Episode 85 Homes Under the Hammer

Buying property in the traditional way can mean

being caught up in a chain and long completion periods.

If you buy at auction, you get really quick results.

In a matter of weeks, the property is yours.

Interested? Well, we have three very different properties to whet your appetite today.

Many of the properties in the auctions need work doing on them before they can be lived in.

But renovating properties means you can add value and that is always the aim.

So let's see the three properties that had the magic wand wafted over them today.

I find myself stooping to new lows in West Looe, Cornwall.

Look at the ceiling height. That's not going to work, is it?

This cottage in Canterbury looks straight out of a fairytale. Now, is this cottage charming on the inside?

Well, no, not really.

And I put on my detective hat for this three-bedroom semi in Gwent, Wales.

Now, there's something which is worrying me about this house.

And it's not that obvious.

All these properties went to auction.

We'll find out who bought them and what they paid for them, when they went under the hammer.

The rugged beauty of the Cornish coast

is a wonderful sight. Between the many estuaries are some very popular towns, and one of them is West Looe.

Well, either side of the estuary, Looe is a beautiful place to either live or visit,

even on a soggy day like today.

But like everywhere, it has been affected by current uncertainties in the property market.

Up for grabs was a three-bedroomed cottage, with a guide price of 100,000 to 120,000 quid.

That's certainly less than it would have been a year ago.

It's near to the quayside and is one of the older properties in the town.

It comes with Grade II listing and is in a conservation area.

Recently, it was a shop and from the outside, it's looking pretty tired.

What about inside?

Oh, yuk.

Let's hope it's drier inside than out, although that doesn't follow in some of the properties I see.

What have we got?

Well, downstairs, one main room.

And straightaway, a very strange ceiling. What is going on here?

Well, this is obviously the frontage of the old shop.

That's a decent height there but then the ceiling

has actually been suspended below a main beam which is going across.

It's not good, really, cos it really lowers the ceiling height here and makes it feel very claustrophobic.

Somebody's been thinking what they might like to do with this place.

There's graffiti on the walls, with things like cupboards and cookers.

This WOULD be a good place for a kitchen. Let's see what the plans for the rest of the house were.

Until recently, this property had planning permission for change of use back to a permanent residence.

However, the key phrase there is "recently", because planning permission has now lapsed.

So, whoever bought this would have to reapply for it or change it altogether.

Here on the first floor, the kind of feeling of cramped sort of claustrophobia continues, I'd say,

but bear in mind, this was probably a fisherman's cottage and it is quaint, you've got to say that.

One bedroom there. Another bedroom here.

Lovely old floorboards you could have some fun with, but look at the ceiling height.

That's not going to work, is it?

I think you need downlighters in this room. But I like the windows. I like the window seats.

They would be absolutely beautiful if you stripped those back.

What isn't so pretty, unless you're into... well, funguses... is this...

a really nasty case of some kind of rot going on there.

But just a word of warning. See this here?

That looks at first glance like dry rot.

But it isn't. What it is, it's a cobweb that's got dust on it.

I'll show you dry rot in a minute.

This is dry rot. Look at the difference.

It's like long sort of roots of a plant, but the trouble is, those roots

go through concrete, they go through wood, they destroy a house.

They call it the cancer of buildings.

That thing downstairs, not a problem.

This definitely needs to be sorted out. You get a specialist firm in.

They'll chop the wall out, treat it with chemicals.

It's not, you know, the be-all and end-all, but definitely

it needs to be sorted out by a specialist sooner rather than later.

There's a lot more to sort out here than just the rot.

Although someone has made a start on improving this property, in reality, there's still quite a bit to do.

But as the auctioneer who sold it points out, when renovating,

you need to be very careful what you change.

You can bet your bottom dollar

that the local planning authority, quite rightly, because it's a

listed building in a conservation area,

they want to make sure that whatever's done,

particularly externally, will fit in with the environment around.

Some while ago, the property was granted planning consent for

reversion to a whole house, cos obviously, it was partly a shop, as the window gives away.

That planning consent, having been actioned, albeit...

by no means finished, means the clock has stopped, and they're fine to carry on with that scheme.

So, provided you stick to those plans, it's fine to carry on.

But a word of warning.

Councils have different definitions of what constitutes work having started.

So do always check before you start knocking down walls.

Also, remember that there are other options than making it a family home, particularly in this area.

Strong holiday demand in this part of Cornwall, this part of the village,

but of course

you'll get good weeks but then you won't get hardly anything in the winter

and every Saturday, you've got to change the sheets.

So it's a balance between how much hands-on management do you want or do you not really want any?

Lots to consider, then.

At that guide price, of £100,000 to £120,000, what would the ceiling value be, once renovated?

A cautious estimate in the current market

and as long as they do half a reasonable job, you could be looking at 145...

145,000, 155,000.

Well, it's a quaint little place, isn't it, with some lovely features

like these window seats and you certainly can't knock the location,

but don't underestimate the amount of effort it's going to take to sort this place out.

Who was ready to take it on when it went to the auction?

Who's going to say 90?

90 somewhere. 90.

For Lot 95. 90.

80? Good heavens. 80.

75, or... We're away.

75 we've got. 75. 78. 80.

At 80. In the aisle, 80.

80 I've got. 80. At 80 for Lot 95. At 80.

At 80 we've got. Orange shirt, we'll do it.

At 80,000 for Lot 95. At 80,000 once.

At 80,000 twice.

At 80,000 - here we go, being sold at 80,000.

