Episode 60 Homes Under the Hammer


Episode 60

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Transcript


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The value of homes can go down as well as up.

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So it pays to buy at the right price.

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One way to do that is to buy your home under the hammer.

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If you'd like to have a go at buying at auction, now could be the perfect time to start.

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The market is always changing so you have to judge the best time to buy.

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-Today's bidders put their money on the line.

-Here's what they bought.

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'In Cheshire, there's big scope for this little bungalow.'

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It's a good size space. Overall, I'm loving this place.

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'I need some extra space in this London semi.'

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The answer to this problem may lie the other side of this wall.

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'I look at this Victorian mid-terrace in Derby, and wonder if it's all it claims to be.'

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How the heck you call THAT a third bedroom?

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'These properties have been sold.

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

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'I'm in the Cheshire town of Nantwich.

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'It's steeped in history, with the buildings to prove it.

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'This beautiful place is experiencing a renaissance,

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'as independent shops and cafes

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'have been creeping in, attracting new admirers.'

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Nantwich is a desirable place to live and property prices are quite high as a result.

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When you hear about a two-bedroom bungalow with a guide price of 115,000 quid

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you think it's got to be worth a lot more.

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It looks a bit dated outside. Let's see what it's like inside.

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'It's not just dated, it looks pretty unkempt, too.

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'It's been empty for over two years.

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'That doesn't mean it doesn't have potential, though.'

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So, what have we got? Wow!

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Nice entrance! A really wide hallway.

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And a parquet floor. I'd love to see that sorted out.

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Two bedrooms. That's the first one. Parquet floor through there.

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It's huge and it's got an open fire. You've got the bathroom there.

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The second bedroom. It's interesting both bedrooms are on the front.

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Both got open fires. Really nice.

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Through to the rear, where the kitchen is. Good size.

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You've got a pantry. I mean, it's terribly in need of some work!

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Wants completely stripping out, but it's a good size.

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The whole bungalow... It's really surprising.

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Through here, you've got a utility area.

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A place where coal used to be stored.

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Fantastic for your washing machine. Views onto the garden.

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It's fantastic!

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# Fantastic day! #

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'Looking past the rundown state,

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'there's plenty of space.

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'Also, the bathroom's a decent size, though obviously needs modernising.'

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Through into a living room area. Not a bad size. I like the open fire.

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But, uh-oh! What is going on here?

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That is textbook damp. Look at the mould that's growing on there.

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Mustn't get too enthusiastic! Be nice in a biology class.

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In a house, it's not ideal. What's causing it?

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Something to do with this bay window. I need to go outside.

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'Damp is a common problem with houses that have been unoccupied.

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'If you can find the cause,

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'you can usually find the solution.'

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It's not exactly rocket science.

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It looks like the covering over that bay window has gone.

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My guess is it was lead and it's been stolen.

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The cast iron guttering has also gone.

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It's not going to be that expensive to sort out.

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Replace the covering and that should solve that problem.

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While I'm out here, here's a nice bonus. A garden!

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Fantastic. It needs sorting out, but it's a good size space.

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Overall, I'm loving this place.

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'You could extend the bungalow, making it a three-bed.

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'Or you could knock it down and put up a couple of new-builds.

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'I asked along a local estate agent to hear his thoughts.'

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An idea would be to knock the property down

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and build a pair of semi-detached houses on here

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for greater return on my investment.

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'If you wanted to instead restore it to its former glory,

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'it could rent for up to £625 per month.

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'But how much could it sell for?'

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If it was kept as a two-bedroomed detached bungalow,

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I would recommend it going on the market in the region of £200,000.

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There is room to expand it into a three-bedroomed bungalow, with land to the rear of the property.

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If you were to do that, I would recommend you put as a resale value

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somewhere in the region of £240,000 to £250,000.

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What a surprising little property this turned out to be.

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It's a bungalow with lots of options.

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Extend. Knock it down and build something in its place.

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I think it's a great one to go for. Who fancied it when it went under the hammer?

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Lot number 7. Nantwich.

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80,000, going to say.

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80 I'm bid. 85 is it now? 85 it is.

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£90,000. At £90,000. 95?

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£95,000. 100?

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£100,000. 105? 105. 106?

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107. 108. 109.

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110. 111. 112.

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113. 114. 115.

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116. 117. 118. 119.

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120. 121.

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Yeah? 122. 123.

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124.

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125. 126. 127. 128.

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129. 139. 131.

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132. 133.

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At £133,000...

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134. 135. 136. 137.

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Yes? 138. 139.

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140. 141.

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Shaking his head. With you, sir, at 141,000.

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At 141,000 for the first time.

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At 141 for the second time.

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Third and final time at £141,000...

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It's your lot, sir. Well done.

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'The successful bid of 141,000 was made by local entrepreneur Tony.

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'I wanted to find out why he paid £26,000 over the guide price.'

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I fell in love with the property.

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Bungalows are highly sought-after in the area, which made it an attractive proposition.

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When I saw the guide price, it was one I was very keen to get.

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So you bought it for you to do up, or what?

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It's basically part of a 20-year plan.

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I'm buying a number of properties in the area.

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I've got one very close by. This is my second property.

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I'm looking to rent it out so it'll be refurbished to a high standard.

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-What's your experience?

-In terms of property, very little, to be fair.

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-What do you do?

-I run a computer company.

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-We make computers that make special effects for films.

-Wow!

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I stepped away from it four years ago. It's run for me now.

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It's a small business.

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Just to follow a passion, really,

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-I became a professional dance teacher as well.

-A dance teacher? Fantastic!

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-It keeps me fit.

-What kind of dancing?

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The main one I do is ceroc, a modern French jive,

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probably the most popular partner dancing in the world, and great fun.

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'Must give it a go some time!

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'Tony's 20-year plan is to make enough money from development

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'for a pension when he retires.

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'This is his second property and I was intrigued to know what he was going to do with it.'

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The kitchen, as is, is going to be converted into a third bedroom.

