Episode 69 Homes Under the Hammer


Episode 69

Martin Roberts and Lucy Alexander visit a three-bedroomed house in London, a two-bedroomed house in Cornwall and flat in Wiltshire, learning how much they sold for at auction.


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Transcript


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-Hello!

-Home is where the heart is, they say, but is your heart in buying a property at auction?

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Let's find out who put their heart and soul into buying Homes Under The Hammer.

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Buying a property at auction can be a road to success, but there are also risks involved.

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Yes, even experienced developers can get it wrong. So what got people interested at the auctions today?

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I'm in Wiltshire, giving you my slant on this curious property.

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Doorframe - completely wonky.

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This house in Cornwall looks like a beauty, but there's a beast within.

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Could these be the scrapings of the Beast of Bodmin Moor?

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And this terraced house in Tooting, London, has a teeny tiny bedroom.

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This is how small it is. I can almost touch the walls.

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All these properties have been sold at auction and we'll find out who bought them and what they paid

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when they went under the hammer.

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Welcome to Warminster in Wiltshire on this rather cold and misty winter morning.

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# Baby, it's cold outside

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# Out here in the rain... #

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I'm here to see this town centre shop. It's got a three-bedroom flat above, it's Grade 2-listed

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and it went to auction with a guide price of £100,000, but before we look inside...

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I've spotted a pretty nasty crack up there. It's a very old building and it could be nothing to worry about,

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but I would definitely want that checked out by an expert.

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Already the alarm bells are ringing with this property.

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Let's start by looking at the shop before the flat above.

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# Sure looks warm inside Through the window pane... #

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The shop has a floor area of 640 square feet.

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It's vacant at present, but was occupied until recently,

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earning an income of £4,500 a year.

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In the past, it's been home to a clothes shop, a computer shop,

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and most recently they sold sandbag filling devices for flood defence,

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so quite a varied life. It's also in a pretty central location. You've got the town just there.

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So you should get some passing trade, but one big disadvantage here is no car parking for customers

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immediately outside.

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The shop has a wide range of occupants, but I still think it's got great potential

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as it's in a central location.

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At the rear is the back door, which is also the entrance to the residential property above.

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Unfortunately, to get access to the door and entry to the flat,

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you have to walk down this rather narrow, dark alleyway.

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So let's take a look at this three-bedroomed flat.

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They're quite steep stairs, but here we have the living quarters.

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Quite disappointing. Got a bit of a shabby feel. It needs upgrading.

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This kitchen, for starters. Although you have got a pretty window with views over the rooftops.

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I think the kitchen needs to be replaced and the layout changed.

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And here's the first internal sign of structural damage -

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the sloping doorway which leads to the sitting room.

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For a Grade 2-listed property, I've not seen any of the period features I would expect.

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Let's head on up another set of steep stairs.

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Up here on the second floor is one of the bedrooms. A couple of things you need to think about.

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This wall is damp to the touch.

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Look. You can see there's just plaster falling away behind there.

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I expect it's possibly something to do with the guttering, so that needs to be looked at.

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And have a look over here.

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Look, the doorframe - completely wonky.

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This whole property definitely feels like it's on a bit of a slant.

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Coupled with that huge crack on the front, it's a house where I would definitely recommend a full survey.

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There are more interesting angles in the master bedroom.

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Whoever bought it will have to learn to love its slopes and slants.

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The cost versus return and planning permission needed for a listed property makes the expense

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of straightening it up prohibitive.

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Lastly on this floor is the bathroom, before I tackle one more flight of stairs.

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Now this is where it gets rather interesting!

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You've got real steep access into this room. No handrail.

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So potentially it could be quite dangerous, but there is enough head height up here in this attic.

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A few more character features than the rest of the building.

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You could get a double bed in there, but this makes me laugh.

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This does a good job for the bathroom, letting light in.

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But this is glass, it's probably dangerous. I'd definitely get that sorted out.

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You could use this as a bedroom, but it's good for storage. Really, what you've got is a bonus room.

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The guide price for this residential and commercial property was £100,000.

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I asked a local estate agent to give me some background on it.

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'The rentals achieved on the property were, for the flat, round about £550 per calendar month.

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'And for the ground floor shop, £4,500 a year. Once it has been'

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renovated, you might get a touch more and achieve closer to £575 per calendar month

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or £600 per calendar month. The ground floor shop, it will probably not make much difference.

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'And the sale value?'

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On the commercial shop downstairs, I would expect to achieve in the region of £50,000-£60,000.

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For the flat upstairs, I would expect, once renovated, in the region of £110,000.

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In today's difficult economic climate, it may be tricky finding a tenant for this shop.

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There are a few empty units along the high street.

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There's also that crack to think about. So who was brave enough to bid for this one? Let's find out.

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Start me at the guide price. £100,000. 80, then. At £80,000.

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I'm selling at £80,000. 82. At 82,000. Against you in the middle at 84.

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86. 88. 90, may I say?

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At £88,000. Still cheap. I'll take 9 if you like. 89.

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90? 90. 91, sir?

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91, OK. £91,000.

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It's against you at the back again. It's going to be sold.

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£91,000 for the first time. £91,000 for the second time.

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Sat down. 91, third and last time.

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With a successful bid of £91,000, the buyers were Steven and Rachel.

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30-year-old Steven is a graphic designer and 23-year-old Rachel works in finance.

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Guys, congratulations.

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-Thank you.

-£91,000!

-I know.

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-Guide price 100. You did very well, didn't you?

-Really good.

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We thought it would go for a lot more. Really pleased.

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-What was your upper limit?

