Episode 64 Homes Under the Hammer

-Welcome to Homes Under The Hammer.

-The UK is obsessed with property.

-And nobody more so than Lucy and I.

-It's a favourite dinner party topic and everybody always has an opinion.

It's our opinion that there's no better way to buy your property than under the hammer.

The auction catalogue can give you clues about a property,

but it's not until you see inside that you can tell if it's a potential gold mine or a money pit.

It's up to you to do your research and dig below the surface of your possible investment.

Let's see what's on offer on today's show.

'You could change the decoration in this Marlborough maisonette.'

But that is much more serious. What's going on there?

'In London, this first floor flat has really spooked me out.'

Unless there's a ghost that's been taking showers here, I think there's been a leak.

'And the kitchen and dodgy colour scheme in this Derby bungalow are the least of your worries.'

Some remedial work required.

'All of 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 Marlborough in Wiltshire on the old main road between Bath and London.

It wasn't always as pretty as this.

The whole place was virtually destroyed in the 1600s by a fire

which led to an Act of Parliament banning thatched roofs.

But when they rebuilt it, they created one of the widest high streets in the country,

a perfect place for the market still held here twice a week.

So what does the property market have on its stall?

Marlborough is picturesque, but not too quaint and chocolate boxy.

It's still a busy trading route as it has been over the centuries.

And its history is never far from view.

The property is just off the high street which is a good start.

It's a maisonette over three floors and it's got four bedrooms.

It was guided at £210,000 which for round here is sounding like a bit of a bargain.

But there is a negative and you can see it.

It's situated right above this Indian restaurant.

You might like curry, but you get noise from the people visiting and also smells from the restaurant.

The other thing is no parking. Still, maybe it's got good things going for it.

The entrance is round the back.

Down this alley and hello, the entrance is next to the church.

At least the neighbours will be quiet, but it's not exactly an ideal start

unless you're a bell-ringer with a love of spicy food.

You've got a little entrance area down there, then up on to the first floor

and the first of lots of little rooms - a toilet in one of those,

then through into what feels like a reception area.

That's because it was, until recently, a natural health centre.

But it's just had change of use, so you've now got planning permission

to convert this into a residential property, but there's work to be done.

Thankfully, a lot of the character of the building still remains.

Look at this room! Look at that ceiling! You've got a half-timbered look, but look at the bulge.

Hopefully, that's just historic and it adds to the character. Fantastic fireplace.

Couple of issues though, first of which, there isn't a kitchen.

There's just a sink in the corner, but outside it's more serious.

This is like a little courtyard area. It's the only outdoor space in the property.

It's quite pretty. You're overlooking the church and the roofs of Marlborough, but look at this.

It's the top end of the extractor fan from, I guess, the Indian restaurant downstairs.

I would contact the council and the environmental health people just to say, "Is this OK?"

And even ask the people in the restaurant if it can be moved because it's not good like that.

It's not just lovely aromas coming from the kitchen. You can also hear the kitchen at work through it.

There's also the constant whirr of a fan in the background,

turning this little piece of outside space into a less than relaxing spot.

However, on the plus side, the square footage here is tremendous.

Next to the living room and that impressive fire, there are two more reception rooms on this floor,

so there is plenty of space to put a kitchen.

While some of the beams look to have been built in the '70s,

there is plenty of evidence of the building's true age elsewhere.

You also get great views on to Marlborough High Street and the church.

Well, onwards and upwards... literally!

Yet more rooms, although no bathrooms up here.

We've got some kind of a bedroom, lots of storage space,

but there's this feeling that the house has been done up in a hotch-potchy kind of way,

especially when you come up here into the attic rooms.

I don't know what's going on with these beams and some of these walls feel like stud partitions.

I'd want to see what's behind there, but then it gets really weird cos look at this.

This is the only way from one part of the building to the other

unless you go downstairs through the living room. Very strange.

I'd want to investigate that wall, maybe take bits of it out, reveal what's underneath there

because it's a really characterful place. And another set of stairs down into the living room.

Weird!

If the strange layout doesn't make you feel disorientated, the decor in some rooms certainly will.

If you're so inclined, you could do laps of the whole property round in a circle

up one set of stairs and down the next.

It will keep you fit, but it's not ideal if you want a family home

which is a possibility for this maisonette as it has four good-sized bedrooms.

But bear in mind this is Grade 2 listed which could restrict any alterations,

so this could prove an expensive and challenging project.

I invited a local estate agent along to get her opinion

about the best refurbishment options for this unusual building.

Well, I think the property has an awful lot of potential.

It could be divided into flats or it could make one really good family home.

Some negative points might be the factor that it's over a restaurant

and obviously being in the market town, it has no parking.

As the plumbing is only on one side of the property

and none on the first floor, there is a lot to tackle here.

It would be a really good idea to turn it into flats.

There's a tremendous market for flats within the High Street of Marlborough.

How much rental income could the flats achieve?

If we were going to rent out the flats, I think a one-bed could achieve £500 to £550 per month

or a two-bed at as much as 600 to 695 per calendar month.

