Episode 34 Homes Under the Hammer

Over the years, we've witnessed the ups and downs of the housing market.

Whether it's an investment or a home you want,

you want to make sure there are more ups than downs.

So make sure you buy your house at the right price.

One way to do that is visit an auction room and buy your house under the hammer!

We've all read about the ever-changing property market.

But doing a deal at auction is one of the simplest processes.

Hand goes up. Hammer comes down. Bought!

That's what happened when today's properties were sold.

Coming up... In Kent, there's a good-sized house that could be pretty APPEALING.

Wallpaper stripping... Not too much of a problem.

I find a semi in Luton that's not exactly touchy-feely.

There is artex slapped on everywhere.

You can see it all dragging down the walls.

And in Plymouth, this four-bed terrace

has potential for more bedrooms.

That is where you are going to make your money with this property.

These properties were sold at auction.

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

It's yours, madam.

I'm in Crayford, North Kent, 15 miles east of London.

The town has great commuter links and has had a facelift over the last few years.

So this is an attractive spot to buy property.

What do you get for a guide price of £215 to £225,000?

Well, potentially this. It's a pretty reasonable two-bedroom semi-detached.

Close to the shops, good transport links. Not bad at all.

But it gets better, because not only do you get that semi-detached property,

you get the two-bedroom semi-detached property that's attached to it.

Now I've got you interested.

These two semis have been joined together

to create one large detached house.

From here, I think it looks wonderful.

However, on closer inspection, it looks like it could do with new windows

and maybe a splash of paint.

DOOR CLANGS

Not the best of designs. Er, OK...

If you can get through the door,

past the meter cupboard... I don't know!

..into the front living room... Oh, dear, oh, dear!

This...

..is a mildew problem. Wow.

My guess is that there's been some sort of a water leak in the past.

You can see the joints on the ceiling, the water's been pouring through there.

It's gone down the walls, it's probably gone under the floors.

It doesn't smell damp in here.

The floor has had a chance to dry, but you don't know what damage has been done.

My guess is, a water tank in the loft has leaked and this has flooded down here.

But the whole room has flooded.

I mean, wallpaper stripping... Not too much of a problem.

I've done my bit to help the restoration!

But then through into the kitchen,

you go from mildew disaster into, well, Swedish log cabin!

Is it a kitchen? Is it a sauna? I don't know! All this woodwork!

It's dark, it's dingy, and that's not helped by the wood.

But it's not a bad size. Lots of hidden cupboards and things like that.

But, realistically, you're looking at taking this out and replacing it.

But all in all, a very good start. Well, apart from the mildew.

There are four reception rooms downstairs

and it looks like the kitchen of one of the old semis is now a bathroom.

The house will need to be cleared and modernised throughout.

But for the price, this is a big place,

so I'm seeing big potential.

So upstairs and...

Whoa, whoa, whoa! The damage from the water is even more apparent.

My guess is that the water tank is actually above me,

and the ball valve that lets the water in has corroded, maybe even just the washer's gone,

that's resulted in the tank overflowing,

flooding the house and causing the damage you can see.

My concern is the damage you can't see. The ironic thing, of course,

is that it was all caused, probably, by a 25p washer.

What have we got? Landing here. Bathroom there. Dark and dingy. Definitely needs to be sorted out.

Bedroom here. Then it gets very interesting, because...

..as I mentioned before, this is two properties that are being converted into one.

What they haven't done well is maximise the space.

They've knocked down the wall and put corridors through.

If you're going to do this, you want to create big, open spaces,

not these tiny little rooms, that don't really work for me.

However, that does throw up some interesting possibilities.

It looks as though not enough thought went into the conversion.

The two original houses were simply joined by some doorways.

This could be beneficial if the buyer decided to reinstate the two properties -

a way to maximise resale value.

Or with a bit of creative thinking and some cash,

the two floors could be opened up to consolidate some of those smaller spaces.

It would be three beds upstairs, two large receptions downstairs,

plus a large modern kitchen.

So it seems there's great scope.

And there's another bonus at the back.

Well, no, I haven't wandered out into a local woodland.

This is actually the back garden of the property

and it is an absolutely delight.

Mature trees, shrubs,

lots and lots of work gone into creating paved areas, pathways through the trees.

It is absolutely beautiful.

If you set about trying to do this, it would take you 100 years

and probably £20,000 in terms of landscaping fees.

Real bonus.

So at what was a guide price of £215 to £225,000 for all this,

I think it was a real opportunity for someone.

I asked a local estate agent what he thought.

My first impressions of the home are,

very distinctive, nice-looking property from the outside,

almost cottagey.

There's some fairly bad mildew and damp round the house.

The ceilings will probably have to be replaced,

walls stripped right back to the bare brick again

and replastered and rendered again.

