Episode 36 Homes Under the Hammer


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Episode 36

Property auction series. Martin Roberts and Lucy Alexander visit a bungalow in East Lothian, a conversion in Twickenham and a property in Stoke.


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-There's a huge variety of properties at an auction.

-And Lucy and I look at all manner of cottages,

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bungalows, houses, plots of land, commercial premises...

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Why not buy your next home under the hammer?

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Buying an investment property often means developing new skills before you can make a profit.

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Learning to put up wallpaper, managing tradesmen and sticking to budgets are just three things.

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Here are the properties that need some attention on today's show.

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Nestling in East Lothian, this bungalow's caught my eye.

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It's a big property. I'm liking what I'm seeing.

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Near Twickenham rugby stadium, this conversion won't be cheap!

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Whoever takes this on will need a stash of cash to make it beautiful.

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And you'd need more than an auction hammer for this Stoke property.

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That is brick and there's no way you'll be moving that.

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All of these properties went to auction and we'll find out who bought them and what they paid

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when they went under the hammer.

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Welcome to beautiful Scotland. East Lothian, to be precise.

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I'm just outside Garvald in the Lammermuir Hills. It's absolutely glorious.

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26 miles from Edinburgh, so I reckon it's commuter district.

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Let's take a look at the property.

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The place I'm here to see is guided at £150,000.

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The property is called Castle Moffat. Now I've done a lot of houses on this show,

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but never a castle before.

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How terribly exciting.

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I don't know about "castle". Looks more like a bungalow to me.

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'My wait for battlements and turrets goes on.

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'It's a three-bedroom bungalow in a rural setting

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'that looks in need of some exterior maintenance.

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'So lower the drawbridge - I'm coming in!'

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At least there's no moat to negotiate! But what's it like?

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Nice, big entrance. Loo and cloakroom there.

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Through to the main corridor.

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A living room/lounge. We'll explore that in a minute.

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Corridor down to the bedrooms, then through to the kitchen.

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It's obviously tired and dated, but intrinsically it's a big property

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and I'm liking what I'm seeing.

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'To go with the three bedrooms there's a family bathroom that's more than big enough.

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'I'd just change the suite. The second loo is fine as it is.

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'Love the lounge. The dining room's got a hatch - keep it or lose it?'

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So dining room there, through to the living room.

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It's great there's a real fire, but the key to this property is out of the window.

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Absolutely fantastic. Shame there's these industrial buildings,

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but look to the distance - what a fantastic view!

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'That's probably the main selling point here - that great view.

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'It's just a shame that there are several other buildings that are rather industrial.

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'They give a clue about what the bungalow was previously used for.'

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The bungalow was owned by the surrounding business and was used as their offices,

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so it's currently got business use. No problem - move your stuff in and you can start living in it.

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Well, sadly not. You'll have to apply for planning permission to change use to residential.

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And, as we know, that takes time and you won't necessarily get it.

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'So the first drawback. Not ideal.

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'Time to see if the auctioneer who sold it can tell me more.

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'It was guided at 150 grand.

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'I know it used to belong to the engineering works next door, which has undergone refurbishment,

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-'but why did this property go to auction?'

-The property was used as a site office

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during that process of refurbishment and then was declared redundant.

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I don't think it's a big problem.

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All that needs to be done is for the inside to be turned round so the front is on the other side.

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'Well, that's relatively easily solved. What are the main options?'

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I think, potentially, you could use the property for holiday lets.

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It's a very popular tourist area.

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You might get people interested to come out here,

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but it's a limited market, so that's only for the summer period.

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'Let's talk money. Once renovated, how much income could it generate,

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'not as a holiday let, but as a home for someone?'

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We believe new owners might be able to let this out at a rental level of £500-£600 per calendar month.

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'Once the bungalow's been fully refurbished, how much could it be worth if sold?'

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Once renovated, depending on what you're going to do with it,

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it's probably going to be about £150,000-£160,000.

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It really depends on how much you spend on it.

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'Maybe all this bungalow needs is a comprehensive makeover.

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'But outside I suspect the roof and gutters could do with some money spent on them.'

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You certainly can't knock the location. It's stunning, but there are the industrial buildings.

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And there is the issue of getting the change of use to residential.

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But it's a lot of property for the money. Let's see who went for it.

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A detached, single-storey bungalow. Reasonable condition, but it does need some care and attention.

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Where are we going to start? 100 anywhere? 80 to get us started?

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70 to get me started?

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Thank you, sir. £70,000, sitting down on my right.

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75 anywhere?

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75. 80?

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85? 90.

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95. 100. 105? He's shaking his head.

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100. With the gentleman in the stripy shirt. £100,000.

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105 anywhere? At the back. 105, standing against the wall. 110, sir?

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Take two and a half. 107,500.

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110, sir? Thank you, sir. 110.

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112 and a half? No.

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110 standing against the back wall. Are we all done? 112. Thank you, sir.

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114? 114. Thank you, sir. 116? 116.

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118? 118.

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120? 120.

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122? He's shaking his head.

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At £120,000. I'll sell at 120.

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It's cheap at that. I'll take 1.

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121. 122?

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122. 123. 124?

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No, he's shaking his head. 123 at the back.

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At £123,000. Going once.

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Twice. You've definitely done? Third and final time. £123,000.

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-The gentleman standing at the back.

-'That successful bid of £123,000

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'came from friends Gerry and Ian.

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'I met them back at the bungalow to find out their plans.'

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-Gerry, Ian, congratulations.

-Thank you.

-Well done.

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-Nice location.

-Yes, it's good.

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Tell me why you wanted it.

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Well, to be honest, it wasn't our first pick at the auction.

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We had another property in mind, but we got outbid for it.

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-This one came up, so we thought we'd go for it.

-We'd viewed quite a few, so we had a sort of list.

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-Had you been round this one?

-Not inside, but outside.

-Right.

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-How come not inside?

-We never came up at the viewing time. But we knew what we were getting.

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-Given that you weren't sure you'd buy it, did you read the legal pack?

-No.

-Have you read it now?

