Episode 62 Homes Under the Hammer

Welcome to Homes Under The Hammer.

Buying at auction gives people the chance to get properties that are in need of work.

People like to put their own stamp and style on their property, and hopefully make a bit of a profit.

There's much more chance that you might do that when you buy your home...under the hammer.

We love the buzz and the excitement in the auction room.

You can almost sense the hope and frustration in the air.

And you never know what's going to happen until the very last second.

So, what tempted the buyers on today's programme?

Just outside Derby, I come across a real hidden gem.

All in all, it's a stonking property.

In west London, there's a cautionary tale to tell.

If you didn't realise how important it is to view properties before the auction, you do now.

And on a trip to Hastings in Sussex,

I find a design feature that's likely to divide opinion.

What is this all about?!

All these properties have been sold at auction.

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

Are we all done? Sold.

This is Chellaston. Once a village in its own right, now a popular suburb of Derby,

about three miles south of the city centre.

Well, I am very excited, because I'm here to see a Victorian semi-detached property

which the auction catalogue describes as being in "unspoilt condition",

so I'm thinking stripped floorboards, old-fashioned fireplaces, high ceilings...

..and mould, and damp, and a real mess inside, and...

The guide price was £160,000 for this four-bed semi built in 1893.

From the outside at least, it seems a potential gem,

but it also looks as though it needs some tender loving care.

Wow! Well, you know what?

I'm liking what I'm seeing.

Erm, lovely bit of stained glass on that door there.

Big, old-fashioned door, and tiling on the floor in the hallway here.

Wow!

Er, I think it's teetering on the side of being a real find, I have to say.

Look at these doors. They're all original.

Get those stripped back, how beautiful would they be?

Look at that! Fantastic! Old fireplace.

It... Straight away, I'm thinking this house

has not really been touched that much for many, many years.

And that is so exciting!

-# Oh happy day

-Oh happy day... #

With another large reception room across the hallway -

again, with an original fireplace -

this place just gets better and better.

It's easy to get carried away,

and forget about some of the practicalities that a restoration will throw up.

For a start, things like the electrics. These are ancient - they'll have to be replaced.

I imagine that the pipework is some of the original lead pipework,

so that'll have to go, and all that has to be factored into your budget.

A real disappointment here, though. This is the kitchen,

and compared to the rest of the house, it's just way too small.

The good news, though, is on the other side of there,

that is a dining area, and I would take out this wall to create

that central kitchen/living area that the house really needs.

And then, just let your imagination run riot.

Some thought is needed about how to incorporate old and new.

And what to keep, update or remove.

But I think the bare bones you have here are fantastic.

So, up here on the first floor, two good size bedrooms.

One at the front there, useful little loo on the landing there.

Through to the second bedroom - wonderful that they've got the open fireplaces. What a great feature.

It's all great, until you come to this part of the house.

This, unfortunately, is the only bathroom in the property.

Well, a big disadvantage is you have to access it through that bedroom.

So, when you're doing the refurbishment,

you'd think about re-siting this.

One thing you're not going to get rid of is that roll-top bath.

That is gorgeous!

All in all, it's a stonking property.

And as if the roll-top bath,

fireplaces and many other original features weren't enough,

there's also another floor.

There's a big landing area with two more good size bedrooms off it,

again, with plenty of the details typical of a Victorian house.

Then, of course, there's the outside space.

Not only do you get a house that absolutely oozes potential,

but at the back, there are also out-buildings that you could use,

including this apple store, which has even got a cellar - fantastic!

And to cap it all, the most amazing garden.

You'd need to get the strimmer out and clear away the brambles,

but what a great garden.

And along with the garage and those out-buildings,

there could also be a massive bonus.

Well, the potential for this place just goes on and on and on, because here at the end of the garden,

what you've got there is vehicle access down a private road.

That is fantastic because it turns this into a potential building plot.

And I reckon if you could get the planning permission for something on here,

this alone could be worth the guide price of the property. Wow!

Yes, that £160,000 guide price seemed to have offered great potential value.

But this house will need some serious investment to bring it up to date.

So, is it as good a deal as it appears?

What does the auctioneer who sold it think?

I think it's a super property. It's a little gem.

It's an auctioneer's dream,

because you don't come across it every weekend by a long way.

I think it was built in 1893,

and almost - perhaps except the toilet - nothing has changed.

But Victorian standards

aren't quite what most people are looking for today.

Once sympathetically modernised, what could it sell for?

Everything about the house is good,

so, I would say - and I'm going to stick my neck out slightly -

I think you could take this to a point

where it could be worth £350,000 on today's market.

Wow! That's pretty impressive.

How would it fare on the rental market?

Your rental income would be something in the order of £750-£800 a calendar month.

Well, this is a great example of why I love property auctions.

Once in a while something - well, basically a gem like this comes up.

Fantastic property, but who bought it, and did they buy it because of the house and its period features,

or because of the potential of that plot of land for building on?

Let's go to the auction and find out.

And lot 65 is our last lot today.