I would suggest that the property be divided back into separate homes,

put a front door on the other part of the house,

create the walls dividing the house between into two

and then fully refurbish the house again.

How much rent could each semi-detached house earn?

For rental purposes, I would suggest a marketing price of around £850 per calendar month.

Bearing in mind the guide price of £215 to £225,000,

what might it sell on for?

After renovation, each property would be worth approximately £250,000 per property.

Well, a lot of work to be done, but I think there's potential for big profits with this place.

The key to that is to turn it back from one property into two.

You don't know how much water damage has been done,

but you'll find that out once you rip the place apart.

Let's see who fancied the opportunity when it went under the hammer.

Lot 65 is the two properties.

The big property that should be semis.

A guide of 215, 220. Is there a bid of 200,000 in the room?

200 I've got. And five. 205.

205. And ten is against you, madam.

210, it's with you again. 215. 215 I've got.

220 now.

220 unbid. And 25. 225.

And 30. 230. And five. 235.

Still worth it. £235,000.

232 I've got in time. 234. 234. And six.

236.

£234,000 I've got, then.

Is it going to be sold for the first time?

Second time at £234,000.

Third and final time, if you're sure you're all done.

Well done. It's yours for £234,000.

For £234,000,

the successful bidder was Dawn.

She bought the house with her son, John, and her husband,

along with John's girlfriend and her parents.

So it's a real family investment.

They've bought the property to develop and sell on. All are hoping to make a profit.

-Dawn, John, lovely to meet you both.

-And you.

-Congratulations!

-Thanks.

-This is an interesting project, isn't it?!

-Just slightly!

-This is your son, John.

-This is my baby.

-Your baby!

-I had four of these!

-You're the youngest?

-I am.

What's your involvement, John?

-I will be doing all the doing-up to the place.

-Right.

It's a good project. Can't wait to get stuck in.

-What got you into property?

-I've been a qualified carpenter for about six, seven years.

-You're looking at him proudly!

-I am very proud of my John. Very proud.

I'm proud of all my boys! But John most of all.

Aww! Why?

Well, John was seriously ill a few years ago.

-Really?

-We've nearly lost John many times.

-Really?!

-Yes.

I had acute myeloid leukaemia seven years ago.

-You had leukaemia?

-They gave me an hour to live.

-What?

-They said, "He's got no chance." I went to six stone in three weeks.

And here you are today,

-standing, talking, about to embark on a project!

-Absolutely!

-How cool is that?

-It's brilliant. Absolutely brilliant.

Congratulations! So there's more in this than just buying a house.

BOTH: Yes.

What's the big picture? Keep it as one house, convert it into two?

It's going to go back into two. We can make more money that way.

In terms of converting it into two, given that it was originally two, not too massive a job?

-It's not too bad. It should be quite easy.

-Right.

-Who's going to do the work?

-I've got a couple of people who work alongside me,

but anyone that I need to pull in, I will do.

But I'll oversee most of the work.

-But you're doing most of it.

-I'll do most of it myself.

-You'll have an electrician.

We've got to have an electrician.

My brother's a gasfitter, so he can do the pipe work.

-Other than that...

-And Ian does windows.

-Yes, my other brother does windows!

And how much do you think it's going to cost?

I originally said 40 to 50,000.

-Er, but the thing is...

-I'm a shopaholic!

This is it! But we think that there's enough profit in it.

Anything we come up... If we make a profit, it's a bonus. It's the first one for us.

Hopefully, we'll make a lot of money.

I think you will. By going down the splitting-into-two route, most definitely.

So 50's your maximum ballpark? That's a healthy budget.

If it goes over, it goes over, but we don't think it will.

It certainly looks as though John has the wherewithal to tackle this massive project,

so I think his family are in safe hands.

-If it's broken, fix it.

-That's it. You can put anything right.

Even at a cost, it doesn't matter. If something breaks, you can fix it.

-Including yourself.

-That's it! I've learnt that.

My little trip has taught me a lot in life.

And, er, it's only up from now, hopefully.

MUSIC: "Fix You" by Coldplay

# And I will try

# To fix you #

-Well, listen, brilliant story. Congratulations.

-Thanks.

Good luck. We look forward to seeing how you get on.

-Cheers.

-Lovely. BOTH: Thanks.

Well, what a positive and inspirational story all round.

I'm delighted for Dawn and John that they've taken on this project,

along with their respective families.

Lots of work to do, though. I am concerned by the water damage, which they haven't discovered yet.

But overall, we wish them all the best.

You can find out how they get on later in the show.

I'm in Luton, Bedfordshire,

known for its international airport, the fifth busiest in the country.

I just hope that our next property can take off, too!

And here it is! It's a three-bed semi-detached house,

and the guide just £85,000.

OK, it might not be all-singing and dancing from the outside,

but there is a party wall!

Let's see what it's like inside.

Fingers crossed that it's a real high-flyer

and not a Plane Jane!

