your loving

# All your hugs and kisses too... #

It also needs a skip.

Throughout the ground floor, there's furniture everywhere and I don't think any of it's usable.

And in a good-sized basement, guess what? More clutter.

A house-clearance company would possibly take this away and save you on skip costs.

It's unlikely they'll want tired kitchen units,

but a renovation here could include French doors, leading onto a little garden.

Upstairs, there's more clutter for the skip, including a Santa,

who seems to have lost his way back to the North Pole!

But, remove all this rubbish and you'd have three well-proportioned bedrooms.

The front one is especially large.

And to complete the tour, there's a good-sized bathroom at the back.

Wandering around this place, I get really excited, cos you know

you spend time and effort sorting it out and you'll transform it.

The kitchen, for instance, is in a right old state, but it's a good-sized space

and you could make it so lovely with just a bit of imagination, really.

However, it's time to drop the bombshell, because, unfortunately, this place is leasehold.

That's not necessarily a bad thing.

The bad thing in this instance is that the lease is very short.

It's only 56 years. Why's that a problem?

If you're trying to get a mortgage, a mortgage company will not go for a lease that's that short.

You can negotiate to have a lease extended, but you don't know it's going to happen.

It's really important, therefore, that you've read the legal pack and are aware of that.

Because if you went to the auction expecting to get a mortgage on this

place and you needed one, you'd have been in trouble.

It's one serious negative against some great positives here.

Time to ask a local estate agent

what he thinks of this three-bedroomed end-of-terrace.

Clearly, it does need upgrading, but the property does have a lot of potential.

I believe if someone does come in here, they will need

to renovate the property throughout.

Ideally, a new kitchen, bathroom, UPVC double glazing, also.

It definitely needs some attention and a full makeover,

but its location is key to making this a success.

A popular location, close to the local amenities,

close to the bus link, but also a stone's throw away from the city centre.

Great if you're going to tap in to that lucrative student market.

But what about the big problem facing any buyer?

There is a short lease which could be a problem for the property for mortgage purposes.

But I would recommend the vendor to purchase the freehold on completion.

Once lease issues are resolved and the freehold purchased, how much could this house sell for?

When renovated, I believe selling this property could be in the region of £170,000 to £180,000.

And with an eye on the student market, how much could each room make in rent?

I believe you could achieve £200 per room per calendar month.

Clearly, this place is in a right old state.

But, intrinsically, it is a great house.

Good location and, of course, that £65,000 guide price, as well.

I can see this really making money for somebody. But the big issue, of course,

is the fact that it does have that short lease, which means you're going to have to buy this with cash.

You're not going to be able to get a mortgage.

If you're not aware of that, you are in big trouble. Let's find out what happened.

Lot number 26 is 70 Mackintosh Place in Roath.

Who's going to put it in? What shall we say?

Bid me 70, if you like. 70, can I see, to start me?

First 70, I'm bid, thank you, I've got in the room.

At 70. 75, can I put you in? 72, then.

72, I've got there. 4. 74.

You're out right in the back, sir. 76, I can see, standing in the back.

At 76. 8, on the side. At 78.

Wave to me with that catalogue. 80, I'm bid.

At 80,000. And again for you, sir.

82. At 82,000.

4, will you? 84, I'm bid, in the back, standing in the back.

86, can I, sir? At 84,

I'm going to sell it, no mistake.

At 84,000. 6, can I, anybody?

Shout if I'm missing you. 6. 86.

You're out now, sir. 88, standing in the back.

Where's yours again? At 88, standing right in the back.

At £88,000, are you all done?

It's yours, sir. Thank you very much. At 88,000.

This is Terry, but it wasn't him bidding at the auction.

That was his brother, Jeff.

Together, they run a successful property business and this is the latest addition to their long list.

Terry, good to meet you.

Congratulations. Why did you want to buy this house?

Erm, basically, the investment.

-And you think now is a good time to do it?

-Yeah.

What do you see about the market in the South Wales area?

-How has it been and how is it now?

-It's dropped by about 20%.

-Has that affected you too much?

-Not really. It's actually done me a favour.

-How come?

Because we've decided to buy more property.

We've got a lot of property that we bought many years ago, which was

obviously really cheap, and two or three years ago we stopped buying, because the market went so high.

And now we've decided to start buying again.

To be a successful developer, judging the right time to buy is crucial.

So, Terry and his brother obviously believe this is the moment to invest in property again.

Having sunk 88 grand into the house, they're confident about making

a return on it, but they're going to have to spend a bit more.

So, the state of the property doesn't bother you too much?

-No, it's in pretty good order.

-That's pretty good?

-Yep.

That's an experienced developer speaking, isn't it?

There's a bit to do, but, really, it's not as much as you think.

When you get going, it'll come together.

When you first saw it, didn't the state of it put you off?

No, I was quite surprised. I was very pleased.

