Episode 42 Homes Under the Hammer

Hello! In today's current climate,

it may be difficult to find your little piece of house heaven.

But whether it's large or small,

auctions can often be a very good place to start.

So today we follow our brave buyers

who try their luck buying their homes under the hammer!

If you've decided to gamble and place a bet on property developing,

you may want to buy at auction.

The atmosphere is electric, the action fast and furious.

Let's look at the properties up for auction on today's show.

In Cardiff, I show why you should not be fooled by innocent-looking twigs.

That is a nightmare!

I find myself going up-market in West London.

It's not often on this programme I find myself on a street

quite as grand as this.

And I think a complete re-design is called for in this Derby house.

A lot of space, but I don't think it's being utilised well at all.

All these properties were sold at auction.

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

The first property today is just outside the vibrant city of Cardiff

in the quieter outskirts.

Judging by the surrounding houses, I've got a good feeling about this one.

This is a highly desirable leafy residential suburb.

The property I'm here to see sounds great.

It's a former caretaker's cottage for a private school, with a guide price of 95,000 quid. That's it.

Built around 1870. Looks OK.

However, one big problem I've spotted already. That tree.

Leafy suburb is great, but not when there's an oak tree like that in your garden.

It's within two to three feet of the house.

It'll be playing havoc with the foundations and the drains.

Not a good start. Let's take a look inside.

So I'd hope the first thing to go would be that tree.

It's worth checking with the local authority that there aren't any tree preservation orders on it

before you rev up the chainsaw.

That also goes for another tree at the side, which ideally should be removed.

Apart from that, this traditionally-built stone house looks promising,

from outside at least.

In a house of this age, you'd hope for some nice character features, but so far it's not looking good.

A big front reception room there, though, which is nice to see.

And some interesting tiles on the floor here.

But I think they may be beyond repair.

But this corridor itself disappears off down there,

basically into an under-stairs cupboard. Strange! Stairs.

Then into a rear reception room.

Again, not a bad space. I'd like to see higher ceilings.

But I'm seeing something potentially much more important you can do with this room.

And that is take out this wall between the reception room and the kitchen.

The kitchen itself is absolutely tiny. It's built into this extension at the rear of the house.

As you see, it's dreadful for the size of the property.

And it gets worse. Just by the side of the kitchen

is the only loo and bathroom in the house.

What on earth were they thinking when they did this?

# Move it, move it, I like to move it, move it

# I like to move it! #

But where could it be moved to? I need to look upstairs.

Upstairs is quite an interesting layout.

It starts well with this big landing which is nice.

It gives a feeling of space.

And three reasonable sized bedrooms.

I'm concerned about the ceiling in this one. Looks like water damage.

But I'm more concerned about that bathroom and toilet downstairs.

Ideally, you want them up here. But I can't really see

where you'd put it without a bit of careful messing around with these walls.

Hmm. It's not obvious.

# With no particular place to go #

Maybe a loft extension could be the answer.

You could put a bedroom up there, freeing up the small bedroom

perhaps to become a bathroom.

Alternatively, you might sneak a shower room into the recesses around the chimney breast.

Or perhaps better still...

I can see one way of resolving that bathroom issue, and that's out the back here.

You can see it would be possible to build a really good extension

to solve the problems and increase the size of the house.

Problem solved. There's another one that's just sprung up.

Look at that. What does it look like to you?

Just a bit of garden weed?

That is a nightmare!

It's called Japanese knotweed.

Introduced into this country cos it looked quite pretty, now it is a certifiable plant.

If you get it, you have to tell the council. It's a nightmare for buildings.

It digs its way through concrete, it grows at a phenomenal rate,

a tennis court's-worth in a year.

This one has been killed, but if its roots haven't been destroyed,

you get the picture? This is horrendous.

It's here and it's very expensive to get rid of.

Concrete-munching weeds aside,

I think this house has got a lot going for it.

It's in a great location with plenty of character.

With thought, it could be turned into something special.

To some buyers, the problems here might seem off-putting.

But how worried should they be?

What does a local estate agent think?

I like the look of the house, stone-fronted.

And I like the shape of the house.

But we have had an instance recently

where a mortgage has been declined because of Japanese knotweed.

In the instance of the bathroom, that needs to go upstairs.

We'd probably lose a bedroom at the front

but if we could extend across the back of the kitchen here,

then we could get the three bedrooms back quite easily.

To get that layout would take a lot of effort, time and money.

Would it be worth it for a house guided at £95,000 at the auction?

I would probably expect to get about 220 to £230,000 for the property.

If it were extended and we put the bathroom upstairs

and came out with a third bedroom over the kitchen,

then I think we're looking at £250,000.

If the potential resale value is encouraging,

how about rental?

If it was done to a really nice standard, you'd get about £900 per calendar month as a rental income.