It's a four-bedroomed, Victorian semi-detached house,

standing in extremely large gardens.

There we are, ladies and gentlemen, a lot of opportunity.

Start me at 150.

£150,000. I'll start it at 150, and we'll see what happens.

We've got bidders. 155, 160.

160.

165, 170.

75.

180 - 180,000.

185.

190.

195.

200, 205,

210, 215.

220.

225? 225.

230?

230.

31?

31.

232? 232,000, the lady's bid.

At 232,000, once, twice...

Third time. Sold at 232, that's the way you do it.

Come in with the last bid.

So, for £232,000 - over £70,000 above the guide price -

the new owners of the four-bed semi in Chellaston

are engaged couple Ronnie and Josephine.

They bought this house to be their first home together,

but before I ask them about their plans for the place,

I want to ask about something I spotted at the auction.

Congratulations. But listen, what happened there?!

Oh! Someone was really determined to buy the house.

-Yes, your partner!

-Someone was a bit more cautious.

Me.

So, yeah...

Were you actually pulling Josephine's hand down, then?

Yeah, cos we agreed we'd go to 220.

Uh-huh.

And somehow, that agreement went out of the window.

Someone's hand went up.

Talk me through things from your side, Josephine.

I was a desperate woman.

Um, I was just in love with this property,

and I wanted to go for it, so I did.

Josephine was really keen to get this property

as they'd failed to complete on three others in the last six months.

On one of those, they'd even done a survey

and were just about to exchange contracts

when the sellers pulled out.

So, she was determined not to lose this one for just a few thousand pounds,

but the purchase of this house wasn't problem-free, either.

The biggest shock was after the bank did the valuation,

the valuer actually ticked the wrong box.

He ticked this property as not mortgageable,

so we rang up the mortgage centre who said,

"Sorry, we're not giving you a mortgage,"

so we cried for a day and a half,

then rang up the guy who did the valuation,

and said, "What's going on?"

-And he said, "Sorry, I ticked the wrong box."

-Oh, right!

It's been a horrible experience.

Must have been a relief when it went through,

because they'd also paid £1,200 for both a valuation

and a structural survey, so they've certainly given this house a thorough examination.

Tell me about you two then. What do you do?

-I'm a doctor, a trainee GP.

-Great.

-I'm in my first year of training as a GP,

so I'm working as an obs and gynae doctor at the moment at Royal Derby Hospital.

OK, so quite locally.

-And you?

-I work for a music promoter,

-as a production manager, so I go on tour with different bands.

-Any bands that I'd have heard of?

-I'm on tour with the Specials at the moment.

-Wow!

Robbie Williams, Basement Jaxx, Kings Of Leon, so yeah...

I have heard of some of those! Robbie who?

-Wow, fantastic!

-Bob, as I like to call him(!)

Your mate Bob.

Joking, not really.

Ronnie's job means he can be away a lot, but he also has periods when he has long breaks,

so it's during those times when he hopes to do work on the house.

OK, well talk me through what you're going to do to it.

I'd quite like to knock this out into one big kitchen/diner.

Possibly join some of the buildings up to give us a utility room out the back there.

And then possibly, in a second phase, doing a side extension on this side.

You want to extend it?! It isn't big enough already?!

-There's only two of you!

-I know!

We've got big families, huge families.

Let's talk about outside, because the garden is unbelievable.

-Yeah, amazing.

-I mean, this bit's lovely,

-but you go behind the wall back there and it stretches to Stoke-on-Trent.

-It is amazing, yeah.

-What are you going to do with it?

-I want to put an office out there.

There are some really dilapidated out-buildings there

which we can tear down and put something else in their place.

And what the idea... Have you looked into the plot at the end,

maybe selling it off as a building plot or something like that?

Um, we have thought about it, but we thought about maybe keeping it and building on it ourselves.

We'd only do that when we were moving.

I want to enjoy the garden. I'm not in a hurry to make money on that bit of land.

Let's talk about the budget, then.

THEY LAUGH

What budget?

Yeah, no, I think the first phase, we're looking at about £40,000.

So... And then if we do go for an extension later on,

that'll obviously cost a little bit more.

Fantastic. Congratulations. It's brilliant this house found you, who obviously love it.

-That's great, well done.

-Thank you, Martin. Thank you.

The couple also have a wedding to organise on top of doing this house,

so it's certainly going to be a busy and expensive time,

but I don't think they'd have it any other way.

# No regrets... #

So, a bit of a shock for Ronnie to end up buying this place,

but I think he's come round to Josephine's way of thinking.

And it is a fantastic house.

The only thing to be aware of is that something like this

could turn into a money pit,

so you need to keep a tight rein on the budget.

Find out how they get on restoring this beautiful house later in the show.

Today, I'm in Isleworth in West London.

The property I'm here to see is not far from Twickenham rugby ground,

and just a short drive from Heathrow airport.

So will it be a high flier, or a tough one to tackle?

The property I'm here to see sold for £169,000 in 2008.