Yours. That was nice and easy.

With just two bids, the new owner is quantity surveyor Alan.

He's snapped this up for much less than the £100,000-£120,000 guide price.

That would put a smile on anybody's face.

But when I met him back at the property,

it turns out it was an even sweeter deal than I first thought.

I tried to buy it last year for 120.

-It went on at 185, originally.

-No way.

Dropped to 165 and I offered 120, but they refused it as a repossession.

So obviously, the market's dipped down, credit crunch.

Yeah, so cheap property at 80,000.

Perhaps the rot scared people away, but if anyone is qualified to sort it out,

it's Alan, who's been in construction for 23 years.

He's currently finishing a block of eight apartments which he and his wife, Dee, plan to let out.

So, are you from here, originally?

No. I'm from West London, originally. So, moved down in 2000.

Did the classic, at the time.

-Jumped out the rat race...

-Really.

to come down and have an easier lifestyle, maybe not work quite so hard.

Hasn't quite worked out like that... and so we bought a block of holiday flats

just literally about half a mile from here and so we've been running that for a few years.

And in the meantime, I've developed a few houses that I've done for myself.

So I've not really been out of construction. I've been building since I've been down here.

But no, so actually now when the market's dipped down,

I've seen the opportunity to potentially start developing again.

Snapping up this property for just £80,000 was a good start.

But he's going to have to put all those years of experience into sorting it out.

The damp and the rot and everything is quite spectacular, isn't it?

Yeah. It's got worse, actually, since I last saw the property.

We'll get a timber treatment specialist in and because the house is in such a state,

if this was a reasonably good condition house, it would be quite an extensive amount of work.

But everything needs replacing, anyway, so it's just how far we have to go with it.

What do you think the biggest challenge is?

Cos it's listed, the roof has got to be replaced in Delabole slate, again.

I'm expecting half the timbers on that front roof to need replacing.

And then actually re-roofing that and actually, also, the front elevation,

cos it's listed, we've got to have single-glazed wood windows made, so...

they're a bit more expensive than if I was doing, you know, a domestic house built in the 1980s.

So it's going to be a bit more expensive on that basis.

Alan estimates it'll cost around £30,000 to do the work on this cottage as he'll have to source

original materials in keeping with its Grade II status.

But when it comes to the finished product, he has some ideas of his own.

So let's talk about the planning.

What do you know about history of it and where, actually, is it at?

Well, obviously, it was originally a house but. I think, back in the '20s or '30s it became a shop.

And then it did have planning permission which I think has lapsed two or three years ago.

They actually have started a little bit of work here,

but as I understand it, because they hadn't got building regulation approval, it isn't considered

a substantial start and so the planning permission actually has lapsed now.

Hence I've got to go through the whole process.

You're starting from scratch, to all intents and purposes.

Yeah. In some respects, it's to my advantage cos the scheme that was drawn originally...

I've come up with a slightly better scheme.

Alan intends to restore this old cottage to a three-bedroom family home.

But he's taking a gamble, as his plans are not yet approved.

I've met the conservation officer and the building control officer.

And because it's listed, fortunately, for the alterations I want to do,

I haven't got to comply with full building regs.

The conservation side of the property takes precedence.

But what they've asked for is actually sort of fully wired, smoke alarms and actually, on some of

the original timbers in the hallways to be painted with intumescent paint, just to stop the spread of fire.

So, in some respects, being listed has actually helped me to do what I want to do.

To help him, Alan has employed the architect who used to have his office in this cottage

so at least he'll know the layout.

It could take up to four months before they start work, as Alan still has those flats to finish.

But there's no rush, which is exactly the pace he moved to West Looe for, in the first place.

-Are you happy you made the move?

-Oh, fantastic. Yeah.

Part of the reason was we had our first child, nine years ago.

So we lived in Iver, just on the edge of Buckinghamshire, you know, just the outside of London.

And it was a lovely place to live, but it's really nice here, my daughter...

the children she went to playgroup with, she's gone to primary school,

she'll go to senior school with them, and it really is a nice cohesive sort of atmosphere down here.

Everybody knows your business, in a nice way. It's a nice place to live, Looe.

Yeah. And in fact, it's just the commuting, as well.

I used to be in the construction industry in London

and it's two or three hours between sites, you know, in traffic.

So now I'm working within a two or three mile radius

of where I live, and on this one we walk into work, so it's much nicer.

Well, clearly, Alan knows that he's got himself a great bargain here but it certainly is a sign of the times

in terms of how much it's dropped in price from what it was before.

Anyway, he's using the fact that it's in a conservation area, and a listed building, to his advantage.

And hopefully, he'll be able to get that all-important planning permission... but you never know.

Find out how he gets on later in the show.

Today, I'm just three miles from Canterbury city centre in a desirable area called Tyler Hill.

Good schools attract families to this place and its prime position is also a draw.

The North Downs are just three miles south and you're only five minutes from the coast.

Walking one day, sailing the next.

Positively spoilt for choice.

It's those options that make buying property in this area of Kent so attractive.

Charming, detached and period property, just some of the buzz words

used in the auction catalogue to describe today's lot.

It's also a cottage. And the guide...

just £120,000-£130,000.

Judging by that glorious facade, the guide price sounds low but will the inside match up?

So is this cottage charming on the inside?

Well, no, not really.

Lots of woodchip wallpaper everywhere and no lovely features, to speak of...

although through here into the second reception room, we've got a little brick fireplace which is quite nice.

And you have got new double-glazed windows which we'll need because that is a noisy road out there.