This house may not be without its problems,

but with a bit of effort it might also bring decent rewards.

So, a house with loads of character

that would benefit from internal modifications,

not least the kitchen, and moving the bathroom upstairs.

The biggest issues are outside - the oak tree and the naughty knotweed!

Let's find out who bought Rose Cottage despite that when it went to auction.

Lot number 28 in your catalogue. Put that in.

Who's going to start me off?

Can I see 150,000, anybody, to start me?

140, then, to start.

I'm in your hands. Bid me.

100, all right, but it's not enough. It's worth more.

100 I've taken there. Five.

Thank you. 105. And ten, if you like.

Ten. Thank you. 15, there. 115. Your bid, sir.

20 on my left. At 120. And five seated in the back.

130. At 130. Five in the back.

135. 40 if you like. The bid is seated at the back.

140, is it. 40, thank you. 140.

You're out, sir. Five. 145.

150, thank you.

At 150. I'll take them two at a time now, if you like.

152 I'm bid, seated there.

At 152. And four, can I?

At 152 seated in the back.

154 is bid. And six is bid. At 156. You're out there, sir.

Eight, thank you. At 158. 60.

160 is bid.

Two. 162. Four, thank you. 164. You're still out.

Six. 166.

168, if you like, sir.

Thank you, sir. 168.

170 if you like now.

170, can I, please? He says no.

There is my bid at 168.

170 - you heard it shouted out.

At 170.

He's going to get it with one bid. Two? 172.

-At 172.

-174.

-Thank you. 174 on the phone.

It's hard to find one of these. Six. Thank you. 176.

At 176. Tell him to come in again quickly on the phone, please.

-This has a lot of potential.

-178.

-178.

At 178. Am I missing... 80, thank you, in the back of the room.

-And two more if he likes. Quickly.

-182.

182, thank you. 182.

Four, can I? Thank you, sir.

Four I'm bid. At 184.

Shout if I'm missing anybody. The hammer's up.

I'm going to sell it at 184.

He says no on the phone.

Have you all done? At £184,000.

It's yours, sir. Thank you very much. Buyer 291.

184,000.

Wow!

So, for practically double the guide price,

at £184,000,

the new owner of the stone-built Cardiff property is local man, Richard.

-Richard, congratulations.

-Thank you.

-A very good solid house.

-Let's hope so!

-Why did you want to buy it?

I'd been looking for a couple of months on the internet

of various auction sites.

I'd been to see this one outside three times. I hadn't seen it before internally before I bought it.

You visited three times, why didn't you visit once to look inside?

I couldn't quite make any of the appointments.

The other thing to mention is the day I went to the auction.

I was in two minds whether to go to Nottingham to a car auction!

I decided I couldn't be bothered to drive to Nottingham so I went to the house auction in Cardiff!

-So you bought a house instead of a car!

-Yes!

How do you feel about the purchase having gone down that route?

I think I've done really well. I can see myself living here.

I'm very excited about doing the work and moving in.

Richard plans to sell his current house and make this his home.

Even if he has to keep his old car!

The move to a new home is just one of a number of changes in his life.

I just decided that having worked for the last 25 years

that it was time to take a six-month career break to decide what I wanted to do with my life.

-How's it gone so far?

-Very well. I've set up my own consultancy

that's dealing with how businesses can react to incidents that occur

-and unforeseen disasters or emergencies.

-Crisis management.

Right. OK. Any other big life changes?

-In the last two to three months, I've lost two stone in weight.

-Wow!

It's been a huge phenomena for me. I can now do 20 miles on my pushbike

without being out of breath.

-I feel much better for it.

-So big life changes there.

-Yeah, huge.

# I know it's never too late

# To make a brand-new start. #

What brand-new start does he plan for the house?

Well, this kitchen we're in now is going to be demolished completely.

A double extension going up.

We're bringing the roof line out so it's level with the back of the house.

The gabled end is going to be in glass.

And we're going to have a mezzanine floor going from the first floor into that gabled area.

-Wow! What's the view that you'll see from there?

-Behind the house is a lovely local authority-owned park.

I'll look directly into the park.

It's going to be a room with a wow factor. And it'll return back into the original attic space.

So it'll be this huge space.

-Have you got planning permission for that already?

-Not yet!

So that could be a problem, then!

But if he does get permission - and boy, does it sound impressive -

it will enable the bathroom to be moved upstairs, yet he'd still have three to four bedrooms.

But before any building can start, he'll need to sort those concrete-eating weeds out.

There is one slight fly in the ointment. Well, actually, a weed in the garden.

What about the Japanese knotweed?

Well, there is the Japanese knotweed.

However, it's been treated by the local authority before I bought the house.

I'm fortunate that my neighbour was the head gardener for the local authority.

-Right.

-I've spoken to a friend of mine who works at Kew Gardens

and she's getting an expert on knotweed to look into it.