So inside... There's quite an interesting use of texture in this place!

It's fair to say there is artex slapped on everywhere.

You can see it all dragging down the walls.

Lots of swirly patterns on the ceiling.

Whoever takes this on has got to think about skimming over this

and giving it a much more modern feel.

Big lounge. Lovely big windows. Bright feeling to it.

That's fantastic.

And downstairs there's a bathroom.

I can only see a sink and a bath. No toilet.

I'd like to think it could become a three-piece suite.

Maybe underneath the stairs there's enough room to put a WC. That would open this space up.

And through here, a good-sized kitchen.

Not bad at all. Access to the garden.

It's all very '70s, it's dated, the tiles need ripping off,

but once you have installed something new, clean and modern, you've got yourself a great house.

# I've got potential #

You could definitely make this something special.

All the rooms offer lovely proportions.

French doors at the end of the lounge would be a welcome addition.

Blocking up the door in the kitchen would allow more space for appliances and units.

So up here, we've got three bedrooms,

and I'm glad to say there is a toilet!

And its next-door neighbour is the sink!

Not very practical to have the sink there, with the wall and a toilet.

I think what you need to do in this property is, knock this wall down

and perhaps have this as a shower room

so you do offer some washing facilities upstairs.

I think this house will be more functional once you've done that.

The bedrooms are all good sizes and the garden is fabulous.

It backs onto a school playing field,

so is not overlooked by other property.

That's a big selling point and means a fantastic sense of space.

When looking to invest, location and transport links are at the top of my list.

Transport couldn't be better here in Luton.

There's an excellent fast rail service to London and Brighton.

The M1 is at the end of the street. Plus, you've got the airport.

Road, rail and air. Luton has it all.

Luton Airport employs over 500 people directly

and around 8,000 indirectly.

They all need homes, which is great news for investors.

The airport is a five-minute drive from this place,

making it perfect for employees there.

What does the local estate agent make of it?

It's a good house, actually. Good location.

Obviously needs a little bit of work inside. Full refurb, I would say.

Very good saleable area, as well.

This could be quite a money-spinner. Let's talk figures.

When renovated, I would say you're probably looking about 145, 150 on the market.

With the airport so close and many employees seeking accommodation,

letting has to be a tempting option.

I would rent this out between 650 and 700 a month.

So, will the property on Keepers Close be a keeper?

Personally, I think it's a good one to go for.

It doesn't require too much work, and the airport and transport links

mean the rental market is strong in this area.

Let's see who agreed with me as we go to auction.

Who wants to give me a start? 90,000?

If not, you tell me. We'll start there. 70 I've got.

75. 80,000.

85?

90,000. 95.

100,000? He knows the value. 100 I've got.

105? 110. 115.

115. New place. 116.

117. 118? 118, somebody want to come in?

118. Back in. 119. 120?

-120. 121.

-120 and a half.

120 and a half. 121?

You might have done it. It's with you. 120,500.

It's going to the gentleman at the front. Anybody else? 120,500 for the first...

120,500 for the second...

120,500 for the third and final time.

All done. Sold. 120,500. Well bought.

That successful bid of 120,500

came from Matt and his partner, Jane.

Matt owned a printing business which closed due to the recession,

so he's now moving into property developing.

I met the couple back at the house

to hear their thoughts on their first auction purchase.

Guys, congratulations.

-You paid 120,000 AND £500!

-Correct.

-Let's not forget that!

-No.

-Happy with the price?

-It went a little bit over what I'd intended.

I was going to stop at 120, but it got so close

I thought I'd give it the extra 500 and I ended up getting it.

Why do you guys want to buy a house?

I need to do something, to be frank. Our business, I've had to wind up in the summer.

I've been looking to do other things.

Unfortunately, it's a difficult age to change career.

I'd always enjoyed property and DIY,

so I thought it'd be a good chance to combine the two and, hopefully, earn a living.

Is this going to be a new career for you?

I've got a couple of properties, and what with Jane's, that's three that we own.

So with this one, it's a good one to add to the portfolio

and, hopefully, take things on from there and expand.

Is this going to keep him busy, Jane?

He's great at this sort of stuff.

He's great at the kitchen stuff and fitting everything.

He can do it all himself, very skilled.

I'm going to give a hand with the decoration, the painting.

Matt's obviously keen to get started.

But if developing is to be his new career,

he'll need to keep on top of the figures.

How are you going to go about it? Let's start off with your budget.

My budget, hopefully, keep it to under ten.

More eight to 9,000.

We've got a major expenditure on the two bathrooms and the kitchen.

Apart from that, it's a sound property. It's bricks, mortar and a tiled roof,

so, hopefully, we can't go too far wrong.

I don't want to skimp. I want to make it look nice and get some good tenants.

You are going to rent this out. No chance of putting it up for sale?