-Didn't you see it before?

-No, it's the first day this morning.

-So you didn't see it before you bought it?

-No.

-Why's that?

-We actually went to auction looking at other properties.

We didn't buy the others. They went too high.

And we looked at this one in the catalogue and we thought, "We'll use that one as a reserve"

and we thought this was going to go for 120, 130, 140.

We would have went up to 120.

-Wow!

-Wouldn't go any more.

-But you got it for 88.

-Yes.

It might turn out the better buy, perhaps.

This one, yeah. We were just really surprised to buy it for that price.

You can't buy many properties for 88,000 in Cardiff.

For Terry and his brother Jeff, it looks like Santa has brought them a great early Christmas present.

# I call it a bargain

# The best I ever had... #

Getting the house for £32,000 less than their top price just goes to show that if there isn't much

action in the auction room, you could secure yourself a property below market value.

# The best I ever had... #

This is one of the concerns I had when I first saw this, the very short lease that's left.

56-odd years. Does that bother you?

Not at all.

We've got somebody working on it at the moment.

We'll try and purchase the lease, which I should imagine will be between 10,000 - 15,000.

-Or we'll just apply for another 99-year lease.

-Right.

But somebody trying to get a mortgage on it would potentially have trouble?

This was unmortgageable. We had to purchase it.

Because of the lease issue?

Because of the lease and its state.

There was no mortgage available.

So we purchased it ourselves and when it's finished, we'll then put in for the mortgage.

With a university nearby, the brothers plan to turn the generous space here into bedsit heaven.

Splitting the front bedroom into two small rooms

and turning the bathroom into another bedsit will create five bedrooms upstairs.

Putting the bathroom in the old utility space

and making the kitchen a communal area will free up the living room as another bedsit.

That would give them a seven-bedroom rental machine.

It sounds like you've got this plan in place already.

-You know exactly what you're going to do.

-Yes.

-When did that formulate?

-This morning!

I was going to say, you've only just seen it!

I mean, you can tell after a while.

I've done so many now, you just walk in and think to yourself, that's it, that's what I'm going to do.

But with so many bedsits, this house will now be termed an HMO - a house of multiple occupancy.

That will mean complying with a host of rules and regulations,

such as installing fire doors and fire alarms.

Give me an idea of the kind of money you can expect?

-In between £50 and £60 per room, per week.

-Talk me through the numbers.

What are you going to spend and stuff like that?

I looked at it this morning.

Initially, I was thinking...25, but it doesn't really need that.

It's going to be about 15 to 20. 20 maximum.

Let me work this out - at seven letable rooms had £50 a week, that's £350 a week, £1,400 a month.

-It's about £17,000 a year.

-Yeah.

-That's a good return.

-A very good return, yeah.

It's like a 14, 15% return.

Yeah, that's very good.

They should know what they're doing.

These brothers own over 100 properties,

their own building company - which will do the conversion - and their own letting agency.

So, it seems this family business has all the necessary bases covered to make this a workable investment.

Well, there you go. Terry obviously knowing exactly what he's doing.

And if you've got any doubts that now's a good time

to invest in property, listen to the professionals.

He's going to get approximately a 15% yield on this place.

Where can you get that at the moment? Certainly not at the banks!

How is he going to get on? There's work to be done.

Will it be as easy as he makes out?

Find out later in the show.

For the next property, I'm visiting an area near the River Itchen in Southampton.

It's in the suburb of Bitterne and it's on Athelstone Road.

Just off this busy main road is today's lot.

It's a three-bedroom semi-detached house and the guide price - 130,000.

Let's see if it's worth the money.

The name of the road, Athelstone, derives from an old English word, meaning "noble stone".

But from the front here, there's not much that lives up to that.

There's moss on the roof tiles and wear and tear.

So, it's not off to a spectacular start.

Well, my first impression of this house once you walk in, is that it's really tired and dated.

And you can see the previous owner has left a lot of possessions

lying around, so it's quite hard to see some of the rooms.

But what I do like about 1920s houses, is that you get

big, big spaces. You've got two lovely reception rooms here.

But I can detect Artex - everywhere! On all the ceilings.

That's something I'd have to address.

But at the back of the house, you've got a really nice, long galley kitchen -

bit dated, you'll have to update.

You've got enough room at the end to put a table and chairs.

But what I'm really like about this room is that cracking little view over the River Itchen.

That's the real selling point here - those views.

People are prepared to pay a premium to look out over the river.

But something buyers do not like paying for is problems - and there's a fair share of those here.

There's the crack in the ceiling, for starters, and also signs of damp, throughout.

Upstairs, we have got this really nice light landing area.

That's down to this lovely, big, sunny window.

The box room, again, with the fantastic view and two really good-sized doubles.

The bathroom suite - avocado - it's got to go. Replace it with something white.

And in this room, you've got a really nice-sized double bedroom.