But where it is, I think it's the ideal spot for a hot tub!

Put something on the top of it!

-Keep it down.

-Lovely foliage all around it!

I guess he might be able to train it up to make a suitable screen if all else fails!

In reality, it's less likely to hamper his plans than the local planners.

But if all this comes to fruition, it will be at a high price.

-How much have you put aside to do the work?

-60,000.

Hopefully, I'll come in under it, but that's what I've got to spend.

That's the maximum amount.

What kind of experience do you have in projects like this?

House projects? I've refurbished my own house completely.

-But it took me four years to put a cooker hood up!

-Four years to put up a cooker hood?

-Yes.

-Richard, how come that took you four years?

That was before the life change!

At least he's just project managing the work here.

Because if he was doing it, his dream house might just remain that!

So, a change of life and a change of house for Richard.

What about those plans? Absolutely spectacular.

But of course he has to get the plans through the planners

and that's not guaranteed.

And his budget of 60,000 quid could soon disappear.

You can find out how he gets on later in the show.

Location is usually the key to the value of a property,

and nowhere is that more true than in London.

You can't get a much more prestigious location to live in London than Kensington.

OK, so West Kensington is something of the poorer relative,

but it's hardly on the bread line.

It's stacked full of beautiful properties,

its fair share of gastro-pub delights and it's well connected.

All looking rather attractive, if you ask me!

This area straddles the border between the boroughs of Kensington,

Hammersmith and Fulham.

As far as claims to fame go,

Freddie Mercury once lived here in W14.

You know, it's not often on this programme

I find myself on a street quite as grand as this.

Look at these Victorian terraces with their Grecian columns

and sheer over-the-top size.

They really are quite staggering.

I'm delighted to tell you the property I'm here to see is right here.

It's a one-bedroom first floor flat with a guide of just £245,000.

When I say "just", I know that's a lot of money,

but we are in a prime London location.

When I tell you a one-bedroom flat round here regularly achieves well over 300 grand,

it doesn't sound quite so shocking.

Do you know, it's quite cramped in here

but it's as you'd expect from a West London flat.

We're in the centre of London.

You've got a kitchen to the right, with double doors leading to a balcony, which is fab.

You've got, I think, a bedroom there.

I'm drawn to this amazing window. Look at this, it's almost double my height.

You can't beat looking out there

onto those wonderful London stucco-fronted properties.

That really is a fantastic view.

But coming back to this room,

a bit of a woodchip nightmare, it's everywhere.

And when you think about getting two sofas in here,

it could be a little bit on the small side.

Not so great. Let's look around the rest of the property.

The narrowness of this room belies the fact that these were originally big wide rooms

that have since been partitioned.

I'm not sure if that was successful.

The place is oddly laid out with the bathroom a few steps down from the bedroom at the back.

Even though it doubles up as a utility area, it still feels a waste of space.

OK, here's a thought.

This is a very old-fashioned layout.

How about turning the bedroom into your lounge and the bathroom into the kitchen?

Then you'd be left with two potential bedrooms where the living room and kitchen are now.

It may sound crazy, but it's something plenty of developers have done around here,

convert a one-bed into a two-bed.

Despite the huge amount of work involved and huge costs,

I think it could still be worth it.

As it stands, the size of this flat as a one-bed in this area is a luxury.

If I wanted to make some cash on this,

I'd look at getting as much out of it as I could.

For many Londoners, postcode is more important than square footage.

So I think this re-jig, well, it might just work.

So sitting room into bedroom one.

kitchen into bedroom two,

bathroom to kitchen,

bedroom to sitting room,

squeeze a bathroom in somewhere and hey presto!

A two-bedroomed flat. Does the idea have legs?

What does a local estate agent think?

There's plenty of scope to make a good bit of money out of this flat.

I think the best angle would be to turn it into a two-bed flat.

There's enough floor space and it should be quite a simple building project.

If you carried out such a project, what change in rental revenue might you see?

As a one-bedroomed flat,

this would be achieving 260, maybe 270 per week, depending on the spec.

If you convert it to a two-bed flat with a similar spec,

then we'd achieve as much as 330, 340 per week, I'd suggest.

So an extra bedroom adds over 20% in rental revenue.

Would it be the same for resale?

In its present condition I would expect this flat

to achieve in the region of 280, maybe £290,000.

Once converted to a two-bedroomed flat,

you could achieve as much as 375, perhaps.

If it was just refurbished as a one-bedroomed flat,

maybe you'd achieve as much as 320.

So that 245,000 guide price

may be more attractive than it first appears.

This flat is more than just a fair bet.

I think it's a super property that it would be hard to lose money on.

Get that second bedroom in and you could see profits soaring.

Of course, all this depends on what it went for at the auction.

Lot 30.

West Ken. Flat. Got those nice deep windows.