Never say never. But I think we're going to rent it.

With such strong transport links, I'm sure they'll have no trouble renting this out.

But there's work to be done first.

-What sort of changes are you planning on making?

-There's some interesting features!

Gold paint around some of the, er...

-I don't know what you call those!

-Yes! The picture rails!

-That's got to come off!

-That'll be coming off.

I think the, erm, the artex paper

in the hall and stairs, is not... I think we'll just paint over that.

We'll have a clean, contemporary look. Neutral colours.

Just a nice, clean, fresh, practical look for a family.

How long do you think it'll take you to do the work?

Of course, luckily I can go full time with it now,

so, hopefully, within two months.

Are you really going to be here every day, doing all the work?

-Er... Apart from bank holidays!

-Jane's laughing! "Yes!"

-Hopefully, I'll get a round of golf some time!

-Have yourself some leisure time.

I've no doubt Matt will give this his best shot,

but he'll have to keep his eye on the ball,

especially if he's to complete this in just two months

for less than £10,000.

But I need to know, how well do this couple work together?

As long as Jane does what I say, we'll have no problem!

-That was a nervous laugh!

-That was a gallows laugh!

-Er, I'll do as I'm told for a short while.

-Five minutes.

We work really well together. Matt's got a good business brain and he's very practical,

and I like the design bit. I'll roll up my sleeves, so we actually make a good team.

# You and me

# All that we need is each other

# That's why we

# Make a good you and me #

This property purchase could signal a career change for Matt.

And with Jane by his side, I'm sure he'll make a huge success of this.

But will he be able to turn this around in just two months?

Having run a business, he'll be used to deadlines, but will he meet this one?

You can find out if he does it later in the programme.

Coming up... In Plymouth, a four-bed terrace

where you've got to be careful what you touch.

Oops. Oh, dear. Literally falling to pieces!

Back in Luton... How did Matt and Jane get on with their semi?

Absolutely rank. It was actually disgusting.

But first, were things as bad as they looked in Kent?

I put a crowbar onto a bit of skirting and it went through the wall.

It's back to Crayford in Kent now,

where earlier, we met John and his mother Dawn.

They bought this rundown, decrepit cottage for £234,000.

It was originally two semis that had been knocked together to make one.

But they plan to convert it back into two separate dwellings.

That was a tough job for first-time developer John.

But he's used to challenges, after overcoming leukaemia a few years ago.

They gave me an hour to live.

-What?

-They said, "He's got no chance." I went to six stone in three weeks.

And here you are today,

-standing, talking, about to embark on a project!

-Absolutely!

-How cool is that?

-It's brilliant.

So this was one project that was much more about rebuilding a life

than a house.

It looks like it's been a fantastic total transformation.

For John and Dawn, it had soon become clear that that was what they had to do.

It was in such a state that it needed everything taken out and starting from scratch.

All the internal walls came out from upstairs.

Where there was so much damp,

all I did was put a crowbar onto a bit of skirting and it went through the wall.

They were concrete walls, as well. But it was shot to pieces with all the water.

They all had to come out. We were left with a big open space.

From that, we re-laid the walls. They've gone back in the same place they were.

We've replaced all the ceiling rafters, all new boards in there.

We've insulated all the walls. New plumbing, new electrics.

Fully decorated, obviously. Inside and out.

Everything that needed doing has been done.

It took 18 to 20 skips to cart away all the rubble.

But it looks as though it was well worth it.

With the house returned back into two semis,

John and Dawn have made the layout of number 22 a mirror-image of number 24.

It may be a copy, but it's a remarkable renovation nevertheless.

# Just the two of us

# We can make it if we try

# Just the two of us

# Just the two of us #

This is the bathroom that we've done. We've put in a pea-style bath,

with tiles all round this part, with a nice strip of glass tiles.

We've carried it on through the floor to make a feature.

We've kept everything very neutral

so that anyone that moves in can dress it to their design

and put their own touches to it with their colour schemes.

So while Dawn dealt with the design,

John faced up to the structural problems.

The problem we had in this house was,

we have a pillar on the opposite side of the kitchen, it mirrors this one,

and we wanted a nice flat wall to put the kitchen units on,

and to do that, I've housed it inside a cupboard.

We did have drawings made up to put new steel in,

but the council wouldn't let us do it

because it was going to go through the party wall.

So to get over that problem, so the kitchen's easier on the eye,

I've just housed it in a cupboard and it looks a lot better.

It's that attention to detail that makes John and Dawn's renovation

such a top-notch product.

While the interiors are identical, the back gardens have been split and tidied up

and the wonderful character revealed.

With the help of family members,

the pair only overran their four-month schedule by a few weeks.

And for this standard of renovation, that's pretty good going.

But in the end, this is principally a mother-and-son team.

It has been a lot of hard work, but a lot of fun.

'We work very well together. We don't argue.