Just two years on, and the guide for this three-bedroom end of terrace

was £200,000.

Let's see what you get for your money inside.

From the outside, this house looks to be in fairly good nick,

but will probably need new windows and the roof should be checked out.

But it is, without doubt, a lovely, 1930s end of terrace.

Do you know what, it really makes my job so much harder

when houses don't smell of fresh roses.

Because walking into here today, it just smells of smoke.

Years and years of smoke. You can even see the nicotine and how it looks on the walls.

The whole place is actually a whole haze of yellowy golden colour.

# Golden brown, texture like sun

# Lays me down With my mind she runs... #

So, as you can see, it needs some renovation. It needs decorating,

but it's a lovely '30s house with some really nice character features.

Lovely little doors and posts.

Good size rooms, we've got a great second reception room here.

Now, I'm just thinking, it might be worth knocking through that small kitchen and opening this space up

to have a really nice kitchen/diner at the back of the house, away from that busy road.

And you've got a lovely '30s back door here, which would be really nice opened out onto that garden.

The general state of the decor and pervading odour means that everything will need to be replaced,

so I'd recommend a paint job, new flooring and wiring,

as well as stripping back that banister and doors to the original wood.

The front room is a good size, with a beautiful bay window, but the kitchen is a museum piece,

and would definitely need a total overhaul.

So far, if you look beyond the yellow haze,

there's definitely tremendous potential.

So upstairs, more of the same, really.

You've got a bit of a selection of groovy bedroom colours.

A nice blue one here, a pink bedroom there.

Two doubles and a very small single, and you've got a separate toilet and bathroom.

Now, some people like to keep their loo separate from their bathroom.

In this case, I actually think it would be worthwhile knocking this wall down,

and joining this up and having one huge room,

because you would gain this amount of space,

and you could shift the bathroom around.

I think that would make for a really good size family bathroom.

As with downstairs, this will need to be redecorated,

but it's all still here - original picture rails, doors, fireplaces and all.

I'm getting the feeling that under that sticky yellow tar

is a wonderful period home.

The single bedroom is really too small,

but could be great as a study or nursery.

Inside, things seem pretty promising,

and I've noticed some potential outside, too.

Looking at next door has given me an idea.

Creating some off-road parking could add as much as 5-10% to the end value of your property.

But how do you go about doing it?

Well, first you'll need to apply to the council for approval.

They'll send an application form which will require you to pay around £50 administration fee.

All councils vary, but in about six to eight weeks, they'll come and visit and carry out a survey.

If access if approved, it could take another month or so for a contractor to come and give you a price.

It can cost anything from £800 to £1,200,

so it's not cheap, but I think well worth it.

Adding value is key to any development, and would make the house much more saleable.

Whoever buys this place will have to do all they can to make it as attractive as possible,

because it's hiding a rather stinky secret!

In the auction catalogue, it really talks this place up -

"The leisure areas of Old Deer Park, Kew Gardens and walkways along the river Thames..."

It says nothing of Mogden treatment sewage works -

one of the largest of its kind in the UK -

and it literally backs onto this property. It's just there.

If you didn't realise how important it is to view properties before the auction, you do now.

# The answer, my friend, is blowing in the wind

# The answer is blowing in the wind. #

This could really put some people off, and would cap the value of the property.

Now I see why the guide price was so comparatively low.

What does a local estate agent make of it all?

The sewage works is quite controversial.

It's not too bad. It's certainly got better.

You get a slight...aroma during the summer months,

but apart from that, they're working hard to eradicate the smells,

so hopefully, it won't have a detrimental effect on the value.

How much could the place fetch if rented out?

Refurbished to a really high standard,

you could get £1,200 per calendar month.

Bearing in mind that guide price of £200,000,

what could it sell for after a renovation?

Refurbished to a very, very high standard,

you'd get in the region of £270,000 - £275,000.

Backing onto the sewage works is far from ideal,

and I think it will keep the end value of this property down,

but it didn't put somebody off,

and let's find out who that somebody was as we go to the auction.

Three-bed, end of terrace house, nice-looking property...

185?

185 on my left.

190, 195.

200, right at the back.

205? 205.

210, 215, madam?

220. 225, yeah?

226.

227, 228.

228 down here. 229. 230?

Yeah?

231. 232?

No? 231. 232?

With you at 231.

232 elsewhere? If not, 231... first time, second time.

Third and last time. If you're all done, sold, 231. Well done.

For 231,000, the successful bidder is property developer, Jean-Michel.

He bid on the house without viewing it beforehand.

I met up with him to find out more.

Jean-Michel, congratulations.

-Thank you.

-Why did you want to buy this at auction?

-We didn't, actually!

We were going for two other properties and we lost out on them,

and we saw this one was coming up, so we decided to bid.

It's a 1930s house, so there's not a lot, really, that can go wrong.

And what about the area, the location, the main road?

You didn't know all this.

Yeah, obviously that, and there's no off-street parking was a big issue.

