Episode 76 Homes Under the Hammer

If you're an auction-goer,

you'll be familiar with the gavel going down when the lot is sold.

If that is what gets your blood pumping,

you're in for a treat today.

We've got three properties, all of which went under the hammer.

The property market is up and down at the best of times,

but now it's certainly tough.

But there are still bargains to be had at the auction.

So do your homework, do your research, set yourself a limit,

and you could still be in with a chance.

So let's see who's bidding on today's show.

'This Southampton property

'with four floors, two flats and three problems.'

But it's all just a bit bland, bland, bland.

'You could be in for a shock at this Hartlepool house.'

A good size. Looks like the electrics are slightly dodgy.

'And in London, a top-floor flat

'that comes with all the fun of the fair.'

It's like walking around in a fun house at a theme park.

'These all went to auction.

'We'll find out who bought them and what they paid

'when they went under the hammer.'

It's yours, sir.

'I'm in Southampton, Hampshire,

'where there are two universities and a busy port.'

This is Oxford Street - not the famous shopping Mecca in London

but one of Southampton's more desirable areas.

There's plenty of smart restaurants and shops everywhere.

But back in the 14th century,

this area belonged to the Queen's College, Oxford -

hence the street name -

and the property I'm here to see today is just on this road.

'But it's not just commercial property that can be found here.'

This is what I'm here to see, this rather grand-looking property.

It's a Georgian mid-terrace

and it went to auction for a guide of £245,000.

And I love it! Let's hope there's loads of character inside.

'There's certainly plenty of it outside.

'This four-storey property is Grade II listed,

'so it's protected by law.

'You'd be restricted in what you can do to change inside and out.'

This whole building has been subdivided into two flats.

So you walk in the front door and up this flight of stairs,

with this gorgeous original staircase,

to the top flat.

Through here is the sitting room.

In a Georgian house you'd expect to see panelled doors, deep cornicing,

big feature fireplaces, a ceiling rose, shutters on the windows,

nine-inch timber floorboards,

not dusty, pink, bobbly carpet,

woodchip wallpaper, storage heaters!

I do love the location,

the windows are beautiful, it's got an amazing facade.

But what a disappointment inside! There's just no character at all.

'Such a shame.

'But if you went to town on this place,

'put some features back in the two large bedrooms at the top...

'and transformed the pokey bathroom...

'and that drab kitchen,

'you could turn it into something really special.

'Even better than that,

'you could reinstate both flats as one magnificent house.

'Time to check out flat two now.

'Sadly, the entrance isn't as imposing. It's at the rear.

'However, you do get off-street parking.

'I wonder what the inside has to offer.'

A much bigger kitchen in this flat.

You could have a table over there.

You can see it's all been neutrally decorated.

It's a bit strange that you have to walk past this blocked-in staircase

to get to the lounge.

It is a good size. Again, there's a beautiful feature window.

But it's all just a bit bland, bland, bland.

'Down in the basement there's a double bedroom...

'one single bedroom...

'and a small bathroom.

'Those small windows make them all a bit dingy.

'They need a full refurbishment.

'But there is one big issue with this property.'

The whole property, i.e. both flats

are under one title on the Land Registry,

so, as far as they're concerned, this is still one house.

Because of this, it'll be hard to get a mortgage.

If you wanted to keep it as flats,

you could apply for retrospective planning consent

if you can prove it was divided into two separate dwellings some time ago.

And then, separate titles can be created

and the property changed from freehold to leasehold.

But you would need legal advice, and that will cost you.

'Finding proof of division shouldn't be a problem.

'You could probably get that from the council tax records.

'But drawing up separate plans and creating leaseholds will be more expensive.

'If the demand's there,

'I'd love to see this place restored to one single home.

'What does the local estate agent

'think would be the best option?'

'You could put it into one house quite easily.

'But from a business perspective,

you'd be better off leaving it as two apartments,

accentuating the two apartments as they are at the moment.

'If you left this place as two two-bed flats,

'you could expect to get a combined rental income

'of about £1,500 per calendar month.

'But if done up to a reasonable standard,

'how much would they sell for?'

The resale value of the flats would probably be around £175,000 each.

I'd keep it probably as it is at the moment,

just accentuate it, separate the title and let the two properties out.

This is a lovely period property. It's in a prime location.

It's unfortunate that the flats inside lack character.

But you can always put back those period features,

although it can be a pricey exercise.

There's also the title issue to sort out.

But I think I've fallen a little in love with this one.

Will the new owner feel the same?

Let's find out who bought it at auction.

Lot No.10, Oxford Street in Southampton, Hampshire.

£215,000 is what I'm looking for.

Somebody start the bidding at 215.

Gentleman in the back left-hand corner. Thank you.

217. Thank you, sir, directly in front of me.

219 I have got.

221.

223 I have.

225.

227.

229.

231? 231 I've got.

233.

235.

237.

At the back at 238.

238 is now bid against you.

239.

240?

241, left-hand corner.

242 here in the front.

243.

244?

245 he's nodding to.

246.

247. He's made that bid.

248 here.

£249,000, sir, is what I now need.

249. He's nodding.

250?