'We do joint decisions on everything,

'on design, planning, what we're putting in, on costs.'

We have done double the work and I think we've got double bubble out of it.

They did start out with a healthy budget of £50,000,

but all the delays bumped that up to 76,000.

So added to the purchase price of £234,000,

their total spend is now £310,000.

But for John, this renovation also marks the start

of a brand-new chapter in his life.

My illness was eight years ago now.

It feels to me like it didn't even happen, it was a dream.

It's amazing that I'm to the health I am now.

And to have a business running, doing houses like this,

from eight years ago, seeing me in my deathbed,

it's amazing to be here now.

One word is "lucky".

I've got the trust that my parents have given me,

knowing that I could complete the job.

Mum's always had faith in me to do and produce,

and it's worked out well and, hopefully, we can do some more.

Well, hopefully they can.

With their total outlay of around £310,000,

it's time to find out what two local property experts think of their handiwork.

Having looked round both, absolutely fantastic finish.

Really, really good condition. Ideal for buyers coming to see them.

Both kitchens have got a lovely spacious feel to them,

ideal for a kitchen-dining room, and backing onto two really nice secluded gardens.

I think the developer has really put his heart and soul into this.

I'm pretty sure that when anybody comes into this house, they will get good feelings

and either buy it or rent it very quickly.

I'm pretty sure these will go fast.

You can see that the developers have put a lot of time and effort into it,

which shows through with the quality of the finish,

and should achieve the best possible interest.

John and Dawn plan to sell the houses.

Bearing in mind that they have invested a total of around £310,000,

what could resale achieve?

The first would achieve slightly more with the benefit of parking.

We'll put that at a price in the region of £205,000.

The second, although has no parking, would still achieve relatively close at £200,000.

The one with the parking, I feel, will go for £205,000.

The one without the parking, probably £200,000.

Those two possible sale valuations total £405,000,

which could give the duo a pre-tax profit of £95,000.

But Dawn thinks it might be more.

This is entirely brand new, totally unique,

and I think they warrant at least 215.

And that's what I hope we get.

Judging by this impressive renovation,

I reckon they might just get it.

Today, I'm on the South Devon coast in Plymouth.

This harbour city is one of the biggest naval ports in Europe

and has a popular university with a large student population.

Today, I'm in student central!

It's an area known as Greenbank,

and it really couldn't be better located for the university

and the harbour-side bars.

I'm here to see a three-storey mid-terrace,

at a guide price of £90 to £110,000.

But rather intriguingly, the catalogue description says

it has two, or potentially four, bedrooms.

Well, only one way to unearth the mystery, and that's to go inside.

The houses on this street remind me of fishermen's cottages

and they look very attractive in the sunshine.

Parking round here, however, is a nightmare

and definitely something to bear in mind.

I happen to know that the previous occupant lived in this property for 70 years,

so it may well be that it hasn't had a lot of work done on it.

As soon as you walk through the door, you get that impression.

It's very tired and dated.

Actually, talking about dates, sometimes you can get a clue as to when the last work was done

by looking underneath the carpets, because people often put newspaper down.

And this one, it's actually The News from Adelaide, Australia,

dated July 29, 1983.

What an intriguing thing. Why is there a newspaper from Australia under there?

1983 is the last time that was touched.

And I would hazard a guess that that's pretty much the same for most of this property.

It's nice it's got an open fire,

but something tells me this is one of those properties...

..where you have to spend some money.

And this is only the beginning.

The back room, which would make a good-sized bedroom, takes you even further back in time

with built-in cupboards and original windows.

But it's not the features that catch my eye here, it's the damp on the walls,

the cracks in the ceiling and the poor condition of, well, everything.

The kitchen is a shrine to 1970s wood cladding.

The thought that more problems could lurk behind there fills me with horror.

So up onto the first floor and, well, this is a bathroom.

Well, I say bathroom, it's not, it's a shower and a sink and no loo.

I don't know what is going on there.

One of the things you'd have to do if you were renting this out, you have to have enough toilets.

Frankly, I haven't found any yet!

Up here, two good-sized bedrooms, one there,

and then through to the front where you've got an amazing room!

I mean, it's tired and falling to pieces,

judging by this...

Oops. Oh, dear. Literally falling to pieces!

But there's something to work with here.

# You walk by

# And I

# Fall to pieces #

Crumbling walls aside, I still haven't seen a loo.

Also, the auction catalogue stated that there are potentially four bedrooms here.

I've found two on the first floor, so not counting the living room downstairs,

there should still be two more.

Well, up onto the top floor

and the mystery of those two elusive rooms is finally solved.

Not much head height.

And they are in a right old state, that one especially.

This one here, less so. But loads of character.

I love attic rooms in general. And they were originally part of the house.

So there you go. Five bedrooms on three floors.

We're now into the realms of HMO - House of Multiple Occupation.