But things like that we can work around. We're going to apply to get off-street parking.

And the fact that you've got the sewage works literally just over there,

do you think that's going to damage the value of this property?

I don't think so. I think they do sell, these houses.

When I spoke to the estate agent, he said they do sell them quite often

and it all depends on the state and condition they're in.

This is going to be a brand-new house when it's done.

People that live round here or want to live round here know about the sewage works.

So, hopefully, everything's OK!

I hope so. Jean-Michel has taken a bit of a risk,

as he may have trouble selling the house.

He paid only 40-odd thousand under the potential resale value of 270,000,

but he still has to shell out for renovations.

This won't leave much in the way of profit.

Maybe the price was slightly too high, but it's a nice house.

We can still turn a profit.

But you've got to make this really spectacular.

You need to get top whack here

to get any kind of money out of it for yourself.

It all depends on the ceiling price on the road and what the estate agents advise us.

So what are you going to do to this house to really make it worth the money?

Well the basics is obviously rewire, replumb,

new kitchen, bathroom, carpets, double glazing, driveway at the front,

sort out the garden...

So what's your budget for the work?

Probably between 15,000 and 20,000.

You've got an awful lot to do for 15 to 20 grand.

-What sort of business are you in?

-I have a building firm.

-Right, OK.

-All the labourers...

-So that explains...

So you can get most things at cost?

-A lot of things at cost.

-And this is an exercise, something you've done many times?

I've done this about 10-15 times for other people.

I've done it twice for myself.

Well, his experience and contacts will certainly keep costs down to a minimum.

How long does he think it will take?

We predict, possibly... six to eight weeks.

Depending on the driveway, cos of the council.

What would you realistically like to market this for?

-Possibly 275.

-OK, 275.

275, so we'll make, possibly, about 10 grand profit for six to eight weeks worth of work.

Jean-Michel didn't know the area, he didn't carry out any research.

He bought this on a whim. He made a reckless purchase.

And if he's not careful, it could cost him dearly.

Luckily for him, he can get this job done and completed at cost price.

But will he make any money on this?

You can find out if he does later on in the programme.

Coming up, I'm off to Hastings in Sussex

to figure out the best approach for this property.

It's all going to come down to the numbers,

and I need to give that some thought.

Back in Isleworth, west London, we find out if Jean-Michel's three-bed semi has been brought up to date.

It hadn't been touched, I believe, since the 1930s.

But first, how was that tricky renovation in Derbyshire?

Do the best for the house, really, and not spoil the features that it's got.

From time to time, I discover houses that have remained relatively untouched over the years.

Little gems that still have many of their original features.

One such property was the four-bed semi I saw in Chellaston, near Derby.

Although clearly in need of modernisation, this place didn't just have bags of period features,

it also sat on a good size plot that had potential to be sold at a later date as a development site.

So, all in all, this looked like a great lot,

and it attracted the attention of engaged couple, Ronnie and Josephine.

Ronnie's a music production manager, while Josephine's training to be a GP.

For her, this had become a must-have property.

Were you actually pulling Josephine's hand down, then?

Yeah, cos we'd agreed we'd go to 220!

Uh-huh.

And somehow, that agreement went out of the window! Someone's hand went up.

Talk me through things from your side, Josephine.

I was a desperate woman.

I was just in love with this property.

And I wanted to go for it, so I did.

Sold at 232. That's the way you do it.

So, having paid £232,000 - £12,000 over their agreed limit -

at last, they got what would be their first home together.

Armed with a £40,000 budget,

they set about bringing the house up to date.

Now, nine months later, we're back.

From the outside, there aren't any noticeable changes, but step inside...

Well, the mixture of old and new

has been blended into a lovely, comfortable living room.

And by merging the old kitchen/dining room into one,

they now have a fabulous new kitchen space.

The kitchen looks quite different. We've had the range cooker removed and fitted a new range cooker.

The dividing wall has been taken down and a steel beam has been put up.

We've had some patio doors put in so we can have a view of the garden and the pond,

and we've got some kitchen units that we got from an auction site and had the windows painted.

Underfloor heating with some slate tiles as well.

This is my favourite room, it's really nice and relaxing when friends come round.

There's also a utility area that's a work in progress.

On the first floor, the bedrooms have been finished.

But despite some changes to the layout,

the only bathroom in the house is still reached

by passing through the second bedroom, as Ronnie explains.

Um, we've put in a new window so we can get the view from the garden.

We've put in this dividing wall - this used to be one big room.

We've taken out the big cast iron bath which we've had re-covered,

ready to go into the main bathroom in the extension once that's done.

We've put in a new shower, new toilet,

we've obviously tiled out everything.

Fitted a new sink, we've got underfloor heating in here now as well.

The long-term plan is to build an extension which will have a bathroom in it.

That will become the en-suite for the second bedroom.

On the top floor, the rooms are gradually being finished.

For Ronnie and Josephine, this has been a labour of love,

and not something to be rushed.