I don't know. West Ken. Where would you like to start?

220 down here. 225 anywhere?

This lady's first. 225.

230.

235. 240.

245.

250. 255.

Should have got there first.

250. 255 over here.

251. 252.

253. 254.

255.

256.

257.

258.

259.

260.

261. Yeah?

Yes? 261.

Back in. 262.

263.

263.

I love it!

264.

265.

266.

267?

266 down here. 267 elsewhere?

If not, 266. First time,

second time,

third and last time. Have you all done?

Sold 266. Well done.

Nice lot, that.

At just a little over the guide price,

for 266,000, the new owners of the Kensington flat

are first-time property developers Kamal and his wife Pavine.

Whilst Pavine looked round their new acquisition,

I chatted to Kamal.

-Kamal, congratulations.

-Thank you.

You started the bidding off on auction day. You were there!

-Indeed I was.

-How much did you want to buy this flat?

I actually was prepared to go up to 300,000.

-Do you feel you've got yourself a bargain?

-I think I did.

How well do you know this area?

Not at all!

I was advised by a friend of mine

and he said, "I think it's a good location."

-Where do you live?

-I live in Kent.

-What do you do with your time at the moment?

Well, I'm a retired doctor.

I don't do anything now. Nothing in particular.

So who is responsible for you buying this flat, then?

Well, actually, it's my wife who is the banker.

-Yes.

-And the investor. So she was working and I was chasing after the property.

So with a bit of encouragement from his wife and his property developing friend,

and a fair amount of trust,

Kamal has taken the plunge into the property market.

-What are you going to do to this place?

-We're going to refurbish it internally.

And we're going to convert it into a two-bedroom flat

with a new kitchen/diner.

Where are you putting the second bedroom?

The second bedroom will be in the present kitchen.

The kitchen will go to the rear,

where there is a large bathroom and toilet.

-What will you use this room for?

-This room will be the lounge.

So, great minds think alike!

Switch lounge and bedroom around, turn the bathroom into a kitchen,

the kitchen into a bedroom and you have two bedrooms.

But we're missing something.

The burning question. Where's the bathroom going?

Now, the bathroom, we have to find a place in the middle of the flat for the bathroom.

That will be between the future lounge and the bedroom.

It will be a shower cubicle

and a toilet. No bath.

-So we can't even call it a bathroom.

-No.

The plan is to rent out this flat. So without a bath, the shower room

will have to be top-notch to attract potential tenants.

So no scrimping here!

What sort of budget are you looking at to do the work?

-My budget is 35 to 40,000.

-OK.

Will you be driving up from Kent most days or just a few days a week?

I'll stay here in my son's place in Barking.

I will be supervising all the work

so I'll come and look at what's going on.

-How does your wife feel about this? Excited?

-Very excited.

She thinks it's a great idea.

Well, it might be a great idea for her,

but it's Kamal who'll be driving the project.

Let's hope that everyone's faith in each other is justified.

This flat is in dire need of some surgery.

Retired doctor Kamal is the man to do it.

This is a big operation, though, for a novice developer.

Will Kamal resuscitate this flat?

Will it make him a fortune?

You can find out later on in the programme.

Coming up: Parts of this Derby house might call for drastic action.

One course of action is to knock it down and start again.

Back in London, it's never too late to acquire new skills.

I've learned quite a bit. I never had any experience before.

First, we're off to Wales to see how Richard's plans worked out.

It wasn't quite what I wanted, but we had far more than I expected.

Just a few miles from Cardiff city centre,

local man Richard bought this three-bed end-of-terrace stone-built house

for £184,000.

This was to be his new home

under the element of a change in direction and approach to life.

I just decided that having worked for the last 25 years

I would take a six-month career break to decide what I wanted to do with my life.

Over the last two to three months, I've lost two stone in weight.

It's been a huge phenomena for me.

So, in a relatively short time,

Richard's managed to make a big change to both his work and physical well-being.

But was he as successful in changing his Cardiff cottage?

It's now 11 months later and we're back to find out.

Yes, the tree has gone.

Inside, the place is almost unrecognisable,

with laminate floors and newly-plastered and decorated walls.

From the dining room, you can now reach a stunning new kitchen.

As you can see, when you came last time

there was a very small kitchen here

with a bathroom and toilet on this side.

We've more than doubled the size of this room.

I've put in water under floor heating.

Obviously the fitted kitchen.

And my favourite feature of the whole house

are the electric Velux windows.

The Velux windows are just part of Richard's fabulous new rear addition.

There's a single-storey kitchen extension.

The end gable wall has been extended and extra windows added.

We went to the planners and said, "This is what we want."

I doubled up on everything. I went for double width and double depth on three floors,

hoping that we would get the double on the bottom and standard on the top.

We did a bit of negotiations and we had to think about a metre deeper on the top two floors.