But that is where you'll make your money with this property.

Perfect for letting to students. Somebody's been doing home brew.

For me, the idea of what to do with this place has finally distilled itself.

Despite appearances, there is scope here.

This house could have up to five bedrooms.

Perfect for a student let.

And it has one more trick up its sleeve.

And what does every student want at the end of the day?

Somewhere to study? I don't think so!

It's a place to relax with friends,

talk about the lectures of the day, life in general,

and this roof terrace is perfect for that.

Not only that, it's got the view of the sea.

What an added bonus!

However, it's not all bonuses.

I've finally found the loo, but it's outside at the back. Brrr!

# Shaking all over! #

This'll need to be added to the list with everything else,

especially to comply with HMO regulations,

which will require extra bathroom and loo facilities.

But remember, this house, which had a guide price of 90 to 110,000,

could have five bedrooms on its three floors.

That could mean a healthy rental return.

I asked the auctioneer who sold it to do some research on this possible student let.

If we assume that the walls and the roof are OK,

it's just about everything else needs doing.

The basic amount needed to bring it up to some form of semblance,

I think, is about £30-35,000.

I did expect a fairly high renovation spend.

But how many bedrooms could be squeezed in?

To have five bedrooms in here is really quite straightforward.

The trick will be, if the new owner wants to get a sixth bedroom,

to somehow get some more sanitation in the building.

Six rooms - you've got to have two showers and loos.

Five - you could just about get away with one.

So possibly six bedrooms.

How much weekly rent could each earn?

For a decent-sized room, you'll get £80,

maybe 85 if it had broadband and a few toys.

Whoa. For a 44-week academic year, that's well over £17,000 annual rent.

How about if it was sold as a single private house?

As just an ordinary house, erm,

done up very nicely, it could be worth £135-145,000.

Well, the house obviously needs quite a lot of sorting out.

I think it would be worth the investment.

It's got "student let" written all over it.

And in this case, I think that could bring in serious money.

Let's see which bright spark spotted this one at the auction.

So a three-storey property.

We've got two phone bidders. It ought to be 100 straight in.

One. And 101, do I? One I've got. At one.

102. 103? 103. 104.

105? 105. 106?

At... 107. 107. 108?

At 108. At 108 once, then. You're both out. 109.

110. 111. 112!

113.

114. And 15. And 16.

And 17.

118. 118. 119. 120.

121. 122. 122.

123. Half.

125?

125. What's a little stamp duty between friends?

At 125 and a half. 125. 126.

And a half! 127.

127 and a half. 128.

128 and a half.

130. At 130. 130 and a half.

131? 131 and a half.

132. 132 and a half. "Not yet", she says. 133.

133? 133 and a half? 134.

135.

136. 136 and a half. The same, if you'd like it, sir. 137.

On my left it is. 137 twice. Here we go.

At 137, I'll look up the line. At 137, it's all done and finished.

Sir, yours. 137.

For £137,000,

the successful bidder was builder Graham,

who's Plymouth born and bred.

He bought the house to add to his growing buy-to-let portfolio.

He already owns two properties in the area, which are student lets.

Graham, lovely to meet you. Congratulations.

What work are you going to carry out on the property?

Literally from head to toe, every room is going to be gutted.

It's all going to be replastered, reskimmed.

There's going to be a new kitchen fitted.

A dormer to be added at the top.

Fire doors. There's going to be two bathrooms put in, two shower rooms.

Double glazed.

Finish of the central heating and it'll be completely rewired.

-Where are the shower rooms going?

-In the bathroom,

-I'm hoping to split it completely down the middle.

-Oh!

Have a passageway in the middle and probably put a window at the end

to give extra light into the hall.

-Keeping it pretty much where it is, but splitting it in two?

-Yes.

Graham hopes to get everything done for 25,000.

To help save on costs, he'll be doing the work himself,

along with his usual team of builders.

By offering all mod-cons, he can to ensure that the place is done to the highest grade-A standards

set by the university.

Modern furniture. Double beds. Broadband in each room.

Nice fitted kitchen.

Basically, all modernised.

Broadband and modern furniture, eh?

How things have changed since I was a student!

But will he have everything done in time to get it rented out

before the new academic year in nine months?

I've got it rented already, last night.

-Sorry?

-I rented it last night.

-How?

I saw some students and took them to one of my other rented properties,

then I was able to take them to another property and they could see the standard.

-Then I brought them here after and they took it.

-Wow!

-So, they took it in this state?

-Yes.

On the assumption that by the time they come to rent in it September...

-So you've got nine months to sort it.

-Yes.

-That's nice to know before you start the work!

-Yes.

Congratulations. Good luck with it all.

-Thanks.

-Look forward to seeing how you get on!

I think Graham's got himself a great property here.

Lots of work to do to get it sorted out.