It would be lovely to see these stripes stripped and this room

painted and something more contemporary and modern.

These stripes aren't the only thing to go.

The heating here is by old storage heaters and gas fires,

so you'd have to consider installing new central heating.

But the bones of this place are solid.

Get past that dated decor, and you've got the makings of a well-configured family house.

And we haven't gone outside yet!

Here's the back garden. You may think it's really interesting,

with all these little paths and winding walkways,

but let's not forget, this is a family house

and this garden could be a very difficult space for kids to play in.

Next door have taken all the flat land by the looks of things.

To get this levelled out would be a very expensive job.

But in my opinion, worth thinking about.

What really sets this garden off, though, is that view.

But just to let you know, folks, it's a winter view only.

In the summer, the leaves will be back and the view will be gone.

This must be one of the few properties I've visited on the show

that has me longing for the cool days of winter! Back to the house...

The back looks very much like the front, everything needs some work.

And though that rendering isn't easy on the eye, it is, at least, low-maintenance.

I asked a local estate agent to come to the house and tell

me more about the potential

for properties like this around here.

People pay a premium to live in Bitterne,

cos it's a nice family area.

Predominantly made up of older properties.

There's also good travel networks into the city and on to such motorways as the M3 and M27.

So, the area seems to have something going for it.

But is the house equally appealing?

And what's needed to maximise its potential?

My first impressions of the property, lovely older style of house.

Good-sized bedrooms. Does need a little bit of upgrading.

Generally, it's a little bit tired.

The house was guided at 130,000, but how much could it be marketed for once refurbished?

These houses, once renovated, are worth approximately £185,000.

A potential profit, then.

How much could it achieve in rental?

I think you'd look to rent this out around £700 per calendar month.

This little 1920s house is in good order.

It does require work and it needs a new kitchen and bathroom,

but it's in a desirable area, with great views from the garden.

And the guide is realistically set at 130,000.

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

Number 21 in your catalogue.

Somebody prepared to start

at just 110,000?

You do, sir. 110, we have.

112, here in the front. 112,000.

114's bid in the back.

116? 116, here in the front.

118, we have got.

120, in the front.

122? No? I'll do a one now if that's going to help you. 121, we have got.

Fresh bid, at 122.

123?

123. 124?

124,000. It's against you now.

125 is what I need.

No, back in at 125. 126, thank you, sir.

127? No, you're out?

£126,000, then, with you, sir.

126,000. 127.

Now we're talking. 127.

The gentleman's back, at 128.

128.

129? 129.

Gentleman's back in at 130. He looks committed! 131.

No? You're out. You sure?

They're out, sir. It's with you at 130.

I have 130,000 on Athelstone Road, then, for the first.

I have 130,000, for the second.

I have £130,000, for the third and final time.

Your property, well done. Your number please, sir?

After that battle in the auction room, it was retired couple, Roger and Lindsey, who emerged victorious.

They got this property for spot on the guide price of £130,000.

-Roger and Lindsey, congratulations!

-Thank you.

-You pulled it off.

-We did.

-You got it for the guide price?

-We did.

-Well done!

-Very lucky, yeah.

-So was that the first auction you've ever been to?

-No.

We've been to about five or six?

-Yes.

-Over the last year.

So how much would you have gone up to? I love asking!

You may not believe this, but I was stopping on 130. I wasn't going further.

You got it bang on the guide price.

On the nail, yes. That's where I had decided to stop.

The other two people backed out, so that was it.

That was the crunch, 130.

So Roger, why was this the right house?

Because our son lives about three streets away.

And is just about to have some work done on his house,

which means he's going to have a lot of demolition done.

So we thought it would be a good idea if they move into here while the builders are in.

My son has got asthma and, of course, little children, as well.

The youngest grandson, he's 18 months.

And they've a four-year-old and a seven-year-old.

And, quite honestly, three children, his wife's very good, but I'm sure she'll be glad to get out.

Building works can be very messy affairs, so Roger and Lindsey are

definitely providing their son and his family with a great alternative.

But there's another personal reason for buying this house.

Were you looking for property for them? Or it just fell into place?

Just happened to fall into place.

I really wanted to have a go at doing a property myself.

I'd done my own house up a few years ago and I thought, when I retire, it will keep me out of mischief!

-Now Lindsey, do you agree with that?

-Yes!

She'll be like, "Go on then, off to work! Off you go!"

Yes, "Out my way!"

Is this something Roger's wanted to do?

He has. Since he's retired last year, he's always said he'd like to do something in property.

And DIY, he's very good at.

So, this is ideal.

Keep him out of mischief!

-You're raring to go, aren't you?

-Absolutely. Toolbox is ready!

# I spent a lifetime

# Waiting for the right time... #

Well, it's time for all the talking to stop and for Roger to prove himself.

This house certainly provides plenty to test his DIY skills.

