Episode 58 Homes Under the Hammer

Have you ever wanted to buy a property at auction?

We can show you some tricks of the trade.

Yes, we join three buyers who bought their home under the hammer.

Auction houses aren't intimidating.

Anyone can buy there. All you need is money.

Today, we talk to some buyers who took the plunge.

Did they sink or swim? Let's find out.

'There are three bedrooms in this Plymouth bungalow,

'and potential for more.'

I think it's pretty good as it is.

'In London, you can have your cake and eat it.

'This flat has large rooms and a garden.'

This is the cherry on the cake.

'The renovation for this Solihull apartment will vary

'according to how it's used.'

If you're going to rent it out, leave it as it is.

'All these properties went to auction.

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

'Plymouth in Devon - blue skies, green fields and peaceful harbours.

'This area is very popular with holidaymakers, home-owners

'and, by the look of it, passing royalty.'

The regal theme continues.

This is Crown Hill Road,

but properties here won't cost you a king's ransom or a princely sum.

I'm here to see a bungalow with a guide price of just 90,000 quid.

That is quite a noisy road, but when you walk through the front door...

You can't hear it, how great is that? And I love this!

Fantastic huge entrance hall! Absolutely marvellous.

All the main rooms spread off this. A lounge there. A bedroom there.

Loo there.

Another room leading to the kitchen.

Bungalows can feel claustrophobic but not this one.

Light pouring through the windows.

In the lounge, two big doors leading out to the lean-to.

It's a bit tired. It's a bit dated.

But some of the features that are still here - picture rails,

high ceilings.

Great start!

Apart from the dated decor, I reckon the rooms down here are great.

They're well-proportioned and very bright.

I would take down the dividing wall in the kitchen

to create an open-plan dining space.

Talking of space, being a dormer bungalow, this has lots of it.

When you come upstairs, I have to say, this dormer bungalow

looks suspiciously like a house - it's certainly got enough space!

Two bedrooms.

You could put another bedroom up here, maybe creating a dormer,

but I think it's pretty good as it is.

'What more could you want than a bungalow that has three bedrooms?

'There's even more to it at the back.'

At the rear of the property, this fairly "tired" lean-to.

But good news, a decent sized garden and, I reckon,

if you got rid of some trees, a nice view.

So, an additional bit of outside space, which is lovely to have.

'I think this semi-detached bungalow would have been a fantastic buy

'around guide price of 90 grand.

'I asked a local estate agent for his opinion of the place.'

It has been a lovely family home. It's just a little bit tired.

The house needs, mostly, DIY. Most people would say, "I could tackle this work myself.

'So, once tidied up, what could it rent for?'

Rental properties in the area for this size are about £700 a month.

'What if the buyer chooses to sell?'

Depending on what you do, it has got a lot of scope, up to £180,000.

An opportunity for sympathetic expansion with this one.

I like the bungalow as it is. It's got a feeling of spaciousness.

You could add another room but you'd have to weigh up the economies.

-TRAFFIC

-Bit noisy on the road.

But for that £90,000 guide price, it was a good one to go for.

Let's see who spotted it when it went to auction.

90, straight in? 90 I've got.

At 90. At 90. At 90. 92.

94. At 94.

94's on my right, sir.

96. 98. At 98. At 98.

Just along from you says 100.

Thank you. That's the way. 100. 102.

You're both out at the back? 102's on my right. 104.

104. Six was the gentleman just before you, madam. Sorry.

107? 107. Gents? 108.

108. 109.

110.

111? Eleven. All the 1s.

112. 113.

113. 113. 14.

114. 115.

116. 117. 117.

118.

18 I've got. 19.

20. At 120.

21?

121. 122.

123. 124.

At 12...5.

126.

127. 128.

129.

130.

At 130. At 130. At 130.

131. 132.

133. 133.

At 133, the lucky lady has it at the moment.

At 133. Rather nervous looking lady here. At 133.

133 second time. Here we go.

At 133 and done. Madam, well done.

'That was more like a game of tennis than an auction.

'The winning serve of £133,000

'came from Jo, a property developer

'who has a portfolio of five properties, including two in Spain

'and one in France.

'I met her and her dog Fuego to see what she's got planned.'

-Jo, congratulations.

-Thank you very much.

-Why did you want to buy the house?

-It had a lovely feel to it.