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The solicitor has!

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-Is there any problem?

-No.

-No.

-You got away with it?

-Yeah. Just.

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'Gerry and Ian were lucky, but it could have been different.

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'Please, would be buyers, always read the legal pack first. It's too large an investment

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'to enter into blind'

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-So tell me about you two.

-We've worked together for 10 years.

-What do you do?

-Both joiners.

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We're sick doing houses up for everybody else.

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-What made you make the decision to do this now?

-I've always been a saver

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and the money I've had in the bank is no' doing anything,

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so we thought with house prices dropping, now would be the time. It's a wise investment.

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-So why this property?

-Well, just cos it's great to do up.

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We've got the resources, it's been quiet at work, so we can spend some time in here.

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-Hopefully make some money on it.

-So that's the plan?

-Do it up and sell it.

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We want to do it to a high standard. It's no' just a lick of paint job.

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We've got to spend some money on it.

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-What about the house appealed? The view?

-The location and view.

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And I was very surprised when we got inside at how big it was.

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-So tell me what you're going to do.

-We'll put a gas burner stove here.

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In the kitchen, we hope to knock down the wall and make a kitchen diner.

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And hopefully patio doors, depending on planning permission. And maybe some ensuite bathrooms.

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'I think that's a great idea. Adding ensuites will help sell the property.

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'The kitchen's a good size, but you could use the space in the utility room more efficiently.

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'Those serving hatches aren't to everyone's taste.

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'It could be time to open it up to one large kitchen/diner.'

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-How much is it going to cost? Budget?

-£40,000.

-40?!

-Budgeted 40.

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-Is that including your own time?

-That's budgeted for our time.

-Uh-huh.

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-That sounds quite a healthy budget.

-Well, the thing is, it's got to be a new central heating system.

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-And we want to take some trees down.

-We've got a budget for that.

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-That can be expensive.

-Yes.

-We're no' sure.

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We spoke to a couple of people who can do it, but no prices.

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The neighbours had their trees taken down.

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'Although the neighbouring property removed the trees, there could be a major issue here.

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'It could require specialists and, potentially, planning permission.'

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-This has currently got planning for business use.

-Yes, uh-huh.

-What will you do about that?

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We've already got in touch with the council. We're applying for planning to turn it back to residential.

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-Think they might say no?

-Don't think so.

-It was residential before it was an office.

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-So what about the timescale?

-We reckon three months.

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-How much of the work will you do?

-I'll do most of it. Gerry will be in Edinburgh on our other work.

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-How much will you do on your own?

-Just the joinery. We'll get trades for everything else.

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-What about the garden?

-I'll do it.

-He's a dab hand in the garden.

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It is lovely up here, but I bet it gets very cold in the winter.

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-Yeah.

-We are quite high up. The neighbours were snowed in for four days last year.

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-Wow! And you're going to be here with no central heating.

-Yeah.

-In a bare house.

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-Yeah.

-In the middle of winter doing it up.

-I'll be all right.

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-You're tough up in Scotland.

-Oh, aye. You have to be.

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Working on building sites, it's hard.

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-Listen, good luck. Congratulations. I'll post you some snow shoes!

-Thanks very much!

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'Whatever the weather, I hope these two don't slip up on this, their first property.'

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Gerry and Ian clearly delighted to have got this place, but they didn't read the legal pack.

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As it is, the major issues are the trees, how much they'll cost,

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and will they get planning permission? On top of that,

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will Ian need a toboggan to get in to work? You can find out later.

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We're just west of London today in Richmond upon Thames, Twickenham to be precise.

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Although it's known for rugby,

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what you might not have heard is that in the 18th century it was also famous for gunpowder.

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So will the property today be as explosively exciting or just a flash in the pan?

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Ah, tranquil swans and boating on the river.

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It would be quite easy to while away an afternoon here,

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but I need to snap out of it and head off to see the property.

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Two minutes from the train station and here's today's auction lot.

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It's a three-bedroom mid-terrace. It had a guide price of £350,000.

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Now that is really cheap for this leafy suburb.

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Well, now I can see why it's so modestly priced.

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'Modestly priced, that is, in a road where nearby houses have sold for £482,000-£600,000.

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'This looks like the classic house of horrors where problems lurk.

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'It really does have a grim appearance - the windows are boarded and rotten.

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'With these cracks, it's not very promising.'

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I'm not going to be put off by those three padlocks and all the boards up outside.

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What I love about this terraced house is you've got a really wide, welcoming entranceway.

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There's enough room here for a table, put a big mirror up.

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There's a lovely lounge, a great size, ceiling height.

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A second reception room towards the back of the property.

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It's all feeling rather empty and cold, though.

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And all the under stairs cupboards have been taken away, there's no kitchen,

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a great big crack in the floor and, before you know it, you're in the back garden,

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which does need a little bit of work. But that is what I call open-plan living.

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'But you've got to think positive. At a guide price of £350,000, there was a lot of house on offer.

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'The two living rooms have original windows and fireplaces,

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'plus some original floorboards that look to be in good nick.

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'The kitchen's been torn to shreds, but at least there are no units to rip out.

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'But I fear it'll be a big job.

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'Upstairs, things are just as bad.

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'The auction catalogue said it had three bedrooms. Well, these two are a good size

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'and have original features.

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'Although the bathroom's been left, it's a temporary stay of execution. It needs to be ripped out as well.'

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Well, this is the third bedroom at the front of the property and the most impressive.

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You've got three lovely sash windows. I like it. One thing's for sure, though,

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whoever takes this on will need a stash of cash to make it a beautiful home.

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'The original design of the house had the back extending out

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'and up here on the first floor, right at the end,

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'this third bedroom has an odd feature - a bay window looking out to the back. Very unusual.'

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I'm always looking to add value to houses. The quickest way is to extend or create extra bedrooms.

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You only need to look next door up there at the neighbours

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to see how they benefit from extra space.

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A precedent has been set, so that is good news for whoever buys this.

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'Time to find out what information a local estate agent can give me about this place

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'that went to auction at a guide price of £350,000.