-Mine was different to Rachel's.

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-Mine was £115,000. Rachel's was a little bit more.

-A little more.

-So how much would you have paid?

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I don't know if Steve would let me go much further. That's why he bid.

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'There can be many unforeseen challenges when renovating,

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'but this couple have previously bought and renovated a listed building as their home.'

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We bought an old telephone exchange about three years ago. We've built an extension on that.

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And there was enough equity to remortgage and pay for this.

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-So where did you buy this old telephone exchange?

-At auction.

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We actually got it for £60,000, but we didn't have planning permission.

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-That's why it went so cheap. So...

-And because of that you have some money left over

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-to invest in this.

-Yeah.

-What are you going to do with this shop and flat?

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The priority is to get the flat up to scratch, do the kitchen, let it out.

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-Once we've got it let out, we'll decide about the shop.

-So there's no business in mind?

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I've always wanted to have a shop and one weekend my dad looked in the paper, saw this shop,

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and said, "Do you fancy buying that?" And I said, "Yeah, cool!"

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Then I thought, "We will go and have a look at it." Then, "We'll go to the auction."

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-Now I've got the shop I always wanted!

-So what have you always dreamed of?

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I've always wanted... Like every young girl I like shopping and would like a clothes shop,

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but I've got to think a bit practical now whether we maybe delay that, have people rent it,

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or whether I can afford to jump straight in. We'll see.

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'This investment could be Rachel's dream come true.

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'Let's hope the structural damage doesn't turn her dream into a nightmare.'

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-How much research did you do into this building?

-We managed to get hold of the structural survey,

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which seemed all OK. There's been movement over the years,

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-but it's from quite a few years ago. So that's about it, really.

-The most we could do in the time.

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-We had three days to do any research.

-And we were working.

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We didn't look at it until the day before the auction, so we didn't have a lot of time.

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-How much are you planning on spending inside?

-How much?

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I think we're looking at a budget of about £10,000 to actually get it up and get it let out.

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That's really on the flat itself. The shop we'll worry about after.

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-Guys, I'm so excited for you both. Well done.

-Thank you.

-Congratulations.

-Thank you.

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This is Rachel and Steven's first investment property and it could mark a complete change of career,

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with the opportunity to open a clothes shop for Rachel.

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So when we come back, will Rachel have taken the plunge and started her new business?

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Or will they opt to play safe and rent both properties out? Find out later in the programme.

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The wild and windswept area of Bodmin Moor,

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where tales have been told of livestock being hunted by a fierce creature,

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the Beast of Bodmin Moor!

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Luckily for me, I'm safe and sound in Upton Cross on the edge of the moor.

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The property I'm here to see is on this little housing estate built in the 1970s.

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It's a linked detached, which means linked by a garage.

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It's got a garage and parking. The guide price was £75,000. Let's see what you got for that.

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From the outside, this house appears to be in reasonable condition.

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With all this rain, I certainly hope the roof doesn't need to be repaired.

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Okey-dokey. What is on offer?

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Into an entrance hall here, stairs up to the bedrooms, very small kitchen I can see,

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but it gets better when you come in to the living room area. Open-plan. Love that.

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A little log burner. Get that checked out that it works properly.

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Then big patio doors out onto a reasonable looking garden.

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Beautiful camellia. Not a bad start.

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With a lot of work, but not so much money, this garden could be

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a real selling point for what seems a fairly standard house.

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Judging by the numerous kennels, animals were kept here previously.

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Hopefully, they were more cuddly Collies than Beasts of Bodmin.

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This open-plan stairway is very '70s, don't you know.

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Up here we've got a bathroom and loo. That's pretty good news.

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Blimey - what's that?!

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Could they be the scrapings of the Beast of Bodmin Moor?

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Arr! Probably just the paint getting a bit old.

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Actually, do you know what? That is a bit more serious. Looks like some water ingress.

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Could be the roof leaking or if there's a tank up there, water leaking from that.

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I don't know about a beast, but that's fairly beastly.

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There are also two bedrooms on this floor, both in need of redecorating.

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I'd also recommend a new bathroom. Coloured suites are sometimes tipped to come back into fashion,

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but unless you want to scare off potential buyers, stick with white.

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The guide price for this house was £75,000.

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I asked the auctioneer who sold it for his opinion.

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This house, tucked away in a close,

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is really quite pleasant. It's got a nice ratio

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of garden to a two-bedroomed house.

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So, actually, I think the major amount of value is creatable outdoors above indoors.

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It's a dog-friendly garden. It needs to be human-friendly

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with terracing and lawns and so on. It's a lot bigger than it looks.

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If renovated and rented out, how much could it earn?

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'The rental value per month is going to be in the region of £525.'

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Probably not quite £550.

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And the sale value once renovated?

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When the property is in apple pie order, the value would be in the region of £134,950,

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or thereabouts.

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So a few damp issues to sort out upstairs, but a good little property

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that for anything like the guide price is a great investment.

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

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So...

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three folk on the phones. Guide 75, then.

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Not going to go for less than 75. 75, good. 78. Do I see 80?

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80. And 2 somewhere here?

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Bring you into it? 80 I've got. 80 in the room.

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82. 82. 84. 84 in the room. 86.

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86, new face. Back to you, sir?

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86 is stood. 86 I've got. 88.

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At 88. 89?

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89. 89. 90.

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A half? 90 and a half, thank you. 91, got it.

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At 91, you're in, sir. At the back.

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91 and a half. 92. 92.

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92 and a half. Are you a cluster of three? You are? OK.

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92 and a half, then.

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93. At 93. Half.