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We'll have three large double bedrooms.

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The lounge at the moment is fairly small.

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We're going to be creating an extension at the back

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with a pitch roof coming away from the property.

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Then that will link in to the extension.

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-The lounge will be 21, 22 foot long.

-Wow.

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By about 17 foot wide, in an L-shape.

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Which is proportionate to the bedrooms in the property.

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Then the utility room, as is, will become the new kitchen.

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'The plans sound good but I wonder if Tony thought about knocking it down and rebuilding.'

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It's something I looked at and had a few tentative enquiries to the planning department.

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I felt that access was going to be quite restrictive.

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It is a bungalow and they are in high demand.

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I felt that it was probably safer, as it's my first project,

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to stick with what I've got.

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At least I've then got a property which I know is desirable.

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'That's pretty sensible, really.

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'Tony paid 141,000 for this bungalow

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'and has a further budget of 40,000.

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'He discovered that he can get a grant of £15,000 from the council.'

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The property's been empty for more than two years.

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It makes me eligible for the landlord regeneration scheme.

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'The council takes charge of the lettings for five years.

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'They give Tony a list of tenants,

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'and the council pay the market rental rate.

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'Sounds a good idea.

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'How long does he think the renovation is going to take?'

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-Six to seven weeks.

-What? Including the extension?

-Yeah.

-Ha!

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I paid cash for the property. The longer it's empty, in theory, I'm losing money.

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But I'm not on a strict deadline. If it takes ten weeks, that's fine.

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'Tony seems quite relaxed about the timescale, but was he just as laid back at the auction?

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'It was the first time he'd bought under the hammer.'

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It was great! Fantastic! I thought I'd be nervous.

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The bidding was going back and forth.

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My head was like a nodding dog! Must have looked ridiculous!

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-I'm delighted you got it. Congratulations.

-Thanks, Martin. God bless you.

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I think Tony picked up a really good property for the second one in his 20-year plan.

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It is great to set your sights and have a goal like Tony has.

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In terms of what he's going to do, that extension, is it worth doing?

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I'm not sure, and certainly his timescale is a little optimistic.

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You can find out if it'll be a slow waltz

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or a quickstep to success for Tony later in in the show.

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'I'm in southeast London today, in Plumstead,

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'a few miles from Woolwich,

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'to see a property that's typical of the area.

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'It's a 1930s three-bed semi

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'with off-street parking and a sizeable garden.

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'It sits right on the edge of the conservation area Plumstead Common.'

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That may or may not have implications for doing this house up. We'll talk about that later.

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It's got three bedrooms. The guide price was 160,000 to 165,000.

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The windows look like they're brand new.

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I love the period arch and those bays.

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Will there be any surprises inside? Let's take a look.

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'This could be a typical three-bed semi in need of modernisation.

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'You know that deal - new kitchen, bathroom, redecoration throughout.

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'Auction properties of this age usually need all of the above,

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'but that double glazing gives me positive vibes.'

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# ..Sweetest feeling Baby, the sweetest

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# Sweetest feeling... #

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Now...that IS a surprise.

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It's like the decorating fairies have been in

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and completely revamped this place.

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You can smell fresh paint. It's been decorated.

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There's no banister, so that's dangerous as it is.

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A big store cupboard in there

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and a very disappointing kitchen.

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This kitchen is tiny, not big enough for a three-bedroom house.

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But I have a feeling that the answer to this problem may lie the other side of this wall.

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A-ha! As I suspected!

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Whoever had this home previously has taken this wall out

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to make these two rooms one - the lounge here, the dining room here.

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I wouldn't have taken this wall out. I'd put this wall back up.

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I would take this wall out here to really open the kitchen up.

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You've got room for a lovely big breakfast table,

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access into the garden, then this will be a fantastic family home.

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As it stands at the moment, that kitchen is too small.

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'Before any walls are removed, check they aren't supporting ones.

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'In this case, I don't think that's a problem.'

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Let's have a look upstairs. We've got a bathroom through here.

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That does need an update.

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You know I said it's all been recently decorated?

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On close inspection, it just looks as though all the rooms have had

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the old-fashioned wallpaper painted, the tiles have just been painted.

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You've got a bedroom here.

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Really nice bedroom to the front and, typically for a 1930s house,

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you've got the box room.

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You can't really call it bedroom.

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It would be OK as a nursery or a good size office space.

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You know what? It's a cool house.

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Big garden, off-street parking - for the price, you've got a good one.

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'The space that's lacking in bedroom three

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'is more than made up for by the huge back garden.'

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There's no getting away from it. It's a wild garden out here.

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Lots of junk you'd need to clear out.

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You've got about 120 foot of space to play with so it's quite exciting.

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I would get rid of this old shed. You've got a garage up the top.

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Once it's been cleared out, maybe lay some patio, a pergola overhead.

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You've got the makings of a really nice family garden.

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'An extension could be an option,

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'although there may be issues being so close to that conservation area.

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'Let's see what a local estate agent says.'

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Plumstead conservation area is a quarter of a mile from here.

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It's an area of listed properties

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where you can't change the exterior without permission from the council.

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These properties are not listed. It's primarily the period houses.

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These are 1930s houses. It doesn't apply to these, but this is a very sought-after location.

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'The sky's the limit, then,

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'but a sensible investor would keep their feet on the ground.'

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In my opinion, there needs to be spent only £10,000 to £15,000.

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The kitchen and bathroom need to be replaced, wiring needs to be done.

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Extending would be viable for the future.

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I don't think you'd get an immediate return.

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It's a good configuration. 1930s houses are well-built.

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A solid property and a very desirable road.

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'Once it's completed, will the value of the property be as desirable?'

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If this property was refurbished,

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I would place it on the market between £225,000 and £230,000.

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The going rate for rental properties would be between £900 and £950 per calendar month.

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This house is ready to move into. All it needs is carpets and sorting out that kitchen.

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You could spend cash on an extension but you might not get your money back.

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Let's see who placed that winning bid at the auction.