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'Is there any point in extending or possibly converting it into two self-contained apartments?'

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You could potentially extend. Going into the loft is an option.

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The garden, with the size that it is, is probably best left as a three-bed.

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You could split it into two flats.

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The ground floor - one bedroom and garden - would be £250,000.

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The top floor, two-bedroom without garden,

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would probably be in the region of £300,000, but you've then got two sales to worry about.

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I think it works better as a house.

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'Let's talk figures now. How much could a buyer make if they kept it as a family home,

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'but gave it a tip-top renovation?'

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You're probably looking to put it on at high fives.

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Good quality renovations go well in this area. Put it around that level and try for, say, 550.

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'This is a huge renovation project for someone to take on,

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'but as it's near the river and central London, Twickenham is high on many house hunters' lists.'

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This property is a bit of a wreck, but it's got great potential.

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For somebody with time and money, it's ideal. You could have a lovely three or four-bedroomed house.

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So who was brave enough to take on this challenge? Let's see who bought it under the hammer.

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The next property is a mid-terraced property.

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Three rooms upstairs.

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350 anywhere?

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340? Not going any lower than 340.

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340? Yeah? 340.

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345? 345.

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345. 350?

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350. 355?

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360.

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365. 370.

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370. 375.

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380? 380? What's that - half or five? 385?

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385. 38...6? 387?

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Struggling. Another place. 387.

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388. 389.

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390. 391?

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392.

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393. 394?

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393, with you. 394?

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393.

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First time. Second time. Th... 394. Another spot.

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395. 396.

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397.

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398.

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399. 400. 400 sitting down.

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401 anywhere?

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400. First time. Second time. Third and last time.

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Are you all done? Sold - 400.

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'That winning bid of £400,000 was made by husband and wife John and Colette.

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'For over 15 years they've run their own maintenance firm, which they sold in 2008.

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'They live in the Wirral, but have bought this house in Twickenham.

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'I met them to hear about their plans.'

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John and Colette, congratulations. You paid 400 grand at auction.

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-We did!

-Yes, we did.

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-Happy with the price?

-Yes.

-We're very happy. We'd have gone up to £450,000.

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-So you're 50 grand in!

-Yes, already.

-Ready to spend!

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-Had you researched this property? Had you viewed it?

-No.

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I hadn't viewed it at all. John did the research.

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Yeah, I...I looked at it. I looked at it and thought...

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-Wait. You looked at it where?

-On the internet. I did everything on the internet, priced it.

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Everything was done on the internet.

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I didn't have time to get down here and view it from the Wirral.

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We charged down here, into the auction and got on with it.

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'Incredibly, they'd only seen it on the internet. Although they sensibly obtained the legal pack,

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'John's solicitor didn't have time to read it before the auction.

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'So they paid £400,000 for a house they'd not seen or checked out for legal issues.'

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-What did you think when you first walked through the door?

-It's big.

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-Not, "Oh, my God! Look at it"?

-Well, I kind of already thought it wouldn't look at its best,

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so not really. I wanted to see the size, the layout, what we could do.

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-I couldn't believe it went for £400,000.

-Do you still feel you got the ultimate bargain?

-Yeah, I do.

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-We've walked around and seen where it is, the location.

-We got a bargain here. Unbelievable.

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'John and Colette's plan is to buy three properties of similar size each year.

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'As they were investing so much, they decided an area near London would be good for the first.'

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We looked at it and thought, whatever needs doing on it, for the price we bought it for,

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even if you spent, in your wildest dreams, £100,000, making £500,000,

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you can't lose because these are going for six,

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six plus. We've looked at everything and we thought, "OK. Give it a go."

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I don't see any way you could lose at all.

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So what's the future for this house? Keeping it as one dwelling?

0:23:040:23:09

What I'm going to do is first check with local estate agents.

0:23:090:23:14

Some of the areas have got flats in. We could make a big family house.

0:23:140:23:19

I'll bring an architect in and get some plans done.

0:23:190:23:23

Once I've done the plans, I'll decide what we're going to do.

0:23:230:23:28

'As they ran a maintenance company for over 15 years,

0:23:280:23:32

'they have useful contacts and some renovation experience themselves.

0:23:320:23:37

'Whatever they decide to do, John will project manage it,

0:23:370:23:42

'and bring some guys from the Wirral to do the renovation.'

0:23:420:23:46

How long will it take you?

0:23:460:23:49

Well, I would reckon about six months.

0:23:490:23:54

How much do you think you'll spend?

0:23:540:23:56

If we spent 50, great. 70 at the most.

0:23:560:24:00

That's to do everything - windows, plastering obviously,

0:24:000:24:04

new kitchen, bathroom, electrics, plumbing.

0:24:040:24:08

Guys, good luck with this! I hope you're still smiling next year!

0:24:080:24:12

-Me, too!

-Well done.

-Thank you.

-Thanks.

0:24:120:24:16

'There's a lot of hard graft necessary to turn this ugly duckling into a beautiful swan.'

0:24:160:24:23

John and Colette have taken on a big project.

0:24:260:24:31

They've got to project manage it from the Wirral and have to choose between conversion to flats

0:24:310:24:37

or keeping it as one house. And with John wanting it all done as soon as possible,

0:24:370:24:43

they'll have to decide soon. Find out later in the programme what happens here in Twickenham.

0:24:430:24:49

Coming up: don't let the state of this Stoke property fool you.

0:24:500:24:55

Sort it out and it's a perfect rental opportunity.

0:24:550:24:59

We return to Twickenham where John has surprised everyone, including himself.

0:25:000:25:07

As project manager, I must be pretty well organised!

0:25:070:25:12

But first, back in East Lothian, have this duo got the property bug?

0:25:120:25:17

Definitely. When this one sells, we'll be in for another one.

0:25:170:25:22

'We return now to Garvald in East Lothian where, earlier in the programme,

0:25:220:25:29

'business partners Gerry and Ian paid £123,000 for this bungalow.

0:25:290:25:34

'They're both joiners by trade, but decided on property developing as a sideline.

0:25:340:25:40

'This property had been used as an office for this engineering works.