The maisonette went to auction guided at 210,000.

How much could it be worth once renovated and converted into one large family home?

This property could be worth, once it's been turned around and done up, 275,000.

So, two clear options - conversion into flats to generate income

or remove the stud walls and open the whole place up into a fabulous family home, but without a garden.

So, a property that oozes character, a great location and an attractive guide price.

Not without its downsides - no parking and no garden, and you've got that Indian restaurant.

Still, let's find out who took it away at the auction.

OK, No.10 is 47 Kingsbury Street, Marlborough.

It's on the first and second floor. Lot of space, as you can see.

Start me at the guide? 210, somebody? 200 then?

£200,000. OK, we'll start there at 200.

And 5? It's at 200. 205, somebody, please?

At 200. 205. 210.

215 may I say? At 210.

215. And 20, if you will? At 215,000.

220, is it?

220 over the far side there. At 220 now. I'll take 5?

Nearly there. At £220,000 on the wall there.

Give me 5 or 2. Otherwise, it's £200,000 over there for the first time...

£220,000 against you for the second time.

And £220,000, third and last time. Are we done...?

-Your number is...?

-3.

-3, sir. Thank you very much.

'Richard made the winning bid of 220,000, but when I visited the property to find out more,

'it was Wendy who I met.

'She lives two doors away and is a psychotherapist and counsellor.

'She'd been looking for somewhere local to buy. I met up with her to hear her plans.'

-Wendy, congratulations.

-Thank you.

-You've got a very interesting property here.

-It's great.

-I didn't see you at the auction.

-I was there, but I was standing away from Richard.

-I got Richard to bid for me.

-Who's Richard?

Richard is a friend who came to see the property when I was first interested. He's a surveyor.

He had a look round. Then I felt very nervous going into the auction

and somebody said, "Why don't you get somebody to bid for you?"

But also I had made an offer to the owners before that for 250.

-Oh!

-And I repeated that offer a couple of times and they kept saying no.

-Ha!

So I withdrew the offer a week before the auction and decided to get Richard to bid for me.

It was just a tactical thing.

-You must be thrilled to bits that you've saved £30,000.

-I'm really pleased.

'Wendy had come for a massage at the therapy centre

'and that's when she fell in love with the property.

'It was put up for sale in 2007 for £370,000

'when there was a lot of interest, but no buyers.'

Then it went to another agent. They brought it down to 225, hoping that people would be very interested.

Apparently, there were lots and lots of viewings,

but people were put off by the Indian restaurant underneath.

-It's a problem. You've got a big vent outside your window.

-Yeah.

-Do you like curry?

-I do, fortunately!

Ask me in ten years' time. I might be sick of it!

-But to have that extractor fan outside your window can't be...

-I don't know what can be done.

-I'll be shutting the windows a lot.

-That's your little outdoor area.

I'm going to screen it off at least, put a fence out there to make it look nicer.

'I think Wendy needs to do a little more than put up some fencing.

'I'd advise her to contact the restaurant and see if they can route the vent in a different direction,

'then she could enjoy that bit of outside space.

'Although she's got two girls of four and eight, she's not worried about the lack of garden

'and has been living without a parking space for two years.'

-It doesn't have various things like a kitchen.

-A bathroom.

-Small points(!)

What are you going to do to change the house around and make it more of a family home?

I'll turn this central room into a kitchen-cum-dining room.

I love big kitchens and living in the kitchen.

Then I'd like to turn those two rooms into a big living area.

And I'm hoping to open up the fireplace on the other side.

I've got to put two bathrooms upstairs, hopefully, so I have to work that one out with the plumbing.

I'll keep the four bedrooms and make one of them smaller and put a bathroom in and an en-suite shower.

I'll keep the two staircases.

We're hoping there'll be some original oak timbers behind the partition walls.

-Now obviously, it is listed.

-Yes.

-Grade 2 listed. That applies to the interior of the building as well.

-What are you gonna do about getting all the plumbing permissions and approvals?

-I'm not sure yet.

It's got planning permission to have the conversion to residential and for alterations.

I've got to look into the listed buildings consent.

-What about timescales and budgets?

-I've given myself six months, but I'm hoping to do it more quickly.

And the budget for the work?

Between 30,000 and 40,000 I think I've got.

I'll probably budget for 30,000.

But that 30,000 is what you might have had to pay extra to get it.

I know. If I had bought it at 250 or even more,

all I would have done is put a shower in probably and a cooker

and lived like this!

-Congratulations.

-Thank you.

-I hope it's a happy home for you.

-Thanks.

It just goes to show if it's meant to be, it's meant to be

and for Wendy, she's got the place she really wanted.

A few issues ahead - it's Grade 2 listed and moving the bathroom is gonna throw up some real issues.

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

For the next property under the hammer, we've come to South London.

# It's a very special knowledge that you've got, my friend

# You can walk around in New York while you sleep in Penge... #

David Bowie once sang, "You can walk around in New York while you sleep in Penge."