But the ceilings are relatively low and the kitchen is disappointing.

I mean, look at the units and sadly, these units completely

obscure this window, so you're missing a lot of light there.

And something that has got the alarm bells ringing is that crack up there.

That needs further investigation.

Let's just hope upstairs is a little more promising.

# You look like an angel... #

All three bedrooms are a good size, but they come with even more cracks and these are serious.

It would seem this charming little cottage is starting to show its devilish side.

# You're the devil in disguise

# Oh, yes, you are # The devil in disguise. #

Most subsidence is the result of shrinkage of clay soil.

During hot weather, large cracks tend to appear in walls, particularly around doors like this...

and...

windows, as the soil dries out.

Now, if the building has shallow foundations and doesn't recover, it'll probably need underpinning.

Great. Spend some money on putting it right and it'll become much easier to sell.

Well, no, not necessarily.

Even though thousands of pounds may have been spent on remedial work, difficulty in finding insurance cover

can just blight the sale of a perfectly sound property.

# Devil in disguise... #

Suddenly, that guide price of 120,000-130,000 doesn't sound too cheap, after all.

What does a local estate agent make of it?

Perhaps the over-riding issue with this particular house is subsidence.

The property has suffered structural movement over time and that's very evidence in the property.

In terms of the impact that subsidence has on the property,

one first has to look at whether or not there is insurance in place

which will enable the works to be done to underpin the property and make it structurally sound.

The problem is that in a difficult market, blight really bites.

And where you have a history of subsidence, that can make selling a property quite difficult.

Not the best appraisal I've heard.

And I fear it's those issues that will put many buyers off.

But this can be rectified and if someone does put this cottage right, what could it sell for?

I think if you're looking to sell this property onto the open market, once all

fully refurbished, underpinning work and everything else, I suspect that you ought to get £250,000 for it.

I think with a history of subsidence and the market we're in at the moment,

I think you'd look to accept £225,000.

This house requires underpinning and that has negative consequences for its future saleability.

Suddenly, this charming detached cottage isn't so charming any more.

Someone found it attractive enough to buy it, though.

Let's find out who that was at the auction.

Great opportunity to buy this and refurbish it and repair it, whatever you're going to do.

You need to buy it first, so where are you going to start me?

We've guided it at 120-130. Start me at 120.

Start me at 110, then. Not going less than this. 110. 110. I'm on the way at the back.

£110,000 is with you. 115, I've got.

Now 120. 120.

And five. 125. At £120,000 I've got.

125 I'm looking for. Are we all done at £120,000? Hands everywhere.

I've got that gentleman there at 125... sorry, 130.

I'll take you at 132. 132.

If you want, 132. And five. 135.

And 40. And 40. And five.

And 50. And five. 150.

£150,000, I've got.

155 I'm looking for. At £150,000 I'm bid.

It's obviously going to be sold. 155. 155, back by the stand. 160.

160. And five. Still in the room.

It's obviously good value. Just who's going to buy it, at £160,000.

I'll take two if it helps you. 162.

Hands out the pocket.

I thought so. 162. 164. And six.

At £164,000. Back to you, sir.

Down the front for the first time.

It's going to be sold. £164,000 for the second time.

Are you having another go? Third and final time at £164,000.

If you're sure you're all done. It's yours, sir, for £164,000.

Following a bit of a battle, the new owners are Paul and Juliette.

Once they'd got the keys to the cottage, I met them there to find out what they had planned for it.

-Paul and Juliette, congratulations.

-Thank you.

-Well done.

-Thank you.

-You got the property.

-Yep.

-I must say, you're in one of my favourite parts of the world... Canterbury.

-Yeah. We like Canterbury.

So what was it about this house that made you want to go to auction and buy it?

I went past it and it sits back from the road and it's a nice cottage. It's detached.

I like the trees, you know, surrounding it.

And I've been looking for something for a long time...

in Whitstable, where I live, really.

More a holiday let, we was looking for, wasn't we?

-We was really. Yeah.

-So I saw this, and I like a project, as well. And I thought I'd like to live here.

So it ticked a lot of boxes for you.

But you weren't at the auction, were you, Juliette?

No. I wasn't. We didn't think we'd get it because we have been looking for such a long time.

And Paul went along with the cheque and I said, oh, well, it'll probably go for a lot more money.

Because there were so many people looking round when we came round, we thought we don't stand a chance.

So he went along and I couldn't believe it when he said he had got it.

Tell me about the day you did your initial viewing on this property.

-It was on a Friday, wasn't it?

-Yes. It was. Yeah.

-Juliette doesn't work on a Friday, so we come up and use it as an excuse for some lunch out.

-Yeah.

And they said come at one o'clock.

So we come at one o'clock and as soon as we got here, they said, you've only got five minutes.

-They had another viewing to do, or something.

-They've all got to go.

So we rushed in and looked round.

-We liked the garden and the look of the place but there were loads of people, weren't there?

-Yeah.

And what did you think when you saw it for the first time?

Well, because I've always lived by the sea, I've always imagined, when

we retire, I would live in the country. And this is quite nice.

It's not too far out but you've got the country feel. So I liked it.

I thought, oh, yes, I could just imagine a white picket fence

and roses over the porch, when you draw a picture when you're a child.

-It's certainly got that cottagey feel to it, hasn't it?

-Yeah.

Paul's been in construction since he left school, but with just five minutes

to view the cottage, he missed its underlying problems.

He only found out when they checked the legal pack on the internet.