It was the only place that stopped my eye in the auction.

'Jo financed this using leftover money from a mortgage arranged

'to pay off loans on her properties in Spain.

'These ventures abroad haven't gone well for her.

'She's struggled to rent them out so has decided to try her luck on these shores.'

Why did you buy it? What's it for?

Well, it was initially with a buy-to-let in mind.

I'd like to keep it, though, to live in if I have to stay in England.

You say that like the plan is to go to Spain?

Well, that was my idea of buying in Spain but things didn't go right.

'Let's hope it'll be more plain sailing in Devon.

'There's lots of rental potential in such a tourist hotspot.'

Tell me what you're going to do.

Upstairs, I would like to put in two dormers in the rear

to get the view of the Tamar and everything else across there,

open it out.

But I don't know whether I'll be able to afford that on the budget!

'Jo's renovation budget is 15,000 to 20,000,

'and she has plans for every room.'

I'd like to get double glazing put in, to replace the Crittall windows.

The biggest problem is the kitchen.

It's a funny shape and apparently you can't knock the wall down entirely to that utility area.

'That is a pain.

'It would be lovely to open it up and make it more liveable.

'Jo is still planning to renovate the kitchen completely.

'In the rest of the house, she's planning to install central heating,

'a bathroom, update the conservatory and double glazing throughout.

'The renovation will be done by her old friend, Paul.

'He has done all the work on her other properties.'

Will you be supervising or do you let him get on with it?

Well, I sort of supervise. LAUGHS

When I can get a chance.

We discuss what's going to be done,

then go off getting materials and choosing the various things.

'Jo's budget of 15,000 to 20,000 is generous. I can't see her spending all that inside.

'Some of it should be spent on the garden,

'especially as there is more to it than first meets the eye.'

The garden's got a very interesting tree area, which no-one knew about when I first went for the house.

I thought it ended at the boundary, this overgrown hedge.

Looking down, there's a slope with an area with great tall trees.

I'd like to open it out so you've got a view of this rural woodland bit.

-Land you didn't know about?

-Yeah.

I asked the solicitor to check and he said, "Yes. It is yours."

'When that area is cleared,

'it should make for great views and a lovely place to relax.

'So, maybe Jo's luck in the property game IS on the turn.'

So, what's next for you?

What's next? To try and balance all these things out.

I'm a walking mortgage, I've got so many mortgages it's unbelievable!

People assume you're well off if you do this.

I joke that my name's Hipoteca, which is Spanish for "mortgage".

Will this herald the start of the good news property stories for Jo?

She's got a nice bungalow and Paul to do the work, as long as he isn't dragged onto other jobs.

15 grand budget should be enough, but with property, you never know.

Find out how she gets on later in the show.

'For the next property,

'I'm in the northwest London suburb of Cricklewood.

'There's a regeneration scheme in the area

'and if you fancy a trip to the sea, it's on the Luton to Brighton line.'

But I want to see what today's property's got to offer.

It's a ground floor garden flat. It's got two bedrooms and a guide price of £250,000.

It looks nice from the outside. It's in a lovely street.

They say the colour of your front door adds kerbside appeal.

This red one's calling me in.

'Enticing as it looks, it's blocked up and is only there for show.

'That could be your first challenge, to reinstate that door.

'The entrance is down the side.'

Now, first impressions for me are it's quite a low ceiling in here.

Bathroom to the right. You'd certainly need to change the decor.

But all is forgiven! Look at this room!

This is something you don't see often on Homes Under The Hammer -

a room with beautiful period features intact.

You've got some stunning cornicing, ceiling rose.

The fireplace has been ripped out.

You'd need to replace that with something original.

You've got the big window area, original sash windows.

You've got to look past all of this dirt and soot,

cos this will be a stunning room once renovated.

Fantastic! Onwards! Let's have a look around.

We've got a skinny hallway. Again, it needs a paint job.

A really nice size room there.

You could probably open this up. Lots of storage space.

At the back of the property... Eugh!

A really disappointing kitchen area!

We've got low ceilings. For me, kitchens really make a home.

I'd use this as a second bedroom,

and I've got a great idea where the kitchen could go.

'Although it doesn't look spacious, imagine this without the units.

'I reckon it's big enough for a double bedroom.

'You could turn this into the quieter, more secluded part.

'And I've got just the place to relocate the kitchen.'