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At 93... 94.

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94 and a half. 95.

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95... 95 and a half.

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Looking at the phones. 96 and a half is here. 97.

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At 97. At 97.

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At 97. At 97. 97 and a half. 97 and a half.

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Give it a good go. 97 and a half.

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98. 98 and a half. 99.

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At 99. It is a lot easier to work out the commission on 100, sir.

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You happy with that? 100 I've got.

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At one. At one I've got.

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At one for the first time.

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At one for... One and a half.

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Sorry. As you were. One and a half I've got.

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At one and a half. Once.

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At one and a half, at the back, twice. At one and a half -

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will we ever know? Last chance.

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One. At 101, first time.

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101, second time. At 101, sure and done. Now it's going to go.

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At 101 and out.

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For £101,000, Moss and his wife Ann were the successful bidders.

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Moss, a recently retired production engineer, and Ann had moved from their West Midlands home

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to the southwest to enjoy their retirement.

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-Ann, Moss, lovely to meet you both. Congratulations.

-Thank you.

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Tell me why you wanted this place.

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We needed somewhere to put the cash from the house that we sold up in the West Midlands.

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-Right.

-And this seemed a better place than the bank at the moment.

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-So it's an investment property.

-Potentially, yes.

-Or what else?

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-We move in and wait for things to move up a little.

-OK.

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-So what made you move down to Cornwall?

-We used to come on holiday every year, so we like it.

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The kids have left home now so it's our time.

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The couple are renting a property in Devon

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and had been attending property auctions in search of Ann's dream home.

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I promised her a period property, not much to do and a sea view.

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So I haven't scored on any of those yet!

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Right. So apart from not ticking all those boxes, what was it here that you liked?

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The valuation, to be fair. It was within our budget

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and we thought that we couldn't go too far wrong with it,

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us being virgins in doing reconstructions of houses.

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-Right. So what tempted you into this?

-Watching the programme.

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-Your programme.

-Oh, great.

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-Big fans since 2003.

-Since we started. Wow, seven years ago.

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-Yeah.

-Fantastic. So seven years on, you decided to take the leap.

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-Yes, absolutely.

-What budget have you put aside?

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We've got £15,000 put on one side for it.

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-Hopefully, that will give us the sort of property people will admire.

-What timescale have you got for it?

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We have to leave our rented accommodation in about two months so that's the timescale.

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-That should be all right.

-I'm hoping so.

-You can dedicate yourself to this full-time.

-Yes, yes.

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-So what are you going to do to it?

-Kitchen, bathroom,

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get the damp problem sorted out upstairs. Looks like the guttering needs attention outside.

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-Who will undertake the work?

-Professionals for plumbing and electrics, someone who likes ladders

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-and the rest is mine.

-Do you not like climbing ladders?

-Er, no.

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But what about that garden, which was highlighted as an area that could,

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once landscaped, increase the value of their property? And, of course, that lovely camellia?

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Are you keen gardeners?

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-Ann is.

-Yeah, I'll go in there.

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-You've got a lovely camellia.

-I think the camellia might be going.

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No!

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-Well, it's just a little close to the house.

-They don't cause problems.

-I'll take your advice.

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-It's beautiful! Why chop that down?!

-We'll try to replant it.

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You might be able to. Good luck with your new life and new home.

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-I'm glad that we inspired you.

-Thank you.

-Thank you.

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It's all change for Moss and Ann in their new Cornish home.

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Will they manage to get it completed in that two and a half months?

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And will the camellia bush survive? Find out later in the show.

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Still to come: I'm all for open-plan living, but in this London terrace...

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I'm not sure if it's too big or not!

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And I fear the worst for my favourite feature at this Cornwall house.

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It ended up in our fire.

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But first we return to Wiltshire to see if Steven and Rachel combined working full-time

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with renovating this property.

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It's a big challenge. A lot of hard work, a lot of late nights.

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It was a cold and frosty morning when we last visited this property in Warminster, Wiltshire.

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It was a commercial unit with a three-bedroomed flat above, spread over three floors.

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Historic subsidence had caused rather odd, curious angles.

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One of the bedrooms was this quirky attic conversion.

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The property was purchased for £91,000

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by graphic designer Steven and Rachel, who works in finance.

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For her, it could be a dream come true.

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I've always sort of wanted... Like every young girl, I like shopping, so having a clothes shop.

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So has Rachel's passion for fashion materialised in her own shop?

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# We are living in a material world And I am a material girl... #

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We're back after six months to see if Rachel's dreams have become reality or she took a reality check.

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# A material...a material

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# Girl Living in a material world... #

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Practicality took precedence over passion.

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The shop, even though a couple of weeks from completion, has been let to a tattoo parlour.

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I still hope one day to have something. It would have been ideal,

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but to get people in and get the rent, we've been practical. But I still have hopes for the future.

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We've spent quite a lot of time doing the shop.

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They've done a lot of the work themselves to help us out.

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We've really concentrated on the flat for the last few months.

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Hopefully, the tenants in the shop will be in in a couple of weeks.

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Let's find out what's been happening in the flat.

0:24:530:24:58

The once-shabby kitchen has been given a much-needed makeover.

0:24:580:25:02

# Totally make me over! Make me over

0:25:020:25:07

# I wanna be made over I wanna be made over... #

0:25:070:25:13

We've completely redone the kitchen.

0:25:130:25:15

We've gone for both sides, rather than just one before. Black gloss, classy-looking, modern.

0:25:150:25:22

We could have gone for a cheaper one, but we wanted the look right.

0:25:220:25:27

Something I would like to live with. We had to completely redo it.