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Good looking semi-detached house. Needs small improvement. Good value.

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Bid me at 150. Got to be worth that.

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I should think so, too. 150 at the back.

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152. And four. And six.

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156, sitting down. 158? 160. Knows its value. 160.

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At £160,000. 162, in a fresh place.

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164? It's against you. 165. And eight?

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168 I'm looking for. 168 I have.

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And 70? 170.

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And two? 172. And five?

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175. And eight?

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178? 178. And 80, if you like?

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At £178,000 I've got.

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180 I'm looking for. Are we all done then, at 178?

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If you're sure you're all done.

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It's yours, sir, for 178,000.

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And your card number is 8481.

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'The successful bid of £178,000 was placed by husband and wife

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'David and Stephanie.'

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Guys, congratulations.

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You must be so pleased. Did you view this property prior to the auction?

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No. We didn't get the chance to have a viewing.

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We made a lot of assumptions from the catalogue.

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We read it in detail and had a good look at the legal stuff.

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So we knew that it was OK.

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It was remortgaged two years ago so it should be structurally sound.

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'That wasn't their only stroke of luck.

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'The photo in the catalogue was an old one

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'and there had since been unexpected improvements.'

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Pictures can be deceiving.

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They can, but what we got was better than what's in the catalogue.

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Exactly! And usually it's the other way round! You guys got lucky!

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The picture in the catalogue isn't the front of the house today.

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No. A new front door, double glazing and it's been painted internally.

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How did you feel when you opened the front door and walked inside for the first time?

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It smelled of fresh gloss paint and looked fairly straightforward.

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New kitchen, new bathroom, no problem at all.

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'David was made redundant from his job in communications nine years ago

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'and the couple have made their living renovating properties since.'

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-Did you feel happy that you had bought a good solid house?

-Yeah.

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We were really pleased. Everything stacked up.

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There's a nice little profit there if we want to take it.

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'Helping them with everything from legal advice to demolition

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'is their old friend, Janet.'

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She's required for everything.

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-Just to make sure...

-Particularly sledgehammering down that wall!

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-Will Janet be involved in knocking walls down?

-She's in charge.

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She will be taking this wall down with her sledgehammer.

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'I need to meet this modern-day wonder woman with legal knowledge

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'and, it seems, strength to take walls down with her bare hands.'

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-So, Janet.

-Hello.

-What is all this about you and a sledgehammer?

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I'm quite used to wielding it. I work in an office five days a week.

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I get so frustrated that I take my frustration out on the wall.

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-But seriously, your friends are really leaning on you.

-Yeah.

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-For the whole...

-They have done throughout the whole process.

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I helped with the legal pack, giving them ideas,

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giving them pointers for the way to go.

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We've been friends for 30, 40 years. We trust each other.

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We know how we work.

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-Have you ever knocked down a wall with a sledgehammer?

-Yes.

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-No. Come on!

-Honestly.

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How long is it going to take you to get that wall down?

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The last time, it took me four hours.

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A builder said it would take him two days, and gave us a weekend to do it in. I did it in four hours.

0:22:340:22:41

-Janet! Put it there, lady!

-Thank you.

0:22:410:22:44

# I want to be

0:22:440:22:46

# Your sledgehammer... #

0:22:480:22:50

'The demolition's sorted. What else are David and Stephanie planning?'

0:22:500:22:55

Bathroom. Kitchen.

0:22:550:22:58

Conservatory out the back.

0:22:580:23:00

Put double doors between the two existing rooms.

0:23:000:23:04

Re-do all the electrics, new heating system, new plumbing, hot water.

0:23:040:23:09

And just spruce it up a bit.

0:23:090:23:13

-David, how much money do you think you need to spend?

-About 20,000.

0:23:130:23:18

-£20,000?

-Yes. Kitchens, bathrooms, surprisingly expensive.

0:23:180:23:22

Then there's the other work, the conservatory.

0:23:220:23:26

We think 20,000. It wouldn't be unreasonable to spend over 30,000.

0:23:260:23:31

If we were staying longer, then we would be looking to spend that sort of figure.

0:23:310:23:37

-You really want to have it looking fantastic?

-It's got to look good.

0:23:370:23:42

David and Stephanie have got an ideal auction property.

0:23:420:23:46

There's not a lot to do, so I'm surprised at that £20,000 budget.

0:23:460:23:52

And Janet will be in charge of the demolition! Hard hats at the ready!

0:23:520:23:56

Join me later in the programme and find out what happens.

0:23:560:24:01

'Coming up, I'm not seeing straight at this Victorian mid-terrace.'

0:24:020:24:08

The door frame looks a bit wonky.

0:24:080:24:11

'We return to this London semi, where there's been fire damage.'

0:24:110:24:17

I said, "Have I lost my eyebrows?" They said, "No. You've lost your hair."

0:24:170:24:23

'First, how did novice Tony get on with that Cheshire bungalow?'

0:24:240:24:29

14, 15-hour days have been typical.

0:24:290:24:32

'Earlier, we were in the historic town of Nantwich in Cheshire,

0:24:370:24:42

'where Tony bought this bungalow at auction for £141,000.

0:24:420:24:47

'Entrepreneur and dance teacher,

0:24:470:24:49

'Tony decided to have a go at property developing, and is looking to the future.'

0:24:490:24:55

It's basically part of a 20-year plan.

0:24:550:24:59

I'm buying a number of properties.

0:24:590:25:02

'This is his second project and, three months later, it looks like he's been busy.

0:25:030:25:10

'The access has been opened up and a gravel driveway laid.

0:25:100:25:14

'The roof has been replaced and there's double glazing throughout.

0:25:140:25:19

'Those two spacious bedrooms have been replastered and painted

0:25:220:25:27

'and that parquet flooring has come up a treat.'

0:25:270:25:31

My beautiful parquet floor!

0:25:350:25:37

It's been labour of love. It was sanded way to early in the project.

0:25:370:25:43

Trying to keep the dirt off it has been difficult, to say the least.

