Episode 38 Homes Under the Hammer

Welcome to the programme.

Despite the doom and gloom in the property market,

buying at auction is still a very good thing to do.

It's important to be cautious and, of course, do your research.

But if you do that, you could find yourself a bargain.

Well, if you are looking for variety and good value,

then buying under the hammer may be for you.

So here's what lured our buyers to the auction rooms on today's show.

The interior of this Devon cottage

is more Swedish sauna than rural retreat.

I've never come across a kitchen/sauna before.

This terrace in London has been converted into two teeny-tiny flats.

In my opinion, this has got to be one house.

And I'll be exploring this house in Leeds, IF I can get in, that is.

A couple of minutes with a hedge trimmer will sort that out.

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.

I'm in Roborough, a little village

between Plymouth and Dartmoor National Park.

You've got a pub, a few shops.

But what attracts people here more than anything else

is easy access to some quite simply stunning countryside.

Well, the property I'm here to see

is in one of the more desirable parts of the village.

Mid-terrace, had a guide price of £115,000, two bedrooms.

Let's see if it's desirable inside.

Roborough has seen some housing development recently,

but this row of cottages does give a taste of old village life.

And this 19th-century cottage does have some kerb appeal.

It will take a little bit of tidying up.

That's interesting. One room that way,

one room that way, stairs in the middle.

Fairly traditional layout, I suppose.

It could even have been two cottages knocked through to one.

Let's come this way.

I like the fact you've got this window seat

and I bet if you stripped that back

you'd find beautiful pitch pine under there.

Not so sure about the old fireplace.

That sort of lets the place down.

But it's a reasonable-sized room. Ceilings could do with more head height,

but I suppose it is a cottage.

What's through there?

Kitchen. We'll explore that in a minute.

The other room on the other side.

A mirror image of what's on that side again. The window seat.

Panelling, strip it back, it could be beautiful.

But beware, sometimes, behind there, you do get damp

and it can turn into dry rot.

So definitely check that out.

Then, back towards the front door to where we started.

Good start, really.

There are signs of wear and tear

but I reckon once you start stripping it back to its bare bones,

there's the opportunity to create something really special here.

So, to the rear of the property, down a few steps

and into basically a kitchen and more.

I'll come to that in a second.

This is a kitchen bit.

You could have fun with these units, basically throw them away,

replace them with something more in keeping with this place.

Not a bad-sized space, I have to say.

Lots of light coming in through the roof light.

Not good though -

here is your bathroom and loo. Off the kitchen,

just one door between the two,

not ideal at all.

I've seen that kind of stuff before.

Then it gets really weird over this way.

This low kind of like beam going across here.

You step into what is basically a little anteroom for the kitchen,

I suppose it's a dining room,

but decked out in all this pine cladding,

meaning it's more like a sauna

and I've never come across a kitchen/sauna before.

# Steamy windows... #

For lots of reasons, I think this could be a pretty hot property! But if you can't stand the heat,

get out of that kitchen and you will find a good-sized garden out back.

If you put in French windows,

they would really open up the rear of the house to this outside space.

Upstairs are two double bedrooms, both in need of renovation.

But they are representative of this house.

It's got bundles of character and plenty of possibilities.

The guide price was £115,000.

We asked a local estate agent to give us the low-down

on this two-bed cottage.

The property was originally owned,

we understand, by Maristow Estate,

which is a large estate a couple of miles down the road

and originally built for the farm workers of that estate

and have been obviously handed down over the years.

This is a good property, it's a sound property.

The vendors have put in some good modernisation,

believe it or not, looking around,

but they've got double glazing,

a relatively new gas central-heating system.

So with that £115,000 guide price, how would you make the most of it?

I think the kitchen here,

you would need to knock this wall out and open it up

to make a nice kitchen-diner or a family room, bearing in mind

it backs out on to the garden.

It's a lovely aspect of the property.

What sort of return can the buyer expect on this place?

Once this property's renovated,

I feel it would be worth in the region of £160,000 to £165,000.

Rental for this property once refurbished

would be between £600 and £650 per calendar month.

Well, this is a great little auction purchase.

Enough space to play around with inside, yes,

some internal modifications and updating required.

But there's money to be made.

Let's see who spotted it at the auction.

Lot number 30. We have a guide price of £115,000.

Anybody going to start me off with £100,000 then?

£90,000 then.

£90,000 I have, thank you. £90,000.

Bid for £95,000? 95, thank you, sir.

97 somewhere. 97 at the back.

99 somewhere. £99,000.

£99,000 in the doorway.

£100,000. I have £100,000.

There's a lot of interest,

but progress is rather slow.

So we rejoin it later at £123,000.

123, thank you.

Looking for 124? 124.

125 somewhere?

We have 124 on my right down here.

Looking for 125.