# Heaven help me

# I didn't see # The devil in your eyes... #

When we downloaded it, we found that there was some subsidence,

but because I'm in the construction, you know, it didn't bother me too much.

On hindsight, I should have done more homework.

-We're a bit impulsive though, aren't we?

-Impulse buys can go very wrong.

While Paul and Juliette did eventually look at the legal pack,

it's an important reminder that when buying at auction, checking it is a must.

But luckily for them, they had a bit of inside knowledge.

I've got a friend who's a structural engineer.

So, you know, I've got someone I can consult with, and ask their opinion.

They sort of put my mind at ease.

And strangely enough, our friend was actually

-the one that did the survey on this, 15 years ago, ten years ago...

-Yeah.

Which was quite unusual, really.

So, yeah, I knew someone who knew something about the property.

So I suppose from that point of view I'd done some homework.

So that's good. You did a little bit of homework there, so I'm not going to tell you off.

So, although this was bought on a whim, at least Paul has done some research.

But even with his experience in the building trade, I'm worried about the cost of fixing this place.

I allow a contingency of about 20,000.

OK. £20,000. Also, you've got to think about the renovation costs because it does need a bit of work.

Yeah. 20,000 for the underpinning.

I would allow for

the drive and the cross over, about 5,000.

The bathroom and the kitchen and decorating...

probably about another sort of 12,000.

So, 37,000.

-37. Yeah.

-Yeah.

So, guys, that brings the total of this house up to £201,000.

-Do you think, in the current climate, this house is worth that?

-Oh, yeah.

Definitely. It's a lovely location.

Detached. No neighbours.

No. It's very desirable, I think.

-Yeah. I think so. Yeah.

-But to start with, we're only really going to...

it's a long-term plan...

so to start with, sort out the essential things that need doing, and then perhaps we'll

consider renting it until we're ready to actually do it exactly how

we want to renovate the cottage, ourselves, for us to move into.

So the plan is to renovate this cottage and get tenants in.

As Kent University is nearby, they should have a constant supply of students.

But how long before they can advertise it for rental?

I've really got to get on and get the work done because I've got to get an income in...

to pay for the mortgage. So really, I'm hoping to get it all the works done within a month.

-A month.

-Yeah.

-Wow. Now that's a tall order.

Well... you know, because I'm in construction, I've got the people there...

and the expertise... and the backup.

That's what it all comes down to.

Paul's set himself a tight deadline, but the sooner he can get tenants,

the sooner he can pay off his mortgage.

Then they can look forward to having it all to themselves... in about three years' time.

I can picture a little cottage with nice little windows, roses over the door, white picket fence.

Lovely walking into Canterbury, going shopping, you know...

into Whitstable to see my family. That would suit me.

Juliette and Paul made quite an impulsive purchase here, but you can see it is a purchase of passion.

For Juliette, well, she's dreaming about roses above the door, the lovely white picket fence.

On the other hand, Paul is thinking about

getting this done in a month and getting a return on his investment.

But will he do all that work in just 28 days? You can find out later.

Coming up, there's a shock in store for the new owners of this house in Gwent. Look what I've found.

There's a hole here to put my hand through and I can see the house is made of concrete.

We return to Canterbury, where things haven't been easy.

I'd be fibbing if I said it wasn't a struggle.

It has been a struggle.

But first, it's back to Cornwall, where quantity surveyor Alan has been very busy.

We've absolutely tried to squeeze as much out of this space as we can.

Remember this cottage in West Looe, Cornwall, with listed status,

lapsed planning permission and a dry rot infestation?

Those were just some of the things that might have put potential investors off.

Maybe that's why Alan was able to pick it up for just £80,000 at auction, with his first bid.

However, he had already offered £120,000 a few months earlier.

It went on at 185, originally.

-No way.

-Dropped to 165.

And I offered 120, but they refused it as a repossession.

Now, that might sound like a result but it's also an indication of how far

the property market around Looe has fallen.

And with no idea of how the planning office would view his ideas, not even a quantity surveyor like Alan

could estimate how long it would take or how much it might cost to renovate.

Well, it's been a year since I visited, and clearly, a lot has changed in that time.

The old shop frontage has completely gone.

In its place are new windows, doors, fresh render and a coat of paint.

Oh, and that's just the start.

There isn't really anything that we haven't done.

All we've kept is actually the original front wall and back wall

and the substructure, if that's the right term, of the roof itself, actually just the carcassing.

So everything's been totally renewed.

Alan kept as much of the original slate from the roof as he possibly could,

in order to comply with the rules regarding its listed status.

He's also done a fine job of renewing the cobbles at the front.

But what about inside? There have been big changes here, too.

After six months of negotiation between his architect

and the local conservation officer, Alan managed to get permission to adjust the plans.

The original planning permission had a slightly different layout.

We re-jigged it to try and optimise the space.

Because it is a small cottage, we've absolutely tried to squeeze as much out of this space as we can.

A good example of that is the kitchen.

The kitchen we're really pleased with.

We actually managed to pinch some space in here by actually moving this staircase slightly forward, which

has created a space where we've actually been able to push the kitchen in this direction.

We've also used a deeper worktop so actually, you don't end up bumping your head on here.

And I think it's worked really well.

We're also really pleased with...

we've gone for a stone, natural product on the actual splashback.

And I think that complements the natural slate floor, as well, really well.

Alan's done a great job here and it's not limited to the ground floor.

He's used every possible nook and cranny to add extra storage space.

