Episode 37 Homes Under the Hammer

Hello. Do you think you could hack it in the world of property?

If you get it right, it can be a great way to earn money.

And one way to be best placed is to buy your home under the hammer.

There are tense moments in the auction room. Who will make the right bid at the right price?

Yes. Properties can change people's fortunes for better or worse.

Here's what inspired people on today's show.

'This property in Devon looks cracking, but is it all it's cracked up to be?'

So what have we got? That's not good.

'I'm seeking inspiration when it comes to the development potential

'of this auction lot in Kent.'

Any ideas what to do with this place?

'And I visit this darling little flat in Darlington.'

I have to say it - there really is nothing wrong with this place!

'All these properties have been sold at auction.

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

-Sold!

# Look at the sun shining

# Down on our love... #

I'm in Exmouth in Devon, which, with its glorious golden sand, is a popular tourist destination.

There's a direct rail link from London to Exmouth's lively town centre.

All in all, there's a lot to like here.

Well, the property I'm here to see is in a nice residential area,

just a short walk up from the town centre if you don't mind the slight hill.

And this is it. Guide price was 95,000 quid. Three-bed semi. Let's take a look inside.

On first impressions, this is a lovely family home.

Paid up for around the guide price of 95 grand and you may have bagged a bargain.

# I'd call that a bargain The best I ever had... #

So what have we got?

Right.

That's not good. A lot of people, you know, walk through that front door,

see that huge great crack here and walk straight out again.

That may not be a bad idea. I need to find out more about the property before I make a decision.

What have we got apart from some issues which need looking at?

A front living room with damp in that bay window.

Through to a rear, well, I don't know, rear sitting room, I suppose?

Lots of storage space. Bit of a larder there. That's quite nice.

More storage space here.

Oh!

Right. Not actually storage space.

That's your kitchen.

Not looking too good so far, is it?

The kitchen is pint-sized and pokey.

I'd open it up into the rear sitting room to create a spacious kitchen/diner.

However, the real cause for concern is the damp in the front sitting room and that crack in the hall.

# Crack me up

# You crack me up... #

Let's take a look up top.

So, I wonder if there are any more surprises in store upstairs?

Ah... Unusual little light fitting on the landing there.

How odd to have a light on the banister like that.

Anyway, three bedrooms, all reasonable size. One there. Big one at the front with the bay window.

Clearly, total refurbishment required. Your bathroom is upstairs which is good news.

Then into the rear bedroom and you can't get away from the overriding thing about this property.

And that is that there is a serious issue.

Look at this. That is a crack and a half. There's a pound coin.

Look how big it is. Not good at all.

I tell you what, it's going to cost you more than a quid to put that right.

More than a pretty penny. What we're talking here is serious subsidence.

This whole corner of the property has sunk down for whatever reason.

My guess would be drains. To sort it out, it'll need underpinning.

For a start, it's not going to be mortgageable in the current state.

All in all, we're looking at a property that's got serious problems.

# It's an SOS, it's an SOS

# Oh, yes, oh, yes

# It's an SOS... #

Well, at the rear corner of the property, there is a drain.

And I don't think it's coincidental that that's there

and it's this corner of the property that is giving all the problems.

Probably that drain has broken down and water is just seeping into the ground,

meaning that the building itself is sinking. And look at these bricks.

It's not just inside that there are problems.

The exterior brickwork is cracking as well here, up there, above the window.

What will you have to do to sort it out? Dig out, underpin - that means replacing the foundations.

Sort out whatever the problem is.

And you know what? All of that is an expensive job.

So let's try and cheer ourselves up - the garden of the property.

Very nice. It's very long. And apart from needing a bit of sorting out, it's a good space,

which is just as well because if I had bought this place, I might have to live out here.

# When tonight you'll be sleeping under the stars... #

But before I pitch my tent and start singing songs around the camp fire,

let's ask a local estate agent for his opinion on this cracking property.

The guide price for this three-bed semi was 95,000.

It's in need of some love and attention.

There is some subsidence, so it needs some work doing to it

to make it an attractive family home.

The kitchen is obviously very, very small, not adequate for modern-day living.

The house offers quite a few opportunities.

The main one would be to put a single storey extension on the back

and make the kitchen there and extend the dining room slightly.

Once renovated, what could it achieve on the rental market?

When the property's renovated,

the property will achieve a rental value of £850 per calendar month.

And the sell-on value?

When the property is renovated,

it'll have a resale value of £175,000.

So, a classic case of why you have to go and visit a property before buying it at auction.

You could see a picture in the catalogue and think, "Fantastic."

It's only when you get here that you discover the problems. They're not insurmountable.

If you get it for the right price, you can allow money for the remedial works

and still make money out of it. Let's see who fancied taking it on when it went under the hammer.

Can I ask for opening bids of 90 on this one?

Would anybody like to open the bids here at 90?

Anybody come in and bid 85?

80,000? Do I have anybody bidding...

I have. Thank you. 80,000 I have, sat just in front of me.

Looking for 85,000. 85 I have, just a little bit further back. Looking for 90.

-87.

-I'll take 87 at this point, madam. 87. Looking still for 90.