125, thank you.

126. 126? Pause it a moment.

125-and-a-half then?

125-and-a-half I have. 125-and-a-half I have. 126?

OK, so we are out at 125-and-a-half on my right here.

Looking for 126?

Then we have, I'm afraid, to pass that one by, I'm sorry. Very close, very close.

Despite all that bidding, the property failed to meet its reserve price.

But, after some behind-the-scenes negotiation

it was finally sold for £128,000.

The new owners who were bidding on the day are Ian and Tina.

Ian's a carpenter by trade,

whilst Tina runs their management consultancy business.

They're also building up a small property portfolio.

Tina, Ian, lovely to meet you both.

-You too.

-Congratulations.

-Thank you.

Why did you want to buy it?

We like doing up properties.

We do about one a year and we usually rent them out,

certainly in this current market, that's what we've been doing.

So this was our one for this year.

This will be the couple's third property in the West Country

but their fifth in total.

They're from West Sussex where they bought property for investment,

but after selling their portfolio, they moved to Devon to escape the rat race.

And what a place to do it.

So, Tina, why this particular property?

-Well, we live on the Moors about five miles that way.

-Oh, lovely.

And Roborough is known to be a really nice little village.

It's got a real village feel,

but you're a few minutes from Plymouth city.

So it's a great rental location.

We've got Derriford Hospital down the road,

so you've got nurses and doctors visiting the area

and looking for short-term lets.

So, we tend to look for nice location,

-we like the older property as well.

-Yes.

We like putting the original features back in

and really trying to bring a contemporary edge.

-But we like the original properties.

-Kick some fresh life into them.

-Yeah.

I reckon they have quite a renovation project on their hands.

The temptation with a rental property is to concentrate on the finances,

but with their aim to restore the original features,

it's clear that these two really care about the places they take on.

Tell me what you are going to do to sort it out?

We'll start top-to-bottom,

completely refurbish right the way throughout, inside and out.

We'll rewire, we'll move plumbing wherever required.

The ceilings will probably need to come down,

so they'll be renewed,

remodel the bathroom,

we'd like to try and squeeze an en suite in upstairs

just so there is an upstairs facility.

What will you do with the kitchen? It's a bit weird.

It is, yes.

It's a bit of a walk-through,

so we may well section a small part of the kitchen off

to provide for a utility area

and separate the bathroom from the kitchen a little further,

and then we'll move the kitchen all towards one end

and so leaving us with a kitchen-breakfast area.

-Are you planning to take out the beam that goes across?

-Yes.

-Yes, and the wood panelling throughout.

-Yes, that will go.

As it will everywhere else in the house.

Their budget is £10,000,

and to do all the work they propose, that might seem a bit tight.

But Ian's got a small contingency fund just in case

and Tina's career as a management consultant to the retail industry should also prove handy

when it comes to bargaining over new kitchen units and a bathroom suite.

So, what kind of timescale?

If you are asking Tina about eight weeks,

I reckon more like 12 is a realistic time frame

and then it depends what else we uncover

as to whether that would need to be extended.

But if we could have it let or ready for letting after three months...

-Yes, three to four months, it should be rented out.

-Then we'll be happy.

Great. Congratulations to you.

-Thank you very much.

-We look forward to seeing how you get on.

-Thank you.

Well, I have to say, I'm really excited

to see how Tina and Ian get on with this place.

I think they're really going to transform it.

The big question is, will it take eight weeks, 12 weeks or longer?

You can find out later in the show.

Today, I'm taking a trip to a peaceful little enclave

amidst the hustle and bustle of southwest London.

Wandsworth was, for hundreds of years, a busy industrial area

and this road would have been your everyday high street,

providing for the working-class locals.

Today, this part of SW18, known as The Tonsleys,

is stacked with countless cafes, delis and beautiful boutiques

and it's something of a hidden gem,

a perfectly-preserved Victorian village

nestled inside the bustling city.

How wonderful!

And, as you can imagine, highly desirable.

# You're so desirable

# I can't resist you... #

Properties in this quiet corner command a high price.

A modest Victorian terrace here can expect to sell for over £600,000.

On this stunning street,

it's hard to imagine that in ten minutes you can be in Waterloo

and trendy Clapham is literally just around the corner.

Here, you're cocooned in a more traditional world for the families

and those looking to hide from the city at the end of the day.

There are only around 600 houses in The Tonsleys area

and, as with anything that's rare and in-demand,

they all come with hefty price tags.

Now, the property I'm here to see, well, it's here,

it's currently laid out as two flats

and it had a guide price of £395,000.

What was once a working-class Victorian terrace is now in high demand

from the professional couples and families who populate this area.

Time to check out the first of two self-contained flats, starting with the ground floor.

You know, I'm not really convinced that these workers' cottages

should be split up.

