Episode 40 Homes Under the Hammer

Welcome to Homes Under The Hammer.

Auctions used to be for just builders and developers.

But now loads of people go to find what they're looking for.

Even in these tough times, they find bargains under the hammer.

Even for the most experienced buyers, auctions can be a nerve-wracking experience

and you have to make sure you don't get carried away.

Did today's buyers keep a cool head and get some bargains? Let's see what they bought.

'This quirky cottage in Exeter has a place for a pig, a tiny stove...'

And the smallest bathroom I've seen in a long time.

'This Kent house has taken open-plan living a bit far.'

Quite spacious, but I think that's down to the fact that there are no doors on this kitchen.

'And if you head up these imposing stairs in Glasgow, you'll find some stunning accommodation.'

I think this is really good.

'All these properties went to auction and we'll find out

-'who bought them and what they paid for them when they went under the hammer.'

-Sir.

Today, I'm in glorious Devon and I thought we'd start with a bit of grandeur.

That is Powderham Castle, home to the Courtenay family and seat of the Earl of Devon.

Well, after that, I bet you can't wait to see what was up for auction.

The Powderham Estate lies between the villages of Kenton and Starcross

on the coast next to the River Exe.

It's beautiful countryside here, yet within commuting distance of Exeter.

I'm here to see a Grade 2 listed property.

Right in the heart of the village of Kenton just opposite the beautiful local church

is a row of terraced houses.

I'm not here to see a castle, but something which I think has potential

to be very interesting indeed.

A two-bedroomed house, had a guide price of 100,000 quid. Let's go inside.

Well, a seriously impressive front door. That's what you call a grand entrance!

Through into the living room. It's nice to have this open fire, but some very strange stuff going on.

All this glass up the side of the staircase there - unusual.

Through into a rear kind of sitting room area.

No natural light in here, other than the stuff coming from the living room and extension to the kitchen,

and all this stone on the walls makes it feel dark and fairly dingy, then wow, look at that!

It's a range cooker for small people. It's almost like one of those children's ones.

Not very practical, I have to say.

So, all in all, it's kind of quirky.

At the back, the kitchen is definitely in need of modernisation.

It's small and there's not really enough room for the units.

It would be worth opening it up into that second living room to create a kitchen-diner.

Upstairs, the two bedrooms have plenty of original character, but again space is limited.

Just imagine trying to squeeze in beds and furniture.

Well, upstairs, two bedrooms and the smallest bathroom I have seen in a very long time,

including a very, very odd Japanese-style mosaic bath.

Why that's there, I don't know. You'd have to be very small to make the most of that.

I'd probably take that out, put a shower cubicle in its place.

In terms of moving the bathroom, your options are limited,

but a shower cubicle would at least improve things from what is very, very, very odd.

There's another unusual detail about this house that went to auction at a guide price of 100,000.

It's outside and you can just see it from the upstairs windows.

Time for a sniff around.

Well, out at the rear of the property here, it just keeps getting quirkier and quirkier.

There's this little courtyard, but then here's something you don't see every day.

This is a Victorian piggery.

Now, in the days before refuse collections and wheelie bins,

you'd have a pig out here and you'd feed it scraps from the kitchen and even ash from the fire.

Then of course, when the time came, a bit of bacon for your sandwiches.

What would you do with it now? Maybe it could be an additional room or a workshop.

Or how about a teenager's bedroom? Well, they're usually a pig sty!

I'm not sure how strong the outbuilding housing the former piggery is.

Lean back on the wall and it might collapse, but through the sliding doors is another room

which has running water, so that could be converted into something useful.

To access the garden, you have to head down this communal path.

There's a shed and a garage which are reached through a car park

and plenty of lawn to accommodate visiting wildlife.

To find out more about the local market,

we asked the auctioneer to come and tell us more.

Kenton is a really pretty little village.

Most of the houses in Kenton are going to be a bit on the older side.

It's the village that served Powderham Castle Estate

just about three-quarters of a mile along the road.

You can get not as much for your money here as pretty well anywhere. It's quite a hot spot.

So, a desirable place to live and there's high demand for property around here.

But I'm keen to know how much the house could be worth.

If done up to a reasonable letting standard,

you could be looking at as much as £675 a calendar month.

If the new owner did an absolutely stunning job,

the property might be worth a little bit over £200,000,

but I feel that's about the cap, whatever you do.

So, the garden, the garage, even the little shed there,

I mean, it's just all the icing on the cake of what is a fascinating and quite charming little property,

close to Exeter, a lovely little village,

and for 100,000 quid, I'm sure it got them buzzing when it went under the hammer.

51...

What a pretty, pretty little house in Church Street in Kenton!

I'm not going to go less than the guide price for that house. Who's going to say 100? 100 we've got.

There it is, at 100. 102, front row. 102. 104.

I'll focus on you chaps. 104. 106.

108. 110.

112. 14.

And 16. 118.

120. 122.

124. 126. 128.

130. 132.

132 to my right. 134.

136. 136.

136 is you. 138. 140.