At 90. Thank you very much. Do I have any other bidders? 92.

I have 92. Looking at 94. 92. I have 93 sat just on my right.

'This auction lot was keenly contested with lots of interested parties.

'We pick it up again at £117,500.'

Lady's popped her hand up again. 117 and a half. 118. Thank you, sir.

118 with the gentleman still sat in the middle of the room. 118 and a half from the lady.

119 from the gentleman.

120. Thank you, madam. 120. 121, sir?

121. Thank you very much. At 121. I'm looking for 122.

Going once at 121.

Going twice at 121.

Third and final time. Just looking at all the bidders.

Yours, sir, at 121. Thank you, sir.

'The successful bid of 121,000 was made by Cameron and his wife Karen.

'Karen runs a holiday let business

'while Cameron's a builder by trade and a keen rugby player.

'So let's find out how he intends to tackle this house.'

Cameron, Karen, congratulations.

-Thank you.

-Well done. Bought a property with a...few problems.

Somewhat.

Obviously not fazed by it enough not to buy it?

-No, it's what we do, so...

-Tell me more.

-We buy cheap properties and do them up and sell them on.

-Right.

-Simple as that.

-So the subsidence then would probably have put quite a few people off and is quite scary.

We actually saw the report at the estate agents and I read it.

And it said that it was caused by broken drains, so...it seems quite an easy one to fix.

Well, that's the cause, but the actual result is that...

There's two ways of looking at subsidence. You either, in section,

actually re-concrete at the foundations or you take it away.

-So we're going to take the back of the building away...

-Ah.

-Extend it.

And then that's actually done away with the subsidence in the same job.

'By removing the rear of the ground floor

'and building an extension which will require new foundations, or footings as they're also known,

'Cameron will fix the subsidence problem and increase the floor space of the house,

'all in one very smart move. I'm impressed.'

That makes sense because what's the point of re-building it as it is

-when with extra money you increase the property?

-It'll cost less.

Talk me through the numbers on that.

-To build an extension would cost me about 5,000.

-Five?

-And to underpin it is roughly £1,000 a metre.

And there's about seven metres to do.

-So how are you going to build an extension with five grand?

-I do 90% of the work myself.

-Right! Including bricklaying?

-Including the bricklaying, plastering, carpentry.

-Wow!

Electrics, central heating. I used to be a heating engineer and an electrician. And plastering as well.

-So you really are a jack of all trades?

-Yes.

-And a master of lots?

-I was going to say a master of none.

# I'm the jack of all trades

# You know that makes me the boss

# You're gonna get your money's worth

# No matter what it costs Hey, hey, hey... #

'Cameron and Karen have developed over 20 properties in the Exmouth area in the last 15 years.

'While Cameron deals with the building work, Karen's in charge of the cosmetic appearance.'

-Could you tell me more about what you do, Karen?

-I do more of the pretty bits.

I do decorating, tiling, coving.

Um..."gofering".

-Right. You're actually hands-on doing it all?

-Yes.

-Oh, great fun.

Yes. And I pick the colours, bathrooms, kitchens, because I've got a bit more taste.

Right!

LAUGHTER

'It's always ideal to have a mix of talent. And this couple certainly seem to be a great team.

'But do their big plans come with a big timeframe?'

-What's the timescale for doing the work?

-We've allowed ourselves 14 weeks,

but if we can do it quicker, then, you know, hey-ho.

And the budget for the whole amount?

We've got a budget of 15,000.

-Right. Including building the extension?

-Including building the extension.

-Well, wow!

-Good luck. We look forward to seeing how you get on.

-Thank you.

-Congratulations.

-Thank you.

-Thank you.

Well, Karen and Cameron not at all fazed by the problems of this property.

And I think they've come up with a really good solution for sorting it out.

Still, that £15,000 budget to do all that work - can they really stick to that?

Well, you can find out later in the show.

I'm in Hollingbourne and this is actually the busy A20 near Maidstone in the Kent countryside.

And I'm here today to see a piece of land with a solitary building on it.

So nothing unusual about that, you might think. And you'd be right.

Except the building is just 5 metres long by 2.5 metres wide.

So not huge by any standards.

So why buy it?

Well, that building also sits on just under a quarter of an acre of land.

And as Mark Twain once said, "Buy land. They're not making it any more."

I've seen many peculiar properties on Homes Under The Hammer

and I think this will be another for the curious and quirky file.

The building I've come to see is a former telephone repeater exchange.

I said, "Telephone repeater exchange." Ha-ha! Sorry.

Well, it is detached, you can see. It's freehold. And it was guided at just £15,000 to £20,000.

Well, I've no words of wisdom to quote on telephone repeater stations from Mark Twain,

but I know what Shania Twain would say...

# That don't impress me much

# Oh, no... #

So, this is what the inside of a repeater station looks like.

Not hugely exciting. But what we do have in terms of services

is electricity. Now I guess this trench down here would have housed the telephone cabling.

But there's no water, there's no gas.

Just one little window.

And not a lot of space to work with.

Any ideas what you could do with this place?

And the answer is probably knock it down.

The attraction of this auction lot is the land, not the building.