I first thought "bedroom".

Now, I'm thinking this would be an amazing kitchen!

I say that because it would be such a great room to entertain in.

You've got wonderful ceiling height. You've got a lovely fireplace.

You could have a working fireplace.

There's enough room to have an island or table and chairs.

Lots of lovely wall space to put your units and cupboards.

Here, you've got a lovely window.

You could knock this through and have a doorway leading straight out

onto the garden.

You've got to move the services - water and gas. That could be costly.

I really think it would be worth it.

Then you've got the quiet sleeping area down one end.

And these two grand, magnificent rooms towards the front

that are perfect for entertaining.

'I love the idea of turning this part into the heart of the flat.

'The leasehold is for a healthy 125 years.

'The ground rent is quite high at £200 a year

'and the annual service charge 600 quid.

'If you forget to factor them into your budget,

'you could get a shock when the bills come in.'

For most London properties, the garden ends about here.

But oh, no! Not for this lovely property it doesn't.

Look at all this space. You've got a walled area there.

Another beautiful wall here. It feels really enclosed.

Once cleared, it would be such a lovely little plot out here. For me, this is the cherry on the cake.

'For that guide price of 250,000, there seems to be a lot on offer.

'What does an estate agent familiar with property in the area think of this flat?'

My first impression is that it's a decent size.

It's larger than I thought it was going to be, and this garden

is larger than I thought as well. It has fantastic potential.

'A good start. I think he likes it as much as I do!

'What should be tackled first?'

It's a wreck at the moment.

It needs a new kitchen, new bathroom, probably wiring, probably plumbing.

I noticed foliage in the front, causing shadow into the living room.

-I'd certainly cut that back.

-'Let's talk figures.

'For buy-to-let investors, how much income could it generate if it was rented out?'

Per calendar month, I would rent this out for circa £1,200.

'Whoever bought the flat has to allow enough to do the work.

'Once renovated, how much could the property be worth?'

When renovated,

I would imagine, if the market stays the same as it is now,

this would go on the market in the region of £325,000 and £350,000.

Well, if you hadn't guessed already, I love this flat!

It's packed with period features. There's scope for real improvement.

A huge garden, for London.

Plus, there is a fantastic margin to be had.

Who agreed with me? Let's go to auction and find out.

Lot 11 is Cricklewood, NW2, garden flat.

Invite your bids on this. I'm not going below 200. Start from there.

200 anywhere? 200.

205? 205 standing up. 210?

215? With you at 215.

220? 225?

230? 230.

235?

235. 240? 240.

245? 245.

250? 250.

255? 251?

251. 252? 253?

252 with you. 253. Hard luck.

254?

255? 256?

257? 258?

259? 260?

260. 261?

262?

Have a think. 261 with you.

262 anywhere else? 262.

New spot. 263? Sorry, I lost you. 263? Yeah?

264?

265? 266?

267? 268? 269?

270? 271? One more go? 271?

I don't want you to home thinking, "Would he? Wouldn't he?" 272?

He did. 273?

272. 273?

Anywhere else? 273?

272 down here, first time.

Second time. Third and last time. Have you all done?

Sold 272.

'That successful final bid of 272,000 was made by Andrew.

'Originally from Poland, he's a developer who's lived in London since 1972.

'I met him to find out more.'

Andrew, congratulations! You got a place with bags of character.

-Why did you want to buy this?

-A long story.

An established client of mine, a tenant, said, "Find me a place.

"I'm going to sign a five-year lease at very good money.

"But it must be two bedrooms, two bathrooms and a garden.

"And it must be around West Hampstead, Cricklewood area."

Had you spotted this property or did you just see it on auction day?

No. I spotted this property on the internet from a catalogue.

I came to the usual half an hour slot of viewing time and thought, "This just fits the bill."

I called the client. He came to look from outside and said, "Done."

-Who owns the property, then? You or your client?

-I bought it.

But it's going to be leased to them straightaway.

-It sounds like you know what you're doing. Have you done this before?

-I've got a few properties

around my studio, and they're all working very well.

-Your studio? What do you do?

-I'm a photographer.

The first time I bought a property, it was purely accident 15 years ago.

I was driving to my studio

and there was suddenly a big notice on a building next to me,

"Property for sale in auction."

We went to the auction and I happened to outbid everybody

and the property's working very well ever since.