So it wasn't quite what I wanted,

but we had far more than what I expected.

It's the gable extension that's enabled Richard to change the upstairs layout.

It was originally one decent-sized bedroom with two quirky bedrooms.

Now I think I've got more or less four double bedrooms

and the bonus room upstairs.

And you could get a double bed in there if you wanted.

But it can be used as a studio or an office.

Upstairs now consists of some revamped old rooms

but mainly new spaces.

The rooms in the extension show where the original outer wall was.

The master bedroom is en-suite.

And yes, there is now a bathroom upstairs.

A stunning loft conversion provides even more rooms.

And Richard has now got the views he'd hoped for across to the park.

When it started off, I had the bright idea of taking a break from work,

this would be my project. Then a job came up in Wales's leading cancer centre

and it was a job I really wanted to go and do for my own personal reasons

and therefore I was very lucky that the work was carried out in the capable hands of my builder.

Fortunately, they started work at 7.00am and didn't finish till after I got home

so I was here every single day and every weekend, to make sure things were going to plan.

Richard may have played a more background role than he first thought,

but he was also hoping that the dreaded Japanese knotweed in the garden

would remain low-profile, too.

The knotty little problem with the knotweed - touch wood - is under control at the moment.

It's obviously not going to go away. I've got a coping mechanism. It'll take three years to finish,

but so far, so good!

As to the hot tub, let's see what the summer brings.

And as to the garden, that's obviously the next project!

So the hot tub and sorting the garden out are more to add to his current expenditure.

The original budget was 60,000, but that was a guess off the top of my head.

When I sat down with the architect, a more realistic budget was 80,000.

That's what I've come in at.

£80,000 is quite an investment.

But this is going to be Richard's new home. Isn't it?

I'm planning to live in for a short period.

It could be the long period. It depends on your valuations!

# So you gotta let me know

# Should I stay or should I go? #

Richard bought this place for £184,000 and spent another £80,000

on it. With costs, he's sunk nearly £270,000 into it.

So to help him decide whether to take the money and run or get ready to move in,

we asked along two local property experts.

Lovely property. Bright and airy.

A very large property with the two-storey extension at the rear.

It's a very popular residential area.

I think could have done a bit better retaining some original features.

It might be a bit bland for some buyers in this area.

But overall, a very nice job.

It's a very nice house.

The finish that's been done is very, very good.

Lovely kitchen. Nice addition with multiple bathrooms.

A lovely feature in the attic room, as well.

An enthusiastic response.

But does it mean Richard's invested around £270,000 wisely?

I would market this property somewhere in the region of £350,000.

I would look to market this property for £325,000.

Well, if I go in my pocket and look at my valuation here that I worked out before,

it was a conservative 320 because I didn't want to be too disappointed. So I'm delighted.

Does that mean he will sell it now or move in?

I'll put it on the market at the higher end

and see if I get any bites.

In fact, Richard has put it on the market for £360,000.

Judging by the interest he's already had,

the signs are he will sell it and move on to a new challenge.

I'm in Derby, in the Midlands, visiting a property two miles from the city centre,

in the large, well-established suburb of Chaddesden.

This is Wiltshire Road, reasonably well located for Derby city centre.

I'm here to see a three-bedroomed semi-detached.

That's it. Let's take a look.

This is quite a busy road, next to a bus stop

and opposite a fire station, so not exactly a quiet suburban retreat.

But the house looks OK from the outside,

with its own driveway, lots of off-street parking, and it's double-glazed.

The guide price was 88,000 quid, so what do you get for your money?

Doesn't look too bad to start off with.

Entrance hall, a front sitting room there,

but as you move to the rear of the property, it goes horribly wrong.

That's the kitchen - very long, very narrow.

Through to rear sitting room, or this could be your main living room.

Not a bad size. But when you get to the rear, you have a little extension.

Another little entrance through to the kitchen.

It's just a bit too corridors and walls that don't need to be there.

So a lot of space, but I don't think it's being utilised well at all.

This is obviously a property where someone's stopped half-way through renovation or maybe just given up.

There's quite a bit of making-good left to do.

Upstairs, a bathroom that's seen better days, but is at least a reasonable size.

A single bedroom and two doubles. Nothing untoward.

Until you walk in to the front double. Look at that.

That's not good news. My guess

is that the roof is either leaking

or the gulley between this and the neighbouring property has got some sort of problem.

Either way, you want to get that sorted out

before the damage that it could create gets much worse.

At the rear of the property is an extension which is a reasonable size

but unfortunately has the words "bodge job" written in huge neon letters all over it.

The lintel above the top of the window is all over the place.

The brickwork doesn't match up.

I don't know what's been going on, but bits have been filled in over time.

It hasn't even been properly keyed in to the main body of the house.

So the most radical course of action is knock it down and start again.

But you have to factor that into the costs.