The proportions aren't there. And they're not big enough,

although you have got quite a nice-size lounge, saying that.

A bedroom here. But you can see, it's narrow, you've got small little cupboards,

not enough room in there for a downstairs toilet under the stairs.

Rather strangely, at the back,

you've got a bathroom, sort of shoved in there,

a weird sort of partition wall with some windows

and the smallest kitchen I think I've ever seen.

Look at this, look, I can touch both walls.

You know, this property looks really nice from the outside,

I'm just not loving it on the inside.

# Bring back that lovin' feelin' Now it's gone

# Gone, gone... #

The tatty toilet and the titchy kitchen are far from ideal.

This property doesn't need TLC,

it needs some tough love to bring back that loving feeling.

The ground-floor flat does have access to this overgrown garden,

where there's potential to extend out into the side return.

Let's take a look at the upstairs apartment.

So this is flat number two. Now, it feels a little bit bigger up here.

You've got a bathroom there, which by the way, is massive.

a little kitchen area here

and this rather large room to the front of the property.

Now, would you call this the bedroom or the lounge?

All you have this room here, an old gas fire there,

some beautiful original sash windows which I love.

You know what, I'm just thinking,

is it worth spending the money trying to make these two flats work?

I don't think so.

In my opinion, this has got to be one house.

It will then fit in with the rest of the street and it will be fantastic.

# When 2 become 1... #

Normally, I would say two properties are better than one, but in this case, this conversion

is crying out to be returned to the house it was originally.

And that is also what the local property market really wants.

Families in London are often desperate for space,

to move out of flats into a home with their own front door,

their own patch of garden and into an area they feel safe and secure.

But many are also desperate to avoid the suburbs,

with long commuting times, and don't want to leave the city at all.

Now, this property offers a very real solution to that problem

and, subject to planning,

there's also potential to go up into the loft,

giving you that third bedroom,

making the house even more family-friendly.

A City worker may well feel that, by buying around here,

there's that winning combination

of space for the kids without sacrificing the culture.

It comes at a price,

but that's something many will be prepared to pay to have it all.

Let's ask a local estate agent for her opinion

on this place, which had a guide price of £395,000.

First impression is, it needs to be turned back into a house.

The people that live round here are mainly families.

There aren't many flats, mostly houses.

People will buy them and do them up to their own spec

or possibly put the loft on too.

Many properties on this street have attic conversions,

giving them a third bedroom.

But what could this one achieve if restored to a two-bedroomed house?

Renovated as a two-bedroomed house,

you would get between £625,000 and £650,000,

and if it was renovated as a three-bedroomed house,

you would get up to £675,000 for it.

And rental value?

As a renovated two-bedroomed house, you'd get around £400 a week

and as a renovated three-bedroomed house,

about £500 per week.

That translates to between £1,600 and £2,000 a month.

So, it looks like this property has the potential

to reap rewards on either resale or rental markets.

This is a very special part of town,

which requires a significant income to afford.

But I think with this lot,

you've come across that extra-special commodity,

the must-have house.

This would make somebody a wonderful home

or potentially a wonderful profit.

Let's see who bought this at the auction.

450? 450 anywhere?

I think it's worth 450 all day long.

I don't know, 370. Won't go below 370. 370 in the aisle. 375?

Sorry, 375. 380.

385.

390.

395. 400.

405. 410.

415. 420.

425.

430 in the aisle. 435.

440.

445.

450. 451.

452.

453. 454.

455.

456. 457.

456 with you. 457. Anyone else?

First time, 457. New spot. 458.

459.

460.

460, sir? 460, yes.

Down here, 460.

461. 462?

461. First... 462 right at the back.

463. 464. 465.

466. 467.

468.

469. 470.

Yes?

471?

470. Anyone else?

First time, second time, third and last time, if you're all done...

And the cool customer at the back with his bid of £470,000 -

£75,000 over the guide price - was Sean.

I met his friend and business partner Richard at the house.

Both are from South Africa, but now live in London where they develop properties.

Richard's background is in accountancy. So, will he be able to make the figures here stack up?

Richard, congratulations. It wasn't you that was at the auction, was it?

No, it wasn't, it was my partner, Sean, who I've worked with now

for the last five years, developing property in London.

Were you happy with the price because you did go over the guide price?

We did, but I just believe in the area and the potential of the place.

We've done a lot of refurbishments ourselves with our team

and I think it's a place we'll be able to sort out really well.

Are you going to keep this as two flats?

No, we are going to convert it into a house.

I just feel that as two flats, it doesn't make sense.

I think the potential of selling it

to an end user as a full house will definitely get us the best returns.

I am so pleased you've said that, it just doesn't work as two flats.

It feels like just the upstairs and the downstairs.

The flat at the moment is very poky, so having two flats as it is now,

it's got the potential to be a really nice home at the end of the process.