0:25:430:25:49

I think the result is beautiful. You wouldn't get it in a new house.

0:25:490:25:54

'You certainly wouldn't.

0:25:540:25:56

'Restoring original features can be costly

0:25:560:26:00

'but will add significant value to an older property.

0:26:000:26:05

'In the sitting room, Tony has extended into the back garden

0:26:050:26:09

'to create a huge L-shaped area

0:26:090:26:12

'with new doors out onto the patio.

0:26:120:26:16

'The bathroom has been elongated by moving a wall,

0:26:160:26:21

'and a high-spec suite installed.'

0:26:210:26:24

Ah! The bathroom! I needed help with this.

0:26:240:26:27

So I called my dad. My dad has done an amazing job here.

0:26:270:26:31

He's in his early 70s, not that I should say that.

0:26:310:26:35

He's been on his hands and knees and done a fantastic job.

0:26:350:26:39

'Hasn't he just?

0:26:390:26:41

'Tony's dad, Harry, is a retired company director,

0:26:410:26:46

'but clearly an expert DIY-er, too.

0:26:460:26:48

'Finally, that prehistoric kitchen has been transformed

0:26:480:26:52

'with white units and modern appliances.'

0:26:520:26:56

This is the site of the kitchen. We've gone with contemporary units.

0:26:590:27:05

High-gloss units. It's a fully integrated kitchen.

0:27:050:27:09

With the downlighters to give it that contemporary feel.

0:27:090:27:13

'There's a beautiful blend of the traditional and modern here.

0:27:130:27:18

'Tony had the original internal doors dipped and stripped

0:27:180:27:22

'and finished with new hardware - and don't they look stunning?

0:27:220:27:27

'My slight worry is that Tony spent too much on luxury fittings

0:27:290:27:34

'for what he intended to be a rental house.

0:27:340:27:37

'I wonder if he got a bit carried away.'

0:27:370:27:41

The property was very much designed to be a rental property.

0:27:410:27:45

Within two or three weeks, it was clear that it would make a beautiful home.

0:27:450:27:51

Rather than putting fencing around the property, for instance,

0:27:510:27:56

we've laid 85 metres of beech hedging.

0:27:560:27:59

The kitchen has been increased, the specification.

0:27:590:28:03

Overall, the light fittings and other things have been increased

0:28:030:28:08

so that it appeals to someone who might want to buy the property.

0:28:080:28:13

It's also functional, if I do decide to rent it.

0:28:130:28:16

'He may have fallen into the classic trap

0:28:180:28:22

'of doing up a place to meet his own standards.

0:28:220:28:26

'While beautiful, that may be excessive for the rental market.

0:28:260:28:31

'Tony might have to shell out again if he sells the house later.

0:28:310:28:35

'But he saved a packet on labour by doing much of the work himself.'

0:28:350:28:40

I spent so much time at the property.

0:28:400:28:43

14, 15-hour days have been typical.

0:28:430:28:47

At least six days a week.

0:28:470:28:49

Sometimes, I've gone for two weeks working continuously through.

0:28:490:28:53

It's not for the faint-hearted, buying property.

0:29:000:29:04

I don't think people appreciate how much it takes over your life.

0:29:040:29:09

# You've got to work hard You've got to work hard... #

0:29:090:29:12

'But the proof is in the pudding and this is a feast for the eyes.

0:29:140:29:20

'Tony only went over his schedule of two months by a few weeks,

0:29:200:29:25

'but I wonder how he did with that all-important budget.'

0:29:250:29:29

My original budget was 41,000.

0:29:300:29:33

It was a fairly loose budget but I'd anticipated about that mark.

0:29:330:29:38

The budget HAS been increased and deliberately so.

0:29:380:29:42

There haven't been any things that have happened

0:29:420:29:46

that meant I had to increase the budget unnecessarily.

0:29:460:29:49

The budget's increased because we increased the specification.

0:29:490:29:54

I would estimate now that the budget is going to be about £47,000.

0:29:540:29:58

'That's more than a 10% increase in his original budget.

0:29:580:30:02

'The total expense, including the purchase price, is £188,000

0:30:020:30:07

'plus the usual fees.

0:30:070:30:09

'Let's hope it makes good financial sense in the long run.

0:30:090:30:13

'We invited two local experts to tell us what they thought.'

0:30:130:30:18

First impressions, returning to the property,

0:30:180:30:21

he's done a fantastic job with the extension

0:30:210:30:25

and quality of the fitments.

0:30:250:30:27

It's well-modernised. Good quality kitchen and bathroom.

0:30:270:30:31

I love those wood block floors. He's done a really good job.

0:30:310:30:35

For rental, I would put it on in the region of £775 per calendar month.

0:30:350:30:40

If I was to offer this property to rent, I would be asking between £750 and £800 per calendar month.

0:30:400:30:48

The rental is about spot-on, to be fair.

0:30:480:30:51

We're going to chance our arm and try 825 but, realistically,

0:30:510:30:56

I think 800 would be a good rate for the property.

0:30:560:30:59

If I was to market it for resale today, I would look to market it in the region of £275,000 to £285,000.

0:30:590:31:07

I would market the property at £225,000.

0:31:070:31:11

My target had been 260, but since I've been working on the property and increased the specification

0:31:110:31:17

I would estimate to get 280 to 290.

0:31:170:31:20

'If he gets around the 290-grand mark -

0:31:200:31:24

'and Tony's had two valuations done independently that suggest this -

0:31:240:31:30

'that could make him a potential profit of over £100,000.

0:31:300:31:34

'Not bad for a first go.

0:31:340:31:36

'Will he do it again?'

0:31:360:31:39

Absolutely want to do it again. I start on Monday.

0:31:390:31:42

This is my full-time job.

0:31:420:31:44

I'm looking forward to many projects in the future.

0:31:440:31:48

'Since filming, Tony decided to move into the bungalow

0:31:480:31:52

'and is doing his old house up to rent out.'

0:31:520:31:55

'This is Derby in the East Midlands.