But the low guide price has set my alarm bells ringing.

So I'm not going to get hung up on this telephone repeater station.

# Every little thing that you say or do

# I'm hung up, I'm hung up on you... #

Now, according to the council, getting planning for building a dwelling here is very unlikely

because the plot is well outside any settlement boundaries.

And that means villages, towns, shops where people live and work.

So the principle of building a house here is against local and national policy.

So in most circumstances they will not allow new buildings outside these boundaries.

In these situations, talk to the planners

before you build your hopes up about building a house here.

The prospects of building on this plot might not look great at the moment,

but that could change in the future.

Broadly speaking, the price of land has gone up over the past ten years despite the recession,

so at least you're less likely to lose money here.

Time to find out what a local estate agent thinks

about this unusual auction lot,

which had a guide price of 15,000 to 20,000.

This plot is a really tight plot.

And to be honest, with the access on to the A20,

I feel it's going to be impossible to get any planning on it.

I think the problem is it's minute. It would have to be extended and I don't know how you'd extend it.

To put water or any other main facilities in would cost an absolute fortune.

It doesn't have any particular use, so you can't apply for change of use.

So you would have to put in some sort of proposal to the council to see what they might accept.

So it's not looking good in the estate agent's opinion.

But planning consent isn't completely ruled out. So you could see that as a glimmer of hope,

rather than a hopeless cause, depending on your outlook.

And you know me - even on a dreary day like today, I always like to look on the sunny side.

Yes, it's quaint. Yes, it's unusual.

And a potential money-spinner should you get permission to build on the plot of land here.

But who thought it was worth a punt at that guide price, I wonder? Let's go to auction and find out.

Guided at 15 to 20. What may I say? 15? 15 I have. 15. 16. 17.

18. 19. 20.

20 I have with Will. At £20,000 is bid.

At £20,000 I have. 22 is bid.

And 23? 23.

25. 28? No?

25,000 I have in the front row. At £25,000 is bid. 28 for anyone else?

At 25,000 then it's being sold for the first time.

At 25,000. Being sold for the second time at 25,000.

26 if it helps?

Being sold for the third and final time.

At 25,000, lady in the front. Are you all done?

'It might have its issues,

'but the interest in this lot pushed it 5,000 over the upper guide price.

'The successful bid of 25,000 came from Anna and her son Arkan.

'Anna's an eye surgeon and Arkan's a bricklayer.

'Anna has appeared on Homes Under The Hammer before

'when she bought and renovated this rundown and dilapidated house in Maidstone.

'I went to meet her and Arkan at their new purchase.'

Arkan and Anna, congratulations!

-Thank you.

-Thank you.

-Anna, we've actually met before, haven't we?

Yes, five years ago, I bought a house in Maidstone.

-And you appeared on Homes Under The Hammer, so you're obviously still buying properties at auctions?

-Yes.

-So who have you brought along with you today?

-This time, with my son, Arkan.

And he loves this small, little house.

And he's imagining he can live in it, so...

-You want to live in this?

-Well, ideally, it would be good to get planning permission

to build, you know...to extend the actual existing property.

You know, that would be the... you know, the ideal thing, really.

-And what would it look like?

-It would look like a tiny little cottage.

I'll build a chimney on the side. I think it would be brilliant, yeah.

What are the chances of you being able to convert this into residential?

-Very slim, probably.

-But would you like to do that?

-Yeah, I'd love to. You've got to try.

-Absolutely.

-I'll probably get refused again and again,

but, you know, we'll keep trying, you know.

'I do admire their ambition and enthusiasm, but it takes more than passion to get planning permission.'

-Tell me, Anna, did you decide to go to auction to buy this telephone repeater station?

-No.

We went to buy some other land at the end of the catalogue.

And I said, "If we didn't buy the other land, we'll waste all our time, so let's buy something else."

'Anna has bought three other auction properties before, but they didn't all make a profit.

'On this impulse buy, they broke the golden rule by not looking at the legal pack.

'They were also unable to heed the auction catalogue advice

'to make enquiries with the planners before bidding.'

-Arkan, do you think she's got a safe investment with her money?

-Well, it's land at the end of the day.

And whatever happens, land... Nothing can go wrong with land, you know.

So whether we develop it or not, eventually it's going to go up in value. It can't, you know, decrease.

'Arkan could be right. Their plans may sound wishful thinking,

'but in the long run if they can't get planning permission,

'Anna should get her money back if she decides to re-sell.'

So, guys, let's do some maths here. You've spent £25,000 so far on buying this.

How much more money have you got to sink into this project?

To build a small cottage or continuation to this to make a small cottage, a two-bedroom or something,

-maybe we'll need about 10,000.

-10,000?

-Yeah.

-10,000?

Yeah. Or more. I think 10,000 is enough.

10,000 to build a small cottage?

Yes. Small, small, you know. Between 10 and 15, but not more.

So are you in any hurry at all to try and get something out of this

-in the immediate future? Or are you prepared to hang on to it?

-I think we're prepared to hang on to it.

It's an investment, you know. If we keep getting turned down with our applications for planning permission,

I think we've got time to... you know, to sit on it.