'Andrew's dabbled in property for many years.

'When his photographic work slowed down,

'he worked full time as a developer, and has a substantial portfolio.

'He concentrates on the affluent Hampstead and Maida Vale areas.

'He self-financed the £272,000 he paid at auction for this flat.

'So, what's the gameplan here?

'Will he change the layout?'

We have to put two bathrooms into this flat.

One is at the very beginning of the flat.

I want to open up and utilise the original door,

bring the flat to its former glory with the entrance on the front.

The entrance is on the side, which is not as attractive.

So we probably will get rid of that bath and juggle the space

and put two bathrooms here, just shower rooms with a loo.

No bath tub. There is no space for that.

-What sort of money have you got to spend?

-I'm budgeting £15,000 to £20,000.

More like 20, I'd say, maybe a little more.

It depends which walls we have to move and what finishing we go for.

'Andrew's hoping to have the flat ready in six months.

'The start could be delayed as he has another property to finish off.

'The pieces of Andrew's jigsaw are fitting together rather well.

'He's got a crack squad of tradesmen standing by,

'and a signed contract to rent to tenants for five years.'

Congratulations. I hope the development goes really well.

-It's been lovely meeting you.

-Thank you very much.

Andrew sounds like

he's got more than enough experience to take on this renovation.

Being a photographer, I expect excellent records of all the work.

The time scale is generous, six months.

Will £15,000 to £20,000 be enough to get a high-spec finish?

Let's see how he gets on later in the programme.

'Coming up, you're spoiled for choice with this place in Solihull.'

This has got lots of options, and we like that.

'In London, the experts were consulted BEFORE the walls came down.'

Just to make sure it's not load-bearing.

'And after ten months, Jo's renovation in Devon isn't finished.'

Another five to six months. It is rather terrifying.

'We're back in Plymouth, at this semi-detached bungalow.

'It needed a lot of refurbishment,

'especially in the kitchen and bathroom.

'Property developer Jo bought it at auction for £133,000.

'She had moved away from her other projects in Spain to build up her portfolio back in Britain.'

Why did you buy it? What's it for?

It was initially with a buy-to-let in mind.

I'd like to keep it, though, to live in if I have to stay in England.

'So, it wasn't just a rental opportunity.

'It could one day be her home.

'Ten months later, we caught up with her and her dog, Fuego,

'to see how the project has gone.

'That old cramped kitchen has been ripped out and opened up

'with new appliances, units and fixtures.

'It's now bright, airy and stylish.'

We knocked through the wall, raised the ceiling,

blocked up the window to get the units in,

and put the sink there so you've got the view through the window.

'There have been more great results in the conservatory.'

This was a rusted-out conservatory with awful Crittall windows.

They've been taken out, new timber put in and new glazing

and solid insulation.

It's a timber structure. And all retiled. The floor's been raised.

It used to step down from the kitchen,

which was rather unpleasant.

'In the rest of the house,

'the decor has been freshened up by using light colours.

'Jo's also recarpeted, but not in a contemporary neutral style,

'as she believes patterned carpets are in keeping with the house.

'There are new gas fires to replace the old ones.

'Things look a lot better in the bathroom,

'which is modern, sleek and freshly tiled.

'Jo hasn't stopped there.

'She's managed to find a bit of room upstairs for another loo.'

Being such a large house, it was ridiculous with just one bathroom.

So the bedrooms are slightly...

The width was taken off each bedroom,

to allow for this shower room, which has worked very well.

'If you're wondering where that shower room had been squeezed in,

'it's right there between those two bedrooms.

'Jo's not just managed to find extra space inside.

'There's plenty more outside now, too.

'The house came with a large chunk of land to one side.

'It was previously overgrown with shrubs, but Jo's cleared that away.'

In the garden, we've opened it out because we've cut down the trees

and tried to incorporate it into the main garden.

We've still got to continue with the inner garden wall,

bring the soil level up a bit and down, sort of landscaped.

It's been quite expensive, of course,

but I think it's well worth it.

'So far, Jo has spent £35,000 on the project,

'including around £3,000 on the garden.

'She thinks her total spend will take her up to around £43,000,

'more than double her budget.

'The work has mainly been done by her friend, Paul.

'But the original time scale of two to three months has gone out the window.

'Up till now, it's already taken ten months.'

I should think the time scale involved

with completion of this house is about...

another five to six months.