0:25:400:25:45

'The plan was to apply for residential use, refurbish it and then sell it on.

0:25:450:25:51

'Well, four months later, we met up again

0:25:510:25:55

'with Gerry and Ian to see what progress they'd made.

0:25:550:26:00

'First, they've moved access to the property from what was the rear.

0:26:000:26:04

'It's created a more pleasing entrance and means the back now looks over the engineering works.

0:26:040:26:10

'Inside, the bungalow looks fabulous with bright, neutral decor.

0:26:130:26:18

'In the living room, the office-style strip lighting and that fireplace have gone,

0:26:180:26:24

'replaced with modern downlighters and this stylish stove.

0:26:240:26:28

'The refurbishment continues in the bedrooms and bathroom.

0:26:280:26:33

'But it's the impressive kitchen conversion that really hits you.'

0:26:330:26:38

This is the kitchen. We've enlarged it by taking the wall down that separated the kitchen

0:26:390:26:46

from the dining room. There was a hatch in it. Not a very good set up.

0:26:460:26:52

So what we've done is enlarge the kitchen to form a dining area

0:26:520:26:57

and we've also got a utility room.

0:26:570:27:00

'Gerry and Ian are more used to bespoke timber constructions,

0:27:000:27:04

'but they fitted the kitchen themselves and it looks pretty good.

0:27:040:27:09

'How much did they spend on this part?'

0:27:090:27:13

Probably about £5,000.

0:27:130:27:15

But we think it's worth it because it was a really old kitchen. It had to be renewed completely.

0:27:150:27:22

We've also put in French doors to the rear of the building, which is south-facing.

0:27:220:27:28

It gets the sun all day and with the patio we'll build this will be a great room.

0:27:280:27:34

'Yes, and a great place to enjoy the views when the weather's brighter.

0:27:340:27:39

'The good news is that they did get a change of use from commercial to residential.

0:27:390:27:45

'It's taken four months, but in spite of the weather and other work, they've achieved a lot here.'

0:27:450:27:53

We've done a lot in a short space of time, but we've a lot more to do.

0:27:530:27:57

We came in, stripped everything out and put a new kitchen in, new bathroom, ensuites,

0:27:570:28:03

new floors, doors

0:28:030:28:05

'They'd hope to remove a lot of the trees at the back.

0:28:050:28:10

'The local authority insisted they remained, apart from one,

0:28:100:28:15

'though they were allowed to cut back the overgrown trees.

0:28:150:28:18

'But they'd barely started when the weather changed.'

0:28:180:28:23

We were in it a month and the snow came. That put us off for a while, so we've not done anything outside.

0:28:230:28:29

The worst moment was digging ourselves into the driveway.

0:28:290:28:33

-Martin was right about the snow shoes.

-We should have got some!

0:28:330:28:37

He was right, aye, but we've been all right.

0:28:370:28:42

'Well, that's a first - owners having to dig their way in to a property to start work.

0:28:420:28:49

'But all that hard work has been worth it, especially dividing the bathroom in two,

0:28:500:28:56

'which added an extra feature.'

0:28:560:28:59

We've decided to chop the bathroom in half. It was really big.

0:29:000:29:04

We've still got a family bathroom and a nice ensuite shower.

0:29:040:29:08

'Gerry reckons the kitchen cost around £5,000, but what's been the total bill?

0:29:100:29:17

'After paying £123,000 at auction, they set a budget of around £40,000, but how much have they spent?'

0:29:170:29:24

-Roughly, we've spent about £35,000.

-But we've still got outside to do, the landscaping

0:29:250:29:31

and the turfing to do. That'll take us up to where we imagined we'd be.

0:29:310:29:37

'Time to see how much two local property experts think it could achieve when put up for sale.'

0:29:410:29:47

I think it's amazing. I really like the log burner, the kitchen

0:29:470:29:52

and splitting the bathroom to create an ensuite.

0:29:520:29:55

It has an awful lot going for it, not least of which is its location.

0:29:550:30:00

It's blissfully rural, yet just half an hour from Edinburgh.

0:30:000:30:04

Nice bright rooms, new lighting, a nice canvas for a family to decorate in the way they want.

0:30:040:30:10

And the kitchen will be really nice.

0:30:100:30:13

I particularly like the bathroom. They've split it into two parts.

0:30:130:30:17

They've fitted it out extremely well.

0:30:170:30:21

What they've very successfully done, which is important,

0:30:210:30:25

is to turn the back on the operational works, with the exception of the views, which are stunning.

0:30:250:30:33

'What about that all-important valuation?

0:30:330:30:37

'Gerry and Ian paid £123,000 at auction and estimate a spend of around £40,000,

0:30:390:30:46

'so they'll have £163,000 invested here.'

0:30:460:30:50

We would expect to achieve something in the order of £250,000,

0:30:500:30:54

or possibly more if there was some competition.

0:30:540:30:58

We're probably looking at somewhere around £200,000 for resale figures.

0:30:580:31:05

'Even on that low valuation of £200,000, that's a gross profit of £37,000

0:31:050:31:11

'before the usual deductions.'

0:31:110:31:14

-Great. Magic.

-That's excellent.

-Really good, yeah.

0:31:140:31:19

-I'm surprised. Delighted.

-Delighted, good.

0:31:190:31:23

Really good. Makes it worthwhile.

0:31:230:31:25

'So their hard work and snow shovelling has paid dividends on this, their second project.

0:31:250:31:33

'They're looking to sell ASAP so what's next? On to Property Three?'

0:31:330:31:38

Yeah, definitely do it again. As soon as this one sells.

0:31:380:31:43

-'Will they head back to the auction to buy under the hammer again?'

-Certainly.

0:31:430:31:49

I think it's an ideal way to get property.

0:31:490:31:53

If you can get it cheaper, I think it's the way to go.

0:31:530:31:58

Very glad that we've done it. I'd do it all over again.

0:31:580:32:03

I'm in Hanley, widely regarded as the capital of the town's making up Stoke-on-Trent.