I'm delighted to hear that Richard and I are of one mind when it comes to these two flats.

Richard and Sean are childhood friends.

After meeting up again in London a few years ago,

they decided to join forces in the property business

and, together, they've developed eight properties so far.

-Tell me a bit about yourself.

-I'm originally from South Africa

and I've been here in London three years.

I've joined together with Sean, my business partner, who's been here for 11 years now.

-Why do you think you and Sean make a good business couple?

-He's the entrepreneur

and I think that, while we both debate and analyse whatever we are doing, I'm the more controlled one

and he'll openly admit that he's the one who goes out with ideas

and generates a lot of what we do. But it's a good team.

Richard and Sean have applied for planning permission to return this property to a house,

build an extension in the back garden and convert the attic space.

They hope to achieve all this in just three months.

They also know they need a high-spec finish inside

to generate a high sell-on price.

What sort of interiors are you going to be showing

and demonstrating inside? How is it going to look and feel?

It's all really about the finishes in the end.

We'll spend X amount doing the structural stuff,

but we want to put a lot of our budget into getting nice finishes

to sell it to the high-end user, the professional couple,

with a nice big bedroom with the en-suite bathroom and put a lot of effort into the final finishes.

-I really think it has to scream luxury as well.

-I think so.

So, straight from the accountant's mouth, what is the budget for the work you need to do here?

With the purchase price of £470,000,

I would like to see it coming in under £105,000 -

all the refurbishment work.

Are you worried you may have paid too much on auction day?

No. I think we can get a good asking price with good finishes here.

-So, are you having sleepless nights about anything?

-I was.

We had a property that was causing me to wake up during the night,

but at the moment, things have been going well, we managed to sell it.

At the moment, this one is a beauty, there is no waking up to be done?

-I'm very confident on this one.

-Good luck with this.

-It's been great meeting you, Richard, and I hope this goes really well. Thank you.

-Thank you.

Richard and Sean have got a corker of a project here

and this could be one heck of a transformation.

But only if they get that planning permission.

Otherwise, accountant Richard will be counting more sheep than profit.

You can join me later in the programme to find out how it goes.

Coming up, I visit this terrace in Leeds where I'm intrigued

to find out what's going on behind...the green door. Hm.

In London, how is Richard getting along with his renovation?

I think at the end of the day, we are very happy with where we are.

First, has this renovation proved a painful process for Ian and Tina?

It's like childbirth - the pain's forgotten the next day.

Back to Devon now and the village of Roborough,

five miles from Plymouth.

That's where husband and wife Ian and Tina bought this run-down farm cottage for £128,000.

'They aim to restore the tired interior and give it back some of its original character.

'They'll add it to their small portfolio of rental properties.'

So what kind of time scale?

Well, if you are asking Tina, it will be about eight weeks.

I reckon probably more like 12.

And then it depends what else we uncover as to whether that would need to be extended.

Tina and Ian tend to renovate a property a year

and this year's model has got lots of potential.

But its rundown looks will need quite a lot of work

to make it attractive to the rental market.

We returned four months later to see if Ian and Tina have made this eye-catching.

The outside has had a fresh lick of paint.

But what's the inside got to offer?

Well, quite a lot. The dated living room has been opened up

to be replaced with a beautiful, rustic reception area.

The stairs have been rotated at 180 degrees

and the living room wall removed,

bringing space and light to what was formerly a dark, dreary entrance.

The living room has also been renovated and made fresh and welcoming.

The kitchen is now an impressive space with tiled floors

and stylish new units installed.

At the far end, a contemporary bathroom suite has been installed.

The whole ground floor has undergone radical renovation.

Tina made some fascinating discoveries about the house,

including its previous life as a village Post Office.

We found some amazing things in the lounge.

The first thing is the slate floor

which we unearthed fairly quickly on in the project.

It was full of mud. So we found the slate floor.

We were also told that because this was a Post Office,

that would absolutely support why we've got so much wear and tear.

We've got some really big dips in the floor

where obviously people came in over the years and bought their wares.

We also found that we could restore these shutters around the window

which were already here, but they were rotten and not in good shape.

So we've done some work there and now it's a really nice window seat.

Then the final surprise was this gorgeous inglenook

which the guys just kept removing and removing bricks and plaster

and discovered this great fire which we love. It's just worked well

to put the wood burner in there so that we've got a great cosy lounge.

Ian and Tina have put their own "stamp" on this former Post Office

and have made a really "first-class" job of the layout!

And, let's not forget upstairs where, needless to say,

the bedrooms have undergone a change as well.

The landing here is perhaps one of the biggest changes.

Because we've turned the stairs around, we've been able to create the landing at the front of the house

and make use of this window which was previously in one of the bedrooms just stuck in the corner.