That is rather terrifying. I might have to leave off for a while.

And resume. I don't know. It depends on the work.

Paul may have to go and do some other work. I don't know.

'The property's still work in progress,

'but we asked two estate agents

'to give their opinions on it so far.'

The work that's been done

has been to a very good standard.

It's a credit to the owners, considering the previous.

When they bought it, a few things really needed to be done.

They've done a fantastic job.

They've done an awful lot here. I'm a great fan of skimmed walls.

You can paint them any colour. Nice kitchen. Nice bathrooms.

UPVC windows and gas central heating so it ticks the right boxes.

The added value comes with the side of the plot,

clearing the trees away.

The conservatory is an added feature, lots of natural light going through the property.

'So, what could this property make on the rental market?'

Rental value for the property

would be between, per calendar month, £650 and £750.

Rental value wise, we're looking at £750 per calendar month

to about £800 per calendar month.

'What does Jo make of those figures?'

The rental value of £750 to £800

is quite in line with what I would have expected.

The other one was a little bit disappointing.

'Jo's total spend here so far has been £35,000 on the renovation

'plus the £133,000 she paid at auction.

'If she were to sell now, she'd need it to make over £168,000 to show a profit.

'What could it be worth?'

We're probably looking at minimum figure of £190,000 up to about £200,000.

'By the time the renovation's finished,

'Jo reckons she'll have spent around £176,000,

'not including the usual fees and expenses.'

When the property has finally been finished

I think the property would be valued between £180,000 and £190,000.

180 seems rather on the low side,

but 200 sounds quite good, really, because it's been quite an expensive project.

'It seems there's still a profit to be made here,

'either by renting or selling it.

'I reckon that when all the work's eventually done,

'Jo WILL be onto a winner.'

Today, I'm in Olton, just outside Solihull in the West Midlands.

This place has a literary history.

The author of the Country Diary Of An Edwardian Lady, Edith Holden, lived here.

Maybe the house I'm going to see is some big grand country affair!

No, actually,

I'm here to see this two-bedroom flat in a house conversion.

It doesn't look much like a country house.

For a guide price of offers over 60,000 quid, it's worth a look.

'All looks promising.

'It has a private entrance set back from the road and fenced off,

'so security's good.

'So far, the only nasty I can see is that there are fewer than 80 years left on the lease.

'That could be a problem in future. Let's concentrate on the present.'

What does this have in store? Straight through the door.

First impressions are pretty good.

Nice clean walls. White painted doors, always good.

Box room there. Tiled floor in the entrance bit through to the kitchen.

The kitchen itself. Double glazing, as the rest of the flat has. Units?

They're not going to win a design award but perfectly practical.

The decision on whether you'd renovate this kitchen depends on what you do with it.

If you live here, you might want a bespoke kitchen. If you're going to rent it out, leave it as it is.

'Just off the entrance is probably the second bedroom.

'It's small but peaceful, with a view over the garden.'

One thing that's obviously lacking is central heating.

You've got these storage radiators and some kind of gas heating system.

Probably worth the investment to get some kind of combi boiler in the property.

But this is the lounge. I like the high ceilings, big windows.

It's a nice space. There's a road outside.

You might get some traffic noise but apart from that, a good size room.

'The road is the main Warwick Road in Olton, and it's a busy one.

'But every cloud has a silver lining which, in this case,

'is that it's on the main bus route, so ideal for renting to commuters.'

This is the main bedroom, and a good size it is, too.

It's got me thinking. That other room, I said was the lounge.

But you could swap it around.

Have that as your bedroom, although you might get traffic noise,

and have this as your lounge.

You've got this patio door onto the garden.

In the summer, you can have that open, have parties, it'd be very nice.

Unlike a lot of flats, this one has lots of options. And we like that.

'To sum up, this lot looks very promising.

'And there's something else I have to show you outside.'

A real benefit to the flat is that it's got this garden,

including this amazing monkey puzzle tree. If that isn't enough...

there's also a garage just over there.

Absolutely fantastic additional features.

'A garage, a massive garden, two bedrooms and in pretty good nick.

'I'm impressed, but usually it's about location.

'To find out about the area and how this flat fits into that,

'I invited a local property expert to give me his opinion.'

This is Olton, which is a suburb of Solihull. It's popular.

The railway's half a mile away and you're straight into Birmingham.