I hope he doesn't uncover too many nasties in the process.

But you can find out what A-grade student accommodation looks like

later in the show. Hopefully!

Now, we always hope that our buyers have set themselves realistic timescales and budgets.

There's only one way to find out and that's to catch up with them after all the hard work.

Earlier, we were in Luton where we met Matt and Jane.

They'd bought this dated, rundown, three-bed semi

for £120,500.

Matt previously ran a printing business,

but now plans to start property developing full time.

He already had clear ideas about delegating the work.

As long as Jane does what I say, we'll have no problem!

-That was a nervous laugh!

-That was a gallows laugh!

-Er, I'll do as I'm told for a short while.

-Five minutes.

-We work really well together.

Just as well, by the sounds of it!

Six months later, the house certainly looks neater and tidier on the outside.

And it's great to see that Matt and Jane

are still happily working together!

What it was like before was absolutely rank!

It was actually disgusting.

There was rubbish everywhere. The walls were dirty.

Everything was filthy,

completely outdated, dirty, unkempt and unloved.

They've definitely put some love back into this house.

The living room is freshly decorated

and that downstairs bathroom has been replaced with a new suite and loo.

Best of all, there's a stylish new kitchen.

But the most significant change is upstairs.

If you remember originally, there was two separate rooms.

This is one room, which held the WC and nothing else.

There was a dividing wall and then just a wash basin, which is quite a strange design.

So I decided to fill this door in, open up the bathroom

and put a quadrant shower in with a basin.

It's fitted in, I think, quite well.

I think the hardest job, personally, was the tiling.

I found that bit painfully slow.

There was a learning curve. I haven't done any for years.

It took a while to get into it. Once I got into it, it wasn't bad.

But I never want to see a tile again for another six months!

And Matt's skills didn't end there.

He's replastered the whole house

and installed and plumbed in the new bathrooms and the kitchen.

With the electrics rewired by professionals,

that left Jane to help with the colour scheme and design.

So teamwork has definitely paid off in this renovation.

But I reckon Matt has had a little difficulty adapting to his new working lifestyle.

There's been lonely times. I'm not used to a working environment by myself for most of the day.

So it's a little bit of a learning curve,

to learn how to just occupy myself as I work.

I do miss actually working alongside other people.

# Lonely days

# Lonely nights

# Where would I be without my woman? #

I think Matt's found this a great challenge.

He's shown a lot of self-discipline, particularly in the early days

when it was freezing, the house was horrible, there was no heating,

it was lonely, there was no electrics,

to where it is today.

I'm very proud of him. He should be very proud of himself.

It's a fabulous achievement for him.

I think Jane's right. Matt really has rejuvenated this rundown property.

He deserves to take great pride in what he's achieved here.

But as the job slowed down from the original two-month schedule to six months,

did the budget take a hit, too?

I hoped to keep it under £11,000.

I think I've just about come under £9,000.

So that's quite a good result.

I'd say so. Roughly two grand under budget.

So on top of the purchase price of £120,500,

that would take his spend to just below £130,000.

Is it time to cash in on that investment?

Originally, I was going to rent it out,

but I think now I'm more prone to try and put it on the market

to see what I can raise to go on to the next project.

Hopefully, Matt's work will show a good enough return to move on.

Let's hear what two local estate agents think of this renovation.

I like the way he's finished the property.

Clean lines and neutral colours will always appeal to a buyer.

Nice fitted kitchen, fitted bathroom, as well. Very nice.

Spacious accommodation. Very nicely refurbished.

Nice setting, in front of the green,

and the nice outlook to the rear over the field.

The sanitary ware is very nice. And a nice fitted kitchen.

I like the off-road parking.

They don't all have that in the area. It's mainly street parking.

Well, it seems to tick all the right boxes.

But remember, Matt and Jane's total outlay here was just under £130,000.

So, what are the resale valuations?

I would put this on between 145 and 150,000.

I could put this on the market for £159,995.

It's slightly disappointing. I was hoping more towards the 160-mark-plus.

It's not a disaster. We're still in profit.

Hopefully, we'll be able to hold onto it for a little bit longer and accrue a bit more profit.

That maximum possible resale valuation could give them a £20,000 pre-tax profit.

But what if they rent it out?

We'd rent this out for £625 per calendar month.

I'd be able to rent this property out for £700 per calendar month.

700 is a good figure for renting and I think there's great possibilities here.

There's Luton Airport with all the workers,

and some quite big companies around here with transient workers,

so I think it's a lovely house to rent.

That's all down to Matt and Jane's hard graft.

I reckon they deserve that cuppa.

And I think Matt really does have an appetite for property developing now.

It's been good. I've enjoyed the journey.

I'm pleased with the result. Just can't wait to start the next project.

Back to Devon now. In Plymouth, we met Graham,

who'd paid £132,000 for this four-bed terraced house.