That's allowed a lot of natural light to come flooding down through the stairs and down into the kitchen,

bringing light from the front to the back of the house.

We've also managed to keep the original oak beams and lintels across the windows.

By keeping those exposed,

it's brought a real old feel back to the property.

We've used the soft corners to keep that feel going throughout also.

On part of our journey of discovery,

we found this little fireplace here,

which is quite a contradiction to the styling of the rest of the house,

being quite Art Deco in appearance,

probably dates back to the '20s or '30s, something like that.

So we've decided to keep that, as well,

a little feature and part of history of the property.

We've also managed to include an en-suite toilet

and washing facilities as well so that those upstairs have that

without having to go downstairs to the bathroom.

Across the landing, the other bedroom has no such luxury

and even had some space removed from it to fit in the toilet.

But even so, Ian and Tina have made this top floor work to its maximum potential.

But there were many obstacles to getting to this stage,

with one of the coldest winters on record being the main culprit.

We've actually drawn a new learning through this project,

which is to try and avoid buying right in the middle of the winter.

We tend to buy in the spring

and working through to a tight timeline with the weather conditions and the cold and the wet,

you know, is certainly something that we've learned from.

The severe weather pushed the time scale up to 18 weeks, but even so,

with Ian doing the bulk of the work himself, it's an amazing renovation.

Tina dealt with the decor and the style of the house,

but how did the couple feel during the renovation?

Fundamentally, it brings with it its stresses and strains

and I tend to shoulder most of those

and let them overflow on to those that are nearest and dearest

as we go through the project.

But I like to think it's a little bit like childbirth and the pain's forgotten the next day.

# Wonderful baby Living on love... #

Well, I'd say they've got themselves a beautiful, bouncing home here.

But did this long delivery affect their budget?

We think we're round about the 13,500 mark

which is a little over the original budget of 10,000,

which I believe was almost optimistic anyway, hence the contingency.

Even so, we're a little beyond that,

but that's taking into account the level of work that needed to be done.

Well, Tina and Ian may have saved the house,

but will it prove a good investment?

Bearing in mind that outlay of £141,500,

we asked two local property experts what they thought of their work.

My first impressions of the cottage are, nice and light, bright,

airy, good-sized rooms.

It's bigger on the inside than it looks from the outside.

Yes, very impressed walking in. The whole place has changed.

The owner's done a good job, really good.

The layout is very good, works very well.

As you come in, you're directly into the lounge,

and off that, you've got another reception room

and steps down to a nice modern kitchen and bathroom.

As Tina and Ian aim to rent the house out,

what sort of income could it achieve on the rental market?

The rental value of the cottage

would be about £675 to £700 per calendar month.

The rental value for this property would be in the region of £750 per calendar month.

That works very well for us.

Our plan is to rent the property and anything in excess of £650,

again, we're very happy with that.

So all in all, we're really pleased with those figures.

But if Tina and Ian decide to off-load this particular baby,

the experts think it could have a resale value of between £165,000 and £175,000,

giving the couple a possible profit of between 23,000 and 33,500 pre-tax profit.

But they're in this for the long-term

and are proud of this addition to their portfolio.

We're delighted with the house. We love it.

And we'll continue to keep it maintained to, hopefully, a high standard,

working with whatever tenants go in.

And we'll continue to look for period properties as well,

because that's what we like. But we're delighted with it.

I'm in West Yorkshire now, in Leeds,

one of the fastest-growing cities in the UK.

It has the second-largest number of IT employees in the country,

and is one of the most important financial services centres outside London.

So if you're looking to invest in the property market,

this may be the place to do it.

Well, I'm about two miles outside Leeds city centre here

to see what's known as a back-to-back property.

It's known as that because literally it is sharing a rear wall with another house.

It was a way in Victorian times of getting high-density housing together.

Guide price was 50,000 quid, three-bedroomed,

erm...behind this hedge thing.

A couple of minutes with a hedge trimmer will sort that out.

This is property itself, three storeys with a cellar.

Let's take a look inside.

Back in 1918, 70% of the population of Leeds lived in back-to-back houses like this.

And it's estimated there are still around 18,000 left in the city.

Well, nice that there's that little entrance porch,

and then into your lounge.

Straight away, I'm seeing it is fairly tired

and in need of a bit of tender loving care, for sure.

Possibly a bit of damp coming through the ceiling there.

Need to check that out.

Looks like there is a few original features left, which is nice to see.

Through there, a kitchen.

What I'm wondering is, if there's a way to take this wall out,

and making it maybe much bigger, kind of like a kitchen-living area.

Something to look at. But all in all, not a bad start.

But one thing already counting against this place is the gas fire.

It's the only one in the house, so central heating's required here.

So up on to the first floor and behind the door... Oh!

A bathroom and loo.