0:25:270:25:32

Floor's new. It really complemented the units and that.

0:25:320:25:36

Really happy with the kitchen. It'll be the main room of the house, somewhere to prepare a nice meal.

0:25:360:25:43

The kitchen is now stylish and chic.

0:25:510:25:54

Let's take a look at the living room. The off-putting green colour has been replaced

0:25:540:25:59

by warm and welcoming colours.

0:25:590:26:02

Despite this youthful makeover, this 100-year-old property still reveals the odd wrinkle.

0:26:050:26:12

Onwards and upwards to the second floor.

0:26:120:26:16

The once drab and dingy master bedroom is now light and bright.

0:26:160:26:21

But the main worry was always the second bedroom, which was riddled with damp.

0:26:220:26:28

We've done a lot of work in this room. Originally, there was a lot of damp coming from this wall.

0:26:330:26:40

We thought the problem was the external wall, but it wasn't.

0:26:400:26:44

It was coming in from the roof. A lot got spent on that.

0:26:440:26:48

But in this room we've replastered completely. The beam's higher, so I can walk under it.

0:26:480:26:54

We've recarpeted, repainted. It's just a brand new room, so we're very happy with this room.

0:26:540:27:00

The roof repairs meant the couple's £10,000 budget had to be revised rapidly.

0:27:000:27:06

We've gone over the £10,000. We're probably up to £15,000.

0:27:070:27:12

We've still got some to spend, so it's been quite tight.

0:27:120:27:16

Obviously, the roof was the major problem area. It cost around £5,000 just to sort that out.

0:27:160:27:23

It's been doable. It's just been hard work.

0:27:230:27:27

But we scraped it together, so we should be able to finish off just fine.

0:27:270:27:32

The attic conversion certainly had character.

0:27:320:27:36

Steven and Rachel added a second window, bringing natural light into the kooky, but cosy corners.

0:27:390:27:46

They have removed the skylight and expect to complete the work in here in three weeks,

0:27:500:27:58

putting them six months behind schedule.

0:27:580:28:02

It has been hard trying to find the time to do this. Both of us work full-time.

0:28:030:28:09

Steve's dad's had the most input. It wouldn't have been possible without him, so big thanks there.

0:28:090:28:16

It's a lot of hard work, a lot of late nights. We've been quite tired, but all worthwhile.

0:28:160:28:22

We invited two local estate agents to give us their opinion on Rachel and Steven's hard work.

0:28:240:28:32

I'm very impressed with what they've done. It's not dramatic,

0:28:320:28:36

but it's very nice, very clean and they've done everything I'd expect.

0:28:360:28:41

It's very good. They've done a very nice job, particularly the kitchen.

0:28:410:28:45

The top floor is particularly nice. It's got lots of character.

0:28:450:28:50

Rachel and Steven will have spent around £20,000 when they finish the renovation,

0:28:520:28:57

making their total outlay approximately 110 grand.

0:28:570:29:02

The shop is already being rented out for £550 per calendar month,

0:29:020:29:06

which the estate agents agree is a good income. What could the flat be rented out for?

0:29:060:29:12

For the flat upstairs,

0:29:120:29:15

I'd expect to achieve a rental in the region of £550 per calendar month.

0:29:150:29:19

If you were letting the flat, I would recommend an asking price around £450 per calendar month.

0:29:190:29:25

Those figures, along with the rent for the shop, would give them an impressive 11-12% yield.

0:29:270:29:34

What would the sell-on valuations be?

0:29:340:29:39

On the shop, I'd expect to get more than £60,000, probably not much more than £70,000.

0:29:390:29:45

For the flat, I'd expect to achieve somewhere between £115,000 and £125,000.

0:29:450:29:50

That's a combined value of £175,000-£195,000, if sold separately,

0:29:520:29:58

but what if the property was marketed as a whole?

0:29:580:30:02

We have a real problem with the sale of flats over shops presently.

0:30:020:30:07

Mortgages are almost impossible to get. I would suggest to quote an asking price of £130,000.

0:30:070:30:15

Quite a difference in valuations.

0:30:150:30:17

Those figures mean the couple could make a pre-tax profit of between £20,000 and £85,000.

0:30:170:30:24

Even if it's only worth the lower amount, and I'm hoping it's worth more towards the higher one,

0:30:240:30:30

the fact we'd be renting it and getting an income for a few years,

0:30:300:30:35

-it's been well worthwhile doing.

-What's the future for Rachel's fashion boutique?

0:30:350:30:41

Well, you know, never say never. I'm working full-time at the moment,

0:30:420:30:46

but it's still a little pipe dream. I've not closed the door on it yet.

0:30:460:30:50

# We're living in a material world. #

0:30:500:30:54

Tooting in southwest London is undergoing regeneration,

0:31:000:31:05

which is encouraging an influx of new shops and residents to the area.

0:31:050:31:09

You could say Tooting is tooting its own horn.

0:31:090:31:13

The property I'm here to see is this white, three-bedroomed terrace.

0:31:140:31:18

It had an auction guide price of £250,000. In 2007, before the downturn in property values,

0:31:200:31:27

a similar house on this street sold for 330 grand.

0:31:270:31:32

This one's near one of London's largest hospitals

0:31:350:31:40

and staff based there are a very useful resource for rentals.

0:31:400:31:43

The first thing that hits me when I walk in here is how spacious it is!

0:31:460:31:52

Think about it. This is a Victorian villa.

0:31:520:31:55

I'd expect a wall here, a bit of a dark space, a room here,

0:31:550:32:00

a wall going off here, but somebody's taken the time to really open this place up.