OK, point taken, it's hardly Manhattan,

but you'd have to be a dreamer not to recognise its good points.

By train, you can be in London Bridge in only 20 minutes.

When the East London line extension opens, you'll be in the centre of town in the blink of an eye.

With property prices much more reasonable than north of the river,

who needs New York when you can afford to sleep in Penge?

# You can walk around in New York while you sleep in Penge... #

Penge is a real mixed bag. When fashionable in the Victorian era, grand villas were built here.

Its reputation has rather fallen by the wayside in recent years,

but that fortune could be on the way up again.

So here's a question - what can you do with 55,000?

That's a lot of money, so maybe a loft conversion, put down a healthy deposit on a new home.

The more frivolous of you can think about a second-hand Rolls-Royce

or an 18-carat gold and diamond necklace perhaps.

Well, you can add to that a first floor, one-bedroom flat on Penge High Street.

That sounds like a good deal to me.

A one-bedroom flat 20 minutes from the centre of London

and just steps from the train station in a period building?

Am I dreaming again?

OK, it is on a busy road and the exterior looks pretty worn,

but the stairwell up to the flat seems in reasonable condition, so fingers crossed.

First impressions? Well, for £55,000 I have to say I was expecting this flat to be in a sorry state.

But it's surprisingly well maintained in here.

I thought I'd be walking into an open-plan lounge, kitchen and diner,

but there is a separate kitchen area with enough space for a table and chairs.

It is dirty, tired and a bit grubby in here, but these units and worktop are in OK condition.

With a bit of a clean and a spruce up, I think it could be a decent room. Not bad, good start.

Apart from the kitchen, the hallway also leads to the bathroom, the bedroom and the living room.

All are good-sized, despite slightly odd shapes.

There's central heating and laminate flooring, but it does feel dirty and needs a good clean.

It's not just the outside that's got me worried.

This brown stain could be a heads-up to problems in the flat above.

So in here is the bathroom. Again it's in decent condition.

It's got a nice white suite, but the floor looks a bit wet.

You can see water in the bath.

Unless there's a ghost that's been taking showers in here, I think there's been a leak.

The ceiling gives the game away. That's one problem that just can't wait.

Don't be fooled by appearances. This flat could be hiding a whole lot of nasty secrets.

I'd be straight up those stairs to the neighbours to find out where that leak's coming from.

But remember that the guide price is £55,000.

On the face of it, these issues don't seem too insurmountable.

Before you get carried away with the apparent bargain we have here,

it's important to keep your head and use your eyes.

I've noticed this rather large crack at the front of the building.

That suggests there's some movement here and it's impossible to tell how bad it is

unless you get a surveyor along or contact the freeholder

and find out who would be responsible for the repairs.

If I was going to bid on this property, I'd get a survey done before I went any further with this.

When you look closely, there are cracks aplenty all over the building

and that metal tie needs investigating. Does this flat hide any more secrets?

Let's see if a local estate agent has any further information.

I keep coming back to that guide price of just £55,000 for this sizeable one-bedroom flat,

but is it worth the risk?

My first thoughts were, from the exterior, it looks like it's been neglected.

The pointing is coming out around the windows.

A lot of the bays are twisted on the windows as well.

When a property is that bad, either the freeholder is absentee or he's neglecting his responsibilities.

So they need to make sure their solicitor double-checks that.

Whatever the reason, legal advice is a must for any purchaser

to make sure they know their liability for any repairs.

The flat here is a very good size, amazing size kitchen.

Condition-wise, you could give it a lick of paint

and it would be ready to go, which is surprising, considering the outside of it.

There are water problems coming from the flat above,

so I'd advise anybody who buys it to get that fixed as soon as possible.

What about the potential to make money here?

The flat was guided at £55,000, so how much would it generate as a re-sale or a rental?

If work was done to the property, the outside bits and the freeholder issue sorted out,

I believe the property would achieve £125,000 to £130,000.

For rental, I believe the property would achieve £600 per calendar month.

This little flat isn't a stunner, but its guide price certainly knocked me out.

It needs work and the crack needs checking, but as a rental, this flat really adds up.

Let's see who agreed at the auction.

Flat 213, High Street, Penge, London SE20.

Start me if you will at, one-bedroom flat in Penge, 45,000?

That sounds reasonable. 45 anywhere for Lot 85?

Where? 45 there, your bid. 46? 45 I have.

46 anywhere? 46 there.

47?

47? 47. 48? 48.

49? 49.

50? All right, 51 I'll take. 52?

52...?

52 anywhere else? Your bid at 51, one-bedroom flat. 51,000 I have.

52 anywhere else? With you at 51, a good bid. 52 anywhere? 52.

53? 53. 54?

54. 55...? No. 54 here. Funny place to stop. 54.

55 anywhere? Nobody else? 54 standing, I am selling...

First time at 54,000...

Second time at 54,000, third and last time at £54,000...

Are you all done?

Sold for 54.

'The winning bid of £54,000 was made by Veryl.