First impressions of this property, it's spacious, lovely and light.

It's clean. Great for letting.

Not a lot needs doing. It would benefit gas-fired central heating.

'It seems we agree.

'Any changes would only enhance it, as there's no need to fix it.'

Rental value for this?

Around £550 a month.

On the market, I would say just under £100,000,

with the hope of achieving around £90,000.

What is there not to like about this flat?

You've got the garden and the garage, and you can pretty much move in or rent it out as it is.

If you can get it for anything like that £60,000 guide price,

it's a fantastic one to go for.

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

At 50,000 to get us started...

You couldn't resist it. At 50. What a buy this will be!

60, madam? At 60. At 60. At 60.

Is it 65, sir? Is it 70?

Will two help you, madam? 67?

67, and thank you.

At 67. And 69.

69. Is it 70? At 70 right on the front.

Is it 71, sir? At 71. Is it two?

72. Is it 73?

Can we say 74? I want you to have it, sir. At 74.

I want you to have it as well, sir. At 75. 76. Is it 77, sir?

77. 78?

79. Is it 80?

At 79,000. Here we go again, then. Once, twice, third and last time.

BANGS GAVEL Sold at 79,000. That is yours, sir.

Congratulations.

'The successful bidder was Sed.

'Although he paid £19,000 over the guide price, he got it for a reasonable sum.

'He comes from this area, so presumably knew what he was buying.

'I met up with him to find out why it appealed to him.'

Congratulations. Tell me why you wanted the flat.

It was opportunistic, really.

I was looking to buy houses and I saw one at the auction.

It looked like a great deal. I came to have a look at it.

It looked very good so I thought I'd make a cheeky bid.

-And your cheeky bid got it.

-My cheeky bid got it! Yeah.

-I was quite excited.

-What tempted you into property investment?

Well, the house prices are going up.

I was thinking if I leave it longer, I won't be able to buy anywhere.

But I haven't got to the stage of settling down yet.

I thought I'd buy the house and rent it out.

I've got my foot on the ladder and insured against the future.

-Have you got your own place?

-I don't own it. I rent.

Why...? He says, without stating the obvious! ..don't you live here?

I've got a housemate, a friend of mine.

I'd prefer to live with someone cos I like the company.

The second bedroom's a bit small for a grown man with a double bed, Playstation and a bike.

So I think I'll rent this one out.

'So, this is an investment purchase.

'It's not as though Sed would lose money renting it out,

'as long as he can rent it out to cover his mortgage repayments.

'It does mean that he has that first step on the property ladder.'

-Tell me what you do when you're not buying houses.

-I've got a job!

I work in a hospital.

I work in a little research team and the main aim is to write a programme to diagnose occupational asthma.

-What's that?

-It's asthma you have from something at work.

If you're a welder, you might breathe in welding fumes,

and that could give you asthma.

If we take you away from the welding or give you a mask

your asthma can clear up completely as long as you do it quickly enough.

'That's certainly very important research.

'Now Sed's got this to think about as well.'

Tell me what you're going to do to it.

-In theory...

-Not do much. Central heating.

I think that will help with renting it out.

I'll probably paint it. I might do the carpets.

I'll have a look round to see what else needs doing but, hopefully, nothing.

-What budget have you got?

-I've got a big budget. £20,000.

-What?

-Well, I think the house would sell for £100,000

once everything's sorted out.

And some money needs to be set aside for sorting out the lease.

'I'm glad that Sed had done his homework.

'There are only 76 years left on the lease, which could be a problem when he comes to sell.

'Most mortgage companies are wary of lending on properties with leases

'that have less than 65 years.

'However, Sed has a plan. He's hoping to buy the freehold.

'Leasehold issues would disappear

'and he could charge other tenants ground rent after he sold his flat.

'But first priority is to get it ready for rental.'

What kind of time scale?

As quickly as possible. It looks like there's not much to do.

Hopefully, I'll get it rented out in two or three months.

-Right.

-Maybe when I'm ready to settle down, I'll sell it and buy a house that I want to live in.

-Makes perfect sense.

-Yeah.

You'll be doing the work yourself or having people in?

I'll probably paint myself and get someone to do the central heating and carpets.

-You'll be here with a paintbrush?

-Yeah.

-Don't inhale those fumes.

-Indeed. I'll have to get low VOC paint.