# It's now or never... #

The couple plan to install a new central heating system,

replace the double-glazing and put in an updated kitchen and bathroom.

As for those cracks, a survey has revealed no subsidence here, so no structural changes are planned.

But there's still a fair amount to do and the couple have given

themselves a comfortable 30 grand renovation budget.

Are you going to get involved, Lindsey?

I shall be helping, probably labouring a little bit, and doing the gardening.

And just supervising, now and again, probably.

-You've made that clear, have you?

-I've made that clear, yes!

Though looking at the state of this garden, I think Lindsey may have drawn the short straw here!

Their son's family plan to move in, but it's got some way to go before being child-friendly.

And the slope rather restricts their options.

I don't think we'll be doing too much to it, but generally give it a tidy up

and there's an old air raid shelter, which to be honest, I didn't know was there when I bought the house!

-Oh wow!

-I had a survey done, and they said, "What are you going to do with the air raid shelter?" Oh!

"What air raid shelter?"!

That's right down at the bottom of the garden, so maybe it'll be safer to get that demolished or filled in.

It seems that Roger's going to do what the Luftwaffe couldn't - demolish the shelter.

But as for the rest of the house, well, Roger and Lindsey hope to have it ready in three months.

Though I reckon they might get a bit distracted by looking out the back window!

What about that view? What about that winter view?!

-Fantastic. Well, I'm a sailor, myself.

-Are you?

Looking at that view, which wasn't there when we came to look a couple of months ago.

A lot of leaves have fallen off since then, so we've got an even better view now.

-I think that's an added bonus to this house.

-That's right.

And this morning, up with the blue sky and the yachts moored out there, it's really lovely.

And you know it's not going to be built on behind, that's one good thing.

What a fantastic story.

What a lovely couple.

Roger and Lindsey have their first project and helped their son,

daughter-in-law and grandchildren out with a temporary new home.

You can find out how all this pans out later on in the programme.

Coming up - there are a lot of good things in this one-bedroom flat in London.

But the biggest thing in this property is these two great sash windows.

Back in Southampton, has Roger's renovation been going strong or has it made him go weak at the knees?

In December, I had a total knee replacement.

But first, in Cardiff, has this run-down three-bedroomed house become a lean, mean, rental machine?

We return to Roath in Cardiff now.

Seasoned developer Terry bought this spacious three-bedroom end-of-terrace for 88,000.

He and his brother Geoff have a portfolio of over 100 properties and this was their latest addition.

The plan was to convert it into several bedsits. And the cost?

Initially, I was thinking...25.

But it doesn't really need that.

It's going to be about 15 to 20. 20 maximum.

With all their experience, that could be possible.

But there was a lot of work to be done to make this place a rental heaven.

Four months later, we returned to see if they'd

created another impressive addition to their portfolio.

Well, from the outside, not a lot has changed,

apart from a fresh lick of paint.

But, head inside...

The clutter has now vanished from that large front room

and it's been transformed into a light, airy space.

And at the back of the house?

Well, a proposed communal area definitely looks more inviting.

It seems that, so far, Geoff and Terry have cooked up a good little renovation here.

From start to finish, we've completely changed the whole house.

From kitchen to bathrooms, to bedrooms and downstairs, everything's had a complete change.

And when Terry says "downstairs", he does mean downstairs.

The cellar has now been converted into a spacious communal area.

So what about upstairs?

One of the major changes in the kitchen, we took the chimney stack completely out, down to floor level.

This enabled us to extend the kitchen and create a bathroom downstairs.

And the bathroom upstairs? Well, as planned, that is now a good-sized bedroom.

But up front, with the help of a partition wall, that large room has become two smaller rooms.

Everything's in good decorative order, though some might think it a bit too snug.

Reconfiguring that middle bedroom has created space for a shower room on the landing.

So far, pretty impressive.

But getting it done on time was down to brother Geoff's project managing skills.

I'm just amazed how we got it finished in that 12 weeks.

He said it would be 12 weeks. I thought it would be four or five months.

And we got it finished exactly on time.

Actually, two days before we were meant to finish.

Here and there are signs that the plaster's still drying out,

but that's a minor quibble in a transformation that,

given the short time spent on it, is really impressive.

But Terry's contribution to this project is also important.

My job was just basically designing and making sure that

the kitchen goes in the right place, the bathroom goes in the right place.

Once that's done, the builders come in. We just make a plan,

"That's what's to be done." I just come from time to time to check it's being done.

With over 100 properties on their books,

the experience of reconfiguring the layout has proved invaluable.

Creating a clean, low-maintenance environment will also mean low overheads in the future.

One of the things I've learnt with student lets is easy maintenance.

As you can see, we've taken all the grass, we've taken the shed from the back.

So there is completely no maintenance.

With seven bedrooms, this property will now be termed a House of Multiple Occupancy, an HMO.

Fire doors and fire alarms have been installed

and there are enough bathrooms and toilets to satisfy requirements.