0:32:050:32:12

Now this area has definitely gone through hard times in recent history.

0:32:120:32:18

All the industries in which it excelled have gone into decline. Steelworks, gone. Mining, gone.

0:32:180:32:24

So with the motto of the town being, "United, strength is stronger,"

0:32:240:32:30

is this place on the up?

0:32:300:32:33

'I think the answer's yes, but it's a slow process.

0:32:330:32:38

'It's not immediately apparent when there are almost more broken windows than undamaged panes,

0:32:380:32:45

'but the signs are promising that investment is giving hope.'

0:32:450:32:49

You may expect property prices to be fairly reasonable,

0:32:490:32:53

but how is this for cheap?

0:32:530:32:56

A two-bedroom mid-terrace at a guide price of just £36,000.

0:32:560:33:01

That's a place to live for the price of a decent car.

0:33:010:33:05

Wow. Is it fit for inhabitants?

0:33:050:33:08

Enter with trepidation... What can that money really buy you?

0:33:090:33:14

You know what? Doesn't smell damp. Doesn't look too bad. I've seen worse.

0:33:140:33:19

Front room here.

0:33:190:33:22

Old fireplace, but that's trifling.

0:33:220:33:25

Good sized ceilings.

0:33:250:33:27

Through this little corridor to the rear sitting room area.

0:33:270:33:31

These are the stairs to the bedrooms and, judging by that noise, that is brick. No moving that.

0:33:310:33:37

Another fireplace in here. Lots of light coming in.

0:33:370:33:42

Through to the kitchen. I haven't found anything wrong yet.

0:33:420:33:46

'Not much wrong with the bathroom, either, but it's in an extension.

0:33:460:33:51

'As with many terraced properties, you have to go through the kitchen to reach it. Not ideal.

0:33:510:33:57

'The kitchen is serviceable, though it looks like they started some work, then left it.'

0:33:570:34:05

So, upstairs, two bedrooms. Fairly standard layout.

0:34:050:34:09

What's strange is it seems to be partially renovated.

0:34:090:34:13

You've got new carpet, recently-painted walls, but work to be done removing the old tiles.

0:34:130:34:20

But not bad-sized rooms. You could improve it even more by taking out these cupboards.

0:34:200:34:25

I keep coming back to that guide price. It's a great house for the money!

0:34:250:34:31

'The back bedroom also appears to be OK and overlooks the back yard.

0:34:310:34:36

'The front of the house doesn't seem in desperate need of attention.

0:34:360:34:40

'The windows are all intact and don't forget that guide price of only £36,000. Wow!

0:34:400:34:47

'At the rear, very little of the backyard remains

0:34:480:34:52

'as the kitchen and bathroom extensions left their footprint,

0:34:520:34:57

'but with all this the options here are interesting.'

0:34:570:35:01

So is this place going to make you any money?

0:35:010:35:05

Well, let's talk it through. You buy it at £36,000, do it up, sell it on for maybe £50,000.

0:35:050:35:11

But why would you sell it on? Just do it up and hold it.

0:35:110:35:15

Rent it out and take the money.

0:35:150:35:17

I think that is the strategy that I'd adopt.

0:35:170:35:22

'I reckon the figures should stack up here.

0:35:220:35:26

'If you were to achieve, say, £350 per month rental income,

0:35:260:35:30

'that's an 8% yield on the guide price of £36,000 - a bit more than the banks pay.

0:35:300:35:36

'To get some advice,

0:35:390:35:41

'I asked a local property expert to take a look at this place and give me his opinion.'

0:35:410:35:47

The immediate area is mainly properties owned by landlords and investors.

0:35:490:35:54

With mainly landlord properties, it limits the appeal to owner-occupiers.

0:35:540:36:00

It's in very basic condition.

0:36:000:36:03

The windows possibly need replacing, but there is central heating. Kitchen and bathroom are workable.

0:36:030:36:11

Many landlords would look to let it.

0:36:110:36:13

'What kind of rental income could be earned here?'

0:36:130:36:17

There would be demand for this on the rental market.

0:36:170:36:21

I would anticipate income in the region of £350 per calendar month.

0:36:210:36:26

'In terms of market value, was the guide price of £36,000 a fair reflection of prices here?

0:36:260:36:32

'And how much could it be worth after renovation?'

0:36:320:36:36

In its current condition, I would anticipate this property to be worth in the region of £35,000-£40,000.

0:36:360:36:42

Ceiling price, once done to a good standard, would be in the region of £55,000.

0:36:420:36:48

'There's clearly work to do, but the rental income sounds very encouraging.'

0:36:480:36:54

Well, it's a decent enough little house. Not a load of options,

0:36:560:37:01

but for that guide price, it's a perfect little rental opportunity.

0:37:010:37:05

Let's see who fancied it.

0:37:050:37:09

Lot 56. Mid-terraced house, gas central heating.

0:37:090:37:14

30 to start me?

0:37:140:37:16

25, can I say? Get it going.

0:37:160:37:19

25 I'm bid. Thank you. At £25,000.

0:37:190:37:22

30, can I say now? 30. Thank you. At £30,000.

0:37:220:37:26

35, is it? I'll take one if it helps. The bid's at 30. 31.

0:37:260:37:30

32. 33.

0:37:300:37:32

At £33,000 for Lot 56.

0:37:320:37:35

At £33,000. Are we all done? £34,000. 35, is it?

0:37:350:37:42

At 34. 34 and a half.

0:37:420:37:44

35? 35?

0:37:440:37:47

A half? At £35,000.

0:37:470:37:50

Seated left at 35.

0:37:500:37:53

At 35. I'm selling it at 35. Are we all done?

0:37:530:37:56

At £35,000, first time.

0:37:560:37:59

At 35, second time.

0:37:590:38:02

Third and final time at £35,000.

0:38:020:38:05

-It's yours, sir, well done.

-'The successful bidder at £35,000

0:38:060:38:11

'was Steve, who was at the auction with his son, Paul.

0:38:110:38:15

'19-year-old Paul trained as a motor mechanic, but now hopes to develop property with his dad.