140 I've got.

On the aisle, 141. 142.

143. 4.

And 5. And 6.

7. 147.

148. 149.

150. And 1.

152. 53.

153. 153's at the back. 153.

4. 154.

155. 155. A little one if it'll help you back?

155 and a half? 155 and a half.

At 155 and a half, all done. It will be sold, make no mistake.

At 155 and a half, glancing back at the phone. At 155 and a half... Sir, yours. Congratulations. Well done.

'That top bid of 155,500 was made by Richard and his wife Jill who live on a farm.

'They've renovated properties in the past and Richard's a builder.

'They're long-term foster carers and bring up their two daughters along with two foster children.

'They've bought this place as an investment for the future. I met them back at the quirky property.'

-Richard, Jill, lovely to meet you both. Congratulations.

-Thank you.

-Tell me why you bought this place.

-We've been looking for a property to buy at auction for a few months.

We missed one at the last auction and I saw this one on Saturday afternoon on the internet.

I came down with my youngest foster child, had a look at the outside

and my little boy was really enthusiastic.

Because I'm buying this property with some money from my late mother,

it was very important that it felt right using her money for something we'd enjoy as a family.

Tell me more about you two. What do you do when you're not doing this?

Richard and I are both long-term foster carers. We've been working for Devon County Council for ten years.

-We do baby placements as well.

-We have little ones and teenagers.

We live on a farm and they've got lots of space to run around and scream and shout and be children.

-Animals as well?

-Yeah, we've got sheep, dogs, cats.

There's a menagerie. There's lots of stuff we have.

'Thanks to the money left to Jill by her mum,

'they've now got this interesting property to look after as well.'

-Richard, what did you think when you first saw it?

-I saw the property needed a lot of work doing to it.

It's going to take a long time to do it, but it's a lovely property in a great setting.

-It's well worth a go.

-Have you done this before?

Yeah, it's not the first time I've done things like this.

I restore old buildings, sometimes do churches, barn conversions.

-Are you a builder?

-Yes, so it doesn't present too much of a challenge to me.

There's lots of pitfalls on the way, but nothing we can't get over.

Tell me what you'll do to it.

We'd like to restore the property as much as we can back to how it would have been in the 1890s.

We'd like to take out the modern '70s style fireplaces

and hopefully, there'll be a nice, Victorian brick fireplace underneath, possibly put wood burners in there.

We need to put a new bathroom in, probably move the bathroom, so it works more effectively.

How are you going to reconfigure the bathroom and the bedrooms?

The end bedroom will become the bathroom and the bathroom will become the bedroom.

We'll move walls and the bedroom will have double-aspect windows.

-You've worked out the plans for this?

-I've measured the rooms up and yes, it will fit in.

What about the courtyard and the old piggery?

-I think the piggery is going to lend itself to a really nice, Victorian-style kitchen.

-A kitchen?

Yes, because it's south-facing, you've got lots of light

and to link the piggery to the main house, we'd like to put in a passageway with a glass roof

and large double doors or a single door to let the light in.

'Sounds wonderful. Getting the extra light into the house will help

'because at present, it's very dark.

'But as it's a listed building, Richard and Jill will need to liaise closely with the planning office.'

So, any idea how much this is going to cost?

-Well, I think 20,000.

-I think we've got to allow at least 25,000 because I want to do it properly.

I want to have good quality materials and I want it to last, so it's not just a quick "do up to sell".

-We want to keep this property.

-What's the plan? Are you going to live in it or rent it out?

We've got a very good friend who's going to rent it from us.

She lives just up the road with her partner. She's got a dog and two cats and no garden.

They're going to help us do some of the work

and they can say they've helped in creating their home. It's our house, but it's going to be their home.

It's great that you found the house and the house found you.

-I'm really looking forward to seeing how you get on.

-Thanks very much.

# I go ahead and smile... #

So there you go, Richard and Jill falling for the obvious charms of this place and who can blame them?

They've got a tenant lined up to move in already.

Before that happens, they've got to sort the place out and that means listed buildings approval, etcetera.

How are they going to get on? Find out later in the show.

For the next property that went under the hammer, one snowy day in winter,

I visited the village of Tonge, two miles east of Sittingbourne in Kent.

It's very rural with no train station or shops -

just a few houses, an old mill and a local parish church.

And like every good village, there's folklore to explain its name.

Local legend has it that a man wished to marry the chief's daughter.

Now, the chief didn't really approve of this marriage,

so only granted the man as much land that could be held in a bull's hide.

Now, being crafty, the man cut the hide into strips or thongs and he laid them in a large circle,

thereby holding quite a large area,

and this is apparently the origin of the village's unusual name - Tonge.

OK, enough local history there. Let's take a look at what I'm actually here to see today.

# We're just another winter's tale... #

The property is right next door to the Church of St Giles, hence being called St Giles Cottages.

Well, it's this three-bedroom, ex-housing association semi

and it was built in the 1940s.

Not the greatest kerb appeal here - bit of a parking lot out there,

but it had a guide price at auction of £85,000 to £90,000.