'He bought this flat with his wife Phyllis to add to their portfolio of buy-to-lets,

'but for this purchase, he was on his own.'

-Congratulations.

-Thank you.

-£54,000 you paid for this at auction.

-I certainly did.

-Why did you want to buy this flat?

-It was down to my wife really.

She looked in the auction catalogue, she saw it. Then my wife said, "Have a look," so we went along.

'Veryl followed her instructions, went to the auction and started to bid on this first-floor flat.'

So, Veryl, there you were, bidding away, £54,000, hammer goes down...

-How did you feel inside?

-"Oh, my goodness, I've bought it!"

And I haven't seen it, in or out, so I'm there thinking, "Well..."

-Ooh!

-Yes, indeed, "ooh"!

We've just spent the better part of £60,000 and we haven't seen the flat and it's ours.

For better or for worse, but it's ours.

'So will Veryl's wedding vows on auction day lead to a long and happy relationship with this flat?

'I want to know what he thinks about the structural issues and the cracks in the exterior.'

-Did you think about having a structural survey done? Have you spoken to any surveyors?

-Yes.

-I've got a couple of structural engineers' reports.

-What does it say?

What you just said - it's got a crack on it and things like that,

but to put it right should be reasonably straightforward.

How much will it cost to put something like that right?

I'd imagine it'll cost us in the region of maybe about £10,000.

Are you solely responsible to repair that crack?

No, in these cases, it's the freeholder who has to repair it.

But we're thinking of selling it quickly, so maybe we'll do the work if we can get the permission.

'I'm concerned that Veryl's costs may spiral.

'That crack will put quite a dent in his £10,000 budget. He needs to be very careful.

'He plans to spend another £5,000 sprucing the place up, bringing his total to 15,000.

'That will give it a fresher feel without changing the kitchen and bathroom completely.

'He's already spoken to the owners of the upstairs flat about fixing the bathroom leak.'

-How did your wife feel when she came here for the first time?

-She hasn't seen it.

-But it was her idea?

-Yeah, but she's overseas working.

-She's relied on you to explain it all to her?

-Yes.

-I hope I've done her proud.

-So tell me what you do for a living. What's your job?

Well, for my sins, I work on the buses.

-Do you? So you're a bus driver?

-Hmm, yes, sort of.

I'm a supervisor on the buses.

'As a supervisor on the buses, Veryl must have seen plenty of lovely properties from the top deck.

'So what was it about this flat that rang his bell? It can't have been the damp patches or that crack.'

The good thing, I was chatting to the estate agent,

is that it's around about £600 a month rental return which is really good rent for this.

I think so, yes, but we're in two minds at the moment.

If we can get it sold on quickly, we might do that, and if we can't, we'll consider renting.

Why do you want to sell this on quickly?

Well, taking into account what we'll spend to put it right, I think we can make a tidy little profit.

So it all boils down to you, to get the flat ready, sell it, to get a profit?

Most of it boils down to me, but we must never forget that it's her idea first

and it's her inspiration.

-So, four weeks and £15,000 later, is it going to look like a new flat?

-We certainly hope so.

-Oh, good.

-Good luck.

-Thank you.

-It's been nice to meet you and I hope it all goes your way.

-I hope so too.

Well done, Veryl. Thank you.

Veryl took a gamble, but it looks like it paid off big time, although that crack outside is a worry.

In the current climate, he'd be wise to keep hold of this flat for a while,

but will he sort out that leak and find a buyer?

Join me later on to find out.

'Coming up, in Derby, it's not all bad news for this kitchen.'

It should be the focal point of the house and it won't be that hard to turn it into that.

'Back in Penge, we finally meet our international property finder.'

I spend half of my time now in Jamaica, so Veryl was sent to the auction on my behalf.

'But first, we return to this hot property above a takeaway in beautiful Marlborough.'

'Earlier in the programme in the historic Wiltshire town of Marlborough,

'Wendy paid £220,000 for a Grade 2 listed building above an Indian restaurant.

'The unusual property had been a therapy centre and living accommodation,

'but it had consent for conversion into a maisonette.'

-You've got a great big vent right outside your window.

-I guess I'll be shutting the windows a lot!

Like a takeaway order on a Friday night, we've had a bit of a wait.

Ten months, in fact.

But Wendy has now moved in and invited us back to see the result.

Upstairs on the first floor where the massage rooms used to be,

Wendy has created a small sitting room.

And she has converted the space where the old office used to be into a self-contained bedsit.

She hopes that will provide extra income to help with the mortgage.

That large room that had a corner kitchenette has now been restored

and now shows off the original oak beams and a superb kitchen has been put in.

More original beams have been discovered behind the partitions in the two living rooms

and reclaimed floorboards have been installed.

This has been a truly superb restoration of a historic Grade 2 listed property.

Before, when you walked in, it didn't feel like an old building,

so I wanted to reveal as many old timbers as possible.

When we took out the partitioning, we found this wall behind me here. That was really, really exciting.

What a find! And Wendy made another important discovery at the back of this 17th century property.