0:32:020:32:05

'A hub of the Industrial Revolution,

0:32:050:32:08

'the city enjoyed tremendous prosperity during Victorian times.

0:32:080:32:14

'One lasting legacy from that boom period is in Derby's housing stock,

0:32:140:32:20

'namely its streets of Victorian terraces.'

0:32:200:32:24

This is a fairly traditional street of terraced houses.

0:32:260:32:29

It was - before they did a fantastic job of making it family friendly.

0:32:290:32:35

We've got traffic calming, a park over there.

0:32:350:32:38

A different way to park the cars. A great start.

0:32:380:32:42

The property is this one. It had a guide price of £58,000.

0:32:420:32:46

A three-bedroom mid-terrace. Let's take a look.

0:32:460:32:50

Probably not too many surprises. Well, there's a pleasant one!

0:32:500:32:54

It doesn't smell damp or look to be in too bad a condition.

0:32:540:32:59

Straight in off the street into your living room. Very traditional.

0:32:590:33:04

It's obviously dated.

0:33:040:33:06

Hasn't been wallpapered for a while.

0:33:060:33:08

You'd want to change this gas fire,

0:33:080:33:11

maybe open that into an open fire.

0:33:110:33:14

You know what? It's fine.

0:33:150:33:18

These glass doors are a hazard. That's probably not safety glass.

0:33:210:33:26

If you've got kids, they should go.

0:33:260:33:28

A rear sitting room. Fireplace could do with updating.

0:33:280:33:33

Then a very traditional layout, through to the kitchen.

0:33:330:33:37

It's long and thin.

0:33:370:33:39

Again, fairly traditional, bathroom and toilet at the rear.

0:33:390:33:44

Your big debate is do you go to the expense of moving that to another part of the house?

0:33:440:33:51

Is it going to make much difference to what it's worth or what you get in rent? I don't think so.

0:33:510:33:57

So leave it there.

0:33:570:33:59

'I've noticed that there's no other form of heating

0:34:000:34:04

'than those old gas fires.

0:34:040:34:06

'Installing central heating would be top of my agenda.

0:34:060:34:10

'Apart from that, it's just cosmetics.

0:34:100:34:14

'A big positive is the back garden.

0:34:160:34:19

'It's small but attractive. It's obviously been well cared for.'

0:34:190:34:24

Upstairs, traditional layout continues.

0:34:270:34:30

One bedroom one side. One bedroom on the other.

0:34:300:34:33

I have to say, the door frame looks a bit wonky on both sides.

0:34:330:34:37

My guess is there has been some historic settlement.

0:34:370:34:42

You might want that checked out.

0:34:420:34:44

The guess is that it is something in the past.

0:34:440:34:47

What concerns me more is how the heck you call that a third bedroom!

0:34:470:34:52

It's microscopic!

0:34:520:34:54

Would you move the bathroom into this and create a corridor?

0:34:540:34:58

I don't think you would. It IS a bedroom.

0:34:580:35:02

It's not ideal but you wouldn't necessarily want to lose it.

0:35:020:35:06

I'd keep it as something like a nursery.

0:35:060:35:10

'What can the auctioneer who sold the property tell us about it?'

0:35:100:35:15

We're in a suburb of Derby called Normanton,

0:35:150:35:19

which is largely terraced housing like this with some later houses.

0:35:190:35:23

Derby City Council did an environmental improvement scheme.

0:35:230:35:28

They've tried to cut out a lot of on-road parking,

0:35:280:35:34

make the environment better, put in little open spaces and called it the Home Zone.

0:35:340:35:40

'Derby Council didn't only improve the surroundings.'

0:35:430:35:47

It's a property which has been reasonably well maintained.

0:35:470:35:52

Before the council did the Home Zone environmental scheme,

0:35:520:35:56

they did a group repair scheme.

0:35:560:35:59

All these houses got re-roofed,

0:35:590:36:01

new double-glazed windows, new downpipes and gutters.

0:36:010:36:06

A lot of that has been achieved.

0:36:060:36:09

'It sounds promising, but what improvements could be made?'

0:36:090:36:13

To keep it as a three-bedroom house,

0:36:130:36:15

you've got to passage out the back bedroom,

0:36:150:36:18

so you've got access to your third bedroom,

0:36:180:36:22

even though it's a small single.

0:36:220:36:24

'Would this make a solid rental investment?'

0:36:240:36:27

There's a good rental demand here.

0:36:270:36:30

These properties, because of what they are, will never fetch huge rental values.

0:36:300:36:36

This would rent out at about £375 to £400 a calendar month.

0:36:360:36:40

'What about a sale value, once renovated?'

0:36:400:36:45

Any terraced house in this locality, two bedrooms, three bedrooms, have a ceiling value of £85,000.

0:36:450:36:52

With money spent on it, to make a nice modern job out of it,

0:36:520:36:58

I would guess its value is probably about 80,000.

0:36:580:37:02

So, a solid little property that would rent out any day of the week,

0:37:030:37:08

and, with the work they've done, a nice place to live.

0:37:080:37:12

Who went for it when it went under the hammer?

0:37:120:37:15

Who's got 58 for a three-bedroom terrace?

0:37:180:37:21

55? Don't mind where we start.

0:37:210:37:23

55? 54? £54,000. Thank you. 55 is bid here.

0:37:230:37:28

60,000. 500.

0:37:280:37:32

61 is bid. 500.

0:37:320:37:35

62. 62,500.

0:37:350:37:38

63? 63,000.

0:37:380:37:40

64. 64,000. I've taken a bid at the back of the room.

0:37:400:37:44

64,500. 65,000.

0:37:440:37:47

65,500. 66.

0:37:470:37:50

500. 67?

0:37:500:37:53

At 66,500.

0:37:530:37:56

Going for the first time. Second time.

0:37:560:37:59

Third time... Yours, sir.

0:37:590:38:01

66,500. Thank you..

0:38:010:38:03

'The final bid of £66,500

0:38:030:38:07

'came from Bobby and his business partner, Dean.