-So really, if I were to say to you, "What is going to happen next," you just don't know, do you?

-Yeah.

I thought maybe if we apply for planning permission and we got it,

then say, "OK, we don't want to do anything." We can sell it with the planning permission,

-which makes a bit of profit, doesn't it?

-That would be a fantastic idea.

So you don't have to carry on doing all the work, but I think Arkan would be disappointed

-because he wanted it to be his home here, especially with this little...

-A place for a bed down there(!)

Guys, I'm really excited to find out what the future holds for this little telephone repeater station!

-It's been really nice to see you both again.

-Thank you very much.

-Thank you.

-Thank you.

Arkan and Anna have taken a risk on this one. Anna has lost money on investments in the past.

Let's hope she doesn't repeat the same mistakes again.

Stay on the line and find out what this repeater station is transformed into. I can't wait!

'Coming up - this one-bedroom flat in Darlington seems to have it all.

'It's in a great area and in good condition.'

So I'm liking this place a lot.

'In Kent, Anna and son Arkan are already planning their next project.'

-Next time you'll be the boss and I'll be the assistant.

-Oh!

'But first, what do the experts think of Cameron and Karen's handiwork?'

The kitchen/breakfast room is the main selling point.

# Let the sun shine Let the sun shine, baby... #

'Let's return to the sunny shores of Exmouth in Devon where I viewed this three-bed semi-detached.

'From the outside, it looked cracking.

'But on the inside, it was literally cracking up.

'There was serious subsidence caused by a leaking underground drain,

'washing away the footings to the rear of the house.

'But what some may have seen as major structural problems

'was little more than a minor inconvenience for builder Cameron and his wife Karen.

'They purchased the property at auction for 121,000.'

-Bought the property with a...few problems.

-Somewhat.

-Obviously not fazed by it enough not to buy it?

-No, it's what we do, so...

-Tell me more.

-We buy cheap properties and do them up and sell them on.

-Right.

-Simple as that.

'We've returned four months later to see if it really was as simple as Cameron expected

'and whether they'd cracked those subsidence problems.

'The exterior is looking spick-and-span. Let's take a peek inside.'

# Crack it

# We will crack it... #

It's looking good. And at the back where the damage was done?

# We will crack it... #

A crack-free zone. Was it all as simple as Cameron predicted?

The main problem I had was a broken drain.

When we removed the existing footings, we found they'd been washed away over a period of years.

So I dug down till I got to the rock, put in four-and-a-half tonnes of concrete, repaired the drain

and re-built the brickwork.

Well, it's easy-peasy if you know how.

In the building game, put your mind to it and you can do it.

On the downside, Cameron was unable to build the rear extension he'd planned

as the water board held rights of access to this sewer pipe.

But on the upside, that allowed Cameron and his wife Karen to splash the cash on the interior.

To the rear of the property was a dining room with a teeny-weeny kitchen running off it.

Now it's a roomy kitchen/diner, which I think is money well spent.

There was a small scullery and a walk-in pantry which we took out.

Supported the ceiling from the wall we removed. Re-plastered, re-wired.

And then fitted a good quality kitchen with integrated appliances and a range cooker.

This high-spec, high-style finish will be really appreciated by potential purchasers.

The kitchen is the heart of a family home and the open fire will be a cosy feature for this room.

And Cameron has added a cloakroom with a WC.

The sitting room has the same bright, fresh, family-friendly appeal.

He has removed the chimney breast to create more living space

and has vanquished all signs of the damp which looked and smelled bad.

Cameron and Karen work hand-in-hand on their renovations.

And whilst Cameron gets down and dirty with the hard labour,

Karen ensures the cosmetic appearance makes an impact.

My wife does quite a bit of interior designing on all the work we do.

She chose the colour scheme, the tiles, wallpaper, even down to the carpets and the vinyl floor.

But we always try and take on a property as if we'd like to live there ourselves.

And we just feel that the look has to be right

and whoever came in to look at it to buy it would say, "Wow, this is just what we want."

The instant impact of the quality finish and modern interior design continues in the master bedroom.

Karen's choice of colour palette and feature wallpaper

brings warmth and personality to the house.

The back bedroom, once riddled with cracks snaking across the walls and ceiling,

now looks as good as new.

All the plaster was removed and then we dry-lined it and skimmed it.

Cameron's matter-of-fact, can-do attitude makes it all sound so easy.

We've developed quite a few properties. This has been comparatively straightforward.

It was a bit of a walk in the park.

And in the bathroom, he's made the best use of a tight space.

The bathroom didn't work, so we decided to put the bath in the opposite direction,

reduced the door size to allow access,

and then put in a shower, towel rail and full white suite, top to bottom.

He's managed to finish the work within his three-and-a-half months' schedule,

but did he keep to his £15,000 budget?

The budget, basically, stayed as it was. We spent 14,400.

The extension, we didn't build, which would've cost us more.

But we decided to put a higher spec on the inside of the house, so the money was actually balanced out.

That means the couple's total outlay here is 135,400,

so within schedule and under budget.

What is the secret of their success?

I look at every property on the basis that I can do the majority of the work myself.