In here, it used to be a big waiting room.

My idea was to turn it into a nice, open-plan kitchen.

One of the exciting things was to find that fireplace,

which is an original 1600 fireplace.

Eventually, I'll have an open fire in that fireplace there.

I'm really pleased with how the kitchen's turned out.

No kidding! It overlooks the terrace where, for the time being, Wendy has put up a fence.

But she's confident the restaurant will arrange a takeaway.

The Indian restaurant have agreed to pay to move the flue away from my property, so that'll help.

We'll put a board in front of it and I've got a screen. It's really nice and I don't mind the smell of curry.

As you may remember, Wendy paid £220,000 for the property

and her hunch that there could be original features hidden away proved right.

Up on the top floor, there was another challenge if the two halves were to become one fabulous home.

This is the top floor now and there was a wall across here, which supported the roof.

The only access between this side and the other side was through a little tiny door,

which obviously wasn't ideal. There was planning permission to cut through this and make a big corridor

which turns it into a proper house. You've got three double bedrooms, a little sewing room,

and then I've turned the fourth double bedroom into a bathroom, which is one of the best rooms.

That's the sort of look you find in a luxury spa. It's Wendy's sanctuary to chill out.

Surprisingly, with three double bedrooms, this top floor still feels really spacious.

I had really good advice from a friend of a friend who's a builder.

He helped me to get all the men together and he helped me with the design as well.

There's a slightly Indian theme with the restaurant and my furniture.

I went to Southall to get silk for my curtains,

which is actually sari material.

Well, a good tip and there are plenty of other places where you could get such wonderful fabrics,

but how much has Wendy spent on this whole refurbishment?

My original budget was about 30-40. I thought that would be enough because I was a bit naive.

I probably ended up spending up to 70. That included some things like the cooker and everything, really.

Time to find out how two local property experts

value this fabulous conversion.

It's simply stunning. It is a complete transformation

from what the property was before. The property was grim, tired,

and needed a lot of work doing and a bit of imagination. Wendy's brought that.

When you walk through into the kitchen and the drawing room,

the character, which was hidden before,

suddenly you walk in to beautiful stripped floors, exposed beams, high ceilings, which is unusual.

-It's a real gem.

-I seem to remember before we were ducking under doors, crawling through. It now fits.

-But what about the location?

-I think the fact that there is a restaurant under the property,

obviously some buyers will see that as a negative.

The location is the high street, albeit a few yards from it. That is a very desirable location.

When property prices do recover, that's extremely desirable.

I think the room that has been converted into a bedsit is a great idea.

It would be hard to find a use for it in the main building, so she's made the right choice.

It's the only part Wendy might consider renting. This is her home.

She paid £220,000 at the auction and her budget has doubled to £70,000,

but exposing those hidden timbers and transforming those two rooms has certainly been money well spent.

In its current state today, I would have to be relatively conservative and say

it's approaching £300,000. If Wendy had to disappear off to the Seychelles tomorrow,

I'd put it on at 295.

I think in today's market, we'd be looking at £285,000-£295,000. That would be sensible.

I thought maybe the 300 mark. I bought at 220, I spent about 70 on it at the most,

so I haven't lost any money. The market's changed since I bought it,

and things will pick up, so that's OK, I think.

You've got to admire Wendy's vision on this property because she looked beyond the location.

It didn't worry her that it was above a restaurant. She hoped it was special and she was proved right.

-So would she do it again?

-I have actually quite enjoyed doing this project. It's been very exciting.

It's been fantastic for me and the girls because of the space.

Would I do it again?

Mmm...not in the next 10 years! I don't think. It's a lot of work, but it's been worth it.

In 1977, Derby was finally granted city status by the Queen to mark her Silver Jubilee.

Even though a cathedral had stood tall and visible here for hundreds of years,

Derby had disproved the usual rule that a cathedral marked a city,

but you do get a wonderful view of local properties from the spire, which is just as well.

You'd have difficulty seeing this property from the next street!

It's a bungalow, but what could make you look up is the guide price - just £60,000 it was.

From the outside, it doesn't look too bad, although the garden is a bit of a mess.

I think we need to investigate more.

'Bungalows may not be everyone's first choice, but they do appeal to a niche market.

'People are often prepared to pay for one in good condition, but this one isn't.'

It's tired and dated, as I might have guessed.

Fairly standard layout - one large area here and all the rooms off it.

Bedroom there, not a bad size. Bedroom there. Some signs of damp.

Very typical for this age of bungalow, for sure.

Kitchen there and then the bathroom. Well, very dated and tired. You'd want to spend some money on that.

Through into the main living room. Gas fire, nice bay-fronted window, which is good to see.

But THAT is not good to see.

Look at the floor. Not in a very good state at all.

Blimey!

Yep, OK. Some remedial work required.

'So far, not so good. The renovation budget for this is mounting up

'and I've only just started.'

Once you've sorted out the rotting floorboards and the damp, you can turn your attention to the kitchen.