0:38:070:38:10

'Regular viewers may recognise restaurateur and property developer Bobby.'

0:38:100:38:16

# Welcome home... #

0:38:160:38:21

'Last time we met him, he'd just finished restoring a Grade II listed

0:38:210:38:26

'Elizabethan manor house he bought at auction.

0:38:260:38:29

'Why was he bidding for a two-up, two-down terrace in Derby?

0:38:290:38:34

'I met him back at his new purchase to find out.'

0:38:340:38:38

# You've been gone too long... #

0:38:380:38:41

-Bobby, good to see you again.

-Yes.

0:38:430:38:47

-How have you been?

-Fine. Good, thank you.

0:38:470:38:50

-How's Wakelin Hall?

-Doing well. Still standing.

-Beautiful property.

-Yes, it is.

0:38:500:38:56

We've come down a peg. It's not quite Elizabethan.

0:38:560:39:00

No. No. Hm.

0:39:000:39:03

-But it's good.

-It is.

-It's a good buy.

0:39:030:39:06

Tell me how come you've ended up buying this.

0:39:060:39:09

-The property's purchased by Dean.

-Your business partner?

0:39:090:39:14

He's my friend and he's purchased the property...

0:39:140:39:18

I've sort of gone along to the auction with him...

0:39:180:39:22

I'm his inspiration and guidance in this project.

0:39:220:39:26

I'm also his speaker. He's lost his voice. He's croaking away.

0:39:260:39:30

What was it that made you think it was a good one for him?

0:39:300:39:34

The property hasn't got a lot that needs doing to it, just the decor.

0:39:340:39:39

It hasn't got central heating, so that'll need to be addressed.

0:39:390:39:43

That's it. Nothing too taxing.

0:39:430:39:46

'This little terrace isn't really going to be Bobby's project at all.

0:39:460:39:51

'His friend Dean wanted to learn about property developing

0:39:510:39:55

'and what better way to do it than start with something small?

0:39:550:39:59

'All it needs is a central heating system, then it's just the decor.

0:39:590:40:04

'Dean should manage that.

0:40:040:40:06

'My instincts are that Bobby may find it hard to take a back seat.'

0:40:060:40:11

How much budget has he put aside to sort out what needs to be sorted?

0:40:110:40:17

Hm. I'd say, probably about... 4,000 to 5,000.

0:40:170:40:21

Top end, 4,000 to 5,000.

0:40:210:40:23

-Are you going to be involved in any of the hands-on work?

-No.

0:40:230:40:28

Is Dean?

0:40:280:40:30

Probably not. MARTIN LAUGHS

0:40:300:40:33

Hands-off property developing?

0:40:330:40:35

It's getting it done and getting some more properties.

0:40:350:40:40

# Relax, take it easy

0:40:400:40:45

# For there is nothing that we can do... #

0:40:450:40:49

What about timescales? How quickly to get it sorted?

0:40:490:40:52

-Three to four weeks.

-Right. So a team of people coming in?

0:40:520:40:57

Get it ready. Get it rented out.

0:40:570:40:59

How are you going to manage to not interfere?

0:40:590:41:02

I think I'll get asked to do certain parts of the job.

0:41:020:41:07

So...I won't NEED to interfere!

0:41:070:41:11

-Your help will be welcome throughout?

-Yes.

0:41:110:41:14

If you see him making mistakes, are you going to say, "Don't do that"?

0:41:140:41:19

Anything drastic, yes.

0:41:190:41:21

I'm a bit of a Scrooge. You may not think, in terms of the last project, how much money was spent.

0:41:210:41:28

But I don't think a lot should be spent on this particular project.

0:41:280:41:32

So if he has any ideas of spending a certain amount on decorating,

0:41:320:41:37

and it's a lot, then I will "step in".

0:41:370:41:40

-Well, he's very lucky to have you as his mentor.

-Yes.

0:41:400:41:45

I hope so.

0:41:450:41:47

Congratulations. Look forward to seeing you again perhaps.

0:41:470:41:51

-Yes.

-On a project somewhere between an Elizabethan manor house and a terrace.

-Yeah. Hopefully.

0:41:510:41:58

Bobby picked a good first project for his business partner Dean.

0:41:580:42:03

Nothing structural to sort out, just a bit of cosmetic work.

0:42:030:42:07

How will they get on? Will Dean like being a property developer? Find out later in the show.

0:42:070:42:14

Time can be a healer. It can also be the enemy when you're up against a deadline.

0:42:170:42:22

-What has happened to those properties?

-Let's find out.

0:42:220:42:26

'We're back at this 1930s semi in Plumstead, southeast London.

0:42:310:42:35

'It was bought at auction by David and Stephanie for £178,000.

0:42:350:42:40

'The couple planned to renovate the house to sell on.

0:42:400:42:45

'David felt pretty confident.'

0:42:450:42:48

We were really pleased.

0:42:480:42:52

Everything stacked up and there's a nice little profit if we want to take it.

0:42:520:42:58

'So, seven months later,

0:42:590:43:01

'how DID things stack up?

0:43:010:43:03

'A fresh coat of paint and a tidy-up of that hedge

0:43:070:43:11

'has made the house much more attractive.

0:43:110:43:14

'Inside, a lick of paint, new carpets and a fireplace

0:43:140:43:19

'bring the living space up to date.

0:43:190:43:21

'They decided against the neutral colours

0:43:210:43:25

'usually chosen when doing a property up for the market,

0:43:250:43:28

'and went for a bold contemporary feature wall and lighting instead.

0:43:280:43:34

'The wisest move was taking down the wall

0:43:340:43:38

'between the galley kitchen and the dining area.

0:43:380:43:41

'This created a large open kitchen living area

0:43:410:43:45

'which flows all the way from the front of the house to the back.

0:43:450:43:50

'A new kitchen maximises the space.

0:43:500:43:53

'There are new units, surfaces and appliances.'

0:43:530:43:59

This was the original kitchen, from that wall to approximately here.