Doesn't look to be in too bad... No, I'm lying.

Er, needs complete refurbishment!

Then through to your first bedroom. A good size, I have to say.

So that's that. And then, I wonder...

what's behind here.

The green door. Hmm.

# So I could find out what's behind the green door.... #

And behind that green door are stairs,

leading up to the attic conversion.

Well, no surprises, I guess. Two bedrooms up here.

But before I get to them, something which I wasn't expecting.

Look at the size of that crack.

It's all over this little part of the building.

It goes all the way round there and there. That's not good.

I'd want to have that checked out by a structural engineer before I went very much further at all.

Doesn't get better in here, I'm afraid

One of the bedrooms up here, and as you can see,

looks like there's been some water ingress from the roof.

That would indicate that the roof itself needs looking at as well.

So all in all, a few bits and pieces to do here.

Also, the third bedroom is tiny,

barely big enough to squeeze in a single bed.

It might be OK as a nursery,

but I think you'd struggle to rent it out as a bedroom.

There is some good news in that cellar,

which has separate access from the front and would be handy for storage.

But in general, it's a property with a few problems -

cracks, damp and no central heating.

Of course, that's reflected in that tempting £50,000 guide price.

We asked a local estate agent for a second opinion

on this Leeds back-to-back.

'The property's a great blank canvas.'

Double glazing's in, so that's a cost which doesn't have to be looked at.

New kitchen, bathroom, central heating and then decor.

Job's a good one.

So if bought as an investment, would this suit the rental market or be better if done up to sell on?

'In my opinion, it's better to buy these properties and let them out at the moment.

'The current market conditions say that prices are not going to go up that much,

'even if you do do the work to the properties at the moment.'

So it's better to get tenants in and get some money back on the property.

What rent could it earn once renovated?

'Currently in the rentals market, if this was going to go up for let...'

I would be putting a valuation of £475 to £550 per calendar month.

What could it get if sold on?

Once it's been renovated, I would put a valuation of £70,000 to £75,000.

So, a few things to sort out.

The roof, for sure, and those cracks on the top floor.

But principally, a solid house in a good area for rental.

So let's see who fancied it when it went under the hammer.

It was late in the day,

but let's see who stayed for one of the last auction lots.

Start me off, please, at the guide. £50,000, 50 if you will?

45, then, to start things off. 45 I'll take.

Thanks, at 45, I'll take yours. 46, then?

46 anywhere else? Are we all finished at £45,000?

Sorry, 46. I didn't see you, sir.

47, then?

47, you will. 48.

49.

Half? All right. 48,500. 49, then sir? 49 you will.

And a half.

£49,000, then, we have. 49,500 anywhere else?

Selling, then, for the first time at £49,000.

Second, third and final time, all finished?

Thank you, sir.

That final and successful bid of 49,000 was made by Parminder,

a local property developer.

He's bought the house to renovate and then rent out.

I met him at his new back-to-back to find out more.

-Parminder, lovely to meet you.

-Hello.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

Well, it was a good investment so I thought I would bid for it.

-The property I wanted got sold prior, so I just bought this one.

-Right.

So what was it about this one that you liked?

The price, mainly, actually.

I think it was a good price, opportunity arised, yeah? So I just bought it.

-Had you seen it before the auction or not?

-I only seen it from outside.

Right.

So, for Parminder, this was an impulse purchase

after the property he was interested in sold prior to the auction.

And not only had he not viewed it inside before buying,

he'd also taken another risk.

Presumably if you bought it last minute, you didn't look at legal packs and things like that?

-No, but there's nothing really.

-But there could have been!

Could have been, yes, yes. That's the risk I took, obviously.

Risks are something you're comfortable with?

Up to reasonable, calculated risks, as you call it, yes.

You didn't see it inside before you bought it.

What did you think when you walked through the door?

It was fine from when I saw the first floor.

When I saw the crack, I was a bit concerned. I already spoke to surveyor.

He said it's settlement and there's nothing really serious to worry about.

That's the wall attached to the other property?

Yes, it's a shared side, so both properties will be the same,

and it's just the settlement, as he said.

Having got that positive news from a surveyor,

I think Parminder's had a lucky break here.

When it comes to those cracks, it could've been a lot worse.

Still, he does have a lot of property experience,

as he's been developing for ten years now.

He's been a full-time landlord for the last four years,

but usually buys in areas of Leeds popular with students,

so this is a bit of a departure and a new location for him.

But he wasn't always a property developer.

-I used to actually be a shopkeeper.

-Oh!

-Long hours.

-Long hours, yeah.

But I started building property since 1984, when I had a shop.

So I bought some property and rentals at the same time.

So I built a portfolio over the years, slowly.

What's the plan? Talk me through what you'll do.

I'm going to obviously get the roof done first

and just start from the top and work down.