Let's take a look inside.

The house is at the end of the row and has a large back garden and double-glazed windows.

Those are both plus points, but it hasn't got much character.

Oh, now, straight away, you can see this house does need a lot of work.

It's completely dated, lots of old woodchip wallpaper.

Even though there is snow on the ground and it's a freezing cold day,

this house is extremely cold inside.

I don't think the heating would have been on in here for a long time. It feels it's been empty for ages.

You have two reception rooms here, quite a spacious area,

but I think that's down to the fact that there are no doors on this kitchen space.

Look at all these old units, really tatty. The whole thing needs to be ripped out and upgraded.

But you do have a couple of little rooms at the back of the property.

I would say they're only single-skin and if you want to use them as an integral part of the house,

you'd need to get that sorted, so you have to put some money aside for some work there.

Let's hope anyone tempted by the guide price of £85,000 to £95,000 remembered to factor that in.

One issue that definitely needs to be addressed is the heating system.

Now, you may think this open fire in the lounge will be romantic on a cold winter's night

and a bit of a feature to the property,

but it's the main source of heating for this whole house.

There's a back boiler behind this

and with this system, if you want the house to be warm when you get up first thing in the morning,

you'll have to stoke the fire just before going to bed, which could be a bit of a hassle.

The fire might go out and as it's coal, it will produce a lot of ash and will require regular cleaning,

so it's not to everybody's taste and it will use about one to two bags of coal for a full day's heating.

But you're not on a gas mains here, so replacing this with gas central heating is not really an option.

So this lovely, remote, country location does have its drawbacks.

Not all the mains services are available. Gas is one,

but there is another, a clue to which is in the front garden.

If you're wondering what this surfboard is doing here, it's the cover for a cesspit underneath

because with this property, you're not on the main sewerage system.

Luckily, it is quite a modern unit, so it won't need to be pumped out and emptied too often.

I suppose it's all part and parcel of living in a rural location.

Back inside and upstairs is a rather dated bathroom

and three bedrooms.

Two are good-sized doubles which, like the whole house, need updating and re-decorating.

There's also this third bedroom which is a fair-sized single.

It's a well-proportioned family home for that guide price of 85,000 to 90,000,

but, as is often the case, the guide price reflected a potential problem here.

Now, this house also has a bit of a hidden secret.

Underneath this brick lies an Airey home.

Not the "airy" you may be thinking of, but it's named after Sir Edwin Airey who developed the design.

These were built after World War Two when resources were limited

and they could be built with unskilled labour.

Basically, they consist of a metal frame with pre-cast concrete panels slotted between.

It's what is known as non-standard construction.

Unfortunately, the metal frames tend to corrode over time and it makes this structure unstable,

so not great and very difficult to obtain a mortgage on if remedial work isn't done.

Fortunately, this one was repaired about 20 years ago with a brick skin,

so getting finance should be possible,

though in today's economic climate, it could still be a bit tricky.

Time to get the advice of a local estate agent.

With no mains gas or sewerage and non-standard construction,

it's definitely a house with some hang-ups.

Where would be the best place to start?

The things I would change would be the heating.

The coal would put some people off, so maybe change that to oil.

The kitchen definitely and the bathroom.

The type of construction shouldn't be problematic any more, now that it has been bricked around.

One question high on the list of buy-to-let investors is the rate of return.

Would it make a good rental investment? What rent could the property generate?

Due to the transport links and the location of the village,

I wouldn't say that there would be high demand for rental.

I still think it would achieve around the figure of £725 per calendar month.

What about the resale value?

I would value this property, in good condition, between £135,000 to £140,000.

Well, plenty of challenges here and some interesting options to think through.

So, what to do with this property? A complete refurbishment is obviously needed.

But would you rent this out or do it up and sell on?

The non-standard construction, although remedied, it still might put off any budding buyers.

But if you opted to rent this out, this rural location might limit its appeal to potential tenants.

So who ended up bidding for this three-bed semi and what would they do with it?

Let's find out at the auction.

Guide of 85-90. Where do you want to start me? Start me at £85,000?

Start me at 80? 80,000? 80, I'm on the way. In the corner, £80,000.

At £80,000, I'm bid. It's with you, sir, at £80,000.

I'm looking for 82. 82 I've got.

Sitting down, 82. And 4. 84.

And 6. 86 in a fresh place.

88 against both of you at the back.

At £86,000, I'm bid.

I thought it would make more than this. It's a good buy. At £86,000 I'm selling for the first time.

88 at the back again. Try 90. 90 I've got.

And 2? 92 is against you. £90,000 I've got standing on my right-hand side for the first time again.

For the second time... 92 I've got. And 4. 94.

94. And 6? 96?

At 94 then. We'll say it again, for the first time at £94,000...

Second time at £94,000. Are you coming back one more time?

For the third and final time at £94,000. Are you all done?

It's yours, sir, for 94,000.

'That final successful bid of 94,000 was made my Phil.