250's here. 250,000, seated.

Looking for 251. Shake of the head.

Anywhere else in the room? Last chance, sir.

250,000 here in the front.

£250,000 I have for the first.

250,000 for the second.

250,000 for the third and the final time.

Your property, sir. Well done. Your number, please.

'Robin made that successful bid of £250,000.

'It was just on the right side of that 3% stamp duty threshold.

'One penny more and he'd have had to pay an extra five grand.

'He was at the auction with his wife Sue.

'In the last 20 years they've been buying and developing property.

'Now their son Chris, a trained cabinet maker, has joined the business.'

Guys, congratulations. You must be so pleased you got this at auction.

Extremely pleased.

We're very enthusiastic about character properties like this

and keen to try and restore it to its former glory.

As you can see, most of that has been taken away.

So did you all view this property prior to auction?

Chris, how involved did you get?

We all came initially before the auction

and me and my mum tried to encourage my dad to try and buy it,

cos of the area, and we did notice the potential the property had.

You see, your dad's all keen now he's here.

Why didn't you want to buy this?

Why did your son have to encourage you?

Probably couldn't see the potential through the magnolia and woodchip wallpaper.

And I think I underestimated how popular the area is.

When I started to see it's very sought-after to even be near Oxford Street,

it suddenly clicked up here it's a great one to get.

'With 20 years' property experience,

'Robin's taken full advantage of the depressed market at the moment.

'He's bought almost a flat a month for the last seven to eight months

'and has now acquired this imposing Georgian house.

'So, what are they going to do with it?

It can either be two fabulous flats or a fabulous house.

It would be nice to get it really traditionally back as a house.

They're very scarce, obviously, Georgian town houses now.

It depends on the finances.

I think initially we'll have it as two flats

and try and get some rental income to cover the loan interest.

We'll do a makeover on the upstairs flat so we can let that as soon as possible.

Not necessarily do the full restoration.

But the downstairs flat, we'll focus on a new kitchen in here, all the floorings,

probably put gas central heating in and the fireplaces back in and suchlike.

'The family may still decide to reinstate this as one house.

'For that reason, they're not planning to change the title deeds just yet.

'Instead, they want to spend around £5,000 on a quick makeover upstairs

'and get that rented out within about a month.

'They'll spend a further £15,000 and three months on the downstairs

'to get some character features back into the place.

'It's Mum's job to sort out the design.'

I just want to put it back as it was.

It seems such a shame that a lovely, period, listed building

has been left to end up like this in such an awful state.

So your gut instinct, when you first walked in,

did you think, "Oh! I would love to turn this into a family house",

or, "This would be a great rental return - two flats"?

No, my first instinct was: I'd love to live here.

-Really?

-That was my first thought - I just loved the building -

to put it back to a family home.

But then I get brought back to earth by Rob, and he says,

"No. We've got to finance this, so we have to bring it down.

"We'll have to rent one flat, we can do one up.

"We've got to finance this. It's not straightforward."

Have you done any research on the building?

I've been to the City Archives,

looked through old Kelly's Directories and things like that.

It's been lots of different things over the years.

It started life as a single home with servants living in the basement.

Originally it was set out by somebody called Laishley,

who was a developer in the area.

This was sold, as lots, at auction.

Which is incredible. It's done the full circle.

Here you are, buying it, as a house at auction.

It was fascinating to find that and see the plot marked on here.

And it had a huge garden.

Sue, good luck with this. I can see how passionate you are.

Thank you.

'There's no garden any more,

'but I can see why this property attracted Robin, Sue and Chris.'

This family have obviously fallen in love with this property -

like I have.

I think it's great they want to lovingly restore it,

but character costs,

and, as a business purchase, you can't let your heart rule your wallet.

Will the budget be blown? Join me later and you can find out.

The county of Durham in the North East,

forever linked with the mining industry.

But here in Hartlepool, it's the sea that rules,

with fishing and shipbuilding being the main two industries.

And here, down on the rejuvenated dockside and quay areas,

it's also home to Europe's oldest floating fighting ship,

the Trincomalee.

You certainly can't miss the maritime history here.

The new marina feels more Monte Carlo than mining.

It goes to show that the river is still vital to the town.

The lot I've come to see is in the very popular central area.

Here you go. Ex-local authority estate,

the majority of the properties now in private hands.

This is the house I'm here to see. It's a two-bedroomed mid-terrace.

Something a bit unusual.

This upstairs window is kind of built into the roof.

It's almost a dormer, but it's not.

So I've invented a new word for it. It's now called a semi-dormer.

You won't find it in any of the textbooks, but you heard it here first.

Let's take a look inside.

'I know this is not a common term, but it does describe it perfectly.

'Considering the guide price for this house was just £45,000 to £50,000,

'I reckon, with or without that semi-dormer, it's not half bad.'

So, what do you get for your money?

Through into a little entrance, living room there.

Doesn't look to be a bad size.

I'd like to see French doors at the end. Apart from that, it's OK.

Through to the kitchen. Not a bad size either.

Total transformation if you put down some nice laminate flooring.

Units look fairly new,

although, strangely, it looks like some have actually been taken.