It really is in a right old state. All you've got, basically, is this drainer and units.

It should be the focal point of the house. You could turn it into that.

While you're doing that, it doesn't have central heating, so get a combination boiler in.

Then move on to remodelling. Take out this wall, even extend out into the rear of the property

to create a nice living space. That would revolutionise this house.

'For an ambitious developer, there's always the loft space for a dormer bungalow conversion.'

There's something you don't expect to see in Derby - a grapevine.

Whether or not these'll ripen, I'm not sure. But a great space.

Not to sure what's in here. I think it's a downstairs loo. There's another outbuilding,

then something that's really lovely. The garden stretches 50 or 60 feet, but it needs sorting out.

It's a real added bonus.

The bungalow went to auction at a guide price of £60,000, which isn't much for the size of the plot.

I asked a local estate agent to have a look. Where would be the best place to start?

'The first thing is to get the basics right. A timber and damp expert would need to look at it'

to make sure everything's fine or what work is required.

There's no point in putting

new walls, new carpets, new double glazing in if that isn't done properly.

-The new clients would have to pull it all out again.

-After renovation, how much could it go for

-in today's market?

-I believe, if all of those jobs were done,

the timber and damp, kitchen, bathroom,

-it could be in the region of £100,000.

-That's £40,000 above the guide price.

-What about the rental potential?

-It's quite a good rental property once it's in a decent condition.

I'd imagine it at £550 per month.

Before either of those two options can be considered, there are some big issues to investigate.

Well, a bit of work required to sort this place out and it would benefit from internal modifications,

but, in general, it's in good condition and bungalows are perennially popular.

Let's see who was interested in it.

Lot number one is a two-bedroom, semi-detached bungalow

in a residential area. Needs upgrading and modernisation.

Where do you want to be on this one? Our guide price is £60,000, which is extremely realistic.

£60,000 to start? 60? 55,000?

£50,000? 50 is bid here. Thank you. £50,000, our opening bid.

51 is bid. Thank you. At £51,000.

52. At 52. 53?

£53,000. At £53,000. 54?

54 is bid. At 54,000. 55?

£55,000. £55,000...

56 is bid. At £56,000. At £56,000 from this side.

57 is bid here. New bidder. 57. 58. 58,000. 59. At 59.

At £60,000. At £60,000. 61? 61 is bid.

At £61,000. 62.

At 62. 63. 63,000. It's in the market, no mistakes. 63,000 is bid.

64? I'll take a half if it will help. 62 and a half? 63 and a half. 64 behind you.

64 and a half. 65? 65 is bid. At 65.

Are you sure? At £65,000 against you. Once, twice, third time.

Any higher bid? We're selling at £65,000. Sold at 65,000. Thank you.

'There was no hanging around in the auction room as Andy bagged it for £65,000.

'I met up with him and his wife Lisa at the bungalow, which appears to have been an impulse purchase.'

-Andy, Lisa, congratulations.

-Thank you.

-Nice to meet you both.

-What did you think he was going to do?

-Er, go to the auctions just to have a look.

-And he was looking at a shop, weren't you?

-Yeah.

And then he says, "I bought a bungalow." As you do, you know.

-And that was it.

-And what did you say?

-Oh! I went, "Right, OK..." That was it.

-I'm used to him doing things like that.

-I've got an eye for a bargain.

-Are you both in the property world?

-No. I'm a car dealer.

-Right.

-I do a lot of auctions

-and turn up with all sorts of things.

-What's the most bizarre thing?

-Probably the boat.

-Probably, yeah.

-What kind of a boat?

-A cabin cruiser.

-Yeah.

-When you live in the Midlands, it's what you need!

-I think we went out in it once.

-Not renowned for its coastline!

Couldn't be further from the sea!

'So car dealer Andy bought this dilapidated bungalow on a whim.

'He hadn't seen it and took a real gamble.'

-So, buying in the way you did probably means you did 10 seconds of preparation?

-Yes.

-Right.

-So the legal pack, forget that.

-Oh, yeah.

-Visiting the property? Forget that, yeah.

-Does that seem slightly foolhardy?

-Not really. I mean, I'm...

I'm not in the dark with it. I have had property before.

Em...and I sort of know what to expect, really.

As long as it were freehold and vacant, which I knew, that was OK for me, really.

-OK. So what did you think when you saw it?

-Well, obviously, it needed a lot of work.

-You weren't impressed.

-No.

-You're being very diplomatic!

Yeah, with projects like this, I don't mind doing things,

-but to get me to do anything at home is different.

-What do you plan?

New kitchen, new bathroom, damp proof, new windows,

doors, central heating,

decoration, new back garden. Pretty much everything.

-Have you got a lot of experience?

-Every house I've owned has needed work. I've done most of it myself.

-So nothing really daunts me.

-Right.

-Who's going to do the work?

-I thought you...

-No.

-I think me.

-Just you?

-Just me. Hired help as and when required.

Plumbers to put the central heating in, but I'll do most of it.

-It's not a small project, is it?