'He works in London as an asset manager for private clients.

'He's bought a few investment properties, but not for his own portfolio.

'I met up with him to find out what was the attraction of this one.'

-Why did you want to buy this?

-I'm looking to acquire a few properties. This is the third one I've bought.

I'm buying a property portfolio for my wife.

She doesn't work and I'm taking advantage of the tax rates, so I'm building a few investments for her.

I'm an investment manager, so it's what I do, but I did break a few rules here.

Tell me about the rules you've broken.

What I did do, against all the rules of investment management where you do research before you make a purchase,

I hadn't even seen the property when I made the purchase.

That's our number one rule at Homes Under The Hammer. Did you read the legal pack?

I hadn't even read the legal pack. I blame my brother-in-law David.

I was with him at the auction and he had done a little bit of research on this.

He said it looked like a good one. I knew where it was. I'm quite local.

-Why did he do the research? Was he going to buy it?

-Yeah, but he got caught between properties.

He went anyway, even though he couldn't bid at the time, so I took him on trust and I started bidding.

What did you think when you viewed this property for the first time?

I was a bit concerned because I'd seen the paperwork by then that had come from the legal packs.

This house was described as an "Airey house" which are prone to all sorts of problems, but when I came here,

I saw that it had a brick skin and the work had been done 20 years ago.

-So the good news with that is it's a mortgageable house?

-Yes.

-It's saleable, so that's a huge tick.

-It's not my intention, though, to sell it.

Because I'm building a property portfolio, I'll rent it.

'Phil's bought the property for his wife's investment portfolio,

'but he'll manage the refurbishment on her behalf.'

So, to what standard are you going to renovate this?

-At the moment, it can only go one way and that's up!

-You've seen the hallway. I want a Titanic moment.

You know they're in the old wreck at the bottom and it magically turns back into the Titanic?

-It's going to look something like that.

-You really are going to make it look fantastic?

Better.

'I'm not sure if turning this wreck of a property into a luxury liner is the best approach.

'Phil could end up in icy water as there are some burning issues.'

-It's freezing in this house on a day like today.

-It is freezing.

-How are you going to keep warm in this house?

-I'm not sure how warm it gets, even when the heating's on.

I would be interested to see if I can put in an alternate burner

that could burn any sort of coal or wood. It could be a cheaper option.

-What budget have you got to spend on this property?

-I didn't want to spend more than £100,000,

so I was getting near to the top of my limit on the purchase. I wanted to squeeze in, if I can, under that.

I've acquired a kitchen which will be fitted within a couple of weeks,

but obviously tiling and carpets, it's relatively cheap and most of it I'll do myself.

How long do you think it's going to take you to get the house completed, to get it out on the rental market?

You don't want to be sitting on a property like this for too long because you're losing money,

so I'll get it done quite quickly.

The fact I'm seeing you today will make sure my schedule is tighter,

-but I intend to get it done...

-Oh, yes.

-..within six weeks.

-The pressure's on from today.

-Thank you.

-I'm excited for you and it'll be fantastic to see the outcome here.

-Congratulations.

-Thank you very much.

Remember, most of an iceberg is invisible as it's below the water.

I wonder what problems will surface here for Phil?

In his own words, Phil admits he broke a few rules with this property.

He didn't view it before buying it and he did no research, so will this house be his Titanic?

Will it be a matter of sink or swim? You can find out what happens later on in the programme.

'Someone could reach dizzying heights with this spacious office accommodation in Glasgow.'

Big, high ceilings. We like that.

'Back in Sittingbourne, Kent, has Phil caught the property auction bug?'

I like the vibe. I think you get some good bargains.

'But first, we return to Exeter where Richard and his builder have been treading carefully.'

The footprint upstairs has changed.

Earlier, Richard and Jill had bought this two-bedroom, Grade 2 listed, terraced cottage

in the Devon village of Kenton for £155,500.

They used money Jill had inherited from her mother.

The couple live on a farm and have renovated properties in the past.

They're both long-term foster carers and have two daughters of their own.

They planned to convert the old piggery at the back of the cottage,

change the layout upstairs and let it out to friends.

Well, it's now six months later. The conversion is finished and what a transformation!

With help from their daughter's boyfriend Lyle, who is a bricklayer, Richard has transformed the cottage.

That middle room next to the kitchen that struggled to get any daylight is now really bright.

The former kitchen is now a living area.

Upstairs, the small bedroom has become the bathroom

and the original bathroom is now the second bedroom.

Walls have been moved and that '70s fireplace has been replaced

with a Victorian one Richard found on an auction website for £74.

What a bargain!

But the former piggery and utility room outside has seen the most dramatic alteration.

It's now the kitchen and is directly connected to the house.

This used to be the piggery, but now we've turned it into a kitchen.

It links to the house via a glass passageway which you'll see later.

We've restored the beams, we've put a new roof on, insulated all the walls

and absolutely rebuilt everything.

This is probably one of the favourite rooms that we have.

It's great. Linking the new kitchen to the original cottage,

this glass-roofed passageway is just wide enough for a table. What a lovely spot for breakfast!