He planned to add it to his growing rental portfolio.

But before he could do that, he faced problems on every level.

The ranged from rampant damp

to an interior that was falling apart.

Plus, the only loo was in a small courtyard at the back.

It was the sort of project where any potential profit could easily be flushed away.

Well, it's been four months, and it's great to see the changes outside.

The front has been painted and replacement windows put in.

Inside, the living room has been transformed into something far more appealing.

A new kitchen's been installed

and now looks a much more attractive place to rattle those pots and pans.

But did Graham manage to turn four bedrooms into six?

It's a six-bedroom house.

We split the front bedroom and made two rooms.

We had to literally alter the passageway.

There was two rooms upstairs in the attic, but we put a dormer on,

highered the roofs and ceilings and made two bedrooms up there.

And we've changed the dining room into also a bedroom.

With that back bedroom on the first floor, that makes six.

With so many bedrooms and floors, this will be a licensable house of multiple occupancy.

This means that, as it has over five bedrooms,

it will need two loos.

This place only had one and it was outside.

In this part of the building, the door used to be here.

We took the door down, created two walls, two bathrooms.

We put a bath on this side, sink, toilet.

This side, there's another toilet, a sink and a shower room.

Now they've got two toilets inside the house, ideal for students.

Graham's done a nifty job of solving that tricky bathroom situation.

But that main solution to enlarging the space started on the roof.

Up here, we had a wall with a chimley.

The wall was quite wide. It was leaning really bad.

We removed the wall and took the chimley right down through the building.

In doing so, we've gained more room in the kitchen and the bathrooms.

We took this flat roof off because the joists were so bad, they were rotten.

We formed a dormer up here to give us more room in the attic for the bedrooms.

We've put the railings up. They just need to be painted now.

We've still got to put tiles down on the floor to finish the job off.

I'm sure the students living here will be on the tiles quite a bit!

From the top to the bottom now, where the courtyard has been revamped,

and there is now a utility area, which frees up space in the kitchen.

The outside loo has been kept, though it's still a bit chilly.

But this small yard sums up the problems Graham faced here.

The worst thing about this project was how small the house was,

no parking, nowhere to put your rubbish

and nowhere to have materials delivered to you.

We had to have all materials delivered up the end of the lane and hand-brought down.

That has been really time consuming.

Due to rebuilding that external back wall,

gutting the house completely and the total renovation required,

budget did increase from 25 to £32,000.

Add that to the purchase price of £137,000,

and the total spend is £169,000.

But with the help of his team, Graham managed to do it in his estimated time of 16 weeks.

Now he's waiting for the HMO inspection to be approved

and then, of course, there's the quality control of the new tenants.

The students who are already renting the property,

they came to look at it in its first state, but they haven't been back yet.

Their eyes will be opened a little bit. Hopefully, anyway!

Graham will be letting to students for £80 per room, per week.

So for six rooms, that all adds up to a lean, mean rental machine.

Bearing Graham's total spend of £169,000 in mind,

we asked two local property experts

if they thought the house came top of the class.

I think the bloke's a magician, compared to when I last saw it.

It's clean, nice, bright, tidy.

It's a quality job.

The standard of finish is very good actually. It's very neat and tidy.

Plaster walls, which is perfect, because you want to avoid paper.

Modern kitchen. He's done a really good job with the bathroom

to make two units out of what is really one room.

The layout is very efficient,

particularly on this floor.

By having an angled lobby, he's ended up with three good rooms

instead of two good rooms and a squirty one.

The layout works very well for his proposed use.

Six double letting rooms is perfect for the size of the property.

Lots of good feedback there.

Graham's charging £80 per week, per room.

So, is the house earning to its full potential?

As a student let, for each room,

you're going to get a minimum of £80 a week for about 11 months.

So the rent roll for the building for a classic academic year

will be around £23,000.

The rental income here will be approximately £2,000 per calendar month.

The year for student rental will be 11 months of the year,

2,000 times 11 - £22,000,

which means it's an excellent investment and incredibly good yield.

Yes, that's what I've valued them at.

I've rented at £80 a week.

So I'm quite happy... very happy with the return on it.

Graham was spot on with his rent there.

But the experts reckon that if he ever decides to sell,

its rental potential could be a real bonus.

If sold as a rental machine, it could possibly fetch £240,000,

meaning a whopping pre-tax profit of £71,000.

That's very pleasing.

I knew on the rental side how much I was going to be getting back, but that's...

Much happier now!

I'm not surprised. But profit aside, Graham's done an excellent job here

and it's something he's sure the students will appreciate, too.

I'm very pleased with the property. It's turned out very nice.

I just can't wait to see the students when they move back in, to see their faces.

Well, those stories have now been added to our archive.

But there are always more. So join us next time for Homes Under The Hammer.

-See you!

-BOTH: Goodbye!

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