0:43:590:44:04

There was a doorway from the hallway.

0:44:040:44:07

The door to the garden there meant that the kitchen was five foot wide.

0:44:070:44:13

It was totally impractical. There was no room to do anything.

0:44:130:44:18

The wall here came down and then we came through

0:44:180:44:22

and that made this great big space here.

0:44:220:44:26

We've moved the main kitchen here,

0:44:260:44:29

which makes this a big through-space.

0:44:290:44:34

'David and Stephanie's friend Janet did most of the heavy work.'

0:44:340:44:39

One of the first tasks she did was to sledgehammer the wall down.

0:44:420:44:47

David was the other side of the wall to where I was.

0:44:470:44:51

He told me to hit it after he'd hit it.

0:44:510:44:54

He hit it the first time and nothing happened.

0:44:540:44:59

I hit it and six bricks fell out.

0:44:590:45:03

His comment was, "I'll leave it to you." It took me two hours.

0:45:030:45:09

# If I had a hammer I'd hammer in the morning

0:45:090:45:14

# I'd hammer in the evening All over this land... #

0:45:140:45:18

'Upstairs, things haven't moved along quite so smoothly.

0:45:180:45:24

'The three bedrooms are being used as storage, while work continues downstairs.

0:45:240:45:29

'Outside, it's a different story.

0:45:330:45:36

'That big overgrown garden has been transformed.

0:45:360:45:40

'The south-facing aspect and large size makes it a fabulous spot to relax in .

0:45:420:45:48

'To get it to this state wasn't without its perils.'

0:45:480:45:52

This area here was almost waist-high in weeds.

0:45:520:45:56

As you go down the garden, there was a very large shrub

0:45:560:46:01

which almost blanked the back end of the garden.

0:46:010:46:05

Beyond there, there was a huge shed, full width of the garden,

0:46:050:46:09

semi-derelict and a complete mess.

0:46:090:46:12

It was an eyesore. David took one look and said, "Leave that to me."

0:46:130:46:19

Turned away and I said, "No."

0:46:190:46:21

And pulled it down in front of him!

0:46:210:46:24

Set fire to the doors that the shed comprised of.

0:46:240:46:28

Had a bit of an accident with that.

0:46:280:46:31

Put one of the doors on the fire. Stood a bit too close.

0:46:310:46:36

Turned round and said to Stephanie and David, who were both aghast,

0:46:360:46:42

"Have I lost my eyebrows?" They said, "No. You've lost your hair."

0:46:420:46:47

# O-o-oh, I'm on fire... #

0:46:470:46:50

'I guess Janet really suffers for her art,

0:46:500:46:54

'The burning question is, did David and Stephanie stay on schedule?'

0:46:540:46:59

We were hoping to be done in the region of four months.

0:47:010:47:06

We're now running at, um...six months.

0:47:060:47:10

Partly because we had a very hard winter.

0:47:100:47:13

That caused a lot of delays.

0:47:130:47:16

'What about their budget?'

0:47:160:47:18

The original budget was 20,000.

0:47:180:47:21

We are running at...

0:47:210:47:24

16 and a half at the moment.

0:47:240:47:27

We expect to spend another two to finish off.

0:47:270:47:31

We're going to come in a little below,

0:47:310:47:34

but we haven't found as many problems as we thought we might.

0:47:340:47:38

'Added to the projected £18,500 budget,

0:47:380:47:42

'the £178,000 purchase price brings their total spend to nearly 200,000.

0:47:420:47:49

'Have they spent their money wisely?

0:47:490:47:51

'We invited two local estate agents

0:47:530:47:56

'to give us their opinions.'

0:47:560:47:59

I'm impressed with the kitchen, particularly how they've arched open

0:48:000:48:06

the wall between the kitchen and the lounge, to give it a lot of light.

0:48:060:48:11

Much bigger. Much more space. It makes it much more saleable.

0:48:110:48:17

'How much could the couple expect if they rented the house out?'

0:48:190:48:25

In the current conditions,

0:48:250:48:27

this property would rent for about £975 per calendar month.

0:48:270:48:32

You'd get a lot of interest and I think it'd get rented quickly.

0:48:320:48:36

You could rent this property for £1,000 per calendar month.

0:48:360:48:41

About what I expected.

0:48:410:48:43

Yeah. The rental's a bit higher than I thought but, you know, hm...

0:48:430:48:49

'How much might it make if they sold it?

0:48:490:48:52

'Remember, their total spend was about £196,500.'

0:48:520:48:59

Reflecting the current market, the property would go on for £225,000 to £230,000.

0:48:590:49:06

You'd get a lot of interest from cash buyers, and I think it's a price we'd sell the property for.

0:49:060:49:12

With the work completed, I would value this property between £220,000 and £225,000.

0:49:120:49:19

Yes. What we were expecting.

0:49:190:49:21

Yeah. It's in the range. Yeah.

0:49:210:49:24

'That sounds like a potential profit of between 23,000 and 33,000,

0:49:270:49:32

'minus tax and fees.

0:49:320:49:34

'They'd need to finish upstairs to the same standard as downstairs.

0:49:340:49:40

'Between David and Stephanie, and the invaluable Janet,

0:49:400:49:44

'they look to have things under control.

0:49:440:49:47

'The secret of their great working relationship?'

0:49:500:49:53

-Oh, well. I do what I'm told.

-THEY LAUGH

0:49:530:49:57

-You can't say that!

-I just have!

-Not with Janet, anyway.

0:49:570:50:02

'We're back at this three-bed mid-terrace in Derby.

0:50:100:50:15

'It had been snapped up for £66,500 by Dean, who bought it as a buy-to-let.

0:50:150:50:22

'It was his first property investment,

0:50:220:50:26

'so Dean decided to have it mentored by business partner Bobby,

0:50:260:50:30

'who has previous renovation experience and a tough business head.'

0:50:300:50:36

I don't think a lot of money should be spent on this particular project.