0:32:000:32:05

You've got a big arch, an archway leading to the stairs,

0:32:050:32:09

some nice wooden flooring. I'm not sure if I'd think about putting one of these rooms back

0:32:090:32:16

because this is a huge space. I'm just not sure whether it's too big or not.

0:32:160:32:21

Let's have a look through here.

0:32:210:32:24

Well, what a great surprise.

0:32:240:32:27

Again, you've got an incredible space in here, but something that does make me laugh a bit

0:32:270:32:33

is the mock Tudor beams.

0:32:330:32:35

What I think has happened is this one here is boxing in an RSJ

0:32:350:32:40

and they've taken a bit of inspiration from that and decided to go a bit haywire.

0:32:400:32:46

It's lots of different eras. You've got green '80s tiles, mixed with quite modern units.

0:32:460:32:53

It kind of clashes a bit and it's not really working, so this kitchen needs an overhaul,

0:32:530:32:59

but the space is good, the light is good, so it could work well

0:32:590:33:04

but with a bit of time and money spent on it.

0:33:040:33:08

The clash of styles isn't working. How should we solve this kitchen crisis?

0:33:080:33:14

# Rip it up and start again

0:33:150:33:19

# Rip it up and start again... #

0:33:210:33:24

And when you've finished ripping up the kitchen, it's time to start clearing up the garden

0:33:260:33:33

or head on up top.

0:33:330:33:35

I think we've established this house feels spacious, there's loads of natural light.

0:33:350:33:41

Even up there - look. There's a skylight with natural daylight. I love to see that.

0:33:410:33:47

And on the half landing we've got the bathroom with tongue and groove woodwork. A few issues to address,

0:33:470:33:54

but it is a very good size.

0:33:540:33:57

And then up here we've got three bedrooms. Now, two really good-sized doubles

0:33:570:34:03

and a very, very small single. This is how small it is, look.

0:34:030:34:08

I can almost touch the walls. Now you could get rid of these and open this space up.

0:34:080:34:14

Do we want three bedrooms here? Well, the answer is, I think, yes.

0:34:140:34:19

It's great letting potential, a hospital just up the road,

0:34:190:34:23

fantastic to let to doctors and nurses. It offers another bedroom.

0:34:230:34:28

So I think this property ticks all the boxes.

0:34:280:34:32

With this property, I've got my eye on the rental returns.

0:34:340:34:39

Even a small bedroom like this in the right market will rent for the right price.

0:34:390:34:45

The master bedroom has similar fitted wardrobes. I'd remove them and go for a clean, bright finish.

0:34:490:34:55

The dated dark wood design continues in the second bedroom.

0:34:550:35:00

The guide price for this property was £250,000.

0:35:000:35:03

I asked a local estate agent to give us the lowdown on this area.

0:35:050:35:10

Tooting's a fabulous area. Tooting High Street

0:35:100:35:14

is very good for restaurants.

0:35:140:35:17

It's very popular for value for money.

0:35:170:35:20

We're seeing a lot of families coming in to the Tooting area.

0:35:200:35:25

It's good for buying and selling because of the hospital.

0:35:250:35:29

When renovated, what could the market value be?

0:35:310:35:35

'Similar properties to this in the local area, you're looking at an asking price

0:35:360:35:42

'of £340,000-£350,000. Realistically speaking,'

0:35:420:35:46

the prices to achieve on something like this will be around about £320,000-£330,000.

0:35:460:35:52

Obviously it's going to depend on the finish of the property.

0:35:520:35:55

And if the house was rented out?

0:35:550:35:58

Something like this, you'd be looking around about £1,200-£1,300 per calendar month.

0:35:580:36:04

The third bedroom is on the small side, but the rental market is extremely strong here.

0:36:050:36:12

It's going to need a bit of work, but once complete, this is a fantastic investment opportunity

0:36:140:36:20

IF you get it for the right price. Let's find out who wanted it.

0:36:200:36:24

Who'd like to start on this? I don't know...300?

0:36:250:36:29

300?

0:36:290:36:31

Start the other way. 250, then.

0:36:310:36:34

250. 255 with another lady. 260.

0:36:340:36:39

265? 265.

0:36:390:36:42

270.

0:36:420:36:44

275. 280.

0:36:440:36:46

285. 290?

0:36:470:36:50

290? Anywhere else?

0:36:500:36:52

28... 290? Yeah?

0:36:520:36:55

300. 301?

0:36:550:36:57

301. 302, sir?

0:36:580:37:02

305. 306?

0:37:020:37:04

305, first time.

0:37:060:37:09

Second time. Third and last time. All done? Sold.

0:37:090:37:14

305. Well bid.

0:37:140:37:16

With his successful bid of £305,000, it was John who bought it.

0:37:160:37:21

He paid a whopping 55 grand over the guide price.

0:37:230:37:27

He works in marketing, but has recently tried property developing.

0:37:270:37:32

This will be his second investment purchase.

0:37:320:37:36

John, congratulations.

0:37:390:37:41

-Well done.

-Nice to meet you.

-How was the auction for you?

-Panic, panic.

0:37:410:37:46

-Why?

-Because I didn't really plan to buy this one. I had seen it.

0:37:460:37:50

But I saw a few that day and I went to go for a flat, actually.

0:37:500:37:57

-Yeah.

-And I didn't get it. So panic set in. I'd been to auctions before and was always second bidder.

0:37:570:38:04

So I'd missed out on a couple and I thought, "I've got to buy something!"

0:38:040:38:09

-So, kind of, here I am.