Put a new bathroom, new kitchen, central heating.

Obviously take the paper off and restart again, you know?

Parminder will carry out most of the work himself,

which will keep the costs down.

What kind of budget have you got to do the work?

About 7,000 or 8,000, something like that.

Presumably you've done this before?

Oh, yes, yes, yes, I do a lot of work myself as well.

What do you get involved in?

Mainly plumbing. I'm a gas-safe engineer,

so I can do the central heating and the plumbing and everything.

-That's convenient, isn't it?

-Yeah, keep the costs down.

What kind of timescale for sorting it?

Two to three months, about three months, yes.

Then back on the rental market.

-Yeah, should be.

-Congratulations. Good luck with it.

-Thank you.

-We look forward to seeing how you get on.

-Thank you very much.

Well, buying a property without seeing it inside

or reading the legal pack is a seriously risky strategy

and one I do not advise.

However, it seems that Parminder has got away with it on this occasion,

although I think he might have a few more structural issues than he's expecting.

Find out how he gets on later in the show.

Well, time has simply flown by.

So, how have our buyers got on? Or has time been an enemy?

Let's go back and check out what's happened.

Let's return to The Tonsleys in Wandsworth, Southwest London.

The traditional terraced houses in this quiet corner are in high demand.

I viewed this property, which had a guide price of £395,000,

and had been converted into two pokey flats.

This area is extremely popular with professional couples

and families and demand for flats is limited.

It was purchased at auction by Richard

and his business partner, Sean, for 470,000.

I wanted to know if Richard agreed with me

that this place should be restored to the house it was originally.

So, Richard, are you going to keep this as two flats?

No, we're converting it immediately into a house.

I feel as two flats, it doesn't make sense.

I'm so pleased you've said that!

It just doesn't work as two flats, does it?

It feels like just the upstairs and the downstairs.

Having two flats as it is now,

it's got the potential to be a really nice home at the end of the process.

In order to maximise their potential profit,

Richard and Sean had applied for planning permission

to construct a rear extension and build into the attic space.

Their £105,000 budget ensured they could splash the cash

to achieve a high-spec, high-style finish.

Three months have flown by and work is well underway.

But it would appear far from finished.

Richard ripped out the interior and stripped it back to the brick

to create what will be a warm and welcoming family home,

rather than the dark and dank flats this property was previously.

To the rear will be an open-plan living and kitchen area.

Planning permission was granted

and we can see the extension that will become the kitchen.

All right, well, this is the downstairs reception area

and we're going to put a lounge in the front

and then a television room here in the middle,

leading through to the kitchen, which is going to lead outside

through double doors, and then out on to a decked garden out this end.

Obviously, having the side return

creates a lot more space that we were requiring to do that.

Upstairs, like downstairs, has had all the interior walls removed.

This will allow Richard and Sean to remodel the layout to their specifications

and create a large master bedroom with walk-in closet and en suite.

Steel supports have been added to carry the weight of the roof

on what will be the attic conversion.

Coming upstairs here, you'll walk into the main bedroom

and this is where we've come to create a lot of the space in the house

in moving through a walk-in closet into the main en-suite bathroom.

Also on the first floor at the far side,

we'll have a bedroom which could either be a double bedroom or study.

And then there'll be a staircase here,

which will go up into the dormer loft and have another bathroom and another double bedroom upstairs.

Alongside the dramatic change in layout,

Richard and his business partner, Sean,

planned an equally impressive interior.

But their plans were put on hold

when they got a phone call from a potential purchaser.

We've sold it halfway through development.

We had a buyer who found the details of the planning permission

off the council website and approached us

and we've decided that it's best to sell on to him immediately.

So Richard and Sean have agreed to continue work on the house

until the first fix is completed.

That means all the building work is done,

including electric cabling and water and sewage plumbing.

But no fixtures or fittings have been installed.

It is sad not to see the building get to its finished product,

but at the same time, we're really happy to cut ourselves

clean of all of the admin to get it to that stage.

So it takes away the nightmare of the end of the refurbishment stage,

when you're trying to curtail costs.

I think, at the end of the day, we're very happy with where we are.

Richard has a contract with his builders

to complete the first fix for £50,000.

Add to that their purchase price of 470 grand

and their total investment here is £520,000.

We asked two local estate agents for their impressions

on what Richard and Sean have achieved with this project.

They've definitely made the best use of the property by extending

into the loft, the layout is by far the best they could have done.

The extension adds to the whole overall feeling of space, light

and creates a really good open-plan ground floor.

I do think he's made best use of the space.

It's nice to see somebody who's actually managed to

increase the value by increasing the square footage,

rather than just doing a cosmetic make-over.

The experts are impressed with the new layout of this house.

Let's hear their sell-on valuations for this property when complete.