-Not so small as I thought it was.

-But I've got plenty of apples and pears.

-And grapes to drown your sorrows. Make some wine.

-Yeah, yeah.

'Let's hope they don't turn out to be of the sour variety. They'll want a drink when this is finished.

'That's if there's any money left.'

I'm hoping to do it for about 10 to 12.

-Pretty tight for what you've got to do there.

-Yes.

-And how long?

-I would love to do it in three months, but it'll probably be nearer to six.

Cos when are you doing it? Is it evenings and weekends?

I will carry on my main job, but I've got somebody who works for me, so I will spend some days here.

-It's going to take a while! It's going to take a while.

-How do you feel now?

-Happy.

-Excited, waiting to get stuck in.

-And, Lisa, how do you feel at this point?

Yeah, excited about it. Seeing it as the work progresses,

-seeing how it's gone.

-You've lived through it with our house.

-Yeah.

-We had a major project.

There's nothing that's not been renewed there. Only took 10 years.

'He hasn't got that luxury of time, but judging by some of the rooms, I think he might need it!'

Oh, boy, Andy and Lisa breaking all the rules in the book for buying property at auction.

I highly recommend you do not follow their example.

However, they have quite a decent property. It might turn out OK.

But it could have gone horribly wrong and, in fact, it still might.

Join us later in the show to find out how they get on.

So time to return to our properties and uncover the truth.

-Are they a triumph of engineering or a house of cards?

-Let's find out.

We're back in South London in Penge where Veryl, a supervisor on the buses,

paid £54,000 for this first-floor flat.

It's got a nice white suite, but the floor looks a little bit wet.

'Water was leaking into it from the flat above

'and there was a nasty crack.

'It was his wife Phyllis' idea to add the flat to their portfolio,

'but she was out of the country at the time, as she now explains three months later.'

Actually, I spend half of my time now in Jamaica and I look on the internet from there.

Veryl was here in London and I contacted him by email and he went to the auction for me.

'Now this globe-trotting couple have swapped around again. Veryl is out of the country.

'They both plan to emigrate to Panama in two weeks.

'So this and the other properties in their portfolio will be managed via the internet,

'which is how Phyllis found this flat. So what had attracted her to this auction lot?'

The flat was described as a one-bedroom flat.

It didn't have much detail about what needed to be done,

but I figured at that price, if we could get it near the reserve, we could do whatever needed doing.

'The first job Veryl had wanted to tackle was repairing the crack.

'But wasn't that down to the freeholder?'

Yeah, I understand that the lawyer did contact the freeholder to explain we were doing that work.

The roofer that we always use did the repointing. And the painting work was done by Veryl.

'That outside work appears purely cosmetic to me,

'but at least inside the stains on the bedroom ceiling have been painted over.'

One benefit of this property is that we also got all the furnishing.

So in the bedrooms we got the bed, the wardrobe, a chest of drawers and bedside cabinet.

In the living room, we got the sofa. And we got all the white goods.

'For any buy-to-let investor, having furniture is a bonus.

'Veryl has been busy with a paintbrush, but what's happened to the leak?'

Veryl has been upstairs and spoken to the landlord

and we thought it had been fixed, so we decorated the bathroom.

Now the problem has reoccurred.

'Oh, no! So has the budget sprung a leak as well for this £54,000 investment?'

In terms of budget, we didn't really have one. I have purchased the property

and didn't have any money left over for a budget, so we spent £350 on the outside

and £100 on the inside.

'What's the plan for the flat now? Hold on to it or sell it?'

Initially, I think Veryl wanted us to put the property straight back on the market and sell it

because we could have, in his view, realised a profit straight away.

My view is we need to look at the longer term view, so we're going to rent the property

and keep it for two or three years.

Time to ask two local estate agents

what they make of Veryl's quick makeover to this first-floor flat.

First impressions, as I came in, everything seemed rather messy.

One wonders if cleaners are employed.

The stairs are fairly narrow, then there's the flat.

The level of finish, at first inspection, looks fantastic.

Upon closer look, it's literally a lick of paint and a clean.

The level of finish is rather basic.

Ideal for maybe letting because you want to keep costs down,

but from the point of view of resale, I'd expect a much higher finish.

There's still the stain, so there's an ongoing problem. That's an issue for a tenant or a buyer.

I noticed some repairs outside which seemed to be done fairly... in an amateurish way.

It's been done, but not to a fantastic level or by a professional pointer.

Someone's just filled the holes and that's it!

'So Veryl took his wife's advice, paid £54,000

'and bought this flat. He's given it a speedy facelift and is now enjoying the sunshine.

'I wonder what he hopes the value will be. Let's find out the answer.'

I think in order to achieve a sale on this type of property,

I'd be looking to put it on the market at £80,000.

This property, in its current state, resale value with its location, I'd say £120,000-£130,000.

Wow! OK. That's good cos that's around £100,000, which was where I figured it.

'But the plan isn't to sell. Remember, Veryl and Phyllis are emigrating to Panama

'and the property is to generate income for them. They've already got tenants.