I am quite competent in most trades. And we constructively look at the property,

take it apart and put it back together again.

And we try and increase the value and to increase the wow factor,

so as when we sell it, we sell it quickly.

In fact, the property has already been snapped up.

We completed the job. We've had it valued. We put it on the market.

And we sold it within 24 hours. And we had three buyers at the asking price.

Now, that's what I call a wow factor.

Let's find out how much two local property experts

think the property could achieve

and how much Cameron and Karen actually sold it for.

My first impressions of the property

is that they've done an excellent job.

They've put wallpaper up and kept colours nice.

-And the kitchen and bathrooms are lovely.

-The property's been been done to a high standard.

The kitchen/breakfast room is the main selling point.

The rest has been done to a lovely standard.

They've put in a downstairs cloakroom, which with a family home is an excellent idea

and a really good selling point.

The decoration has been done to a lovely standard, retaining some original features as well

with picture rails and high skirting boards,

but also wallpaper in some rooms and some lovely finishing touches.

These experts really like all the couple have achieved with this property.

So bearing in mind their total spend of 135,400, what could they sell for?

If I were to market this property, I would put it on the market in the region of £170,000.

If the property was to go on the open market,

I'd expect to see it with an asking price in the region of £175,000.

Of course, Cameron has already accepted an offer he received

within 24 hours of putting it on the market, but for how much?

We had the two agents come out on the Tuesday.

We had two viewings for the following day. By the end of the following day, we had five viewings

and three offers of the asking price of 170. I'm over the moon with that.

Cameron's a perfect example for any would-be property developer.

He's really got this business cracked.

# Crack it... #

I'm in Darlington, County Durham.

The architecture here pays tribute to its rich Quaker heritage

with a statue of the first Quaker MP, Joseph Pease, taking pride of place in the town centre.

Well, the property I'm here to see is in the popular west end part of Darlington.

And walking along these pleasant residential streets, it's easy to see why it is so popular.

The property is a one-bedroom flat in this block. It looks fairly well-maintained from the outside.

Let's take a look inside.

The flat's on the second floor of this 25-year-old building.

And its guide price at auction was 59,950.

The approach is lovely with expansive gardens,

making you feel as though you're in a very peaceful park.

Well, whenever you're looking at a flat in a block, before you even get to the flat itself,

you want to look at the communal areas, the stairs, the grounds, etc.

The outside looks pretty good and it gets better in some ways when you come inside

because the stairway here has got a nice carpet. It's been recently painted. It's all boding well.

So hopes are set pretty high as you come through the door.

And do you know what? First impressions? Not too bad.

The carpet's tired. But it doesn't smell damp. Looks OK. Reasonably clean walls. Nice colours.

Bathroom? Yeah, reasonably trendy. So we like that. It's got a white suite. That's good news.

That's your bedroom. It's not huge, but not bad for a one-bedroom flat.

Kitchen? Well, yeah... It's not that huge.

But again, it's a one-bedroom flat.

And actually the units look to be in reasonable condition, so I'm liking this place a lot.

In fact, it's in such good nick that you could move in straight away without having to do much at all.

And finally, the living room. Yes, I mean, you've even got a balcony, looking out over the gardens!

I have to say it -

there really is nothing wrong with this place.

# Something tells me I'm into something good

# Something tells me I'm into something... #

And looking out over those well-kept gardens, are they expensive as well as expansive?

Don't forget that when you buy a flat it's really important that you check out the lease

or get your solicitor to do so. Along with the other tenants,

you will be partly responsible for the upkeep of the grounds, such as these communal lawns.

They won't cost much to look after, but you need to be aware of that.

In fact, the service charge here is £500 per annum, including building insurance.

But the ground rent's a mere £10 a year.

Time for a local estate agent to give us his opinion

of this cosy little flat.

Well, it needs a little bit of work doing to it.

But it's ideal for a first-time buyer

who wants their first home in a popular part of town.

As it's on the top floor, it might not suit everybody

because there's two flights of stairs to go up, carrying shopping.

Might be a problem. But apart from that, I don't see a great deal wrong.

I can't help but agree and being so close to the town centre, it could make an ideal rental unit.

What kind of income could it generate?

In the rental market, I would suggest it would achieve a rental income of around about £450 per calendar month.

If you manage to get the place for near its guide price of around 60,000,

it would be ripe for rental. It could achieve a very healthy yield,

making this gem of a property even more appealing.

# You're so desirable

# I can't resist you... #

What could the resale value be once it's been freshened up a bit?

In the sales market, I would suggest once the property's finished,

it would sell for a price of between £80,000 and £85,000.

Well, more often than you might think, properties like this do come up for auction.

There is absolutely nothing wrong with this flat.

You could literally move into it as it is or rent it out.

It's just a case of being there on the auction day.

Let's find out who was when it went under the hammer.

We'll move on now to lot number 46.

There with a price guide of 59,950.

60,000. Do I have 60,000 in the room anywhere?

60,000 right on the back wall.

Can I ask for 61,000 anywhere?

I've got 60,000 right on the back. I need 61.

61,000. It's against you. It's the lady at 61.