All in all, a bit of a shame, a blight on the property.

An extension like this probably wouldn't have needed planning permission

but best to check it had building regulation approval.

If that's OK, the cheapest option

would be to cover up the dodgy brickwork by rendering it.

So was this property a good buy?

Let's ask the auctioneer who sold it.

Three-bedroomed houses like this have a fair demand in Chaddesden.

It's not the most popular of residential suburbs,

it's average housing, average price scale,

but generally, they do sell fairly well.

What could it make if rented out?

Once improved, finished off and so on,

and in presentable condition,

this would have a rental value of about 525 to £550 a calendar month.

And if re-sale was on the cards?

Properties here tend to have a ceiling value.

I would say it's probably going to have an absolute maximum value

of about 130,000.

The possibility is you might struggle to get that much on today's market.

Still, with a guide price of £88,000,

if it were to achieve £130,000 at re-sale,

there could be money in it.

So, a solid enough property, but one that you could really add value to,

primarily by playing around with the downstairs layout.

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

Where do you want to be on this one, ladies and gentlemen? 88, guide price.

88. 85. I'll take 85 to start.

86, somewhere? 86 is bid on the left.

At £86,000.

87. 87. 88.

89.

89. 90? 90,000 is bid.

At 90,000. 91.

92.

93. 94.

94. 95.

96 is bid.

97.

-100.

-100,000.

At £100,000.

500.

101.

Yes, 101. 500.

102. 102?

500. 103.

103,500.

104.

104 and a half.

£104,500. On the right.

Once.

Twice. Third time.

Sold at 104,500.

The happy couple who made that final bid of 104,500

are husband and wife Gary and Cathy.

I met them back at their new property to find out more.

Good to meet you both. Congratulations!

-Tell me why you wanted to buy the house.

-Price, really.

We've been to auction before and been out-bid. The 100,000 mark was our price

and this property was that amount.

-Do you know the area?

-Not at all, no.

-Never been here before!

Once, to see the house!

-Where are you from?

-We've been living in Spain.

Spain? What were you doing in Spain?

-Estate agency and letting office.

-Wow.

-Must have been tough in recent years?

-Very tough.

-OK.

So why Derby? Is this where you're located and based in general?

-No.

-No.

-We're in Norfolk at the moment.

-Norfolk?

-Yeah.

We'll be here in the week and Norfolk at weekends.

Gary and Cathy's current home in Norfolk is three-and-a-half hours away.

That's quite some commute while they're working on the house.

They plan to stay on-site during the week

and go back to Norfolk at weekends.

-You're going to live in the house while you do it up?

-Yeah.

-We bought a bed yesterday!

-The plan is to do up one of the bedrooms

and get it really nice so we've got a nice room to go to

when we're finished.

Get the central heating before we move in.

So at least it's sort of warm, and we'll work around it.

Have you done this before?

I used to be a painter and decorator.

I've learnt how to fit kitchens, fit bathrooms, tile floors, walls.

Most things, really.

-And Cathy?

-I can shop! I can buy things and tidy up, I guess.

-Support for Gary, really.

-Right.

-The main thing is, you're doing it together.

-Yeah.

Which is great. How hard has it been coming back from Spain?

For me, it's been quite easy because I missed England.

-I'm happy to be back in England. But Gary...

-I like the sun.

That's the main part I'll miss.

But we weren't earning any money in Spain, so we had to come back, unfortunately.

We'll make the most of it.

-Definitely. And you start in a new direction in lots of ways.

-Yes.

Gary and Cathy returned from Spain just four months ago.

With no jobs to come back to,

they decided to develop property as a self-generating job creation scheme.

What are their specific ideas for this Derby house?

Just modernise it generally. Upstairs isn't too bad.

The bedroom's a bit small, the smallest one. The others are doubles.

Just put a nice bathroom in and a nice kitchen

and just generally bring it up to modern standards.

Downstairs at the back is higgledy-piggledy.

It's got to be sorted out some way or other, which we're working on.

-This extension looks like it's been bodged.

-Terrible.

-Yeah.

Get an open plan kitchen in,

a downstairs loo if we can.

Re-jig it totally.

Any idea how much it's going to cost, to do what you want to do?

We'd like to bring it in at a total cost of about 115, all in.

-So ten, really.

-Probably about just under ten.

-See how we go.

-She spends more money than me!

See how we go. Keep it as low as we can, really.

It's tight, but if you're doing it yourself,

you should be all right.

Most of the money should go on materials cos the labour's free.

And the big picture plan if this goes well?

How big will the portfolio be?

I don't know if it's about portfolio size.

It's maybe going from one place to another place,

and see how we go. It's early days. Just test the water and see if we're any good at it. That's the plan.

Great. Good luck. Congratulations.

Look forward to seeing how you get on.

Thank you.

This is no small project for a first time development.