0:38:150:38:22

'Steve, an IT project manager, owns seven other properties.

0:38:220:38:27

'I met Paul back at the house to ask him about their plans.'

0:38:300:38:34

-Paul, good to meet you.

-Hello.

-Congratulations. A good price!

0:38:340:38:39

It is, yeah. Could be good profit.

0:38:390:38:42

Tell me why you wanted the place.

0:38:420:38:45

Well, basically, we just started off trying to find somewhere to start off

0:38:450:38:49

so I could help him do up the houses, basically.

0:38:490:38:53

What have you been doing so far?

0:38:530:38:56

This is the first property I'm going to be working on,

0:38:560:39:00

so we'll get this done, then there's one round the corner.

0:39:000:39:04

-What have you been doing previously?

-Working in warehouses, agency work.

0:39:040:39:10

So your dad has been doing this?

0:39:100:39:13

-Yeah. He's not really got the time.

-So you've been drafted in to do the labour.

-I have!

0:39:130:39:19

How will it work between you?

0:39:190:39:22

He's still got a full-time job, so I'll be up here in the week, doing it with my dad's mate.

0:39:220:39:29

We should be able to get it done.

0:39:290:39:32

-How will it work financially?

-We've not really discussed that yet. He's paying me a weekly rate.

0:39:320:39:38

-I'm not sure what it'll be.

-You're very trusting! He won't rip you off.

-Hopefully not!

0:39:380:39:45

'I'm sure he won't. This first joint development project for Steve and Paul seems ideal.

0:39:450:39:51

'Steve's provided the funding, but he's busy with his IT work.

0:39:510:39:56

'This will give Paul experience of renovation.

0:39:560:39:59

-'It should be a win-win. What attracted Paul's dad to this house?

-He hasn't been to see it yet.'

0:39:590:40:06

-He hasn't seen it?

-No, I came and viewed it for him

0:40:060:40:10

and it's just the project we were looking for. We went to the auction.

0:40:100:40:16

-On your say so.

-Yeah.

-Fantastic.

0:40:160:40:19

-So tell me what you're going to do.

-Carpet it throughout, chimney needs repointing,

0:40:190:40:25

new flooring throughout the kitchen and bathroom, the roof needs redoing.

0:40:250:40:29

And a new bathroom fitted. All the electrics.

0:40:290:40:33

The gas piping needs reconnecting.

0:40:330:40:36

'Paul's dad paid £35,000 for this place.

0:40:360:40:41

'The surveyor's report has indicated a lot of issues that need attention, but Paul's keen to learn new skills.

0:40:410:40:48

'Is that why he recommended the property?'

0:40:480:40:52

-Any idea how much it will cost?

-Well, we've got a budget of about £8,000-£9,000.

0:40:520:40:58

So we should do it with that.

0:40:580:41:01

-Hopefully.

-And have you got the purse strings?

0:41:010:41:04

-Have you got the chequebook?

-No, my dad's got that. He wouldn't let me loose with it.

0:41:040:41:10

-You'll oversee the project.

-Yeah.

-Looking forward to that?

-I am.

0:41:100:41:15

-Will you have anyone to help you?

-Yeah, my girlfriend.

0:41:150:41:19

She'll be up a few times a week helping me out.

0:41:190:41:22

'I'm sure all helping hands will be gratefully accepted

0:41:220:41:27

'to refurbish this place Paul's dad bought.

0:41:270:41:30

'Paul's girlfriend's one-year-old son might even lend a hand,

0:41:320:41:36

'but Paul had better keep a watchful eye on his young helper

0:41:360:41:41

'or he could find interesting finger marks on his new walls.'

0:41:410:41:46

-And then, if this goes well, what happens?

-We've got another property round the corner to start.

0:41:460:41:52

We'll put the deposit down on another one and keep going.

0:41:520:41:57

-And you'll work with your dad?

-Yeah, that's the plan.

0:41:570:42:02

-Well, congratulations. Good luck. We'll see how you get on.

-Thanks.

0:42:020:42:07

So a good project for Paul to cut his teeth as a developer on.

0:42:080:42:13

But will they make any money and will Paul be paid the going rate?

0:42:130:42:18

Find out later in the show.

0:42:180:42:20

We're dying to find out what happened to those investors.

0:42:230:42:27

-Are they tearing their hair out? Or cool as cucumbers?

-Let's find out.

0:42:270:42:32

'Time now to return to Twickenham where, earlier in the programme,

0:42:320:42:37

'John and Colette paid £400,000 for this dilapidated mid-terrace.

0:42:370:42:42

'They live in the Wirral and John had only seen the house on the internet before the auction.

0:42:430:42:50

'After selling their maintenance company, they only recently got into property developing.

0:42:500:42:57

'They planned to get a team in to restore this place and sell it.

0:42:570:43:01

'Well, five months have passed and the former boarded-up house has been transformed.

0:43:010:43:08

'John and Colette will show us the fantastic results.

0:43:080:43:11

'The kerb appeal has certainly returned with new windows and white paint. Even the bricks are scrubbed.

0:43:110:43:18

'Inside, the living room looks superb, with all that light streaming through the windows.

0:43:200:43:27

'Solid oak flooring is a feature throughout the ground floor.

0:43:270:43:31

'That flooring only stops in the fabulous kitchen, which you'll see later.

0:43:310:43:38

'Upstairs, the lavish makeover continues in the bedroom...

0:43:380:43:43

'and the wonderful bathroom.

0:43:450:43:48

'But taking on a project this big meant starting from scratch.

0:43:480:43:52

'That must have been a problem when they live over 200 miles away, so who did what?'

0:43:520:43:58

Well, my main input was through the colour schemes and setting out of the kitchen area,

0:43:580:44:04

choosing some of the bathroom parts. John did all the work, really.

0:44:040:44:10

He came down quite a lot and stayed in London.

0:44:100:44:13

At the beginning, I had to manage the project and find contractors.

0:44:130:44:18

So we found a good Polish contracting crew. Absolutely brilliant.

0:44:180:44:23

They did an amazing job.