It has been quite hard, because we've wanted to...

do the best for the house, really, and not spoil the features that it's got and the feel that it's got.

And so it's just got a nice flow through it.

We're getting married in four weeks' time,

so it'll be somewhere nice to have kids as well.

-I've had that in mind, he just wants his boy's toys...

-Yeah, totally!

Josephine is clearly the planner here.

For them, this has always been a two-part process,

with the first stage being to refurbish the house and garden,

then move in and look at stage two, which is to extend.

We're hoping to extend the house out this way..

So downstairs, we'll have a longer hallway with a dining room here

and a larger front room on the right-hand side.

And upstairs, we'll have another bedroom and a family bathroom

and a balcony opposite this bedroom with the en-suite.

And on the top floor, another bedroom with a shower room.

We've had outline planning permission approved.

We're just going through detailed plans now.

We're hoping to have it all completed within two years.

When that's all complete, they'll have a huge, six-bedroom house

with two en-suites and a large family bathroom.

But of course, they'll also have significantly higher costs.

Building works, we've probably spent about 25,000 - 30,000.

The extension we've had priced up for about 60,000

and then there's also... We're going to probably put an orangery between the out-house and the scullery.

So I think, realistically, it's going to go to about 70,000.

They paid £232,000 at auction and have spent another 30,000 on it.

So, along with costs and fees, their total outlay is around 270 grand.

So, is it money well spent?

Let's hear from two local property experts.

The house is tremendous - it's a fantastic period property

that's got the right position, the right size, the right location

and still the right features.

Although they've brought it up to a modern standard -

or at least it's getting there -

they've retained the character of the house, and that's key.

So, a positive response.

But will that equate to decent returns?

Ronnie and Josephine have invested around 270,000 in their home.

It's likely to sell at the moment for around about £250,000.

With the present footprint of the house,

I would say you could probably go up to about £275,000.

So, perhaps not the best resale values, but this IS only stage one.

The plan for stage two - an extension - will add another £70,000,

taking their total spend to around £340,000.

Extended, we're probably looking towards the £300,000 mark.

I would say probably up to about £315,000.

Hmm, that is a potential loss.

But what do they think of those valuations?

A bit disappointing.

We were hoping more, sort of 350-ish by the time we've spent what we're going to spend on it.

On the face of it, this might not be a money-spinner, but remember,

they have that potential building plot in the garden.

Should they ever wish to sell it,

that would more than cover any shortfall on their investment.

In the end, I'm sure they'll do pretty well.

Are they glad they took on this project?

It definitely feels worth it. I love living here.

It's so private and pretty,

really close to town, but it feels like you're out in the country.

And it'll be a great place to have kids, and have family round.

So no, don't regret it. It's not all about the money.

So, their enthusiasm remains undimmed.

Although with a wedding on the horizon and a new home,

this has been a busy period.

But soon, hopefully, they'll have a chance to relax and enjoy

what is becoming a really beautiful house once again.

Well, think of Hastings, and you think of the famous battle in 1066.

But the town has much more history besides.

Some of it dates back to the 1400s.

There's the old pier, the cliff railway,

and if you get bored of the past, you can return to the present

and enjoy the views from the beach.

In fact, John Logie Baird, the inventor of television,

lived in Hastings for a time,

so we all have a lot to thank the town for.

Let's hope today's auction lot proves to be as exciting a discovery.

The property I'm here to see had a guide price of £75,000.

What does that buy you? Three storeys, three bedrooms.

You know what? Looks pretty impressive.

Whoa, just a little bit of junk mail(!)

What have we got? I like the fact that there's a little bit of a porch there to keep the draught out.

Entrance hall, pretty standard, but what is going on there?

Actually, that's not too serious, just a bit of polystyrene cornicing

and the paper from the ceiling coming off.

All in all, looking promising.

So, through to a nice, big dining/living room area that's been knocked through,

but what is this all about?!

Very Arabian Nights, and I don't think it quite fits in with the whole Hastings theme,

but it's a good size room. I'd like to see a nice fireplace in there.

Certainly get rid of the bricks, but apart from that,

I'm liking this place.

Unfortunately, there's a little less to like in the kitchen.

It's a tired space and needs a complete overhaul.

At the back, there's a garden that would be fine for a family,

which is just as well, because the size of the rooms

in the rest of the house means this isn't for a single person.

Just look at that bathroom -

it's huge, and such a crazy waste of space.

It makes a nice change to be trying to figure out what to do with too much space,

rather than trying to create it.

What I would do is create an en-suite to the master bedroom here.

You could still end up with a lovely, family size bathroom

and enhance this, which is a fantastic room anyway.

At the front of the house - big bay window there.

The only thing slightly wrong with it -

in this corner here, we have got some major signs of damp.

My guess is, coming down through the ceiling, maybe something to do with the roof -

a roof tile missing or something in the past. Definitely get that checked out.

You're not sure what damage has been done to the floorboards and joists.

A bit of investigation here, but apart from that, it's a lovely room.

It is a great space, if a bit decaying.