But enough room for a dining table there to create a lovely breakfast kitchen area.

Just check that out. A boiler. Looks like that needs servicing.

But, apart from that, it's a good-size space

and, a bit of a surprise, I think, a good heart to the house.

'From what I've seen so far,

'getting this place up to scratch shouldn't require major surgery.

'But there is another floor to look at.'

So, upstairs, big double bedroom there.

Very pink, that's for sure!

You've got the bathroom and loo there, which is great.

No messing around trying to bring it upstairs.

Into the second double bedroom. A good size.

Looks like the electrics are slightly dodgy.

But here we have the advantages of a semi-dormer.

'It lets in so much light as the window extends up to the roof line.

'Time to see if a local estate agent agrees with my diagnosis.

'With a guide price of £45,000 to £50,000,

'this seems to have plenty to offer,

'and I can sense a real feeling of rebirth around here.'

It is an up-and-coming area.

House prices have risen in this town over the last few years.

First-time buyers can't afford

the type of property they would have bought on private estates.

'This type of property is now more appealing because it is a decent size,

'they are affordable to the first-time buyers,

'and they get a nice garden for the family to grow into.'

'So, will it be a straightforward quick-turnaround job,

'or would you be better to splash the cash and do this place up?'

'I think the property is an interesting proposition.

'With a bit of TLC, it could be brought up to a lovely standard.'

'The question is, would it be worth that financial outlay?'

Once this property has been modernised,

I'd expect it to get a rental price of around £425 per calendar month.

And for resale, it should achieve around £69,950, early £70,000.

'That would represent £20,000 over the upper guide price

'for a property that seems to need very little work,

'at least on the inside.'

So, all in all, a nice enough little house.

And for that guide price of £40,000 to £45,000,

I don't think you can go too far wrong.

Let's see who agreed with me when it went under the hammer.

Lot 162 takes us to Hartlepool, No.9 Falkirk Road,

two-bedroom accommodation, vacant possession.

Two telephone bids. Where shall we begin? 40?

Thank you. Shout away. 40,000. 41, may I say?

40 I have. 41. 42? 42.

43? 43. 44?

44. 45? 45.

46? 46. 47? 47.

48?

No. 47 I have. 48 anywhere else?

For the first time 47.

Second time 47.

48. 49?

49. 50?

No? 49 with you against two of you in the room and on the phones.

49,000 for the first time.

For the second time.

For the third and final time at £49,000...

50. You almost missed out there. 50 with you. Either of you, 51?

No, I won't take a half.

It's with you, sir, on my right at 50,000 for the first time.

For the second time. Third and final time at £50,000.

Are we all done?

It's yours, sir. 50,000.

'For £50,000, at the top of the guide price range,

'the new owner is Alan.

'He's the director of a building and lettings management company.

'I met him at his new purchase to find out about his plans for it.'

Alan, congratulations. Tell me why you wanted to buy the house.

We know the area very well.

-We manage about 15 houses on this estate.

-Oh, really? Wow.

We have bought quite a number over the years, so we know it.

We know the rent levels, we know the type of people,

and we know exactly what type of work this house will need.

-Very good local knowledge, then.

-Yes.

What is interesting is that this was actually in a London auction.

Tell me the circumstances around that.

We noticed the property was for sale locally

but, because it was going to auction,

it's preferable for me to go to the auction and buy it

instead of going through an agent.

I've tried internet and telephone bidding. I wasn't happy with them.

Particularly this house, I think if I hadn't been in the room, I wouldn't have managed to get it.

So it's worth the trip to London for you.

For the cost of a train fare, it's negligible for the property.

A lot of repossessions don't go to local auctions.

When they do, the houses go for too much.

When it goes to London, it's normally investors who are buying,

not owner-occupiers, people who want to live in the house.

So your competition's different.

In addition to that, a lot of people in the South will buy a house without viewing.

They won't travel up to see it and don't know what they're buying.

-That makes them more cautious, so you've got a better chance of competing with them.

-Right.

So you think this would have been more expensive had it been in a local auction.

Yes, cos a lot more people would have been looking at it.

It could have been just about £3,000 to £5,000,

which would have not made it profitable.

'That's very interesting indeed.

'A tried and tested formula for Alan,

'which also has implications for properties from elsewhere in the country

'that go to auction in London.'

Tell me a bit more about you.

I've been doing property development for about 10 years.

Originally we started out buying the odd house to renovate to sell.

Then we got some contacts who wanted us to buy houses on their behalf.

So we started developing that side more,

moved into property management so they'd buy more properties from us,

-and it's developed from there.

-How many properties do you manage now?

-About 200.

Oh, blimey!

We don't buy and sell as much as we used to because of the changes in the marketplace.

It's only in the last four months that we've gone back into buying.

It's now more possible to obtain a decent property at a good price.

'As every successful property developer knows,

'the numbers have to add up.

'Alan's company manages 200 properties,

'of which 25 are in his own personal portfolio.

'And this is number 26.'

-So, what are you going to do to this place?

-Not a great deal.

-Really?

-Luckily, yeah.

The kitchen needs a revamp. Most of it is straightforward.

We'll improve, add more units.