62 bid. 63.

64. 65.

You're shaking. At 65, do you not want to nod? We're selling to the lady at 65,000.

I'll take a half?

I'm selling it once at 65.

I'm selling for the second time at £65,000. Sold.

£65,000 to the lady in the pink shirt.

'The victor in that lightning fast auction was Jan.

'She bought the flat for £65,000 and was actually bidding for her daughter Abby.

'I went to meet Abby and her father Ray to find out more.'

-Abby, Ray, lovely to meet you both.

-And you.

-Hello.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-This is my first house.

I'm 23, so it's my first venture into getting my own home.

Wow! It is really difficult these days for first-time buyers to get on the property ladder.

-So what was your story?

-I've been living at home since I moved back from university three years ago.

I've been saving up, so I had some help from my family in guiding me through the financial side.

-Great. What was it about it that you liked, Abby?

-I think being by myself and only being 23,

it's just the perfect size for what I want. The kitchen is a good size. The living room's definitely a good size.

The balcony brings in a lot of light. And also the local area.

The site across from us is an old college site with brand-new buildings on,

so it obviously will increase the house prices later on when I sell it.

'Abby's a teacher

'and has obviously been doing her homework where property's concerned.

'Dad Ray has retired from the manufacturing industry

'and manages three buy-to-let properties with Abby's mum Jan.

'He's obviously given Abby lessons in what to look for and she's been a very attentive student.'

Well, we looked about three months ago to make a decision on buying property, saw this place.

I came, then you came to have a look at it. Interesting, because it's the first time I've been to an auction.

-And we took it from there, really.

-Am I right in thinking it was up for sale for quite a lot more?

It had been for sale for 12 months, which is presumably why they put it into the auction.

-And I think 12 months ago, it was about 89,000.

-Right.

-There's a property on the same block here at 78, currently.

-Right.

So we thought the price at anywhere from 60 to 68,

which is probably the maximum we would've paid, was about right. So worked out very well.

'That's definitely the way to do it.

'Although it was Ray and Abby's first property auction, they knew exactly what it was worth

'and how much they were prepared to pay.

'Now they've got the place, they want to maximise their investment.'

Basically, it's looking tired and old, so we're looking at replacing, for example, the external windows

-and the sliding doors for a start.

-So replace the windows, right?

-Um... Why?

-Basically, because it's going to be my home.

You could practically live in here as a rental property or if you want to come straight in to live in it,

but I want to make it a home, and for resale later on, to increase the price of the property.

And in terms of energy efficiency, it's better off replacing old, tired, wooden, aluminium windows

for the better, modern alternatives. As well as that, we're looking at maybe insulating the roof space,

so we'll look at some storage up there and more insulation as it helps energy efficiency.

I have to say, to your credit, a lot of 23-year-olds wouldn't be putting more insulation in the loft

and putting in new double glazing! It would be like funky furniture and plasma screen TVs.

-But you're really thinking about the property.

-Well, I've got previous experience from helping out

and project-managing rental properties that my parents have bought.

So I have got a bit of a wise head on myself, basically in terms of re-doing properties.

And yes, sadly, my first thought is insulation!

'It seems that Ray and his wife have taught science teacher Abby

'all she needs to know about developing her first property.'

# We've got the chemistry right

# We didn't have to try

# It just turned out that way Whoa-oa-oa... #

'Abby won't stop at just external improvements to her new bachelorette pad.'

Kitchen, although it looks new, the layout doesn't work. The sink's the wrong way round. It's not manageable.

We're going to have a new kitchen in there, including new work surfaces.

Laminated flooring from kitchen to bathroom.

They'll be all matching. And a new bathroom. It's looking tired.

And we're hoping to get, basically, a shower/bath put in.

-How much will you spend?

-We reckon 6,000. In addition, the heating as well, as the boiler's 25 years old.

-Could be tight. You're going to do the kitchen, bathroom, boiler and the windows.

-Well...

-And insulation.

My wife is a dab hand on the internet.

-The bathroom suite cost £350 off the internet.

-You've got it already?

-Yeah. That's in the garage.

-Is it? All right.

'They've certainly got big plans and will need to keep a tight rein on those purse strings

'to bring the work in on budget. I wonder who'll be the driving force in this developing duo?'

Well, both of us, really. But I'm retired now, so I get lumbered.

-So I'm the project manager.

-That's what dads are for. Sorry.

So on a day-to-day basis over the next few weeks, I'll be here, organising the electrician, plumber,

kitchen fitter, that kind of thing.

-So what kind of timescale, Abby?

-We want to turn it round very quick. You want to get me out of the house!

-Hopefully, turn it round in two months, two-and-a-half months.

-Right. And then you'll be in.

-Yeah.

-Yeah.

-Will you be sad to see her go or happy?

-We've had practice cos she was at university for three years,

-so we know what it's like, but of course we'll miss her.

-I'm delighted for you. It's a great flat.

-And I wish you all the best.

-Thank you.

-Good luck.

-Thank you.

-We look forward to seeing how you get on.

Well, Abby clearly knows exactly what she's doing. With Dad's help, I'm sure she'll get on just fine.