Gary and Cathy are pinning a lot on its success

but with Gary's practical skills and Cathy's support,

they're off to a flying start.

The issues Gary and Cathy face doing this house up will be more emotional than practical.

Moving from sunny Spain to fairly cold Derby,

living in the house while they're doing it up, and having their home so far away in Norfolk.

All things to resolve. How will they get on?

You can find out later in the show!

The moment of reckoning has arrived.

Have those property gambles paid off

-or have our buyers backed the wrong horse?

-Let's find out.

Time to rush back to West Kensington in London

to see how retired doctor Kamal and his wife Pavine's

£266,000 flat is recovering after what sounded like a major operation!

What are you going to do to this place?

We're going to convert it into a two-bedroom flat.

The second bedroom will be in the present kitchen.

The kitchen will go to the rear,

where there is a large bathroom and toilet.

Just three months later, we're back to check on the patient's progress.

Although the outer skin still needs some cosmetic surgery,

inside, the reconstruction work has begun.

Rooms have been switched around, there are now laminate floors,

and it's been redecorated throughout.

# Changes Turn and face the strain

# Changes Oh, look out... #

So the kitchen is now a bedroom while the bathroom is the kitchen.

# Turn and face the strain

# Changes... #

This room was the bathroom and toilet.

And now where you're standing is the kitchen/diner.

So it's a completely new kitchen

and we're quite happy about the outcome of the kitchen

although it needs more polishing to the finish

and I'm hoping that in two weeks' time, it will be complete.

So it's well underway.

But the tricky part was to find room for the bathroom

or, more accurately, the shower room.

Kamal and his builders have cleverly managed to insert one

between the bedroom and lounge...

..to complete what is now a two-bed flat.

So Kamal and his wife, Pavine, have nearly achieved what they set out to do.

How do they feel about it all?

When we came first time, I thought we had made a mistake.

Then afterwards, I got used to this place and I started liking it.

This flat was bought as an investment to top up their pension.

But taking on a project like this is hardly taking it easy in retirement.

Every morning I was here, almost,

and I used to co-ordinate with the builder,

the architect, the structural engineer,

the electrician.

He kept a brave face, though I could see from his face he was tired.

At the end of the day, when he came home,

he would just read the newspaper and go to sleep.

So that's how tired he was!

I have learned quite a bit.

I never had any experience before!

Kamal has a property developer friend who organised the work and sorted out builders

while Kamal oversaw the project and paid the bills.

I thought it would be about 35,000

but I have been given an invoice of 44,600 and something.

But there will be little pluses as well.

I think it will be well over 45,000.

£45,000 on top of a purchase price of 266,000, plus costs,

brings Kamal and Pavine's total expenditure

to around 320,000.

That sounds a lot, but this is West Kensington.

What do two local estate agents think of the progress so far?

My first impression of the property is he's done a good job.

It looks as if it's aimed for the rental market.

Wood floors, nice and clean, high ceilings.

I'm a little disappointed.

I was expecting the finish to be of a higher quality.

The flooring's very nice.

Not entirely convinced with the layout.

Quite honestly, that bedroom is tiny,

and it may lend itself better as the kitchen which was originally there.

Hmm.

Does this mean they've got a costly mistake on their hands,

with £320,000 of their retirement fund invested here?

When this flat is completed, I would expect to market it at £350,000.

To market this property, I'd look to market it at £350,000.

Oh, my goodness, that's very good.

Good. That's nice. So I'm not losing.

Phew! So some signs of potential profit.

But first and foremost, this was intended for the rental market.

To rent out, I'd put it on the market for £1,250 per calendar month.

If this came on the market for rental, obviously in a finished condition,

I'd put it on the market at £1,350 per calendar month.

Those rental figures equate to around £15,000 a year,

just under a five per cent yield.

Solid, but not spectacular.

So, has it been worth the effort?

Yes, I think we're quite pleased that we've taken it on

after finding out the price it will be.

And the rental value as well.

Hopefully we will get whatever we were hoping for.

Well, if you're pleased, so am I!

# Take a holiday in Spain

# Leave my wings behind me

# Flush my worries down the drain

# And fly away to somewhere new. #

For many people, the idea of moving to Spain to live would be a dream come true.

But for Gary and Cathy, after three years of running a lettings agency there,

the desire to be home was stronger than the Spanish sun.

So they returned to England, got a house in Norfolk to live in,

and embarked on a property developing career.

For £104,500, their first purchase was a three-bed semi in Derby

over 150 miles away from their Norfolk home.

-You're going to live here while you do it up?

-Yeah.

-We bought a bed yesterday.

-The plan is to do up one of the bedrooms

and get it nice so we've got a nice room to go to when we're finished.

So, after swapping Spanish sun for six months of Derbyshire winter,

how had the project fared?

From the outside, it's certainly looking good.