Cos it is a cottage, it's difficult to get big furniture upstairs,

so we've got built-in wardrobes in the bedrooms.

We've got storage on the landing, to make it as practical as possible to live in.

He moved the bathroom into one of the bedrooms on the first floor.

My daughter, she comes round to see what I'm up to sometimes,

so she takes credit for the bathroom being in the position it's in.

So she was quite pleased with that decision.

That means there's now a bedroom on the top floor, where the bathroom used to be.

You've got this little landing area here, as well, which actually is ideal for a little computer station.

And we're really pleased with this room. It used to have a window that was much higher.

You couldn't see out and it didn't make the room such a nice place to be.

The conservation officer was really good and let us make that window much bigger.

And it's made this room much nicer. So we're really pleased how this one's turned out.

One thing that Alan wasn't able to do was fit double glazing, because of those planning constraints.

But he does intend to install a special system to combat condensation.

All in all, this is a fantastic renovation but none of it's been plain sailing.

We did have some real problems, mostly because of the rot and damp,

which has just eaten away and actually destroyed most of the timbers in the floors.

We had to have a steelwork scheme put together to strengthen the building,

and replace all the floors internally.

So it's one of those things that I was hoping I wouldn't have to do.

It's cost me quite a bit more money to actually do this work,

but I think we've got a better product at the end.

With a lack of parking or storage space outside,

moving materials on and off site has also added to the cost of the job.

Alan estimates he's spent around £135,000 on the place, including his purchase price and fees.

He'd like to sell it for £200,000, but with the slump in the market,

he's keeping his options open and may choose to rent it long-term or as a holiday let.

What will two local property experts think?

My first thoughts are -

obviously, he's done a great job inside...

but primarily, how he's managed to get

the shop front gone and a cottage front in...

amazing, he's done a really good job there.

Externally, it looks bright and clean and tidy, and you come in, and he's

obviously spent a lot of time and thought over how he's converted it.

The fellow could resell it quite happily and I'm

sure he'd make some money out of it, but it is a very good letting spot.

Looe is hugely popular.

This property's an ideal holiday let.

You've got three bedrooms so therefore you're going to accommodate four people,

but the living space isn't really big enough for a permanent living home.

It sounds as though the experts are leaning towards letting the property out.

But what sort of return could Alan get?

If you were in a holiday let, then in the height of the summer, you'd be looking at around £600 per week.

On an ordinary residential letting, you're probably looking at about that sort of money per month.

£600 per calendar month would provide a yield of around 5.5% on Alan's £135,000 investment.

I'm hoping to rent it out for about £625, so that's not a million miles apart.

And on the holiday market, I mean, we run holiday accommodation...

I'd say that's quite realistic.

I was hoping a little bit more but around that sort of figure.

How much could Alan make if he decided to sell?

Remember, he spent around £135,000 on it, and would really like to get around 200,000.

If I had to put the property on the market today, I'd pitch it at around £180,000.

I would recommend an asking price of 185,000.

That's around a £45,000-£50,000 pre-tax profit.

But after a year's work, it sounds as though Alan's mind is made up.

I think I would rent it in the short term, just to wait till the figures get a little bit higher.

But, you know, quite pleased with that.

In fact, Alan did decide to rent out the property.

Just a few days after our filming, he found tenants who are paying him £650 per calendar month.

So, this is Blackwood and I'm here to see an ex-local authority house.

Three bedrooms, semi-detached,

at a guide price of 35,000-41,000 quid, which for around here, seems like pretty good value for money.

So, let's find out what's wrong with it. Well, for a start, the entrance is quite unusual.

You have this sort of zig-zaggy slope.

Now, you may consider this to be a real bonus...

somebody with walking difficulties, perhaps, or in a wheelchair.

On the other hand, you could consider it a bit of an eyesore.

Removal of the wheelchair access could cost quite a bit

and the slope itself would be rather steep, too.

However, the house seems to be in reasonable condition with new uPVC glazing always a bonus.

Okey-dokey. Right into the entrance. Now, this is an ex-local authority house,

so we're expecting it to be really solidly built. Quite right, too.

Lots of storage space. That's my experience of these kind of places.

Got your stairs up to the bedrooms, there. You've got a front sitting room here.

Then through to the rear of the property where you've got rear lounge, sitting room area.

I would actually use this as a dining room.

Nice view out onto the garden. Maybe put some French doors in there.

And then through to the kitchen. Perfectly serviceable.

These units are obviously not brand spanking new but if you're renting this place out, they would do.

You've got your utility room there. You've got a loo. Everything you need.

Obviously, there is a bit of work needed, mainly restoration and redecoration.

I'd say the central heating needs to be replaced but there's nothing here

that's going to surprise the new owner.

Well, the good news is, the bathroom and loo are upstairs,

although there is only a shower, a disabled access shower, so no bath.

You might want to put one of those in.

Three bedrooms, small box room there. Double bedroom here. And a double bedroom at the back.

Looks like the paper's coming off the ceiling.

I'd want to just check that out a little bit more but apart from that,

you know, it's a solid, good-sized little house.

Outside, there's a decent-sized garden that just needs some TLC.

But all the signs point to an ideal family home.

So, why the low guide price of just 35-41 grand?

That needs further investigation.

Now there's something which is worrying me about this house, and it's not that obvious.

But whenever I see pebbledash like this, I get an alarm going off in my head

which says "I wonder what this house is constructed of?"

cos you want to try and avoid houses of non-standard construction.

You've probably heard me talking about that before.