But they had to make some compromises to their plans due to the Grade 2 listed status.

Yes, our original idea was to take down the wall from the first room in the front of the house

to actually join the middle room and make a large sitting room at the front of the property.

The listing officer didn't want us to do that as that was the original wall when the house was built in 1857.

But we were allowed to take out the further wall

which was originally the outside wall of the property.

They've still managed to create a stunning home from this cottage,

180 years after the first brick was laid.

How hands-on has Lyle been? When did he start to get involved?

Right from the start near enough, just knocking things about, rebuilding them,

generally rebuilding more as well, exposing new things and just kept going on and on really.

Upstairs, we've taken the bathroom out of the bedroom and then swapped them all around,

so the footprint upstairs has totally changed as well.

This was the original bathroom. The wall came along here and finished in a triangular shape here.

So we've reconfigured all of this now, we've moved the wall back,

pinched a little bit of room from the bedroom next door

and made the second bedroom into a bathroom, so that's a lot bigger and more usable.

At the back of the kitchen, a pathway leads to the garden with its garage and shed.

It's been cleared right back and you can now really appreciate how large the plot is.

But what about the budget? Did they keep that under control?

I think we've blown the budget really.

My wife said 25,000. I think we've probably gone 28,000.

Apart from a few details, the house is done, so are their friends ready to move in and rent it?

No, that changed a little bit.

They decided not to take over the property, but it's good for us in a sense

because we're going to holiday-let it and get some enjoyment out of it.

Time to hear what two local property experts think of this cottage

after its comprehensive overhaul.

The changes are spectacular.

It really is special. There's so much light now.

It has been sympathetically renovated to a very high standard.

I like the linking up of the old piggery, which is now the kitchen.

There's now two proper reception rooms and they've brought the kitchen out into this space

which is by the garden with lightness and freshness again. It's wonderful.

On the first floor, there are now two good-sized bedrooms and a pleasant-sized family bathroom.

There'll be good demand for rental. I'd expect a rent of £750 a month.

On a per calendar monthly basis...

you could probably tiptoe towards 650...yeah, around £650 per calendar month.

There's potentially a good income all year round here.

Will that tempt Jill to rent it out after all?

Probably later. We'll still go for the holiday let to begin with,

so we can enjoy it, then possibly in a couple of years.

Is that feasible?

The property would work well as a holiday let. It's only six miles from the Devon coast at Dawlish.

I would expect to achieve in the high season around £550 per week.

For the peak holiday weeks, you could be looking to achieve getting on for £650 a week or maybe even 675.

-That's very good.

-We'll go for the second one. Lovely.

-Excellent.

Great. They can continue to use the cottage themselves

and get some income in the peak summer holiday period.

But what's the property now worth?

Remember, they paid £155,500 at the auction and have spent £28,000 on the refurbishment,

making £183,500 in total.

If the house was mine and I was going to sell it, I'd put it on the market at £250,000

and I'd hope to get... I'd hope to get above 235,000.

A similar property has sold recently for £245,000 and I would expect to achieve a figure in that region.

Based on 245,000, that's a gross profit of £60,000 before the usual selling expenses.

Jill's made good use of her inheritance, so would she take the money?

I don't think we'd ever really want to sell. I would like to be able to pass this on to my grandchildren.

The fact that Richard and Lyle have worked so hard,

I think it would be really nice for it to stay in the family.

We feel really welcome and we belong here and we weren't expecting that.

I may have lost my mum, but I feel we've gained other friends which she would be really happy about.

I'm here to see a property that was recently marketed for 150,000 quid

and yet it went to auction with a guide price of just 98,000.

You know what, the location? Right in the centre of Glasgow!

With a population of over 580,000, Glasgow is Scotland's largest city and the commercial capital.

It boasts some stunning architecture and the property I'm here to see is on West Regent Street

in this imposing building right in the heart of the city.

It was residential, but like many city centre houses in Glasgow, has been converted into offices.

It was just the first floor that went under the hammer, guided at £98,000,

and you reach it up these lovely stairs.

A reasonably impressive communal area creates the right impression, then into the office.

Big, high ceilings, then lots of little rooms darting around all over the place,

including this one which I imagine at some stage was a boardroom.

This looks like wood panelling. It is wallpaper.

The building is B-listed, so you'll have to get approval before you do things like changing windows.

You've got to factor that into your costs, but as offices go,

I think this is really good.

A property that is Category B listed in Scotland is the same as a Grade 2 listing in England

and means any modifications have to be approved.

At the front, this big room has great views out on to the busy city.

I love this old "enquiries" window.

Next door, there's a second slightly smaller room,

but it has lots of light coming in through the lovely window.

There's another much smaller room that connects the two big rooms.

It could make an ideal kitchen for staff, perfect for making cups of coffee.

You could always knock down a wall or two and make it more open-plan.

But do remember it's a B-listed building,

so there could be issues which you would need to check out.

Hello!