-How are you going to learn to control yourself

0:38:090:38:14

-in terms of going to auctions?

-I've learned!

-Spending your money, overspending...!

0:38:140:38:20

-What are you playing at?

-I did one auction property before and I kind of got it right,

0:38:200:38:26

-so I got a bit full of myself.

-Did you?

-I was overly confident! Tooting's not in my comfort zone.

0:38:260:38:32

I didn't know the area that well. I did a bit of research, but the roads vary

0:38:320:38:38

from road to road. If I'd bought round the corner, I'd be quids in.

0:38:380:38:42

But because I'm on this road, a main road by a junction, it hasn't got the value of round the corner.

0:38:420:38:48

So I did some research, but I've got to do more next time.

0:38:480:38:52

And learn from it. It's a bit of a painful mistake,

0:38:520:38:57

-but I won't do it again!

-So when you first looked at this property, what did you like about it?

0:38:570:39:03

Not a lot, to be honest. If I'm really honest, I didn't.

0:39:030:39:07

It's OK. Location, actually.

0:39:070:39:10

It's right next to a hospital, so for letting it's a winner.

0:39:100:39:14

My immediate thing was to do it up and flip it, but I don't think I'll get anything out of that,

0:39:140:39:20

so it's long term.

0:39:200:39:23

Flipping this property, meaning doing it up quickly and selling on, won't make John much profit,

0:39:230:39:30

bearing in mind the cost of renovations and his £305,000 price.

0:39:300:39:34

That means the cupboard is almost bare in terms of paying for work.

0:39:340:39:39

-So what sort of budget have you got to spend on this?

-Well, I haven't got any budget now! I've blown it.

0:39:410:39:48

I really don't want to spend much over £10,000. There's no real structural work.

0:39:480:39:54

Just new kitchen, new bathroom and partition walls.

0:39:540:39:59

And then a good paint, skimming the walls. And we'll take it from there.

0:39:590:40:04

-What about that nice pink wall at the front?

-I think I might paint the whole house pink.

0:40:040:40:10

-Stop it! What colour can we expect this house to be painted?

-It'll just be neutral colours.

0:40:100:40:17

-Rebuild that wall.

-And are you going to be doing this work?

-God, no.

0:40:170:40:21

I've got a good set of builders. They can turn a place over for me.

0:40:210:40:26

I'm happy to demolish. I like that bit, but don't get me doing anything crafty. It's not going to work.

0:40:260:40:33

It's going to look hideous.

0:40:330:40:36

They're really busy guys as well. We're going to schedule when they can start work.

0:40:360:40:41

I'm hoping as soon as next week. They'll start cracking the whip.

0:40:410:40:46

Hopefully, they'll turn it round within a matter of weeks.

0:40:460:40:52

John's right to get this onto the rental market as soon as possible,

0:40:530:40:57

turning it from money pit to money maker.

0:40:570:41:01

He'll need to keep that positive attitude if he's going to turn it around on schedule.

0:41:010:41:07

# We've got to stay positive

0:41:070:41:10

# We gotta stay positive... #

0:41:130:41:15

-I want to see you make a success of this.

-Thank you.

-And I'm desperate to see it with these beams down!

0:41:150:41:23

Give this house a personality. It's a mish-mash.

0:41:230:41:27

-It's been lovely meeting you.

-And you.

-And good luck. Well done.

0:41:270:41:31

Poor old John. Auction fever certainly got the better of him

0:41:330:41:38

and he paid well over the odds. It's a lesson to you all -

0:41:380:41:42

sticking to budgets is crucial if you want to succeed at this.

0:41:420:41:46

The big question now is will he stick to his £10,000 budget?

0:41:460:41:51

And will this wall remain pink?

0:41:510:41:54

You can find out how John gets on later on in the programme.

0:41:540:41:58

Buying your property for the right price is the first step to success.

0:42:010:42:05

But the next step is just as important - sticking to timescales and budgets is the only way

0:42:050:42:11

-to a decent profit.

-Let's see how our purchasers are progressing.

0:42:110:42:16

Let's head back to Cornwall

0:42:160:42:19

where, on a wet and windy day, I met recently-retired production engineer Moss and his wife Ann.

0:42:190:42:26

The couple had moved to the southwest from the Midlands

0:42:260:42:31

and Moss had promised Ann her dream home.

0:42:310:42:35

I promised her a period property,

0:42:350:42:38

not much to do and a sea view.

0:42:390:42:41

So I haven't scored on any of those yet!

0:42:410:42:45

So the purchase of this 1970s, two-bedroomed house for £101,000

0:42:500:42:57

wasn't quite what Ann had in mind.

0:42:570:42:59

But it would allow Moss to try his hand at house renovation

0:42:590:43:03

to see if a new career in property development beckoned.

0:43:030:43:08

Six months later, we're back.

0:43:090:43:11

The weather has brightened up and so has the exterior of the house.

0:43:150:43:19

Let's take a look at the interior.

0:43:190:43:23

The kitchen has been transformed with the '70s style banished forever.

0:43:260:43:32

There are still a couple of finishing touches to do, but the work looks top quality so far.

0:43:320:43:38

Once the plumber had plumbed us in, I put the units together

0:43:380:43:43

and worktops and whatever else. We're now in the process of tiling and painting.

0:43:430:43:49

Their living area is very much still a work in progress

0:43:500:43:55

as Moss has been using it as a workroom.

0:43:550:43:59

He has installed a new wood burner, which adds some real rural charm to this modern house.

0:43:590:44:05

When we came, I tried to light a fire in the existing wood burner

0:44:060:44:10

and soon found that the top was cracked. So after clearing the smoke from the living room,

0:44:100:44:17

we decided we'd replace the wood burner itself.