If I do a bit of investigation here, look what I've found.

There's a hole here to put my hand through and I can see that actually, the house is made of concrete.

So, it is non-standard construction.

Now that may instil fear into you, and quite rightly so.

However, the good news is that there are different kinds of non-standard construction.

And this happens to be something called Wimpey no-fines.

Thankfully, generally, these kinds of properties,

with that construction, don't have any problems.

So, it's mortgageable, and nothing to worry about.

A no-fines Wimpey home essentially means

that there's no fine aggregate in the mixture used to build the house.

So, it really is a solid one.

But what does a local estate agent make of it?

This could be quite a nice property.

Obviously, there are things that need to be done.

The kitchen needs a little bit more refinement.

The units are quite nice standard.

And I would probably do something with the outside

because it has no kerb appeal, whatsoever, at the moment.

And basically, if you don't like a house from the outside, then you're not even going to view it.

Rental income for this sort of area's quite high because it's

quite near the high street and all the local amenities here.

So, per calendar month, I would say about £500 per month.

If someone snapped this up near the guide price of just 35,000-41,000,

what could it sell for once renovated?

Once refurbished to a nice standard, it would probably range anything from £85,000-£80,000.

So, what appears to be a fairly normal house on the outside is, in fact, non-standard construction,

but thankfully, it's of the type that shouldn't give too many problems

when it comes to raising a mortgage.

However, it could still catch out the unwary.

Let's find out who bought it at the auction and if they were prepared.

What shall we say on it? Can I see someone near 60? Start me.

Lot number 260 then.

Start me. I'm in your hands. Who's got 55 then to get on?

55.

50. 50. Thank you, sir, at 50,000.

That's no money for it. At 52,000, can I? At 50...

all right. One I'll take. 51 is bid.

Two is bid. Thank you. At 52,000.

At 52. Three. Thank you. At 53.

You're out right in front of me.

It is your bid, sir. 53. 54.

Thank you. 54. 55?

55. 56 on my left here.

Half, thank you, in the back.

56,500. Seven, can I say?

At 57. Make it another half, is bid. Thank you. 57,500. Eight, can I?

At £58,000. Am I missing you? Half.

Thank you. Fresh bidder at 58,500.

Nine seated here. At 59. Half.

Thank you. At 59,500. 60 bid here.

Can I take another one there, please?

Are you coming back in, behind?

How much... A half. Thank you. 60,500. I thought you'd got it.

At 61. And another half. 61,500.

Thank you. 62. 62 I'm bid.

Do it again, sir. It's 62,000. Is it going to be another one?

Change your mind if you like. At £62,000. It's yours, sir.

Thank you very much. Buyer number ten.

The successful bidders for that semi in Blackwood were local couple, Richard and Eileen.

I met Richard to hear about their plans and it turned out he's a lot more local than I thought.

Richard, congratulations. Nice to meet you.

Why did you want to buy this house?

I was born about 500 yards away.

And at the moment, I still live 500 yards away but in a different house.

-So I do know the area pretty well.

-Pretty well.

-Pretty well.

You were born 500 yards away and you now live 500 yards away.

That's right. Yeah. Not in the same house.

I have moved once or twice, but always in Blackwood.

When I was young, you know, and you get invited to birthday parties,

I'm pretty certain this is one of the houses I came to, you know.

Used to play kiss chase and things like that,

-round the outside.

-You were playing kiss chase in the garden.

So it has very happy memories for you then.

Yeah... bearing in mind, I was probably only four or five at the time, you know.

And I did grow up slightly and I wasn't quite so tall at the time.

Fantastic. So, tell me more about you.

Well, basically, I retired about two and a half years ago.

I had a specialist builder's merchant's company, about ten miles away.

And we got to the stage where we thought we've got to start thinking

about retirement in a few years' time.

And obviously, we had some money for the business which we invested at the time,

which over the last year or so, because of the credit crunch,

we've just seen our income drop by about 80%.

-80%.

-80%. Yes.

Good heavens.

You know, and when we retired we thought, oh, we can live quite comfortably

on our income from our capital.

But we thought perhaps it's time now to do something else and look at something else to do.

Plus, I was starting to get a little bit bored.

# Golden years, gold... #

So much for an early retirement.

Seeing such a drop in their savings, Richard decided enough was enough.

In order to secure their pension, he and his wife, Eileen,

invested in a couple of properties which, so far, is going well.

-What are the plans for it?

-The plans are to strip it out a little bit, see what we come across.

And then we decide on how much replastering's got to be done and

how much work's got to be done to the kitchen.

And if we're going to sell it, then obviously we're going to

do it to a higher standard than if we're going to let it back out.

-But you're not quite sure what you're going to do, at this point.

-Not sure, at the moment.

We've got a couple of other properties we've also bought, which are in stock,

waiting for us to do something with.

So we may renovate this one to a higher standard and sell it on.

-You haven't talked about the front, which obviously was put there for somebody for wheelchair access.

-Yes.

What are you going to do about that? Are you going to leave it like that so it would be suitable for...?

At the moment, I think we will because once somebody found out we bought it at auction,

they came along to me and said, well, look, you know, if you're thinking of letting,

we wouldn't mind being considered because we're expecting our first child

and this would be ideal for us cos it's close to our mother, we can get the pram up and down.

I hadn't thought about using it for a stroller. Yeah.

But if we find that it does put people off, it's not too much

of a job to put a machine in, get rid of it and reinstate a garden with a set of steps out the front.

As the estate agent pointed out, lettings are strong in this area.