-HIGH-PITCHED VOICE:

-Yes, can I help?

What business could you run here?

Well, any sort of business. Why?

Wouldn't parking be a problem?

Yeah, but you're in the centre of the city. You've got great transport links.

But what kind of business could you run here?

Any kind of business, a start-up, an existing one. We're closing for lunch. I haven't got time for this!

Charming(!)

There are plenty of options here. Even the toilets are already installed.

You might want to replace them with something more modern, but at least the plumbing is in place.

So this property is not sending out any warning signals.

What can a local property expert tell us about it?

It has an interesting history.

It's not typical of a city centre building in Glasgow.

It dates from the mid-19th century.

It was converted around the turn of the century to offices from a residential use.

Although it's still got a lot of character, it's in a sorry state,

so will need quite a bit of attention.

It's tired, dated, it has suffered neglect to internal maintenance,

but it certainly has potential to be improved and to be a very good self-contained office suite.

I think you could be looking presently to achieve a rental rate

per square foot of around £10, rising to £12 per square foot per annum,

so I think presently somewhere between £12,500 to £13,000 per annum,

rising to somewhere in excess of £15,000 per annum on refurbishment.

The property went to auction at a guide price of £98,000,

so if it was bought for around that guide price and refurbished, how much could it then be worth?

I think if a refurbishment was carried out comprehensively to a good standard,

there's a realistic prospect that the value could increase

and I could offer this to the market at offers in excess of £130,000 at that stage

with the prospect of achieving closer to £150,000.

Well, maybe someone will be cashing in here again. We'll have to see.

There's a bit of work to be done, but for an office in this fantastic location with lots of character

and a great guide price, it's a superb one to go for. Let's see who spotted it at the auction.

Number 37.

Excellent-sized office

with internal floor space of 1,277 square feet.

100,000, is it? Commercial investment again.

99, is it? Start me away on Lot number 37 in the catalogue?

80, there we go. 80 bid start. 80,000 I have.

80,000. Bid of 80. 1.

81,000. 82 bid. 82,000.

83 bid. At 83,000.

At 83,000. Bid of 83. 84 now, commercial investment?

At 84. Bid of 84. 85,000. 85,000 I have.

At 85... 6. At 86,000. 7.

At 87,000. At 87... 88,000.

89,000. At 89,000 bid.

At 89... 90,000 bid again.

91 in blue. 91,000. At 91. Bid of 91.

At 92. Bid of 92. At 92. 93,000.

At 93,000. Bid of 93.

94,000. At 94,000.

Lady's bid. Quickly now, sir?

At 94,000. Bid of 94. At 94. 94.

94-5. 94-5. Bid of 94-5.

Selling... 95,000. Selling all the time at 95,000.

You've worked hard. You shouldn't miss it for 500.

At 95,000. Quickly now, sir, if you want it?

At 95,000, lady's bid.

Are you all sure? Once...

Twice...

Give me the time thrice... What's your number, madam?

'That final bid was made by Caroline, an accountant who owns a property investment company

'with her father and two brothers.

'Her brother Grant is a joiner.

'I met up with them to hear about their plans.'

-Grant, Caroline, congratulations.

-Thank you.

-Cheers.

-Good price, I think, for somewhere like this?

We were pleased with it, quite happy.

Tell me why you wanted to buy it.

We're looking to have offices of our own that we can develop and move into ourselves and this seemed perfect.

-What was it about this place that you liked?

-The location. It's handy for everything.

It's close to the train station, the underground, restaurants.

-And quite prestigious, I would say.

-Lovely building. Grade B listed.

We can do the inside pretty much to suit us as we like, so it has everything.

'It certainly has. They've bought a property in a great location,

'but they need to be careful they don't rent their current offices and pay the mortgage here for too long.'

-Presumably, there's a period where you've got to... You'll be paying both, won't you?

-Yes.

We have a six-month notice period where we are just now,

so the morning after the auction, I handed in our notice on the rented one,

so I hope we're not doubling up for too long.

It is in a bit of a state, so what are you planning to do with it?

-That would be your department.

-Yeah.

A full office fit-out, budget depending,

so a raised floor, lowered ceilings for data access cabling.

-Everything's getting ripped back to the bare walls to start from scratch.

-Have you got experience?

Yeah, I've done a fair bit of office fit-outs and old tenement restructurings as well,

-so I've got a fair bit of knowledge of this kind of thing. This is easy.

-Is it?

-Yeah.

-We'll see if he says that three months down the line.

-It won't be easy when she gets the bill.

-What's it like working for your sister?

-She's pretty good.

-He's not a bad lad.

'I'm sure he's not, but I hope he's a handy lad.

'He's got his work cut out here to transform this place,

'so have they decided on the look they're trying to create here?'

This room we're in just now would be where the office staff would sit.

This would be the sort of reception area and main staff desks.

Then we'd use some of the other rooms as a meeting room, boardroom, put in a little kitchenette,

so the staff can make their lunches, then another office suite.

-How well does the space suit your business?

-It's ideally-sized for us.