A good clean-out, new carpets, lino, a bit of decorating,

but that's all it needs.

And the idea is then to what, sell it or to rent it out?

Rent it out immediately

and then potentially sell it on to another investor, with a sitting tenant.

Any idea what you'll get in terms of rent?

About £450 a month.

In terms of what you paid for it, that's a fairly good yield.

-Over 10%.

-Can't get that at the bank at the moment, can you!

'For those figures, that return fare to London looks like money well spent to me.

'Alan's pretty optimistic that auction rooms are the place to be.'

There is a lot more houses selling than there was a year ago.

I went to auctions a year ago when less than 50% of properties were selling at an auction.

Now it looks like nearly 80-90% selling.

So there's more movement. There's a lot more people buying.

There's more competition, though.

So how much is it going to cost to get the house up to scratch?

Couple of thousand.

Will a team of people do that, or will you be involved?

I may get involved, but not always. Depends how busy I am.

I don't get my hands dirty too much these days,

so we'll get a few contractors to do the work we require.

-What timescale are you looking at?

-Two weeks.

-Two weeks before you get somebody in here?

-Yeah.

-Wow.

Well, congratulations. Good luck.

And thanks for the insight. Fascinating. Good to meet you.

'Well, Alan's got an eye for a property - and a bargain.'

So, some interesting tips there about buying a property

that's in an auction outside the area where it's located.

Something certainly worth considering.

So, Alan's got the experience to do this place up, no problem.

But still, £2,000 - that's a tight budget.

And in just two weeks!

Will he do it? You can find out later in the show.

'Coming up,

'you might be tempted to rearrange the layout of this London flat, but...'

If it's not broken, perhaps don't fix it.

'Back in Hartlepool,

'is it the budget or the valuations that pleased our developer?'

Those figures were virtually the same as what I had anticipated.

'But first we return to Southampton,

'where they've been watching the budget.

I'd like to do it inside 10 for the rest of it, and we should be able to.

'Back to trendy Oxford Street now.

'No, not the one in London, the one in Southampton,

'where husband and wife property developer team Robin and Sue and their son Chris

'bought this lovely Georgian town house at auction for £250,000.

'The property had been split into two separate flats,

'although it's still shown on the title deeds as one house.

'Most of the original character detail was missing,

'so Robin, Sue and Chris planned a thorough £15,000 renovation in the bottom flat

'to put a lot of it back.

'They intended a basic £5,000 makeover on the top flat,

'and then to let them both out as quickly as possible.

'Ten months on, plans seem to have changed a bit.

'The top flat has had a much bigger refit than I expected.'

We started working on it,

and we'd decided that we could make it reasonable to let.

But then we got a bit carried away, interest rates dropped,

we saw some good deals with kitchens

and, after all the effort of stripping all that wallpaper,

discovered some plaster was damaged that really needed replastering

and thought, "This is crazy.

"We might just as well do the whole thing."

'So that's what they've done.

'New coving, new skirting, new doors, new electrics,

'and central heating.

'Since Chris is a trained cabinet maker,

'he's taken responsibility for some of the more involved jobs.'

As you can see, there's a brand-new kitchen in here.

The old one wasn't very nice,

but we have actually managed to recycle most of it.

We got this kitchen at a bargain price from somewhere that closed down.

We've got lovely bamboo worktops.

Some of it we got from somewhere else cos there wasn't quite enough.

It's got nice appliances.

Everything you need, from a warming drawer to a dishwasher,

and everything else, yeah.

'Sue had the task of sourcing most of the materials in this project.

'The living room in the upstairs flat is a good example

'of how her research has been put to great effect.'

This room we basically stripped completely back to the bare walls.

It was covered in woodchip, so we removed all of that.

There was no fireplace there,

just a hole,

so we've sorted that one out now,

had new skirting board made that copies what's on the stairway.

There was a horrible bullnosed architrave all round the window,

which we've managed to source, and done the same around the doorway.

The coving - there was none here at all,

and it took a bit of research to find something

that would complement the architrave round the window

and also was in keeping with the house.

This wasn't a particularly grand house originally, but a town house.

But it still would have had all those features.

But I like a little impact and put the chandelier in.

'Sue has put so much time into this project

'that I can't help wondering,

is she still thinking about moving in herself?'

I had suggested it

because we've got a project going on at our own home.

-It's worth considering.

-Could be expensive with all those pubs and restaurants on the doorstep.

'It sounds like Robin remains to be convinced!

'But with the top flat very nearly finished and ready to rent out,

'it will soon be time to make a decision.

'The same can't be said for the bottom flat, though.'

Well, the main progress is the wallpaper's been stripped,

and there's more mess because it's become a storage area for all that's going on elsewhere.

A lot of the magnolia and woodchip has gone.

Quite a lot of replastering has been done as well.

'So some of the work here was underway.

'But Robin thinks there's another four or five months of finishing off to do.

'While Sue's been buying for the top flat,

'she's also managed to prepare for this one.

'They now have a pretty good idea of their final budget.

'Originally they hoped to spend £20,000 on renovating both flats,

'but, as their plans changed, the budget has risen dramatically.'

It's at about £40,000 now.