But she is undertaking some major projects - windows, doors, kitchen, bathroom.

I mean, can she really keep under that £6,000 budget? I think it's going to be tight.

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

If you want to profit from property, timing is crucial. And you've got to be flexible with your plans.

Yes, and don't let time pass you by. So here's how today's buyers got on.

'Let's make our way back to Maidstone, where just off this main road,

'I visited this very tiny telephone repeater station.

'It was purchased by Anna for her son Arkan.

'She was gripped by auction fever and paid a whopping £25,000 for the property,

'plus the quarter-acre plot it sat on.

'Her son Arkan dreamed of turning this little brick building into his new home.'

-You want to live in this?

-Yeah. It would be brilliant, yeah.

-And what would it look like?

It would look like a tiny little cottage, you know. I'll build a chimney on the side. Yeah.

Anna broke the golden rule of buying at auction. She didn't read the legal pack before she bought it

and didn't know they'd struggle to get planning permission.

Luckily, she and Arkan were prepared to play the long game to see if the situation might change.

A whole one year later to the day, we're back.

So what's new?

# I can see that nothing's changed at all... #

What have Anna and Arkan been up to?

Hardly anything.

Hmm... Yes, I can see that.

We're a bit naughty. We haven't done much.

Just talking, really, to everybody and asking their opinions and...

We'll see how it goes. We haven't done a lot.

In fact, they have yet to apply for planning permission

as they were advised by their architect that it would be impossible to obtain.

I feel a bit... A bit restless cos I do want to, um...get things moving.

But I don't... I don't want to make any mistakes either, you know, so it's quite...

I don't mind, to be honest, taking my time. I think it's a safe option, really.

And I'd rather be safe than sorry, so... And I love this little building. It's very small.

But I know I can... I would definitely love to live in this.

It's like a little cottage, really.

Arkan's wise to be cautious. As long as they don't do anything without planning permission,

the land will likely increase in value, so they won't lose out by sitting on it

and waiting to see if the planning situation changes.

The lands adjacent to this plot have only just been sold, so if we could wait to see what happens,

if any development takes place on the adjacent lands, then that would, you know...

That would be a lot better for us.

Arkan's right. If the much bigger plots of land either side were to get planning permission,

that could change things for him, but is it really a ray of light?

# Quicker than a ray of light

# Quicker than a ray of light... #

For the moment, for Arkan and Anna,

it's a case of hold tight and wait and see.

We invited two local property experts to give us their opinions,

including the estate agent who viewed it previously.

It's my second time here and I'm not surprised nothing's been done

because it's the sort of something that you don't know what to do with.

I'm not surprised that nothing's yet been built. I think for the area and the size of the plot

and a severe lack of residential property in the immediate location,

it's not surprising they haven't been able to do anything with it.

What about possible commercial use?

Some form of commercial use,

subject to the relevant planning permissions, could be found.

There's a lot of local farms and produce in the area.

So whether it could be used as some sort of farm shop or local flowers

or something along those lines would probably be its best use as it currently stands.

The problems with sort of doing anything with this property is going to be the cost of services,

the main road which is a really difficult road to come out on to.

So with all these into consideration, it's better that they just sit on it for the time being.

Bearing in mind Anna's purchase price of 25,000, what could the property be worth at the moment?

I think the value of this plot is probably somewhere in the region of around £20,000 for it.

Again, it's just really what somebody might need it for.

It really doesn't have much of a value to most people

because it isn't anything. It can't be used for anything.

It's essentially a big back garden with a shed, so its value is what someone's prepared to pay for it.

Remember at the auction, the underbidder was prepared to pay 23,000,

so over the long term, it's unlikely Anna will lose money on her £25,000 investment.

So what's next for this property developing mother and son?

If we succeed in this one, let's say... I think we'll give it for three years?

-We'll never fail. We're not going to fail.

-In the next three years, we'll have to finish this project here.

And then maybe we sell it and with that money we can buy a bigger one.

-We can possibly do it. But next time you'll be the boss and I'll be the assistant.

-Oh, right!

-Yeah?

No, you'll always be the boss.

I wish them both well, but let's hope that after this cautionary tale,

they do their research next time.

# Quicker than a ray of light I'm flying... #

'The clock's been ticking and it's time to return to Darlington.

'It was here that we saw this lovely little one-bed, top floor flat in a 25-year-old apartment complex

'in a highly desirable area.

'The decor was dated

'with '80s design fads, such as dark wood doors and Artex ceilings.

'But all in all, it was in very good nick.

'It was purchased for £65,000 by 23-year-old school science teacher Abby.

'It was to be her first home.

'Her property developer dad Ray would be lending a helping hand with the renovations.

'Abby was viewing this flat, not only as her bachelorette pad,

'but also as the first addition to her property portfolio.

'And she was more concerned with keeping the flat warm than flat-warming parties.'

We're looking at maybe insulating above. We own the roof space.

I have to say, to your credit, a lot of 23-year-olds,

their first things wouldn't be putting more insulation in the loft and putting in new double glazing!

It'd be like funky furniture and plasma screen TVs.

Yes. Sadly, my first thought is insulation!