We don't have to do any structural work for the way we want to arrange our office space, so it's perfect.

What kind of budget have you got set aside for doing the work?

-You're smirking!

-Yeah.

-Do you want to have a private conversation?

We've not got enough. Caroline's talking about 30-odd. I'd like a wee bit more.

-There'll maybe be a bit of coming and going with that. 30-odd?

-30,000 to 35,000.

-Plus office furniture.

-35 then?

-I've gained another five grand!

Things like windows are going to be expensive.

Windows, if we want double glazing.

As it's a listed building, we'll be restricted as to what we can put in the windows,

so we won't be able to put in cheap PVC windows or anything like that.

It'll be a specialist company that I know probably fitting them.

-What about timescales for doing the work?

-The majority of the work should be done within eight weeks.

After that, we'll start moving furniture in, snagging out and tackle any problems as we hit them.

-Congratulations. We look forward to seeing how you get on.

-Thanks very much.

-Thank you.

Well, they got it at a good price,

but time is now money for Caroline and Grant and they'll get on with sorting this place out

because nobody wants to pay a mortgage and rent at the same time.

Find out how they get on with this little project later in the show.

Once you've bought your property, the hard work starts and you've got to be prepared for a few surprises.

So, did our buyers unearth hidden treasures or encounter pitfalls? Let's find out.

Time now to return to Tonge, a small village in Kent

where earlier in the programme, investment manager Phil paid 94,000 for this three-bedroom property.

He intended to renovate and then rent it out.

It was the third property in a growing portfolio he was acquiring for his wife.

Now, just over three months later, the snow has been shovelled away

and we caught up with Phil to see how the work's progressed.

Once you get inside, the larger living room hasn't changed much at all.

That back-burning fire remains as the only source of heat in the house.

In the second reception room, the walls are stripped and the cladding round the chimney breast has gone.

While Phil's been working abroad, his builder has been getting the house ready for decorating

and work on the kitchen is almost complete.

The kitchen is probably the job that we've done the most on and, as you can see, it's finished now.

This doorway here never used to be here,

so we've had to give the kitchen its identity back.

The door was here, which went through to the living room, which is a strange concept.

But we've had to change that, so this is perhaps the one finished room

and perhaps if you can envisage this as the completed house...

Work has also started on the extension at the back.

Again it looks a lot worse than it is as it's ready for the last bit of filler

before the paintbrush works its magic.

It promises to be a lovely room with great views out into the garden.

Upstairs is a similar story.

The biggest job that we've done upstairs, apart from changing these banisters which were solid,

just to fit in with the old banister,

was we had to take down the ceilings.

This is because the old ceilings used to be made of cardboard which is a real fire hazard.

Phil paid 94,000 for the house on auction day and now three bedrooms look a lot larger

since the walls no longer support those vibrant shades.

Meanwhile, with the new colour scheme yet to appear,

has Phil managed to keep to that very ambitious budget?

I think I was rather joking last time when I suggested that it would be about £4,000,

which is a lot less than it's turned out to be,

but it's only about £10,000 over that, so about £14,000 in total.

The carpet is the last thing that will be of any great expenditure.

Maybe on the inside, but outside, Phil has set his sights on the land in front of the house

which could be an added expense.

It's a tiny strip of land. The next-door neighbour uses it as a parking lot.

The parish council are the current owners of that piece of land, so I've put in a bid.

They have to go through the parish meetings and they'll come back to me.

This property is the third in the portfolio for Phil's wife.

The plan was to generate income by renting the house out, so is that still the case?

The original intention was to rent it and that is the case.

I've even had... Next door has indicated that he may wish to rent it for a member of his family.

I wanted to get the property done first, but if he is still interested, that's something I would do.

Maybe that's so that the neighbour can continue parking on that land

if Phil does buy it from the parish council.

Time to see what two local estate agents think of the potential here,

now the structural work is done and the decorating is about to begin.

It looks like not a great deal has been done,

but with the ceilings refurbished and a lot of remedial work,

if it's the same standard as the kitchen, it'll be fine.

It's been done on a budget, but all the preparatory work's been done,

so that when it's painted through, it should look fine.

It's a great family home with a big garden, so buyers that like to enjoy their garden, it's an ideal buy.

The position is nice. It's got lovely views over farmland.

Its only drawback is the parking arrangements at the front. If that could be resolved,

it would improve the value of the property significantly.

Once the renovation and decorations are completed, how much could it potentially be worth?

Remember, Phil paid 94,000 on auction day

and his budget has stretched to £14,000,

making 108,000 in total.

Fully completed, I would put this property on the market between £150,000 to £155,000.

When completed and decorated throughout, I would expect to sell this property for £150,000.

If the parking problem was resolved,

I think there is the potential that the value of this property could be up as high as £185,000 to £190,000.

Based on that £150,000 valuation, Phil's looking at a gross profit of 42,000

before the usual deductions.

That could vary, depending on what the council ask for the land, if they do agree to sell it.