But the potential of this room combined with the bathroom is fantastic.

But now it's up the third and final flight of stairs

to see what the top floor has to offer.

More slightly worrying signs of water ingress there.

But up here on the top floor, two more bedrooms.

The house just goes on. What would you do with this place, then? How about converting it into flats?

Maybe a ground floor one-bedroom flat,

and the first two floors, a two-bedroom maisonette?

The good news is, a precedent has been set.

Nearly half the houses on this street have had that done.

So, it's all going to come down to the numbers.

I need to give that some thought.

When you consider the house had a guide price of £75,000,

it could be a real investment opportunity.

How about some fresh, sea air, just to clear the head?

Mmm, down on the beach with an ice cream, the perfect place to contemplate.

I've been thinking. A property like this -

done up to a really high standard -

at the moment is going to get a maximum of £150,000 to £160,000.

Convert it into two flats, you'll be able to sell those for, what, £80,000 to £85,000 each?

So in this instance, there isn't actually that much financial gain from converting to flats.

It may be better from a rental point of view, but purely looking at the resale value, I wouldn't do it.

The amount of extra time, effort and money it's going to cost to convert...

For once, learn to love it as it is and keep it as a single house.

Mmm! That's the way to cream off the profits.

It's amazing what a tasty ice cream can do for mental arithmetic,

but seriously, just because you've got a lovely, spacious house, doesn't mean the sky's the limit.

Know your market, and in this case, it's not crying out for flats.

So, bearing in mind that guide price of £75,000,

I asked a local estate agent what she thought of this place,

and whether she loved it as much as I do.

Walking into this house,

my first impression is, "It needs work doing to it."

From what I can see, I don't think there's structural work to be done. Most of it is cosmetic.

Obviously, redecoration throughout, new floor covering,

possibly look at the windows.

Kitchen, bathroom - all of those things need doing.

It does need a considerable refurbishment, but is Hastings itself appealing to investors?

There's been quite a lot of money invested in the town.

It has changed quite a bit. We've got a new university centre, we've had a new college built.

The seafront has changed quite radically,

so it's a town where things are happening because it's been neglected for so long.

It will never be a Brighton, but it's getting there slowly.

So, it's on the up, but how much could this house sell for?

If it was all done up, nothing to do, I'd imagine you could market it in the region of £160,000.

What about rental?

The rental cost of this, once all done, would be in the region of £750-£800 per calendar month.

Well, the tide may be turning in Hastings and the property does offer good value for money,

but it's really important that you don't spend too much,

cos at the moment, there's still a ceiling

on what you'll get back for this kind of house.

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

Lot 118...

Who wants to get me started on this? Lot 118.

£80,000 anybody? 75, OK.

OK, start there. 75 I've got.

Anybody else? At £75,000... 76?

77, 78, 79...

80,000? 80, 81, 82,

No? It's with you at the back, sir. At £81,000, back of the room. Anybody else?

82, new place. 83.

84, 85, 86.

87, 88, 89,

90,000. 91, 92, 93, 94.

95, 96, 97, 98.

100? 100,000. 101.

102, 103, 104,

105, 106, no?

OK, it's with you, 105. Anybody else?

105 for the first, 105 for the second,

105 for the third and final time. Are we all done? Sold.

105.

That keen, determined and ultimately successful bidder was Steve.

He runs a decorating business and lives in Epsom, Surrey, which isn't that near to Hastings.

I met him at the blue house

to find out what had brought him down to the seaside.

Steve, congratulations!

-Yeah, a result, I think.

-A bit of a result.

-Why were you so keen to buy it?

-Well I just love the period properties.

Hastings, it's up and coming - regeneration in the area,

so I thought I'd set myself in before it really starts to kick off.

OK, so tell me about you.

I run a high-quality decorating company. I work for some of the top design and architects in the country.

-Wow!

-I've got some good men behind me, and it's just another little step up the ladder, hopefully.

-And where are you based?

-I live in Epsom, but most of my work is in Kensington and Chelsea,

around that area. Wherever people want me to go, I go.

Compared to the areas you're used to,

this is a lot of property for the money, isn't it?

This is unbelievable.

I mean, this could command six figures in Kensington and Chelsea, with out a doubt.

Everywhere has its own market.

I'll try and break that ceiling with a quality finish,

and bring that Kensington and Chelsea feel into this area.

Steve's right. There's plenty of scope here, but with plans to sell it on,

he'd better be careful that his standard of renovation

doesn't take the place above this area's ceiling price.

I'm going to strip it all back to near enough bare.

It's going to be replastered, new timbers, new woodwork everywhere it's needed. New flooring.

The bathroom's going to be done - we'll take some of it away

and make an en-suite with the first floor bedroom.

The kitchen's going to be a high-spec kitchen. Lights everywhere.

The garden's going to be landscaped, and it's going to bring it up to a really quality piece of work.

-So is there a market for this high level of specification in this area?

-I'm going to make it that market.

If I'm going to do something, I'm going to do it how I want it to be myself. I've got pride in my work.