The only snag is that the kitchen will need another sink.

Not a big problem, but with all this work, how did the budget cope?

We gave it a budget of 25,000.

We then decided to take out the chimney breast, the stack, from ceiling to floor.

And we decided to tank the cellar.

That wasn't in the budget.

But other things went better than we thought, so we still came in

on budget, slightly over by, perhaps, a few hundred pounds.

Still, pretty good going at this level of renovation.

They also incurred another expense - but one they wanted.

We've recently bought the freehold for 4,700,

which, I think, is absolutely fantastic.

Getting the freehold at such a great price has immediately increased the value of the property.

Add that to their renovation costs of 25,000,

plus the house price of 88,000, that takes their total spend to 118 grand.

Time now to ask two local estate agents

what they think of the brothers' renovation.

My impressions are very good.

I'm impressed with the way he's actually improved the property.

He's obviously spent a considerable amount.

I think the property has been renovated to an average standard.

It's neutral throughout, so it can suit all types of people.

They have done a considerable amount of work to the property in a short period of time.

It's very presentable and will sell or let very quickly.

Although the brothers have designed this as a seven-room bedsit,

the agents feel that the front room should be a communal area.

This would make it a six-bed house, so what would the rental return on that be?

I would be looking at renting each of the rooms at 250 per calendar month.

You would probably be looking at £250 a room, so six rooms, £1,500 a month.

They're pretty close. We've actually just rented it for 1,600, per calendar month.

It was on the market for one day and the first viewers came and we've just signed them for one year.

That would give the brothers a whopping 16% yield, even if it was just a six-bed.

Remember, their total outlay on the house was just under 118,000, so what could it achieve on resale?

I'd expect to market the property at 225,000, with any offers over 200 being considered.

I would expect to achieve 215,000 for this property.

I expected it around the 200, but, you know, 200, 215 is, literally, fantastic.

That would give the boys a potentially impressive pre-tax profit of just under £100,000.

So this rental machine will soon be earning its keep.

This is Maida Vale in West London, just north of Paddington.

It really is a delightful spot.

The poet Browning actually had a house overlooking the pool

where the Grand Union and Regent's Canal meet here.

He was so inspired by the area he named it Little Venice.

Well, it's lost none of its charm and it really is an oasis in the centre of London.

This isn't an area with a chequered history.

It always was, and still is, a hugely-desirable place to live,

with grand mansions sitting alongside narrowboats.

It's a perfect hidden idyll.

And with a good selection of atmospheric old-fashioned pubs, what's not to like?

Well, just steps away from the Tube station of the same name,

you have Warwick Avenue, made famous most recently by the Welsh songstress, Duffy.

And, of course, the street is well deserved of a song of its own.

It's beautiful. Just look around. So what am I here to see?

Well, it's a one-bedroomed first-floor flat at a very appealing guide price of 165,000.

# When I get to Warwick Avenue... #

These attractive, early-Victorian terraces are typical of the area. Believe me, by London standards,

165 grand is a snip, compared with what you'd normally pay for this location.

So, not a bad little entrance foyer there,

but then straight into the flat and you're faced with...the loo.

Quite unusual for a one-bedroomed flat to have a separate loo but it does take up a lot of space,

probably at the expense of other parts of the flat.

We'll explore that in a sec.

Into what, I suppose, is your living room.

It's got a gas fire, probably need upgrading, but you could make a centrepoint.

Reasonably high ceilings and then I like the way it's been divided off.

This is actually your kitchen.

It's in a right old state, clearly in need of total refurbishment.

You may take down this wall, make it open-plan.

But the biggest thing in this property is these two great sash windows.

Loads of light pouring in and it gets better than that.

Because out here, you've got use of this absolutely delightful little private terrace.

This is rather special.

With its original iron railings and enough space for a chair or two,

it's perfect for people-watching and taking in the afternoon sun.

Slightly less perfect is the bedroom.

It's a reasonable size and has its own sash window, which is good, but it's an odd raised area which

makes me think maybe the plumbing has been laid clumsily underneath.

And I was right. That separate loo does eat into the space.

So this is the bathroom and actually, good news, because there's a lot of wasted space.

You've got this cupboard here.

There's another there, housing the hot water cylinder.

If you stick a new combination boiler in, you can get rid of that,

create lots of the extra space, move your loo from the centre of the property in here -

it's on an external wall, so you shouldn't have problems with the soil pipe -

and then you're going to generate yourself a heck of a lot more space.

Absolutely perfect.

So, we're back to perfect again.

But there's still a lot to do here, most of it about getting this space to work for you.

I asked a local estate agent along to tell me about

the potential of this one-bedroom flat in Warwick Avenue.

It's not the biggest flat in the world, but I think with the right eye

and a good builder, it could be a very nice little one-bed.