We've bought most of the stuff for downstairs.

It'll finish at about £50,000 spent on it.

So a total cost of £300,000.

'But how much will it be worth?

'We asked two local estate agents along to tell us.'

I think the property is stunning.

The standard of finish is very good.

Obviously there's still a fair bit to be done,

but I think the finished product will be very nice.

I think the owners have done a really nice job.

I particularly like that they've tried to retain or replicate

some of the original features of the period.

They've done a really nice job on the kitchens, and the bathrooms are high-spec,

which I think buyers certainly are looking for today.

'So, a big thumbs up from the estate agents.

'But what could Robin, Chris and Sue expect to make in rental

'from their £300,000 investment?'

To rent this, you'd advertise at around £900 per calendar month.

The basement flat, as long as it's spec'd up to this sort of standard,

you're probably looking at £825.

The top flat I would like to see on the market

at around £1100-£1200 per calendar month on a furnished basis.

With the bottom flat being slightly smaller,

I would expect to achieve in the region of £1000 to £1100.

That was exactly the sort of figures I was thinking.

We were thinking a corporate let would be ideal,

and actually to furnish it.

So that's exactly what we were thinking.

'So they could see a 7% to 9% rental return

'on their £300,000 outlay.

'But if they spent a bit more to split the property at the Land Registry,

'how much could they sell each flat for?'

I would expect to see this on the market, the top flat,

in the region of £215,000 to £220,000.

With regards to the bottom flat,

I would expect to see that on the market between £205,000 and £210,000.

I'd advertise this at around £225,000.

The basement flat, you'd probably advertise that at around £200,000.

That's what we were thinking.

That's exactly the sort of price range that we thought.

-£200,000.

-Yeah, so I'm quite happy about that.

Especially in this market, if they're valuing at that level.

'So Robin, Sue and Chris could make over £100,000 pre-tax profit

'if they decided to sell.

'But sadly, both estate agents agreed that, in the current market,

'they couldn't make anything like that from converting it back into one house.

'So, for now, this place is destined to stay as two flats.'

# Ride with us

# On top of a London bus...#

'I'm in Hackney, East London,

'which used to be a less-than-desirable area

'but has now become an up-and-coming hot spot,

'with galleries and gastropubs on every corner.

# By bus is best #

'This gentrification hasn't been without controversy.

'The arrival of many artists and young professionals

'has seen property prices soar, forcing the locals out.

'Despite that, it's a great place to invest -

'if you can find any bargains left.'

I'm on Graham Road, a busy thoroughfare

linking vibrant Hackney to fashionable Islington.

Despite its slightly scruffy appearance,

believe me when I say this area is highly desirable,

as is the guide price for this one-bedroom flat -

£135,000.

I know this one-bedroom property on the second floor

is on the market as we speak for nearly £100,000 more.

Let's go inside and find out why.

'The flat I'm here to see is on the top floor,

'so there aren't lovely bay windows that you get on the lower level.

'Still, the top floor does provide better security,

'an important consideration in Central London.

'Through the front door, and it's not pretty.

'The entrance hall is in a sorry old state.

'Once you've climbed flights of dangerous-looking stairs

'you're greeted with a rotten window on the top landing,

'which leads to the flat.

The communal area really leaves a lot to be desired,

and those stairs slant at an alarming angle.

It's like walking around in a fun house at a theme park.

I'd be phoning the freeholder about the mess down there

and I'd also be calling in a surveyor about this tilt.

Being on the top floor, it's not got the lovely high ceilings

I would have hoped for from a Victorian terrace.

But first impressions, the flat does seem small, but it's neat.

Let's take a look around.

The bedroom's not a bad size.

Look - somebody's left you a bed!

You've got a big window, but the sash has been replaced, which is a shame.

And your only air flow is through that vent at the top.

One slight worry is the damp patch above me on the ceiling.

That could be just an old stain,

a historic leak from the roof perhaps.

It would be worth getting a damp meter reading as soon as possible

to check that there's nothing more serious.

'The living room is a similar size to the bedroom,

'also with a large window overlooking the busy road.

'But it's just a small louvre window to let air in.

'One positive: the flat does have central heating.

'But the bathroom will need a complete overhaul

'with new appliances, and that hole in the wall needs fixing.'

It is a decent-size kitchen,

and the good news is there's space for a table over there.

That's all you'd need for a one-bedroom flat.

You could get some white, light-reflective units in here,

perhaps some wooden worktops,

and you'd really transform it.

Or maybe you could think about reorganising this space

and put the kitchen in the living room,

knock through to the bedroom and create a kitchen-diner,

and make this area the bedroom.

I'm not sure, though. I do like the proportions of this flat.

The layout is practical and it works.

If it's not broken, perhaps don't fix it.

'Why get all steamed up and risk putting your budget in hot water?

'But moving the bedroom to the back of the flat would make it much quieter

'away from the noisy road.

'As it is, I don't think you'd need to spend a fortune

'to bring this Hackney pad up to scratch.

'I've asked a local estate agent to have a look at the flat

'and see what he thinks.'

'In the current climate, people want period features.'

Any reverting back to its original state would increase the value.