On paper, it sounds pretty straightforward.

A month to sort the place out. A reasonable budget.

And the sort of place that will rent out pretty easily.

The property world doesn't always work like that!

But I'm sure Sed made a fantastic investment. Find out how he gets on later in the show.

-It's been some time since we saw those properties.

-Has it been plain sailing or a bumpy ride?

Let's find out.

'We return now to Cricklewood in northwest London.

'Full-time developer Andrew had paid £272,000 for this two-bedroom garden flat,

'which needed total refurbishment.

'He bought it as he had a client who wanted to move to the area.

'Over five months have passed since I first met Andrew.

'The first obvious change is that access has been restored

'to the original entrance,

'that now has a new door to go with the replacement windows.

'You now enter straight into the front living room,

'as the dividing wall to the bathroom has been removed.

'Sadly, all the original features have gone as well.

'As Andrew explains, he gave a lot of thought

'to how he could maximise the potential.'

When I bought the property,

and completion day arrived,

I came to the place, sat down here for a day

making little sketches and drawings how the property can be improved.

I made up my mind to change this little pokey entrance,

the original entrance to the flat,

and reinstate the main door.

There was a bathroom here. Also, there was a big partition here.

A bit of luck, the wall was not load-bearing.

We knocked it down, moved the bathroom.

The new windows, that was requirement from building control.

And new doors. So that's, in this room, more or less everything.

'That loo washroom that Andrew added is the first of three in the flat.

'Rather than move the kitchen, he decided to put one of the bedrooms

'behind the living room.

'It has an en suite bathroom and loo number two.

'The layout in the kitchen has changed quite a bit.

'It remains in its original position but walls have been moved

'so that access to bedroom two is now through the kitchen.

'But the original passageway has been put to much better use.'

The entrance to this bedroom was here. That was a corridor.

So I decided to put an en suite bath with a big shower head.

Every foot of this flat is being utilised as a functional space.

'Andrew paid 272,000 at auction, and has liaised closely with his client

'to achieve this high quality finish.'

I'm not very happy with one item, the front door.

I ordered a different door.

It was a plain glass and suddenly the door arrived with roses on it.

We will change it but it will take a bit of time.

'The garden was a mess.

'It's been cleared and is ready for the tenants to plant what they like.

'Andrew had originally budgeted 15,000 to 20,000.

'So what was his final figure?'

I know exactly how much I spent.

It is frightening. It was just under £30,000.

But, initially, I'd planned only one and a half bathrooms.

We've installed additional bathroom.

It took considerable amount of money. Plus, we decided

not to repair anything, just rip it all out and have it brand new.

'That's taken Andrew's budget £10,000 over his upper limit.

'Let's hope it's worth it. Is the plan still to rent it out?'

My plans remain the same. I'll let it out to tenants.

They already signed the agreement. The money will replenish the missing funds!

Two local estate agents are on the way to give their verdict.

The change is utterly dramatic.

He's made a wreck of a flat into this magnificent modern home.

He's done the flat to a high spec. It shows that he's spent money well.

I did not imagine this layout when I came to see it.

I thought he would refurbish what was in situ.

I'm not a great fan when you've got a bedroom off a kitchen.

It's nice having an en suite and the wet room's very trendy.

He has put three WCs in which, for a two-bedroom flat, is probably one too many.

'So has the money gone down the pan?

'How much rental income could the flat achieve?'

There's a reasonable demand for two-bedroom flats.

Somewhere between £1,200 and £1,300 a calendar month.

I certainly suggest that he could easily achieve in the region of £1,500 per calendar month.

The rental incomes, probably for the area, it's quite good.

However, I managed to achieve better figures with my direct contact

at £400 a week, which is about £1,600, £1,700 a month.

'So the quality of the finish is reflected in the rental figure.

'What's the flat now worth?

'Andy paid 272,000 for it and a further £30,000 on the work.

'302,000 in total.'

I would value this flat...at £395,000 in its current condition.

I would think this should be worth something in the region of 375,

on the market at just under 400,000.

'Wow! A potential gross profit of at least 73,000,

'before the usual selling expenses - IF he decided to sell.'

I am impressed with these figures.

Because I was personally estimating 340,000.

So this is a really nice bonus.

I still won't sell, but it's nice to know.

'Andrew normally buys in the grander suburbs of Maida Vale and West Hampstead.