You don't want to overspend on this type of property, because it's not a

big flat and you don't really want to be putting a Porsche engine inside a Ford Mondeo.

I'd be looking to spend around 25, I think you could be quite a good job with 25,000.

But still, on top of that £165,000 guide price, the flat would still represent a good buy.

What could be achieved on the open market?

In its current state, I'd value the property at 275,000.

Once the work is done I'd expect to achieve 330,000 on the open market.

As a letting valuation, you'd probably be looking at anywhere from £320 to £340 a week.

Make no mistake, this is a hot property.

That guide price, I think, set deliberately low, just to attract attention.

But who couldn't be touched by the appeal of the area?

The flat itself needs a bit of work,

but I'm sure it's one that sailed away at the auction.

Lot 10, Warwick Avenue. Over to you. I think I've got a low reserve.

Is somebody going to start off punchy? 215. 220.

225. 230?

250.

A great bid, well done.

Lay it down. 251.

It's not going to make any odds, is it? 252. Good bid, though.

251 down here. 252, anywhere? 252.

253. 253. 254.

Anyone else? 253, anywhere else? It's going down here.

Are you together? Blimey.

In all this room, everyone there and you are together.

How much? 254. 255.

256. 257. 258.

257, 258. Anywhere?

257, with you. First time, 258. 259.

259, down here. 260.

260, well done. 261, sir?

260, anyone else, down here?

First time. 261. 262, madam.

261, with you, first time, second time, 262.

263? 262, in the front, first time,

second time, third and last time, are you all done? 264.

265. 266.

265, in front, first time, second time, third and last time, 266.

266, with you now. 267?

Yeah? 267. 268?

With the lady, 267, first time, second time, third and last time...

Well done, 267. Well bought.

The winning bidder of that hard-fought battle was Paula.

She's a first-time buyer, who had her heart set on this one-bed in Warwick Avenue.

Originally from Romania, Paula has lived in London for four years since finishing her Master's degree.

She now calls the city home, but I wanted to know why she chose this flat.

-Paula, congratulations.

-Thank you very much.

You've got a gorgeous flat in a lovely location.

-It's fantastic, indeed.

-Why did you decide to buy at auction?

I started looking exactly a year ago and I remember having a wander

in Little Venice and I decided, this is where I want to live.

I found it very frustrating to deal with estate agents and not be able

to negotiate with the sellers, so I thought I'd try the auction.

How did it turn out? Because it seemed a bit frantic

and the price just went up and up and up and up and up.

I hadn't been to an auction before, so I had, literally, ten minutes to learn how it works.

So I got in and there was this massive room,

with hundreds of people and I felt very small and very nervous

and then it was Lot 10 and everything goes really quickly,

so I had, literally, five, ten minutes to figure out,

"Oh yes, I have to raise my hand and I have to shout my price and

"he has a gavel and he bangs it three times before that's it, all is gone."

You didn't even know that before you went there?

No.

But it was a lot of work I did prior the auction.

I did my homework before.

Paula may be inexperienced at auctions, but feels she paid the right price for this property.

For her, this is not just a way of making a fast buck, but somewhere to make her home.

The location suits her as it's only a 12-minute journey to her work.

She's in procurement for the Royal Mail, buying anything from planes, trains to automobiles.

Is she going to sort this place out special delivery or second-class snail mail?

There's nothing special about it.

I think it has potential.

-There's a lot of work to be done, but we'll see.

-What are you going to do?

Loads of things. Shall we start with the bathroom?

I have a budget and the plan for the bathroom only.

It'll have the feel and the look of a spa.

I'll have small luxuries, like underfloor heating and a spa bath

-and...ceiling speakers.

-Wow.

Do you spend a lot of time in the bathroom?

I think it adds value to a property.

With the bargains you can get today for tiles and bathtubs,

it's a pity not to do it, really.

Paula also recognises that reconfiguring the layout would make this place more desirable.

So her plans are to move the toilet into the bathroom, create a walk-in wardrobe in the old toilet area

and take out that dividing wall, to create an open-plan kitchen-living area.

In terms of the work inside, have you had quotes for that?

Yes. The most expensive was £29,000.

-To do what?

-To do the whole place.

What I decided in the end was to do it in chunks, so I'll start

with the bathroom and then move into the bedroom and to the living room.

I envisage to spend about £15,000 in total.

Paula seems to have got her teeth into this particular project

and hopes to raise this place from the dead in six weeks.

Do you bring any of the skills from your job into the purchase?

Oh, absolutely.

I'll have a contract with the builders, a service agreement and...

Great. More people should do that.

Write it down, what they've said to you, what they have agreed to do, how much they'll charge.

Yes, I have everything in writing and if they

give me a quotation I'll ask them to break it down and include all

-materials they're going to use, where they're going to source them...

-Ha!

..quantity, all of those things.

This is exactly what budding developers should do so, they aren't hit by unexpected extra charges.