I'd put the sash windows back in to the front of the property,

put in a new kitchen and bathroom, and I think it would resell very well.

Or, if you've got a buy-to-let investor, it would rent as well.

-So both sides of the coin would be covered.

-KER-CHING!

'Speaking of coins, how do the values stack up?'

In these current conditions, I think it'd be worth £150,000.

But with the improvements that I've suggested, I think you could get as much as £200,000.

For rental purposes,

you could achieve between £700 and £800 per calendar month.

'So, for a £10,000 to £15,000 spend,

'you could make about £50,000 profit.

'It all depends on whether it would sell in this market,

'but with around a 7% return on rental, that's promising too.'

I said bargains were scarce around here,

but I think I've found one.

Before the property market turmoil,

you wouldn't have found a studio flat in this area at such a low price.

It will be easy to add value here, and it will rent out in an instant.

Anywhere near the guide price and this flat is a complete steal.

Let's see who snapped it up in the auction room.

Lot 79

is 102D Graham Road, Hackney, London E8.

It's a well-located one-bedroom flat at the heart of Hackney.

What shall we say? 130, anybody?

Looking for 130. Who wants to give me a start?

How about 100? Immediate discount.

90. OK, we'll take it.

Got £90,000.

Anybody else? 95. Thank you.

100.

105.

110.

115.

120?

116, then.

117.

118.

119.

120.

121.

122.

123.

124.

125?

We'll take 500. If not... Yes? No?

If not, 124 for the first.

Oh, hello there. Sorry. 125. More competition.

126?

One more?

126?

If not, first bid, £125,000 against you at the back of the room.

125 for the first.

125 for the second.

125 for the third and final time. Are we all done?

Sold. Well bid. 125,000.

'Ruby and Antonio were the successful purchasers

'who paid £125,000 for that top-floor flat in Hackney.

'They'd gone to the auction looking for somewhere for their son Dean.'

Ruby and Antonio, congratulations.

I can't believe you paid £125,000 for this.

That's below the guide price.

Yeah, absolutely. We thought it would go much higher.

But it worked out very well.

So did you go to auction to buy this flat?

Not really. We had two in mind.

One was the one at Highbury,

and then this one.

And then the Highbury one went so high.

I was talking to Ruby and especially Dean.

I said, "What do you think we should do?

"Do you think we've got a chance with Graham Road?"

So were you buying this property for your son?

Yes. Very much for Dean.

Why?

Because he is the youngest,

and we feel that now that we are not working, he needs a good start.

-How does Dean feel about this?

-He is very excited.

And moreover because we got a good bargain.

'A bargain it certainly was.

'Dean may not end up living here himself

'as he prefers somewhere nearer to work.

'But I'm sure the rental income will come in very handy for him.'

Tell me what you think you might do to change the layout of this flat

or to improve it.

I would very much like to change the whole flat,

make it really lovely and modern.

But one of the things I have in mind is,

because the entrance and the steps and everything is not very good,

I'm hoping that the freeholder will either give everyone a share of the freehold

or sell it to me, maybe,

and then we can get the whole building done up.

The communal areas, Ruby, really let this flat down, don't they?

Yes.

But I think we should be able to do something good with this place.

Have you thought about changing the layout?

Perhaps knocking a few walls down, moving the kitchen to the front?

No, I don't think so. I prefer the kitchen as it is.

But just modernise it.

But what we'll need to do is the bathroom.

The whole bath has to be changed, so everything new in there,

a totally new set-up there.

Well, I feel, if we get a freehold, I would like to expand.

But that all depends on what happens with the freeholder.

'I think that's a good tactic.

'If you control the freehold, you can take matters into your own hands.

'Antonio and Ruby are aware that the roof needs checking because of the damp patch in the bedroom.'

What sort of budget have you got to spend on this flat?

-£15,000 to £20,000?

-Maximum.

£20,000 is around the maximum.

One thing that does concern me is,

structurally, this whole place leans inwards, doesn't it?

You can feel the floors are wobbly, the staircase is a bit rickety.

-Did you get a structural survey on the property?

-No, we did not.

So why did you not think about getting a structural survey?

If it was a house, I definitely would have done, but it's a flat.

On hindsight maybe I made a mistake but, you know, it's a gamble.

I've always believed in taking a risk,

and this is a risk - worth it, maybe.

If I was buying a house, maybe different, absolutely.

And are you guys going to be involved with the refurb here?

We will. He is good at it.

Both of us together are good at it, I must say.

'But some major work, like the electrics and things like that,

'we'll have to have professionals coming in.'

Another thing that I always think - "Top floor flat, three flights of stairs, you need a skip..."

It's a lot of work to carry a lot of things out,

and then you've got to carry a lot of things up.

That's going to be quite a big job for you both.

I know we may seem a bit older,

but I've got lots of energy.

I feel I'm only 30, believe me or not.

Some people say I'm much older, but I don't believe that.

-You don't look a day over 30.

-Oh, my God! You believe that?

-And I bet you're fit as a fiddle.

-Absolutely! Ready for anything.

'I hope that's not tempting fate, because there are plenty of signs in the flat

'that lead me to think they could be in for some surprises.'