'Science teacher Abby was intent on creating the right chemistry between neutral colours

'that will help her sell the flat in the future and reflecting her own taste for bright and modern design.

'We returned four months later to see if she's managed to combine those elements successively.'

# Ah, ah All about chemistry

# Won't you show me everything you know?

# Ah, ah All about chemistry

# Oh-whoa-oh-oh-oh... #

It's definitely got a newer hint to it.

-It's much more modern.

-Lighter.

-It's cleaner, lighter. Definitely much more of a home now.

# It's all about chemistry... #

I tried to stay quite neutral in some of the colours I picked,

but then have feature colours. So in the living room, there's purples and pinks, but not too much.

Does her property developer dad Ray like it?

Yes, I do. Yeah. It's definitely girly, I think.

Not just the wallpaper, but some of the decor as well, as you'd expect, because it is a home.

That's the important part. It's not just to sell on, it's for you to live in. And that's great.

# Oh, baby, it's home sweet home

# Do-do-do-do-do, do-do... #

Well, I think Abby's experiment has been a success.

# Home sweet home Do-do-do-do-do, do-do... #

The feature wallpaper in the living room is bold and bright

while neutral-coloured walls and carpets ensure it's not overpowering.

I'm particularly impressed by the kitchen and the quality of finish.

OK, in the kitchen, we have replaced the windows with new double glazing.

We took out all the old kitchen surfaces and we replaced them with brand-new ones.

Also replaced all the radiators. Brand-new boiler as well,

which meant we had to do all the plumbing in the flat.

We replaced the very unattractive floor tiles on the wall

with some nice, much more subtle wall tiles. But they're much better and much nicer.

Abby and Ray have done a fantastic job in the kitchen. What about that gloomy bathroom?

# Home sweet home... #

This little flat packs a big punch in terms of instant appeal.

Abby and Ray have spent money where it counts and can be recouped - the kitchen and the bathroom.

We kind of went for the hotel look, as my friends said. They all say it looks a bit like a hotel now.

But it's quite neutral, so if I do sell on in the future, it's nothing garish that other people won't like.

So it's very much neutral and definitely more modern now.

Abby and Ray's efforts have really transformed this flat.

The quality of finish and attention to detail is evident throughout.

They've even insulated the roof.

Abby's love of contemporary design can be seen in the bedroom.

She purchased this property with a mortgage while Mum and Dad were paying for the renovation.

So how deep were her parents' pockets?

Originally, we looked at, as we bought the property for 65,000, spending around about 6,000,

-but we kind of went over that, didn't we?

-Yeah. We came in at 10,000.

Which I think probably reflects a little bit that it's Abby's home.

So we probably spent more on items than we would've done

and previously have done when we've been doing buy-to-let, as you do.

However, that £4,000 overspend includes all the replacement windows and balcony door,

plus new boiler and plumbing, so not too bad.

They also managed to complete the work within their two-month schedule.

Now the flat's looking so inviting, does Abby see herself living here long term?

I guess there's two different options in, like, two years' time.

Maybe sell on, but probably looking more at keeping this property

and just renting it and buying another place as well,

-so kind of building up a property portfolio.

-She's got the family bug.

Before you move out, Abby, I hope you find time for that flat-warming party.

I was... I don't know. I don't want to get my carpets dirty now.

I'm quite scared of inviting people round cos I don't want to touch anything yet.

Oh, come on, Abby, you're only young once.

But before she sends out the party invites,

we invited two local estate agents along

to see if they're as impressed by the place as I am.

Wow!

Not enough words to say to it. What a beautiful job!

Very tastefully appointed. The decor is absolutely fantastic.

I love the way it's all put together in every respect.

The owners have done a very good job.

It's very tastefully appointed. It's very attractive.

Very appealing. I like the kitchen.

I like the bathroom and the decor. I think they've done an excellent job.

Bearing in mind Ray and Abby's total outlay of 75,000,

how much could this apartment achieve if sold?

I'd market this property at offers invited in the region of £85,000.

If the owners were to put the property on the open market to sell,

I would suggest an asking price of somewhere around about £80,000 to £85,000.

-I think that's probably what we were thinking.

-Yeah. A good £5,000, maybe even £10,000 profit on that,

-which is...

-Good.

-Really, really good.

Not too bad at all. But Abby wants to keep this property even when it comes time for her to move on.

So what could it achieve as a rental?

Rental valuation, I would estimate to be £425 per month.

In my opinion, in the current market,

I would see the rental value for this property at somewhere around about £400 to £425 per calendar month.

-Wow!

-That's very good.

-That's much more than I thought it would be.

-We were thinking 350.

-We've got properties rented for that kind of money,

two or three-bedroomed houses, so that's really good.

Those figures could give Abby a rental return of between 6.5% and 7%.

So would Ray and Abby go to another auction?

As long as you do the homework and find the right place that you're looking for,

rather than just going to an auction and panicking when you get there.

Make sure it's the one you want and where you want it. And if you can't afford it, don't buy it.

# Home sweet home... #

-We'll have more stories for you next time on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Subtext for Red Bee Media Ltd - 2011

Email [email protected]