It seems that Paula is a tough cookie, who won't get bamboozled by any dodgy builders.

But there is another way to save even more.

DIY? Any experience of that?

Have you done up properties before?

No way.

-Are you going to be getting your hands dirty?

-No way.

You're just going to oversee, tell people what to do?

Not even, I'll call my mum in.

-Your mum in?

-My mother.

All the builders would be really scared of her.

I trust her with my life.

She'll come over and will manage the project.

Well, good luck with it all and I hope it turns out just as you want.

Quite an experience for Paula's first venture at the auctions.

And yes, she paid well over the guide price, but I think

she's got herself a lovely home here and that's all that really matters.

With her organisational skills and the help of her mum,

I'm sure she'll do a great job at making sure she gets a good job done by those builders!

Find out how she gets on later in the show.

In the property world, time is money.

If you want to make profits, you've got to work quickly and get the job done.

Have our owners finished their projects, or is time their enemy?

Let's go back and find out.

Earlier, we met retired couple, Roger and Lindsey, who bought this

run-down three-bed semi in Bitterne, Southampton for £130,000.

They were planning to renovate and use it as a temporary home for their son and his family.

But for Roger, there was also a chance to pursue his dreams of refurbishing a property.

Seven months later, we return to see if it's now a dream home or a nightmare on Athelstone Road.

The house still looks like it's in a deep sleep.

There's no sign of curb appeal yet and when you head inside,

again, there's no evidence of any renovation work taking place.

But as Roger explains, there has been an unavoidable delay.

In December, I had a total knee replacement,

so I've been a few months getting back to strength.

It was twofold, really. My son has used the house to store

furniture and goods etc while he's had his house renovated.

As he was able to work around the builders, Roger and Lindsey's son

had decided not to move in, taking the pressure off Roger getting the renovation done.

That gave him time for his knee to heal

and also provided an opportunity to think about the layout.

Out here, once I've got the new roof on and the double glazing,

we're going to knock the extension down here and build a new extension right across the back

and open up with a nice, big kitchen living room, really.

It should all fit in very nicely and I've talked to the neighbours

and, apparently, they're going to extend across the back, as well, so it'll all conform quite nicely

and the whole thing should look really good.

Once this garden has had its makeover, the new extension

will definitely provide a great place to sit, relax and take in views of the River Itchen.

Remember, winter only, though!

Inside, there's another welcome addition for downstairs.

One of the main considerations that I've got here is to put a downstairs toilet in.

This was just a cloakroom previously, with a meter cupboard, so I've just plonked a toilet and

sink in at the moment, just to see how it fits in, and, yeah, I think I'll have plenty of room for that.

It should be good.

Roger didn't see the renovation budget extending beyond his original £30,000 estimate.

That would take the total bill to 160,000, plus the usual expenses.

Even though seven months have passed since buying the house, he's still relaxed about getting the job done.

I'm in the position really where there's no real big hurry.

The fact that property prices have not moved, there's a lot

of properties out there to let, so I'm happy, really, just to wait for the property prices to rise.

But will the agents think it's time lost on the investment?

Remember, Roger and Lindsey

bought the house for 130,000 seven months ago.

So has the value of this three-bed semi changed in that time?

At this stage I'd say that the value hasn't increased, whatsoever.

Obviously the potential is there,

but at the moment, it's looking on a par from when I first saw it, a few months ago.

The main thing I'd say to get as much value out of the property,

is make sure that the refurb is done to a good standard

and not just your basic refurbishment.

To achieve as much as you physically can, go that little bit extra.

Roger and Lindsey are planning to spend 30,000 on the renovation,

which would take their spend on the property to £160,000.

What could they achieve on a resale?

The figure I'd value the property, once the work has been done, would be around about 184,495.

You're probably looking at an asking price, once it's fully refurbished, of about 180,000 to £185,000.

That sounds good.

That's round about the sort of area that I thought of.

If I make 20, 25,000, I shall be more than pleased.

Far more than it would have made in the bank.

And what could the rental income be?

The rental value on this, once the work has been done, would be 775 per calendar month.

You're looking at around £800 per calendar month.

To sell or rent?

When the renovation is done, Roger and Lindsey will test the waters

of the resale market to see if their first property will sink or float.

It's taken a long time to get there, but after all the hold-ups,

is Roger still keen to make this new venture work?

I think it's a hobby, so it's not dead serious.

But at the end of the day, obviously, I've got to be serious about the money.

But I'd rather do something with it, with something I like doing,

rather than just sitting there earning money in the bank.

So, I shall probably have another go at it.

# When I get to Warwick Avenue... #

And that's where we were earlier, in Warwick Avenue, Maida Vale, north-west London.

Here we met Paula, who bought this one-bedroom flat for £267,000.

Originally from Romania, she was well prepared for her

first dip in the property market, but not for quotes on a renovation.

Most expensive was £29,000.