Ruby and Antonio are a lovely couple and make a great team.

Their son Dean is a lucky boy.

I am concerned about the lack of survey,

but I think: obtain the freehold and the gamble on this flat will really pay off.

Find out how they get on later in the show.

Once you've bought a property, the challenge is to add value to it.

Project-managing renovations is not always as easy as it looks.

Let's find out how today's buyers got on.

'We return to Hartlepool in the North East now

'where Alan paid £50,000 for this multicoloured house.

'He's director of a building and lettings company that manages over 200 rentals.

'This one would add to his personal portfolio of 25 properties.'

# I drove all night to get to you...#

'And now, after just one month, the quick makeover is complete.

'It's largely been a splash of paint,

'but those knotted curtains in the living room do now hang down.

'Upstairs, thankfully the bedroom colours have been toned down.

'And check out the bathroom - new tiles and laminate flooring.'

We haven't had to do very much in the house at all.

Mostly just quick decoration, clean-up,

the bathroom had a bit of tiling, the kitchen's done,

cleaned up the gardens - that's it, very simple.

The house was very quick to turn round.

'And that's exactly what buy-to-let investors want.'

This is the kitchen. It's the room we've done the most work in.

It's still not a great deal.

We replaced the top units that were missing when we got the property.

We replaced the oven, hob and extractor.

The rest was just tidying up tiles and splashbacks.

The whole house has been turned round for under £1800.

'That sounds impressive, but Alan's only tidied up here.

'The main work's taking place in the kitchen and bathroom.

'His original budget was about £3,000

'because he thought the boiler might need replacing,

'and one electrical socket needed attention.

'But the boiler and electrics were checked and are fine.

'Remember, Alan travelled down to a London auction

'where he paid £50,000 for the house,

'and he's learnt to watch every penny.'

I'm very cautious when I'm planning a house.

Most people don't take into account the solicitor's fees, survey fees,

minor expenditure.

Everything's got to be put right before you can tell if you're going to make money or not.

'That's the aim for any buy-to-let businessman.

'And Alan's already found a tenant willing to lend a hand.'

We had a large number of people interested in the property.

Luckily we found a tenant willing to do the decorating himself.

We find that, if we give someone work to do in the house,

they're likely to look after it better.

Also, it keeps our costs down as we're just providing the materials.

'With over nine years' experience of lettings,

'Alan knows how important it is to make an accurate inventory

'of any property he lets out.'

We always take a written inventory,

and we normally use a digital camera

to take photographs of every little detail in the property.

It stops arguments at the end of the tenancy if we have to go to court over a problem.

It resolves it before it gets too far.

# If I had a photograph of you...#

'That protection is good news for anyone leaving rented accommodation,

'but I'd always advise you to check and agree the inventory

'when you first sign your tenancy agreement.

'So, apart from the photos, what else has Alan done here?'

I try not to get too involved much at all.

My main job was to buy the property.

A member of staff sourced this, found it and recommended it to me.

I went to the auction, bid, and then arranged the works.

That's it. Everybody else does all the running around after me.

'Time to see what two local estate agents think of Alan's purchase.

'Has he done enough?

'How much rental income could he generate?'

My first impression is, the guy's been in. It's clean and tidy.

Maybe a bit of extra finish

could have been applied throughout the property,

a bit more attention to detail.

Apart from that, for the line for rentals, it should suffice for the area.

I think it's quite good. It's clean.

It's very, very good for rental purposes.

I don't foresee any problems in that respect at all.

Saleswise, I would change a few things

if the gentleman was thinking about getting top value.

If I was looking at resale and the highest valuation possible,

there'd be thoughts to recommend the bathroom to be changed,

a combination boiler to be put in, etc.

I totally agree. It was aimed purely at the rental market.

If it's going to be sold, it'll be to another investor who is going to keep it rented.

No point in spending too much money. It would be a waste.

'I agree. This is a business, after all.

'So how much rental income should Alan achieve here?'

Rental valuation, I'd say between £450 to £475 per calendar month.

I'd say the rental for this area would be £425 to £450 pcm.

We looked at the property and said £450, which is what we're charging the tenant,

and everyone seems happy.

No point pushing rents too high cos the house ends up empty.

'How much is the house now worth?

'Remember, Alan paid £50,000 at the auction

'and has spent just £1800.

'So, about £52,000 in total.'

In my opinion, this property is going to be worth

between £65,000 and £70,000.

At the moment, in its current condition,

I'd value the property at around £65,000.

If you spend a few extra thousand on a combi boiler and tidy the garden, about £70,000.

Those figures are virtually the same as what I had anticipated.

I know the area quite well, so I knew I wouldn't be very far off.

'Whoa! That's at least £13,000 gross profit after just one month.

'Even allowing for other expenses that Alan always factors in to his properties,

'that's a great return.

'Has he any advice for investors looking to emulate his success?'

I would recommend anybody getting a property,

if you're looking probably for the long term,

you'll always make money.

It's not a short-term gain.

Whatever you do, make sure you do enough research

and have enough capital behind you for those extra problems that you don't expect.