For someone to have approached Richard before he's even started work is encouraging.

But does the non-standard construction of this property worry him?

No. Not at all. I've known these houses for many years and during my working life,

I've worked on many of them, as well. So it's not a problem.

It's never been a problem with mortgaging them or anything else.

I did actually just check with my solicitor before we went to auction just to make certain that

there isn't a problem if we did decide to sell it,

for people to be able to get a mortgage on it.

And he said no, there's no problem,

he's dealt with many, many of these because there's an awful lot of them in this area.

So how much are you planning to spend doing it up?

Well, if we're going to let it, we've got a budget of about £5,000.

But if we're going to do it to a standard for reselling,

which includes a fair amount of replastering, especially upstairs...

new electrics... well, I think it could go up to £8,000 or £9,000 then.

What kind of timescale have you got?

Well, we're going away in a couple of weeks' time and we're away for a month,

so we're not really going to get much done before we go away.

But we'd like to think that when we come back,

about a month's work on it, cos again, it's just myself and my wife.

She tells me what to do and I do it.

In fairness, she's very good, very handy with a paintbrush.

-And she's not bad on a cement mixer, as well.

-Fantastic.

-Yeah.

-She's a keeper.

Yes. So we're probably looking at six weeks' work, realistically...

to get it into a reasonable order.

Well, listen, congratulations. Good luck and we look forward to seeing how you get on.

Thank you very much, indeed. Thank you.

Well, from playing kiss chase in the garden to actually owning the house, Richard has come a long way.

I am a little bit concerned that he doesn't know what he's going to do with it, though.

Will he rent it or will he sell it?

A very important decision cos everything hinges on it when it comes to the renovation.

You can find out what he decides to do later in the show.

In the game of property investment, you want to make sure you're holding all the cards.

But did today's developers get a full house, or did they go bust?

Time now for them to show us their hands.

# You look like an angel... #

When husband and wife Paul and Juliette paid £164,000 for this picturesque cottage

near Canterbury, in Kent, it was because they fell in love with it, but inside, there was a dark side.

# You're the devil in disguise

# Oh, yes, you are Devil in disguise. #

Subsidence had caused some major internal problems,

but as Paul was a master builder, they didn't scare him.

It took just ten weeks to fix and renovate. But it's not been easy.

# Heaven knows how you lied to me

# You're not the way you seemed... #

I'd be fibbing if I said it wasn't a struggle. It has been a struggle.

But, you know, no pain, no gain.

You've just got to, you know,

-buckle down and get on with it.

-The best bit is seeing it all finished...

really. And also, I'm really pleased with the way it has turned out.

With the help of his trusted team, Paul has successfully

exorcised this cottage and all those cracks are just a memory.

While the couple hope to live here themselves one day, the initial plan was to renovate

and let it to students for the next couple of years.

To maximise their return, the dining room's now a bedroom

and upstairs, Paul has made a few adjustments to the existing bedrooms.

This was one of the larger bedrooms, but to create a bigger box room, we've put in this petition here...

and here. So, as you can see, as we come in now to the box room...

it's a bigger room.

This was the original wall...

of the box room. So we've knocked through here

to give us a room for our wardrobe, desk and chest of drawers.

And a nice area...

for the bed.

This gives us my square footage for student lettings, what they require.

For a small cottage, there's actually quite a lot of room.

However, if the four students can't find enough space in the communal lounge,

or the brand new fitted kitchen, there's plenty of space outside.

When we first looked at the property, the boundary came

from over there, just down to that behind them trees there.

Well, we had to clear it cos it was all overgrown.

So we got a digger in, levelled it and we found

that the boundary actually went far-reaching over there.

So it makes the property a lot bigger here, the garden area.

So we've levelled it off a bit, we've grass-seeded it.

And it'll come up green so it's still an added benefit on the property, really.

Although Paul has been busy on other projects, they've still completed this cottage on schedule.

That work included underpinning to solve those structural issues, on top of a thorough renovation.

Did they manage to stick to their original budget?

I said 17, and you know, it really has cost 17.

If I had put my own time on top of it, it probably would have come out more,

but as it's my project, you tend to do a lot of things... you know,

for nothing... for free.

That brings the total investment to date to about 181,000.

Now that it's finished, it's all ready for the first group of students.

With this our first year of ever renting a house out to students,

we went to a student letting agency, so they took all the hard work out.

They found the students for us. And they've got four moving in.

And they collect the rent but we'd be doing the partial management,

so we'll still have a good eye on the cottage and any problems that come back to us.

They paid 165,000 for this property at auction and spent £17,000 on renovation.

To make it work, they're looking for about £1,200 per calendar month in rent.

What will two local estate agents think of that?

First time I've been back to the property

and they've done a really good job on it.

It's been done on a budget but it's been done pretty well.

And they created a good student house.

This will be good for students - it is detached, it has got parking

and it is a configuration that can be let to four.

And there are lots of groups of four looking to rent.

Arguably, this is a really good student house.

It's detached. It's got parking. It's a really quaint cottage.

On the other hand, some of the bedrooms are quite small.

It's got no ensuite facilities, so I think it's going to be

much of a muchness for some of the purpose-built student accommodation.

There is a massive demand for student accommodation in Canterbury.

There are something like 35,000 students in the population of Canterbury, which is about 40%.

That will be music to Paul and Juliette's ears, as they'll

almost certainly be guaranteed tenants for as long as they want.

What kind of rental do the estate agents think they could get?