-'How much should they be charging?'

-In terms of rent for the property,

I believe they'd achieve £600-£650 per calendar month.

The rental market for this sort of property is good.

I'd anticipate a rental of £650-£700 per calendar month.

That's fine. We've actually managed to achieve £700. I think that's because this is on a high street,

right next to the station and there are lots of buses and shops. That's why we get the £700 mark.

'Yes, that's a good return, but remember Veryl bought the flat on Phyllis' recommendation

'and was worried if she'd approve of his refurbishment work. So what's her verdict?'

This property is fantastic. I'm pleased with the space and size and location. Veryl's done us proud!

'Earlier in the programme, this bungalow in Derby looked ripe for demolition.'

Look at the floor. Not in a very good state at all.

'But that didn't put Andy off because he'd never seen the property before he bought it

'on a whim for £65,000.

'He'd actually gone to the auction to buy a shop!

'When his wife, Lisa, saw the state of the place, she knew she'd heard it all before.'

-You lived through it with our house.

-Yeah.

-We had a major project. There's nothing not been renewed.

-It only took 10 years.

-'Well, we're not waiting that long.

'We've given Andy seven months before coming back to check on his progress.

'Now that the overgrown back garden has been cleared, the last vintage from this chateau has been drunk.

'A shame, as Andy really deserves a toast to celebrate the fabulous transformation he's achieved.

'The bay-fronted living room and the bedrooms all look superb.

'And that horrid old kitchen is now unrecognisable.

'Andy lives some distance away and has had to split his time between his car business and this.'

I got builders in to do most of the big jobs.

I did some work myself, removing the chimney breast and some walls.

And tradesmen for all the other work.

'It was in a much worse state than Andy had initially thought,

'needing a full-scale overhaul.'

First of all, we took the floors out, took a couple of walls out,

skylights, central heating and then, obviously, new kitchen, tiling.

We also removed a chimney which wasn't being used.

Pretty much everything, really.

'Now you may remember Andy has a reputation for coming back from auctions with unusual items.

'He once went for a car and came back with a boat, so I suppose this wasn't too unusual.

'But what does his wife, Lisa, think of the place now?'

Oh, it's fantastic compared to what it was. I walked in and thought, "Oh, my God."

Where do you start? But he's done a really good job.

Lisa was not really involved. She's happy to go along with whatever I decide.

And hopefully she's happy with it.

Everything's done the way, really, I'd kind of do it.

Probably a few little tweaks that I'd do differently, but it's lovely.

What we've done in this room is open up the fireplace.

We had to rip the old flooring out. It was absolutely rotten.

Originally, we thought it was just damp rot, but when we actually investigated, it was dry rot.

So we had to treat everything.

And then replace everything as brand new.

'Sounds expensive. What impact did that have on Andy's budget?'

Budget-wise, originally, we budgeted for £10,000-£12,000.

We've doubled that.

Obviously a lot, lot more work than I originally thought.

And I also decided to do it to a much better standard.

'I'm concerned that Andy's gone for too high a spec in the finish. I don't think that's necessary

'if his plan's to look for tenants.'

Originally, I wanted to rent it, but I would possibly look at selling it at this moment in time.

We'll see how it goes.

Let's see if two local property experts can help Andy decide.

I think, overall, they've made a really good job of the property.

The kitchen and the bathroom

are really good. Work in progress, but really good.

They've done a very good job. Very nice refurb.

Yes, it's ongoing work in progress, but it'll make a very nice property.

Clearly, knocking the room through to the kitchen diner with the velux windows is a huge improvement.

-The bathroom's really nice.

-'I do like the kitchen with the skylight

'where they've knocked through to extend the kitchen, with integrated appliances.

'Yes, I like that.'

So what's the rental potential here for this bungalow? How much income could Andy generate?

Rental of bungalows is difficult. Nevertheless, I'd market it in the region of £425 per calendar month.

'The rental market is OK in this area at the moment.'

It would be £425 per calendar month.

Em, a little bit less than I thought.

I've actually had people turn up at the door and offer more than that.

'Andy paid £65,000 at auction for the bungalow and his budget has doubled to £24,000.

'That makes a total outlay of £89,000, but how much is it now worth if he was to try to sell it?'

If I was marketing it at the moment, I would put it at £99,950.

If I was to place the property on the market, it would be £95,000.

Have those figures helped Andy make his decision? It's only a gross profit of £6,000-£10,000

for seven months' work.

Em, again probably slightly less than I would have hoped.

-But it's not too bad. I would certainly say that's made my mind up to sell it.

-Sell it.

-Yeah.

Andy bought this property without seeing it first - never a good idea.

Although he's done a fabulous refurbishment, remember his budget has doubled.

It has been a learning curve. I would say if I did it again we could probably do it for less

and a little bit more profit, hopefully.

-Well, that's it for today's show.

-Join us next time for more thrills and spills.

-See you then!

-Goodbye!

Subtitles by Subtext for Red Bee Media Ltd - 2009

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