0:44:170:44:21

The people replacing it for us said that the stack was not, in fact, up to the present specification.

0:44:210:44:28

So we had to replace the stack and the wood burner in one go.

0:44:290:44:34

The cluttered garden has been cleared, revealing its true size.

0:44:350:44:40

This type of house is fairly standard for this area,

0:44:430:44:47

but the garden has blossomed into a distinguishing feature.

0:44:470:44:52

We had loads of trees chopped down. Somebody came to do them

0:44:520:44:56

and we did the rest ourselves. We chopped lots of stuff down.

0:44:560:45:01

-Still needs plenty of work, though. That's your job.

-My job.

0:45:010:45:06

And what about that beautiful camelliaI was so fond of?

0:45:090:45:13

That was one of the first things that was taken away.

0:45:130:45:18

I think it ended up in our fire.

0:45:180:45:20

# Oh, Camellia

0:45:200:45:22

# Won't you take me away... #

0:45:220:45:25

Oh, Moss! How could you?

0:45:270:45:30

Anyway, let's take a look upstairs.

0:45:310:45:33

The bedrooms have been redecorated in warm, cosy colours.

0:45:410:45:45

The couple have replaced the doors and hung feature wallpaper.

0:45:450:45:49

The bedrooms were riddled with damp, a problem trickier to solve than first thought.

0:45:560:46:02

Effectively, we've had to replace whole walls just to get rid of the damp.

0:46:030:46:09

We're still suffering with some damp. We replaced the ceilings.

0:46:090:46:14

All of the ceilings. New plasterboard plastered over.

0:46:140:46:18

We've struggled along, haven't we?

0:46:180:46:21

In the bathroom, Moss has removed the multi-coloured bathroom suite

0:46:240:46:29

and replaced it with a modern P-shaped bath and matching sink and toilet.

0:46:290:46:34

There's still a lot of work to do, but the couple have recently moved from their rented accommodation

0:46:340:46:40

and into their new property.

0:46:400:46:43

They hope living and working here will speed up the renovation.

0:46:440:46:49

We've been in the property six weeks.

0:46:500:46:52

Prior to that, I was travelling on a daily basis

0:46:520:46:57

from Devon, which is a 140-mile round trip.

0:46:570:47:01

-So that was tiring us out, wasn't it?

-Yeah.

0:47:010:47:06

-You camped a few times.

-Yes, I did.

-I wouldn't camp!

0:47:060:47:10

Their original two and a half month schedule has long since passed.

0:47:110:47:16

But have they kept to their £15,000 budget?

0:47:160:47:21

We've overspent now by about £3,000,

0:47:230:47:26

but I think we've got everything in place. We haven't got to spend any more,

0:47:260:47:32

other than carpeting the lounge.

0:47:320:47:34

So, you know, if we're £3,500 or £4,000 over the top,

0:47:340:47:40

that wouldn't worry me unduly.

0:47:400:47:44

Moss and Ann's projected total outlay on this house is £120,000.

0:47:470:47:51

We asked two local property experts for their opinion.

0:47:530:47:58

The biggest selling point

0:47:580:48:01

for the house, without a shadow of a doubt, is the garden.

0:48:010:48:05

It's really bug, quite mature, lots of trees and things for nooks and crannies.

0:48:050:48:11

As you approach from the front, it looks like it could be just an ordinary house in a close,

0:48:110:48:17

but it's far from it.

0:48:170:48:19

The rear garden is a good asset. It's a nice size,

0:48:190:48:23

it's fairly level, flat. It's obviously safe if you have children, it's quite secure.

0:48:230:48:29

What do the experts believe this property could achieve if rented out?

0:48:310:48:36

Rental, per calendar month, is going to push on towards £600, but probably not quite.

0:48:360:48:42

A rental figure for a property such as this would be in the region of around £550 per calendar month.

0:48:420:48:48

And the sell on value, bearing in mind Moss and Ann's total outlay of £120,000?

0:48:490:48:56

The value of the property when it is in absolutely apple pie order would be in the region of £140,000.

0:48:560:49:02

The resale value of the property once completed will be in the region of £140,000-£145,000.

0:49:020:49:08

-Cor!

-Gosh.

0:49:090:49:11

-That's a lot more than we thought.

-That's great news, yeah.

0:49:110:49:15

-That's good.

-The whole idea was for us not to lose money, but if we can make a bit, even better.

0:49:150:49:21

So what's the plan for Moss's property developing future?

0:49:220:49:27

-And will Ann forget her period property by the sea?

-We'll live here for 2 or 3 years,

0:49:270:49:34

but try to find somewhere, maybe at auction again.

0:49:340:49:38

-It would be nice to get the house that you deserve, dear.

-Yeah.

-Yes.

0:49:380:49:42

Yes.

0:49:420:49:44

Let's return to Tooting in London where I met John who works in marketing.

0:49:510:49:57

He had aspirations to be a full-time property developer and purchased this three-bedroom terrace

0:49:580:50:04

initially hoping to do it up quickly and sell on.

0:50:040:50:09

John's high purchase price of £305,000 left only the narrowest of margins to turn a profit.

0:50:120:50:18

Why did this would-be developer pay so much?

0:50:180:50:23

-So how was the auction for you?

-Panic set in!

0:50:230:50:27

I'd been to a couple of auctions and missed out on a couple.

0:50:270:50:32

I got to the point, "I've got to buy something!" So here I am, here we are.