I'd expect a rental for this property in the student market to be

somewhere around about £300 a room, per month, generating about £1,200 per calendar month.

I would expect this one to let at about £300 per person, per room.

£1,200 per calendar month.

And the students pay for 11 months of the year.

-Oh, good.

-Yeah.

-Right on the button there.

-Who we went with.

Yeah. It was obviously the right choice.

No surprises there then. A good solid rental return.

But has all the work done here increased the value of this property?

The guide price for this cottage was £120,000-£130,000.

They paid a little bit over the odds... 164,000...

and they spent a reasonable amount on the property, £18,000.

They've done a good job with that budget and I think they've created quite a good investment.

It's going to be great for the student market

and in terms of capital value, you're probably up to £225,000.

-Yeah.

-That's good. Yeah.

That's a pleasant surprise. Yeah.

In conclusion, it's a sound investment, both in rental and long-term value...

exactly what Paul and Juliette planned all along.

We're doing this for ourselves, long-term.

Being self-employed, I haven't got a great pension, so you know, you have got to think about those things.

It soon comes round.

And it's been hard work, but you know, no money's easy.

You've got to work at it, so yeah, it's been a good experience. We'll do it again.

When Richard and his wife, Eileen, sold their builder's merchant's business

and settled into early retirement, they thought their working days were behind them.

But seeing their income drop as much as 80% due to the credit crunch,

they decided to take action and invest in property.

One of those was this three-bedroom semi in Blackwood which they bought for £62,000.

We returned after nearly four months to find out how they'd got on.

Well, first thing which is happening after three-and-a-half months,

once we started it, we went away for a month.

And we left it to a plasterer and in fairness, he did a first-class job of it.

# We're all going on a summer holiday

# No more working for a week or two... #

I like Richard's style of developing, but in fact, this was no holiday.

On their return, he, his son and wife Eileen did most of the work themselves.

When we started in here, we realised that the wall wasn't actually the wall, it was hardboard and everything

was fitted on to hardboard which was falling away from the existing walls.

So we decided we had to rip it all out and start again.

And we think it's come out quite well.

The existing kitchen was not as big as this.

We, obviously, strayed a bit in to the living area, but to compensate, we put the French

windows in and generally, yes, we're very pleased with it. We are quite pleased with the way it's come out.

As well as the new kitchen/diner, the whole property's been renovated to a high standard.

But it took slightly longer than expected as they were working

on another three properties they'd bought at the same time.

So much for early retirement.

# And I said

-# Are you ready

-Are you ready

-# Are you ready

-Are you ready

# To retire. #

Yes. It has been hard work and having several houses on the go at the same time

has meant I'm working seven days a week now which is coming up to retirement with a vengeance.

But, yes, I've enjoyed it. It gives me a purpose of getting up in the morning. The highlight of the day,

a few months ago used to be walking my grandchildren down to school and picking them up in the afternoon.

And I still like doing that. But I've certainly

enjoyed being more hands-on than I have been for a couple of years.

At the back of the house, Richard's wife, Eileen, has been busy with the garden and it's looking good.

Overall, the renovation is a big improvement, but it must have cost a lot more than originally budgeted.

We didn't pay a huge amount for the property to begin with.

We put £11,000 into the property.

And I'm still quite happy with what we've spent on it.

When we first met, Richard hadn't decided whether to let this property or sell it.

After investing a total of £73,000 buying and renovating, what's he decided to do with it?

By putting the quality into the property as we were renovating it,

in five years' time, that quality will still be there if we do decide to sell it.

So we're going to rent it and actually we have a tenant for it.

Richard paid just £62,000 for the property at auction and spent £11,000 on renovations.

What will two local estate agents think of this property and its potential returns?

I think this property has been renovated to a very high standard.

The colours are neutral and will appeal to the majority of people,

both in the rental market and for the sales market, also.

I think the renovation is done to a very, very high standard.

It's almost like a different house.

The only downsides, I would say, at the moment, the bathroom, the way it is, won't appeal to everybody...

and the front of the property is a bit of a different situation, as well.

Hopefully, the tenant that Richard has lined up

won't mind not having a bath, but that may depend on how much the rent is.

For rental, I would expect this property to achieve anywhere between £475 and £500 per calendar month.

Rental assessment on this property, I would say £500 per calendar month.

Well, pretty much on the money there because we're actually letting it

£495 per calendar month, so I think they were pretty close.

With a tenant ready to move in, Richard is happy to let for a while.

As he's invested a total of £73,000 buying and renovating this property,

he needs to know what it might be worth in the current market.

I'd put it on the market at £110,000, to look to achieve 105.

-I would market the property between £110,000 and £115,000.

-I've got no problem with that.

I would have been happy if it was in the 95 mark and anything over the 100, quite happy with it.

Based on those figures, Richard would make a pre-tax profit of

around £30,000-£35,000 if he decided to sell.

That would go a long way to helping him retire properly.

# I want to retire

# No longer required

# I want to get by without the man on my back... #

Am I tempted to sell?

No. I think the lady who's going to rent the house tomorrow would

strangle me if the day before she's due to move in, I change my mind. No.

We're quite happy to long-term rent, nice tenants.

Nice tenants coming in to a nice area, nice neighbours.

I've got no problem with it.

But the house will be a nice house for many years to come.

With another two properties already on the go, it seems that Richard

is quite content not to retire for at least another few months.

So, lessons have been learned and some money has been made.

So tune in again for some more Homes Under The Hammer.

-We'll see you then.

-Goodbye.

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