And inside? Well, the front room has really come on with an elegant makeover.

The furnishings give it a lift.

But it's the back dining room that's been completely transformed with a fabulous kitchen/diner.

And a complete reorganisation of the other living spaces.

The main change in the house is the kitchen which used to be in the utility room.

Which is now in through here. There was a lot of work putting in a new drain.

We've blocked off one of the walls here and a doorway here and another doorway here.

We've put an RSJ in to create an opening in what will be the dining room.

We've taken out the chimney breast so we could fit a nice cooker in

and build the kitchen around that.

And we're pleased with the result.

I think the new layout is fantastic.

It's open, bright, and makes the most of both Derbyshire sunshine

and the new revitalised flat roof extension.

From the new decking and patio, you can reach the good sized family garden.

Upstairs, there's been impressive progress as well.

The layout upstairs has pretty much stayed the same.

This is the master bedroom.

We put in fitted wardrobes. I put the doors up this morning. It has to be boxed in.

I've sorted out the leak on the roof, filled in the hole in the ceiling,

and this is pretty much nearly finished now.

The other two bedrooms also have a bit of work to do before they're finished,

but they're on their way.

As is the bathroom.

With all this work, it's clear it must have been a building site at times

and no picnic living here. So how was it?

It hasn't worked that well. We've only been home twice.

It's not been ideal.

But it's a double-edged sword, really.

It's good to be here because you can carry on working and get up and start working,

but it's nice to go home to a nice clean house.

The worst thing is the dust.

Every day, you have to spend an hour every day at the end,

just clearing up dust cos you don't want it all upstairs.

-Living in one room was...

-Hard.

-Quite hard.

We didn't want to change the bathroom straightaway

cos you were getting so dirty taking out walls

so having to use someone else's horrible old bath wasn't pleasant, either!

It's never easy living in a house you're working on.

Not only is there the mess, but you're constantly reminded of the jobs that need to be done.

We had a contractor in to run a new drain cos we moved the kitchen.

And we had somebody come and do the two chimney breasts for us.

-And that's it.

-Apart from that, we've done everything ourselves.

-Well, you have!

-I have, yeah.

Just the dogsbody is what I've been!

You've saved us a lot of money by going to boot sales.

We've been sourcing things as cheaply as possible.

Buying at car boot sales and doing most of the work themselves

should have kept the budget under control.

The budget's gone well. We're over by a thousand, so it's 11,000.

We've bought everything we need to buy now,

so I think we've done quite well on that budget.

It really is impressive to have done all this work for just £11,000.

But with no siestas, a lot of dust and hard work,

Spain must seem a long way away!

It's been so, so cold and no central heating,

so it's been hard, I think, don't you?

-Yeah. And the views are not as nice!

-No!

We had a beach-side flat, so that's hard to get used to again.

OK. The outlook from the house might not be as good as their one in Spain,

but what about its financial outlook?

That £11,000 budget,

plus the £104,500 purchase price, with costs,

takes the couple's total spend to around £120,000.

So, has switching from sun and sand

to sawdust and sandpaper paid off?

What do two local property experts think?

I've had a look round and it's fantastic.

It's a really, really nice job.

They've got some nice design ideas, so it's come up good.

The house has changed a lot, certainly on the ground floor.

It was a bit of a mess before, if I can say that nicely.

But now first impressions are really positive

and change it around, it looks good.

The kitchen/living area is brilliant.

It's just what people are looking for

and some of the touches with lights and flooring finish it off nicely.

Getting those finishing touches right is vital.

It should help appeal to the rental market.

I would suggest that it would have a rental value

of between 550 and £575 a calendar month.

If I put this property on the market for rental, we would get £550 per calendar month,

due to the standard of finish.

-That's not too bad, is it?

-That's a good return.

-That's OK.

That's a healthy rental return.

But ideally, Cathy and Gary hope to sell their £120,000 investment.

On completion, I would value the property at about £135,000.

I would value this property at £150,000.

Can I have the number of the agent that said 150,000, please?

-Delighted with that.

-That's higher than what we expected.

-We thought around the 130, 135 mark.

-Yeah.

-So very pleased.

-Pleased with that.

Certainly that £150,000 valuation would mean significant profit

and that it had been a successful project.

Cos it was our very first one, we weren't looking for a massive profit.

We were looking mainly not to lose any money.

-And a wage.

-And make a wage for the time we've spent here.

-So to make a bit of profit on top is...

-Fantastic.

-Fantastic. Good result.

Coming home to England seems to have paid off.

But they need to finish this house off completely

not only to bring in some income but also so they can get back home to Norfolk.

# That's why I tell you

# You'd better be home

# Soon. #

Whether you're a property novice or an old hand,

make sure you join us next time

for more stories from the auction rooms.

-Tune in to more Homes under the Hammer!

-See you then.

-Bye!

-Bye!

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