'Back now to the London suburb of Hackney,

'where Antonio and his wife Ruby paid £125,000

'for a one-bedroom top-floor flat in this end of terrace.

'They bought it to help their son Dean onto the property ladder.

'The flat wasn't in great condition,

'and the communal staircase was even worse.

'But Antonio is a bit of a gambler.

'He was banking on getting all the other tenants to join him in buying the freehold

'and then really do the place up.

'Twelve months have passed

'and we now meet up again with the couple at the flat.

'From the outside, the property still looks in a pretty bad state.

'But on the top floor, there have been major changes to the layout,

'as Antonio explains.'

When we first started, I thought the bathroom was in the wrong place.

We wanted to get a designer and a planner,

then we decided, "Forget about all that, we'll do it ourselves."

We decided to go and do it ourselves.

# It takes two, baby...#

'So they drew up a new layout for the flat,

'and the first job was to move the bathroom.'

The bathroom was here.

It was enclosed, and there were partitions and a door here.

It didn't give a lot of room.

Plus there was no natural light.

So we thought we'd make the bathroom where the kitchen used to be.

And that's how we have changed it. We have taken everything out.

Everything that you see is new.

With a bigger space it would have been even better,

but with the space we have, I think we have done a very good job.

'The original kitchen had a large window at the rear,

'and that had to be removed.'

We decided to have half the window for the bath

and half the window for the kitchen,

since we wanted more light.

The boiler was in the bathroom,

so we had to move the boiler from the bathroom to the kitchen.

And then we fitted all the new tiling and flooring.

A neutral colour for the ceiling.

'Antonio had hoped to get the other tenants on board to buy the freehold jointly,

'but it's taken him and Ruby almost a year to get the flat to this condition.

'So why the delay?'

From the time we bought the flat to the time we started the work,

it took about eight months.

The reason for that is that we were hoping to get their agreement,

we didn't get it, then we decided, no point in waiting any more, let's do the best we can.

'Without financial support from the other residents,

'Antonio has only done a quick freshen-up on the stairs.

'It's the first thing you see, and it remains a bit of a letdown.

'But Antonio is confident that they'll soon buy the freehold and start work.'

Do it up properly and...

'Back in the flat, work has been slow.'

It has taken quite a bit of time

because we got different people,

but either their charges were too high,

or we couldn't get the guarantee that it would be done properly.

So in the end we decided we would buy the material ourselves...

Yes, we bought the material ourselves,

and there was only labour.

'So how did that impact on the budget?

'They'd originally set it between £15,000 and £20,000.'

We spent... how much was it?

£17,000? Something like £17,000 we have spent, total.

'Well, the flat is finished.

'So is their son Dean going to move in?'

That's the main reason we bought the flat.

Unfortunately, when he came here, he started thinking,

"I don't want to live alone. I want to live with a colleague of mine."

He wanted a two-bedroom place.

That's why we changed our minds

and said, "OK, we'll have to rent it if he doesn't want it."

'Although Dean said, "No thank you, Dad,"

'Antonio has had no trouble finding a tenant.

'Art student Joanna brushed aside the state of the stairs

'as she could see the potential for herself and a friend.'

When I came in the entrance hall, I didn't have high expectations.

It's not attractive downstairs.

Then, coming up to the top floor, the flat is so bright and light.

We snapped it up quickly.

We didn't have much chance to even think about it.

Even though it's a one-bed flat,

it can work as a two-bed if we put up our own partition.

'But what about that nasty stain on the ceiling?'

There was a damp patch

because the loft was a haven for the pigeons.

Unbelievable. I have never seen so many pigeons in the loft.

'So is Ruby now cooing about the flat,

'even though Dean's flown the nest?'

'Actually, I'm very happy because we did it ourselves together,

and how it's come up, it really is a different thing altogether.

'Time for two local estate agents to climb those stairs

'and give their opinions.'

The standard of work here is good, from what I can see.

The kitchen's well finished, as is the bathroom.

They've done well with the limited space available.

The standard of finish is OK.

The work surface in the kitchen is good, and the bathroom as well.

In the property, the communal areas aren't very well maintained.

I believe this will put some people off.

'Antonio is letting it out at £205 per week.

'Is that about right?'

In the rental market, I think you'd achieve from £220 to £230 a week.

As a rental value, I believe £220 to £230 a week could be achievable.

The rent we are getting now is OK.

When we renew the lease in the future,

then obviously we'll charge the right rent.

Now it is a bit low.

'What about the resale value?

'He paid £125,000 at auction and spent £17,000 on it,

'making about £142,000 in total.'

I think you'd market the property for sale at around £200,000

to achieve between £180,000 and £190,000.

I'd expect this property to achieve

in the region of £200,000 to £210,000.

I think £200,000 to £210,000 is the right one.

That's what I think it should be.

'If they get £200,000,

'that represents a £58,000 gross profit in 12 months.

'So Antonio's gamble looks to have paid off.

'Would they try their hand at an auction again?'

I think so, knowing my husband.

We will gamble, but with more preparation

and more hindsight, more thought.

If you don't venture, you'll never know.

That's it for more tantalising tales from the auction rooms.

-See you soon.

-For more homes under the hammer.

-Goodbye.

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