0:50:320:50:38

Nearby St George's Hospital is one of London's largest,

0:50:500:50:55

so a ready-made market for tenants. The property had three bedrooms - two doubles and a very small single.

0:50:550:51:02

There's also a good-sized bathroom.

0:51:020:51:05

And downstairs there's a large, open-plan, living/dining area

0:51:060:51:10

and, of course, that lovely mock Tudor kitchen!

0:51:100:51:15

Three months later, we came back.

0:51:150:51:18

The front wall has been rebuilt and is thankfully no longer pink!

0:51:230:51:29

Like the rest of the exterior, it's been brightened up with a new coat of white paint.

0:51:290:51:35

The mock Tudor kitchen is no more.

0:51:360:51:39

John has replaced the dated decor with clean, crisp, white units and tiles.

0:51:390:51:44

The open-plan living area has been divided back into two rooms.

0:51:480:51:52

The room at the rear will now be a communal living/ dining room leading into the new kitchen.

0:51:520:51:59

What we've done, we've opened up this area, this slightly wider doorway.

0:51:590:52:05

It lets some more light in, back into this room here.

0:52:050:52:09

We've got an L-shaped kitchen here, glossy white to reflect the light as much as possible.

0:52:090:52:14

And we've got a roof light to let in some extra light to flood back in.

0:52:140:52:19

And we've opened up the space here. There was an old serving hatch that's now a doorway

0:52:190:52:25

to create more sense of an open kitchen/lounge area.

0:52:250:52:29

The room on the other side of the partition wall will be a bedroom.

0:52:340:52:40

John is wisely maximising his rental returns. He's already let the property out to four people.

0:52:400:52:46

I've got four trainee doctors going to be moving in very shortly.

0:52:460:52:51

That's bang on what I wanted, so I'm really pleased.

0:52:510:52:55

I'm getting £1,500 a month so that's 18 grand a year. I'm quite happy.

0:52:550:53:00

John's cleaning up with rental income with his student doctors.

0:53:020:53:07

Let's give upstairs a check-up.

0:53:070:53:10

The three bedrooms all had floor-to-ceiling fitted wardrobes.

0:53:120:53:16

John's removed them, replastered the walls and ceilings and painted each room.

0:53:180:53:24

Yes, you've guessed it - it's clinical white.

0:53:240:53:28

He has new bedroom furniture ready to be assembled.

0:53:280:53:32

He still has plenty of work to do in the bathroom.

0:53:320:53:36

What we've done with the upstairs is we've kept the same configuration of three bedrooms and one bathroom.

0:53:410:53:48

We thought about moving the bathroom into this small room. It would have seemed to make sense.

0:53:480:53:54

It would free up another double bedroom, but getting the services into the front - drainage, sewerage,

0:53:540:54:00

plumbing - is a bit of a no go.

0:54:000:54:03

John's original budget was £10,000. Has he managed to keep to that?

0:54:030:54:07

I was hoping to spend 10 grand, but I didn't. I'm nearer £20,000.

0:54:090:54:14

But considering we've overhauled the whole of the property, for £20,000 we've done really well.

0:54:140:54:20

That includes fittings for the kitchen and me buying furniture.

0:54:200:54:24

John purchased the property for £305,000 and has spent 20 grand on the renovation.

0:54:260:54:32

After three months, have his alterations had any impact on the value here?

0:54:330:54:38

Let's hear from two local estate agents.

0:54:400:54:44

First impressions, it's good.

0:54:440:54:46

However, some aspects of the work could be better, the finishing.

0:54:460:54:51

However, for the rental purpose, the finish is fine.

0:54:510:54:55

The open plan kitchen/diner works very well.

0:54:550:54:59

Accommodation such as this needs an area for everybody

0:54:590:55:03

to come into and use as a communal part. It works very, very well.

0:55:030:55:07

The estate agents agree that John's getting the going rate with his rental income of £1,500 per month,

0:55:100:55:17

but if he were to sell, bearing in mind his total outlay of £325,000,

0:55:170:55:23

what could this place achieve?

0:55:230:55:25

If this property was up for sale, in my opinion, it would be valued from £360,000-£380,000.

0:55:290:55:35

If I put the property on the market today, I'd be expecting approximately £350,000-£360,000.

0:55:350:55:42

That's good to hear. It really is.

0:55:420:55:45

I was thinking if I wanted to make a quick sale and get out, I'd think 350.

0:55:450:55:51

If I want to hang on and test the market for a bit, I'd push it,

0:55:510:55:55

but I think that makes me realise that I've done OK and if I sit on it for two years, maybe it'll be better.

0:55:550:56:02

So that's really good news.

0:56:020:56:04

When John initially bought this house, he feared his career as a property developer

0:56:070:56:13

was in a critical condition, but his hard work has brought it back to life. What has he learned?

0:56:130:56:20

Just relax about it. No point getting uptight.

0:56:200:56:24

It's only bricks and mortar. So I think, yeah, great. Let's crack on with the next one.

0:56:240:56:31

# We gotta stay positive! #

0:56:330:56:35

So has all this whetted your appetite for buying at auction?

0:56:380:56:43

-If so, there will be more compelling stories for you next time.

-We'll see you then.

-Goodbye.

0:56:430:56:49

Subtitles by Subtext for Red Bee Media Ltd - 2011

0:56:580:57:02

Email [email protected]

0:57:070:57:09

Martin Roberts and Lucy Alexander visit a three bedroomed house in London, a two bedroomed house in Cornwall and a three bedroom flat in Wiltshire. All of these properties have been sold at auction; Martin and Lucy find out who bought them, and what they paid when they went under the hammer.


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