Huh! To do what?

To do the whole place. I envisaged to spend about £15,000 in total.

Well, it is just a one-bedroom flat, but with great views up and down Warwick Avenue.

I don't think this place will break her heart, but it might have broken her budget.

Three months later, we've returned to see what Paula has managed to do.

And the result?

Tearing down that kitchen wall has transformed what was a shabby

lifeless lounge into a more open and stylish kitchen living area.

And the bedroom?

Well, this is a far more relaxing, elegant room.

What about that bathroom?

The bathroom was actually the biggest change in the flat.

I had to change all the planning.

As you can see, I changed the layout completely.

Obviously I added little things, luxurious things, like a sound system, underfloor heating.

A towel heater and a shower head.

So, all good. I'm really pleased with it.

Back in the bedroom, there has been one very important change.

As you remember, there was a wall here.

There was a loo with a door from the hallway.

That has gone from there.

I've turned the space into a wardrobe, which is fantastic.

I didn't have enough storage space before.

This, you know, does...look,

it goes all the way back and it's great.

I think Paula's alterations have made the best use of space in this small flat.

She can be very proud of the final result.

But getting to the finished product was not her idea of fun.

I enjoy things being developed.

Transformed. I enjoy the end result.

But I wasn't patient enough to stay here and help the builders, for example.

I tried for a couple of days and gave up. It's just not for me.

I'll not touch a brush or anything.

Well, Paula may have struggled to understand DIY, but she was lucky enough

to find a team of Romanian builders, who did this fantastic renovation.

By the sound of it, a bit more, as well.

The builder picked the colours, the furniture. Everything, basically.

It made my job really easy.

They've certainly done a great job in creating a stylish flat,

but that's only half the story.

It was still up to Paula to make the finances work and stick to her £15,000 renovation budget.

Everything that you see in here cost about £20,000.

That includes furniture and kitchen equipment, everything.

She may have been £5,000 over the original estimate, but considering she had a

higher quote of £29,000 to achieve the same renovation, I reckon Paula has done extremely well here.

But then with her background in buying for the Royal Mail, she knows

all about the haggling process and the savings that can result.

I just found the right places to go.

I went to clearances for houses.

I looked for deals. For example, the work top, it was in a state.

It needed a lot of work, but I got it for £50.

The same work top, you buy it in a place with a name,

the branded places - £400.

So, that's how you save money.

Paula bought the flat for £267,000.

But she had to add a seller's fee of 2%, which took her costs to just over 272,000.

Add that £20,000 spent on the renovation,

plus other expenses, and Paula's total outlay is now £300,000.

For a first investment, that's a pretty big commitment.

Paula seems to have navigated her way so far without any problems.

But now the flat has to face its toughest test.

My mum hasn't seen the property. She's coming in a couple of days.

I'm quite nervous about it. My mum will like the property,

but she'll think it's a bit too small...

So, we'll see.

Well, her mother's opinion will be important to Paula.

But it's the property market that will decide if her flat's a winner.

So we asked two local estate agents to tell us what they thought of this renovation.

My first impressions are very good.

The transformation is incredible, actually.

New kitchen, new bathroom, wooden floors.

Just the little touches on the wallpaper.

It's looking very good.

I'd think it's very good.

Lots of natural light, which is important in this area,

cos people like outside space and you've got that at the front.

Well proportioned, nice colours. Very good.

The size of the reception is just about big enough.

By taking down that wall, she's brought both windows into play,

so when you walk in, you get a "wow" factor,

there's more light and you can see the balcony.

So I think it's a winner as far as I'm concerned.

But will the returns match their enthusiasm?

Remember, Paula spent £300,000, so what can she expect to sell the flat for?

I'd probably put this on the market for an asking price of somewhere about 375,000.

I'd put it on the market for 370,000 and I'd expect offers anywhere in the region of 360 upwards.

That sounds fantastic.

I really, really didn't expect it.

I'm not surprised. In just three months, she could have made a potential pre-tax profit of £65,000.

Will the rental figures make her even happier?

For rental, very attractive.

You'd be looking in the region of £1,500 per calendar month.

Per calendar month? I think it would achieve in the region of £1,500.

Wow! That's fantastic! Because...wow!

My mortgage is £720, so that's amazing.

Paula's first dip into the property market has proved a real success.

With the help of her builders she has created a cool, contemporary London flat.

She's quite clear about the reason for her success.

Obviously, I got something right.

So, yes. Buy it at auction, be clever about it, work hard

and everybody can do it. Anyone can do it.

Paula was lucky when everything hit the mark.

She bought a run-down flat at the right price and definitely in a desirable part of London.

Also, she did her research and make the figures work for her.

In this case, there will be no broken hearts in Warwick Avenue.

That's it for today's properties.

Join us next time for more Homes Under The Hammer.

Subtitles by Red Bee Media Ltd

E-mail [email protected]