I can't go in and walk out if it isn't exactly what I wanted.

-Listen, good luck.

-Appreciate it.

-I look forward to seeing how you get on.

-Thank you.

Steve's playing a risky game,

and I'm worried that the sort of spec he's aiming for

might not have a market in Hastings.

He's got a budget of £25,000 to achieve his planned finish,

and aims to do it in ten weeks.

Steve's certainly ready to take on this project,

but is Hastings ready for the kind of high level of finish that Steve is going to create?

I'm not so sure, and I'm concerned that he'll spend too much money and not get that money back.

It could, in fact, be another battle in Hastings - this time, for profit.

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

The moment of reckoning has arrived.

Have those property gambles paid off, or have our buyers backed the wrong horse?

Let's find out.

Back in Isleworth, west London, within walking distance

of Twickenham rugby ground and close to Heathrow airport,

a three-bed semi went up for auction.

It wasn't quite the high flier I'd hoped for,

but certainly had an air about it with interior walls covered in nicotine stains and grease.

But on the whole, it was just in need of a good makeover.

However, it was going to need more than a lick of paint

to take away what lurked at the bottom of the garden.

The local sewage works.

But you know what they say - where there's muck, there's brass,

so sniffing out a possible good deal, building firm owner Jean-Michel

bought the property at auction for £231,000.

He felt confident he could get the place back together again.

The fact that you've got the sewage works just over there,

do you think that's going to damage the value of this property?

I don't think so. I think they do sell, these houses.

The estate agent said they do sell them quite often,

and it all depends on the condition they're in,

so hopefully, everything's OK.

So, with a 15-grand budget and six to eight weeks timescale,

Jean-Michel and his team set about peeling back the layers.

It was awful, wasn't it? It was yellow everywhere.

Tobacco stains, or grease, or whatever it was.

It was grim. It hadn't been touched, I believe, since the 1930s,

so it was the original - everything - kitchen, bathroom.

Pretty grim.

Seven weeks later, we're back.

The years have been stripped away, and the house looks good as new.

There are new windows, doors, carpets, laminate floors and central heating - all in just seven weeks!

Wow - that's pretty impressive!

We've pretty much finished. We've got two weeks left.

Just snagging - the driveway, the front garden, the back garden - and then we're there.

And this hasn't just been a makeover.

Jean-Michel has also altered the layout.

Basically there was a wall dividing the kitchen and the sitting room.

We've knocked the kitchen wall down, made it completely open plan.

Decided on a walnut kitchen as opposed to the high-gloss white.

Obviously double French doors here that look straight into the garden.

Now those patio doors will take you out into a good size garden

that just needs finishing off with some new turf.

Upstairs has also been given a slight re-jig.

Well, basically we knocked down the partition wall,

and created an open, full-size bathroom.

We fitted a thermostatic shower,

full-size bath, WC, toilet and sink.

Along with a fantastic bigger bathroom, three bedrooms have been finished with new windows,

central heating and a complete refurbishment.

So, Jean-Michel and his team have been busy,

but it seems there was one step he couldn't take quite so quickly.

We've managed to build a house - or rebuild a house -

in seven weeks, but we can't get a kerb lowered in seven weeks.

So we just have to wait.

At present, it may be lacking some kerb appeal, though he hopes this will be sorted out fairly soon,

and obviously he now wants to get some return on his investment.

The original budget was about £15,000.

That was going to include all the windows,

and knocking down the walls in the kitchen, stuff like that,

so we've gone a little bit over budget,

and the driveway was a little bit more expensive than we predicted.

Erm, so we've gone to about £21,000, I think.

That 21 grand budget

on top of the £231,000 purchase price and other costs

will take his total investment to around £260,000.

Money well spent. What do two local estate agents think?

I think the property is good. It's spacious and nice and neutral.

I think he could finish off around the windows

and certain snagging bits,

but all in all, I think it's a good property.

It's a popular family layout, fairly standard.

Separate reception room -

a family room where people can spend time together,

two bedrooms and a box room upstairs.

I think there are a few reasons why perhaps he won't achieve as much as he's hoping.

Erm, the...

stamp duty is a big one,

and the increase up to 3% after the 250 level.

The planes - unfortunately it is on the flight path.

It does back onto the Mogden sewage works, which may be slightly off-putting for some families.

Jean-Michel has invested around £260,000 on his three-bed Isleworth semi.

Could it turn a profit for him if resold?

I'd probably look to market the house at 275...

to achieve offers from 250 upwards.

I would put this on the market at £275,000

Pretty much what we envisaged.

When I looked at the property, I really did think about 275.

That would be a low £15,000 profit.

But he thinks he's more likely to hang onto it for a couple of years and rent it out.

We'd be looking at putting it on the market for about £1,000 a month.

We would market this at £1,200 per calendar month.

Yeah, that's OK. The average is about £1,100 a month.

Yeah, that's pretty good. That still gives us a good return.