0:50:360:50:41

If he has ideas of spending a certain amount on decorating, and it's a lot, then I will "step in".

0:50:410:50:48

'Six months later, we joined Bobby to see how things have been going.

0:50:520:50:57

'Someone's moved in, by the looks of it.

0:50:570:51:00

'But apart from some new flooring, the rooms haven't changed much.'

0:51:020:51:09

We've done a small amount of work, the reason being tenants wanted to move in very quickly.

0:51:090:51:15

They didn't have anywhere to live.

0:51:150:51:17

They were living at a relative's house.

0:51:170:51:21

There was no need to spend any extra cash.

0:51:210:51:25

'It's great that they got tenants in so fast.

0:51:250:51:29

'This house was bought as a buy-to-let, after all.

0:51:290:51:33

'Despite appearances, Bobby did manage to get some jobs done in the few weeks before they moved in.'

0:51:360:51:44

OK, so we've plastered the walls.

0:51:440:51:46

The painting's not finished, as you can see.

0:51:460:51:50

New central heating system and new flooring. They're the three items.

0:51:500:51:55

'What about that tiny third bedroom?

0:51:550:51:58

'Are the tenants happy accessing it through the second bedroom?'

0:51:580:52:02

They were happy with the arrangement

0:52:020:52:05

for the bedrooms to be through one to the next.

0:52:050:52:08

So we left it. For now.

0:52:080:52:11

'With a minimum of fuss, Bobby has had the house rented out for six months,

0:52:110:52:17

'which means a steady income for Dean.

0:52:170:52:20

'Recently, the first tenants moved out, allowing more work to be done.'

0:52:200:52:25

We've got a new set of tenants in.

0:52:260:52:29

And we can now complete some of the work whilst these tenants are in,

0:52:290:52:36

because they're OK for us to carry on.

0:52:360:52:39

Somebody will come back and finish off bits of trim,

0:52:390:52:43

painting around the door frames, just remedial work.

0:52:430:52:48

If it means getting the rent in quickly rather than losing rent for another week or two,

0:52:480:52:55

it's better that way.

0:52:550:52:57

'I think Bobby's got the right idea.

0:52:570:53:00

'His focus is on having the property work for its keep.

0:53:000:53:04

'That means ensuring the house is occupied by tenants.'

0:53:040:53:08

My personal belief is,

0:53:080:53:11

if you're keeping this property a long time, as long as the fabric of the property is sound,

0:53:110:53:17

I don't think you need to spend much more.

0:53:170:53:20

If the tenants are happy, leave it at that.

0:53:200:53:24

If you're spending extra, you've got to justify it.

0:53:240:53:27

If you're going to market it and sell it, spend more.

0:53:270:53:32

If you're keeping it long term, you could spend thousands later.

0:53:320:53:37

'With such a frugal approach, did he allow Dean to go over his £4,000 to £5,000 budget?'

0:53:370:53:45

We spent 4,000 in total. The majority on central heating.

0:53:450:53:49

And around £1,000 for the flooring, painting these walls and replastering these two rooms.

0:53:490:53:56

A few hundred pounds need to be spent finishing off, but that's all.

0:53:560:54:01

'Adding the renovation budget of £4,000 to the £66,500 paid for the house,

0:54:030:54:10

'a total of £70,500 has been spent.

0:54:100:54:14

'It seems to have paid off, as it's an in-demand rental property

0:54:140:54:18

'that's working well for Bobby's friend Dean.

0:54:180:54:22

'We invited two property experts along to see what they thought

0:54:220:54:27

'of Bobby and Dean's approach.'

0:54:270:54:29

I have to say, not a lot has changed, has it, really?

0:54:290:54:34

Laminate flooring, a central heating system

0:54:340:54:37

and a quick wallop of paint.

0:54:370:54:41

I think, as a future improvement, you would passage out the bedroom.

0:54:410:54:46

It's a logical thing to do. It doesn't work well as it is.

0:54:460:54:51

It's a thing you'd do if you took it further.

0:54:510:54:54

If the owner's renting it out for a good return, and done minimal work,

0:54:540:55:00

great, leave it as it is.

0:55:000:55:02

'With a basic refurbishment, did they settle for a lower monthly rent?'

0:55:050:55:11

This sort of property in this location is easy to rent out.

0:55:110:55:16

In rental value, it's about £400 a calendar month.

0:55:160:55:19

A bit more, a little bit less, but it's about that sort of ballpark.

0:55:190:55:24

Judging on the properties around here, you could get £400 per calendar month.

0:55:240:55:31

We're getting 410.

0:55:310:55:33

It's £10 over, not under, so that's fine.

0:55:330:55:36

'It looks like Bobby's businesslike approach is paying dividends.

0:55:380:55:43

'How much could this house fetch, if put up for sale?'

0:55:430:55:47

If you offered the property as it is, there's a market for it, yes.

0:55:470:55:52

You could take it a bit further, improve the kitchen and bathroom.

0:55:520:55:57

You will add value, but you can't take it too much further

0:55:570:56:01

because there's a cap on the level of values of standard terrace houses in this location.

0:56:010:56:08

If this was on today's market,

0:56:080:56:10

you'd have an asking price of around £75,000, and expect to get fairly close to that.

0:56:100:56:16

I would put this property on the market at £69,950 and hope to get an offer fairly close.

0:56:160:56:22

Won't be tempted to sell, but I think, with the market the way it is, it's OK.

0:56:220:56:28

I think the 65 to 70 is slightly low for private treaty.

0:56:280:56:33

For auction, OK, it'll be somewhere close to that.

0:56:330:56:37

75 is still a realistic price.

0:56:370:56:40

'No matter. This place is a rent machine.

0:56:400:56:44

'Bobby and Dean approached the venture on business principles

0:56:440:56:48

'and are already reaping the rewards.'

0:56:480:56:51

We'll be back with more action from auctions around the country.

0:56:540:56:59

-Make sure you're watching Homes Under The Hammer.

-Goodbye.

0:56:590:57:03

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