0:44:230:44:26

I did mainly project management. And it went very smoothly. We had a 16-week deadline to do it.

0:44:260:44:33

We done it in 13 weeks.

0:44:330:44:36

'Some going! Unlike a new build, where you start from scratch,

0:44:360:44:41

'this had years of plumbing, wiring and rotten timbers to rip out before new stuff could go in.

0:44:410:44:48

'The kitchen's a perfect example.'

0:44:480:44:51

Everything that we've done in here... One of the big changes is the back door used to be here.

0:44:510:44:57

We've now took that out and put the back door over here.

0:44:570:45:01

The reason for that is so you can get a nice table and chairs in this area.

0:45:010:45:08

So it can be a kitchen diner.

0:45:080:45:10

The other thing that has changed is we've tiled the floor.

0:45:100:45:15

We've put all new lighting in the ceiling.

0:45:150:45:18

We've put all new units all round and completely re-tiled it.

0:45:180:45:23

'Of course, it still looks out onto the back garden where decking has been laid.

0:45:230:45:29

'It will soften up with pot plants, but I'd have left more grass.

0:45:290:45:34

'But, like the front, the brickwork has been cleaned, windows replaced and there's a new door.

0:45:340:45:42

'Upstairs, they retained the bay window in the back bedroom, but they're new double-glazed units

0:45:450:45:51

'and they've replumbed.'

0:45:510:45:54

What we did in this room was there was a wall across here.

0:45:540:45:59

This was the main master bedroom.

0:45:590:46:02

We wanted an ensuite in here. A big area here was the hall,

0:46:020:46:07

so we moved the wall further back and took a little from that room, which was the middle bedroom.

0:46:070:46:13

That's allowed us to put a huge ensuite in. That's worked very well.

0:46:130:46:18

It's made no difference to the house. We still have three bedrooms.

0:46:180:46:22

'With three bedrooms, one ensuite and a family bathroom, John decided against the loft conversion.

0:46:220:46:30

'So time to talk money. How much has this impressive refurbishment cost, on top of the £400,000 at auction?

0:46:300:46:38

'Remember, he and Colette had set a budget of £50,000-£70,000.'

0:46:380:46:43

The budget has worked quite within what we thought.

0:46:430:46:49

Basically, what we have spent on the actual house, about £70,000,

0:46:490:46:53

but also we've got Stamp Duty that was over £15,000

0:46:530:46:57

and £5,000 for legal fees, buying, selling, that sort of stuff.

0:46:570:47:01

So 490 is where I've got up to now on what we've spent to get the whole house complete.

0:47:010:47:08

'Let's get some expert advice from two local estate agents.'

0:47:100:47:14

The house is beautiful. It's nice to see that a developer's come in

0:47:220:47:26

and really put their stamp on it.

0:47:260:47:29

The choice to keep it as a house was the right thing to do.

0:47:290:47:33

There's a lack of housing in this area. Family homes are in demand.

0:47:330:47:38

Flats would have been a mistake.

0:47:380:47:40

I do particularly like the kitchen. They've been very brave with colours

0:47:400:47:45

but it does match in with the floor and I think people will walk in and think, "Mm, I like that."

0:47:450:47:51

I love the bay. I wasn't sure when he said he'd move the door,

0:47:510:47:55

but it's fantastic, and the colours.

0:47:550:47:58

'It's lovely to see a dilapidated property brought back to life.

0:47:580:48:02

'There could be quite a bit of interest if it was put up for sale, but what about renting it out?'

0:48:020:48:09

Rental's very busy round here. It's a great location.

0:48:090:48:13

You'd get £1,800 per calendar month.

0:48:130:48:16

You'd let it quite easily. Probably looking at £1,700 per calendar month.

0:48:160:48:21

-'With the potential to generate that sort of income, might they be persuaded to let it out?'

-No.

0:48:210:48:29

The amounts we've invested in it, the rental return wouldn't be enough for what we need to do.

0:48:290:48:35

So we're going to put it up for sale straight away.

0:48:350:48:39

'Even though the house was in a terrible state,

0:48:390:48:43

'don't forget John specifically chose it for the return he wanted.

0:48:430:48:48

'He paid £400,000 at auction and he's estimated his costs at £90,000.

0:48:480:48:55

'So is it now worth more than £490,000?'

0:48:550:49:00

The property could go on the market for sale at £575,000, to achieve anything upwards of £550,000.

0:49:000:49:08

I'd put it on the market at £650,000 and look to get very close to.

0:49:080:49:12

There's a bit of a difference there and it just shows the area.

0:49:120:49:16

We've looked at a house up the road for £800,000.

0:49:160:49:21

The 650 would suit us fine. That's what we'll put it up for and I believe we'll get.

0:49:210:49:27

'Even if they achieve the middle of those valuations, say £590,000,

0:49:270:49:33

'that would represent £100,000 gross profit in 5 months.

0:49:330:49:37

'So what's next? Another property around here or back to the Wirral?'

0:49:370:49:43

We've already eyed up a place in Fulham so we're going to go and have a look at it on Saturday.

0:49:430:49:50

We'll go to the next auction and hopefully get it and get on with the next project.

0:49:500:49:56

-Onwards and upwards, I think.

-Yeah.

0:49:560:49:59

-If there's any footballers out there...

-We're coming your way!

-We're coming your way, yeah!

0:49:590:50:05

'John and Colette certainly look to have scored a winner in Twickenham and they didn't need extra time!'

0:50:050:50:12

'We return now to this mid-terrace property in Hanley, Stoke-on-Trent,

0:50:150:50:19

'where, earlier in the programme, Steve, a freelance IT project manager, paid £35,000 for it.

0:50:190:50:26

'His son, Paul, was going to do a lot of the renovation.

0:50:260:50:30

'Although he'd trained as a motor mechanic, he'd now decided to work with his dad,

0:50:300:50:36

'developing properties.

0:50:360:50:38

'The refurbishment's taken four months. Both Paul and Steve met us to show us the results.

0:50:380:50:46

'The new windows and front door are a promising start.