Yes, £1,100 a month is over £13,000 a year, or a 5% yield.

So, would he do it all again?

I would do it again, once I've saved some more money. Yeah.

So, cashflow allowing, Jean-Michel will continue his climb up the property developing ladder.

I think he'll look back on this house as a pretty successful project.

Back to Hastings, now, where earlier we met Steve,

who'd bought this three-storey Victorian house for £105,000.

He runs a decorating firm which renovates properties for clients in Kensington and Chelsea.

But this time, he was stepping out his own to grasp what he hoped was an investment opportunity.

Hastings is up and coming - regeneration in the area,

so I thought I'd set myself in before it all really starts to kick off.

With his eye on bringing some London style to Hastings,

Steve and his team were ready to take on this house.

Three months later, you can see that he's already made his mark on the exterior.

As you can see, I think the bathroom's stunning.

We've moved everything everywhere, put everything in here.

There was a shower before, the bath was here.

The pedestal was over here, but there was no toilet.

I'm wondering why that was. All the joists run this way, there was nowhere to get one out.

I literally raised the floor, moved the shower over to here,

nice Victorian roll-top bath to go with the house.

I think the bathroom looks amazing, and I'm over the moon with it.

It's a fantastic looking bathroom,

and the rest of the house continues in the same vein.

Totally renewed, renovated and refurbished,

and thankfully, no more 1,001 Nights for this little touch of Arabia.

It had to come down, so got in touch with the council, got everything done legally, proper...

knocked it down, stuck in an 8x4 RSJ, and this is what we've got now.

Steve originally aimed for a high end of the market look,

and has achieved a good, contemporary feel here.

That still left a tired kitchen at the back,

but again, Steve doesn't disappoint.

It was a mess, absolute mess.

So we ripped the whole lot out, ceiling down,

everything off the walls, and completely rebuilt it.

All the outside walls are insulated everywhere.

New lighting, down-lighting - a little bit modern.

Stuck in a washing machine, dishwasher, fridge-freezer...

electric oven extractor fan, gas hob.

Everything is brand new.

New tiles on the floor.

It looks good.

With the help of his team, Steve has achieved a major overhaul from top to bottom -

replastering, rewiring and plumbing throughout.

But despite his aim for a top-of-the-range finish,

it seems that there has been a bit of a compromise.

They are a good standard for this type of house. You've got to draw a level.

You could spend thousands on bathrooms, thousands.

But for the level of this house and what it's going to be used for,

we've gone for the best possible materials and fittings

and you can see how it's come up.

It's still an impressive job,

and one that took his team only just over five weeks to achieve.

But the renovation has stretched his budget from an original £25,000 to £41,000.

Steve was aiming to make it stand out in the local property market,

but I didn't think he meant that quite so literally.

Well, the frontage was a dirty old blue when you saw it last time.

The roof was like a dirty red, so I thought,

"What's brighter than yellow?" And it just brightens it up.

You can see it from down the street.

And basically, it's a house that you can walk in, it's there, it's fresh.

People can see it, and it stands out.

Well, Steve's managed that.

As he runs a decorating business and this is his first attempt at property developing,

it's no wonder he paid close attention to the look and quality of this renovation.

I've been on site, I've managed it myself,

Anything that's gone wrong, it's been sorted out there and then.

Touch wood, nothing really did go wrong here.

Comparing it to contracting, it's totally different.

At the end of the day, it's my work,

so it's all down to me to build this up,

and this is the way, really, that I'm going to go.

Time to hear if Steve is heading in the right direction.

With a total spend of £146,000, here,

we asked two local estate agents what they thought of his hard work.

Obviously visiting the property again, a vast difference from what I saw last time.

Much improved. The finish is really good, I have to say, throughout.

New bathroom, new kitchen, it's lovely.

Absolutely fantastic property. It's been modernised to a very high standard.

It will appeal to a wide range of buyers.

Buyers within the local area,

but also people looking to relocate from London or Brighton.

Looking through the property, I'm very impressed with the finish.

The bathroom and the kitchen are big talking points -

nice and modern, a lovely shower cubicle in the bathroom.

The garden's nice and level, much tidier.

Good size accommodation, very nicely presented.

So the agents are positive about Steve's efforts, but does it work as an investment?

With a total spend of £146,000 on the house,

what could a resale achieve?

I think you would put this on the market for £169,950.

We could sell this property for between £160,000 and £165,000.

That's about right, about right.

We have sold it for £160,000.

Selling privately also means no agency fees,

so Steve's first project has reeled in a £14,000 pre-tax profit.

But would a rental return have appealed to Steve?

If the owner was looking to rent this property out,

I would suggest a figure of about £795 per calendar month.

We would be able to rent this out for between £725 and £750 per calendar month.

That's a possible rental yield of 6.5%.

But Steve's not going to lose out on all of that,

because he and a newly acquired business partner will now manage the let for the buyer.

So, things are looking up for him and for this part of Hastings.

Well, whether you're an old-hand developer or a property novice,

join us next time for more stories on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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