'Would he consider buying again in this part of town?'

I would look at Cricklewood again.

You have to be very careful what you choose.

The more risk you take, the better profits you can make.

You can also lose more money so you have to be personally responsible

for your actions.

'We return now to check on the progress of this ground floor flat

'in Solihull.

'Earlier in the programme, Sed, an analyst with the NHS,

'had paid £79,000 for this ground floor apartment,

'which he planned to refurbish and rent out as quickly as possible.

'It's almost three months and the progress has been a little slow.

'The second bedroom has been decorated

'and the kitchen has a new cooker and fridge.

'Two big changes have occurred.

'The first being a major rethink about prospects for the property.'

I was planning to rent this place but shortly after I bought it,

we got given notice on the place I was living in.

It made sense to move in, so that's what we're doing.

'Sed had originally thought this flat would be too small

'for him and his mate, with all their bits and pieces.

'But needs must, I suppose.

'It meant that there was no urgency to improve the property for rental.

'What's been the main progress, and what's left to do?'

Since I bought the place I've had central heating put in.

I've had quotes for various work, mainly to do with damp.

There's damp in the small bedroom.

The wall outside needs to be re-screeded.

There's a couple of holes in outside walls where the gas heaters were.

I will probably do the carpets, although now me and my housemate are living here,

it seems a waste to do the carpets now as we'll get them dirty!

'The carpet can wait because the second thing that changed plans

'occurred when Sed's builder found a bit more space than anticipated.'

My builder Dan was knocking a hole in the wall here.

The stairs go up to the flat above and we were putting in a cupboard.

It's a small flat so if the storage could be there, it would be great.

Dan made the hole, poked his head through and found stairs going down.

We went downstairs and found this amazing cellar,

which is damp, but it's big and exciting so I'm very pleased.

'Wow! What a find! But there's a problem.

'Like lots of cellars, it's damp,

'and that meant unexpected work had to be done in the main bedroom.'

I was planning to do nothing in this room but then we found the cellar,

and we saw water literally dripping off the beams.

So the whole of this floor came up. The beams went back in.

It's had a new carpet, a bit of replastering and been repainted.

'As the lease was short, Sed had planned to try and buy the freehold.

'That's been shelved, as the owner of one of the flats was proving hard to track down.

'However, Sed has found the cellar, but when he started to decorate

'he could sense the damp down there and the condensation,

'but he carried on regardless.'

It was all splotchy.

I haven't done much painting so I thought maybe it's too cold

so I turned the heating really high

and I was painting practically naked, it was so hot.

'Oh-er. But can he spare his blushes on the budget?

'He hoped to do it for £5,000.'

I have spent about five so far. Probably nearer six with the cellar.

'But the big job now is the cellar.

'How much could that cost?'

I've had some quotes to turn it into a bedroom with a window.

It would cost, I would imagine, about £20,000.

To turn it into just a room without a window, probably nearer ten.

'I'm not sure it's worth it, as he's planning to move out in nine months.

'Time to see what two local estate agents will advise.'

The main change that's been done

is the gas central heating, which has made a massive difference.

There's a lot of decoration to do.

The owner's part way through doing a renovation.

Sadly, a lot of original features

have been taken away.

The best use of the cellar would be another bedroom. An en suite as well would be great.

It's not worth developing a cellar other than as a cellar.

The cost of putting in proper damp-proof coursing, tanking,

et cetera, far outweighs the likely gain.

A cellar is a cellar.

'Can't argue with that.

'If Sed did decide to sell, how much could he get if he left the cellar as it is

'and just gave the flat a comprehensive makeover?

'Remember, he paid £79,000 on auction day,

'and has spent £6,000 so far, making a total of £85,000.'

We would value this at a figure of between £95,000 and £100,000,

depending on its final presentation.

I value the property at just below 100,000 with the hope of achieving anything over 90.

100,000 is what I was thinking it was worth, which is why I bought it for 80 and had a budget of 20.

Yeah, I'm happy with that.

'It seems that Sed is getting the property developer's bug.

'He's bought another property, so will he be on the lookout for more?'

I have another house,

which is on the market now.

And my friend Dan, who's a builder who's been helping out,

is keen to do some with me, so maybe.

We'll be back next time with more tales from the auction rooms.

Join us then for more Homes Under The Hammer. Goodbye.

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