0:50:460:50:50

'Inside, in the living room, the big stone fireplace is gone. That rubble must have been a pain!

0:50:500:50:57

'The neutral colour scheme continues into the dining room where, again, the fireplace has been removed.

0:50:570:51:03

'Beyond the kitchen, at the back, the bathroom's been retiled, but the suite remains.

0:51:030:51:09

'It's been Paul's first development and it sounds like he's put in more hours than his dad!'

0:51:090:51:14

Since we bought it, I've been here during the week and my dad's been up at weekends.

0:51:140:51:20

It's taken four months to get to this stage.

0:51:200:51:25

Paul came down just one or two days a week, and I came with my friend John on Saturdays.

0:51:250:51:32

But there was more work, so Paul came down all week and we did Saturdays and Sundays.

0:51:320:51:39

We've almost finished now and it'll be ready for letting out.

0:51:390:51:43

'This has been an invaluable opportunity for Paul to see what it takes

0:51:430:51:49

'to renovate a place like this.'

0:51:490:51:51

Originally, it was plastic tiles on the walls. Once we removed them, the plasterboard was damp and soggy.

0:51:510:51:59

So we took all that off and we had to get a few builders in to see what they thought.

0:51:590:52:06

We had a quote to rebuild the extension,

0:52:060:52:10

but the prices were too high, so me and my dad's mate John made a new cavity,

0:52:100:52:17

put the plasterboard on, plastered it, redone the roof to stop leaks and it turned out OK.

0:52:170:52:25

'With eight properties in his portfolio, Paul's dad Steve has picked up new skills on each one

0:52:270:52:33

'and he's getting confident.

0:52:330:52:35

'He wasn't afraid to remove any obstruction to gain extra valuable space in the kitchen.'

0:52:350:52:41

This is where the chimney was before. It came out to about here.

0:52:410:52:46

As you can see, it was taking up a lot of space in the kitchen.

0:52:460:52:50

So we decided we'd knock it down. It was a little bit scary as all the bricks came tumbling down.

0:52:500:52:57

So we put three lintels, concrete lintels, in the ceiling here,

0:52:570:53:04

to support the building. It's created a lot more space.

0:53:040:53:08

We've now got a long galley kitchen. A lot better than it was before.

0:53:080:53:13

'Paul has left the structural stuff to his dad, while he concentrated on the decorating,

0:53:130:53:18

'brushing up skills he'll need on other properties.'

0:53:180:53:23

I'm going back to college in September to do a part-time painting and decorating course.

0:53:230:53:30

I can earn money at the same time.

0:53:300:53:33

'How much has the refurbishment cost on top of the 35 grand paid for the property at auction?'

0:53:340:53:42

-Our original budget was £8,500.

-And we've actually spent about £7,500,

0:53:420:53:47

so we've come under budget.

0:53:470:53:50

The only major cost has been the double glazing and the plastering work, really.

0:53:500:53:55

I've had a few friends to keep the cost down.

0:53:550:53:59

other than that, we did it ourselves. It's been really enjoyable, but hard work.

0:53:590:54:05

You're working all week, then Saturdays and Sundays here.

0:54:050:54:09

I've got a property round the corner that we need to renovate, so we know what we've let ourselves in for!

0:54:090:54:15

-And Paul's got one in Wales to start on next week.

-'No wonder Steve feels tired!

0:54:150:54:23

'Anyway, he's left Paul to find out what two local estate agents think

0:54:250:54:29

'of this property.'

0:54:290:54:32

The standard of finish is quite basic. It could have been done to a slightly higher standard.

0:54:320:54:38

There's a lot of natural light coming into the house.

0:54:380:54:43

It creates a lot of space. It's been decorated to quite a good standard,

0:54:430:54:50

although it could have been to a higher standard.

0:54:500:54:53

There's nothing additional structurally that can be improved that would make sense financially.

0:54:530:55:01

It just needs finishing off properly to get the top valuation figure.

0:55:010:55:06

I'd recommend a rental price of £395 per calendar month.

0:55:060:55:11

The likely rental income would be in the region of £350.

0:55:110:55:16

That's what I expected, £350. £395 is a bit of a surprise to us.

0:55:160:55:22

I'm sure my dad will be quite happy with the results of that.

0:55:220:55:26

We've had someone in from across the road interested in renting

0:55:260:55:31

and they've had a look round and seemed keen to move in quite quickly.

0:55:310:55:36

'It sounds like renting will be no problem. But how much is it worth?

0:55:360:55:41

'Steve paid £35,000 on auction day and they've spent £7,500,

0:55:410:55:45

'making a £42,500 total outlay.'

0:55:450:55:50

I'd recommend a valuation price of £59,950.

0:55:500:55:55

I would imagine this property to be placed on the market at £55,000.

0:55:550:56:00

'Goodness. Even the lower valuation of £55,000 would mean a minimum gross profit of £12,000

0:56:000:56:07

'before the usual deductions.'

0:56:070:56:10

Yeah, that's great. My dad was expecting about £50,000, so it's a bit above what we thought.

0:56:120:56:19

Our intention will still be to rent for a while and maybe later sell it.

0:56:190:56:24

'Paul's worked hard on this, his first project with his dad.

0:56:240:56:28

'Is he pleased to have changed his job from working in a warehouse to buying at an auction house?'

0:56:280:56:34

Yeah, this is a new career for me.

0:56:340:56:37

Joining college in September, so I'll get a trade and go from there.

0:56:370:56:42

We've done good as a team. Didn't expect to be as good as we were, but it's been all right.

0:56:420:56:50

-Join us for more pleasures and pitfalls of property developing next time.

-We will see you then.

0:56:540:57:00

-Goodbye.

-Goodbye.

0:57:000:57:02

Subtitles by Subtext for Red Bee Media Ltd - 2010

0:57:100:57:14

Email [email protected]

0:57:170:57:20

Martin Roberts and Lucy Alexander visit a bungalow in East Lothian, a conversion in Twickenham and a property in Stoke.

All of these properties were sold at auction; Martin and Lucy find out who bought them, and what they paid when they went under the hammer.