Certainly with the upper valuation based on the acquisition of that land,

maybe I'll push it a little bit harder with the parish council now and see if I can acquire that,

but they may want a bit more from me to be able to give up those rights.

How much could it generate per calendar month if rented out to tenants?

I would rent this property out for £725 to £750 per calendar month.

I would rent this property for £650 per month.

That's interesting. It's certainly very good in terms of money for the amount that I paid for the property.

In terms of yield on the current valuations, maybe that raises the spectre of a potential sale.

Whatever that decision is, will Phil be tempted to return to an auction

to look for more property in the future?

I like the vibe. You can get some good bargains

and I want to build a portfolio of properties, so I would go back to the auctions.

Time to return to Glasgow where earlier in the programme,

Grant and his sister Caroline had paid 95,000

for the first-floor commercial office space in this impressive Category B listed building.

They were going to re-locate their family's property investment company here after the refurbishment,

but the clock was ticking as they'd given six months' notice on their current offices,

so the refit had to hit the deadline and it was joiner Grant who would do the donkey work.

Well, it's now seven months later and we're back to check on progress.

Originally, the layout had been divided into several small offices plus this enquiries counter,

but the floor space now has been divided to create an environment more suitable for their business.

The big question is - did Grant manage to hit the deadline and get the place ready on time?

# I said baby, baby, baby You're out of time... #

We made it by the skin of our teeth. The walls were maybe just drying off by the time the office moved in!

Great news. The team of six have actually been in here for about a month.

The various partition walls were removed, leaving just the load-bearing walls.

Then new suspended ceilings and walls and a raised floor were added,

so that the computer and telephone cabling of a modern office could be installed,

along with the perks that every worker appreciates.

We put in a small kitchen. We're quite a small office

and they like to have their tea and coffee and use the microwave at lunchtime,

so it was important they had a proper tea and coffee preparation area.

The kitchen is really well-equipped and looks as if it's in an upscale apartment, rather than an office.

The washrooms and loos have also been refitted to a high standard

and an energy-efficient boiler was installed.

As the building is Category B listed, it's not been possible simply to add sealed double glazing.

That's a real problem for anyone with a listed property.

We had issues with the windows. It's a B-listed building, so there's very little we could do with them.

But we found that when the old hardboard panelling came away, the original mouldings were all here,

so we've brought it back to what it would have looked like.

We've also replaced all the panels with a very low profile double-glazed unit

and with that, we've definitely made the office an awful lot warmer,

but we've also helped an awful lot with the sound.

There was very loud traffic noise here beforehand and now we've got away with that...

It's pretty noisy, but with the panels in place, it's really cut down the noise

and the office staff can now hear what they're doing and work better.

The staff of six certainly have a great office to work in with its smart kitchen and washrooms.

But for any business, the big decisions have to be made in the boardroom

and the strategy there was to impress.

In the boardroom, we decided to make a feature of the ceiling. We raised it up and put in feature lighting.

We then put in a new table in oak to match the woodwork in the room

and framed that with an inset in the carpet in a contrasting colour, which sets it all off very nicely.

It's definitely been a high quality refurbishment here.

# Tumble out of bed and I stumble to the kitchen... #

How much has it cost on top of the 95,000 they paid at auction?

I think we originally had hoped for something around 36,000.

By design, we increased that for the heating and the boardroom

and some other bits and pieces up to 40,000.

I think we came in at the end about 43,000.

Time now to hear how two property experts,

familiar with commercial properties,

rate this refurbished office.

I'm very impressed.

I think they have completely transformed the office suite

into a very good quality,

modern office which is unrecognisable from the condition and standard here before.

It's very rare to have a property

that has their own bathroom and kitchen and this one does.

That might be the difference between somebody taking this property

and somewhere else.

The cosmetic work done here is of a very high standard.

The windows, especially, have been upgraded well.

You've got a new heating system. You've also got complete rewiring.

The quality of workmanship is very, very good.

I think the standard of specification is first-class

and the suite now meets modern user requirements, no question of that.

But the question has to be the current market value of the office after its impressive refurbishment.

It's not been cheap. They've spent £43,000 on top of the 95,000 they paid at auction,

so is it now worth more than their total outlay of 138,000?

The facility has been significantly improved

and I would think now that we are looking at a market value of between £140,000 and £150,000.

The resale value of the property I would put at around £150,000.

150,000 would represent a gross profit of £12,000 before any of the usual deductions.

I would have expected it to be slightly higher than that,

but we've done this for our own office and for ourselves, so I'm still happy with the result.

So, impressive new offices for tenants to visit for meetings and everyone seems happy.

The staff really enjoy this office.

It's a great environment to work in and the location is ideal in Glasgow city centre.

And they've got Grant to thank for getting the place up and running bang on time. So, what now?

I'm going on a nice, big, long holiday. I've been here for too long now and I need a break.

Wish granted, I'd say, and well deserved.

We hope you've enjoyed Homes Under The Hammer.

-Join us next time for more exciting tales from the auction rooms.

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Subtext for Red Bee Media Ltd 2010

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