I think the resale value of this property,

when everything is finished, including kitchens and bathrooms to a good spec,

would be between £725,000 and £750,000.

When fully completed,

I would expect the value to be in the region of £750,000.

If Richard and Sean had kept their original £105,000 budget,

those figures would have earned them a pre-tax profit

of between 150,000 and 175,000.

That's all ifs and buts, though.

They actually sold the house in its incomplete state for £665,000,

earning them a pre-tax profit of 145 grand!

Not too bad at all.

So, do they have any regrets about not seeing this project through to completion?

I believe we made the right decision.

I feel that there is a slight bit of regret

about the fact we never took it to its real end value

and the achievement of having fulfilled what the potential of the property is,

but at the moment, I'm very happy to take what we've made and walk on to the next one.

Let's return to the back-to-back terraces of Leeds,

where I viewed this three-bedroomed house.

It was purchased at auction for 49,000

by professional developer Parminder,

to add to his portfolio of over 20 rental properties.

However, he had not viewed the interior of the terrace.

While the mould and mildew failed to dampen his spirits,

the cracks in the ceiling and the rear walls proved to be quite a shock.

I was surprised an experienced developer such as Parminder

would gamble on a property he'd never viewed.

So you didn't see it inside before you bought it.

What did you think when you walked through the door?

It was fine. When I saw the crack, I was a bit concerned.

But taking risks is something you're quite comfortable with?

Calculated risks, I should call it, yes.

So has Parminder's purchase proved to be risky business

or a risk worth taking?

Four months later, we've returned to find out,

and I'm relieved to say, the hedge has been trimmed.

# Risky business

# Ah ha, ah ha

# Some kind of risky business #

Parminder has carried out the majority of the work himself,

including fitting a quality kitchen.

This shows that even though this house is destined for the rental market,

Parminder doesn't cut corners where it counts.

Well, we've done a lot of work since you were here.

Virtually complete renovation, yes.

Replastered the whole place, new kitchen, skirtings, architraves, you know, so...

Re-painted the whole place.

In the sitting room, Parminder has removed the gas fire

and installed an all-new central heating system.

Upstairs, the quality workmanship continues.

The bathroom felt cramped,

and its black-and-white decoration looked harsh and cold.

Now, it's cool, calm and collected, just like Parminder.

There are large floor and wall tiles in neutral tones,

a modern white suite and contemporary fixtures and fittings.

It used to be a big cupboard here for the hot-water cylinder.

We removed that and created a space for a bath,

moved the bath this way and made a space for a toilet there,

and obviously fitted the new heating and wall tiles as well.

Parminder fitted the bathroom suite himself and did the tiling,

achieving a quality finish.

He's obviously not afraid of a little hard graft,

and his qualification as a heating engineer has come in handy too.

I fitted the kitchen myself, the bathroom, did the tiling.

The central heating myself. So most of it, apart from plastering.

The master bedroom, once dizzying in its decor, has been stripped,

replastered and re-painted in restful tones,

with contrasting curtains, carpets and a new radiator fitted.

The attic conversion was the main cause for concern.

The cracks that once snaked across the walls and ceilings are gone.

There was a lot of cracks, and there was one big crack.

We called a surveyor, he examined it, and said there is no subsidence.

We just repaired it, and that was the end of it, really.

It was very good after that.

And, as for the damp-ridden bedrooms, no problem for Parminder.

He replaced the roof

and the dormer extension, which was allowing the water to come in.

We did a new flat roof on the top,

and obviously there were some other tiles and we sorted that out,

and everything's good now, everything's fantastic.

It would seem there's nothing that can faze

Parminder's positive can-do attitude.

# No problems, no problems

# Only solutions... #

Well, maybe one thing - getting all his tools

and equipment up that rather steep staircase.

# Only solutions... #

My legs are a lot fitter than before, yes!

It's good, yeah, keeping me fit, yeah.

Parminder completed the work within his three-month schedule.

But he spent £2,000 more than his eight-grand budget,

as he hadn't factored in replacing the dormer roof

and replastering all the walls.

However, as he's a registered gas engineer, he was able to

install the boiler and gas central heating himself, and he has also

fitted the bathroom and kitchen,

which certainly helped keep the costs down.

His total outlay, including purchase price, was 59,000.

Parminder plans to rent out this property,

so we asked two local estate agents for their opinion.

Was Parminder's impulse purchase at the auction worth the risk?

I think he's done a really, really good job.

Sale or rental, people coming,

first impressions would be really good.

Interest would be high, and I think the pictures will look good

from a marketing perspective.

First impressions are absolutely brilliant.

The owner of the property's done a fantastic job,

especially the kitchen and bathroom, changed the layout

of the bathroom, which has opened up some more space,

and the kitchen, quality of finish is really good.

The estate agents believe this property

could make 75 to £80,000 on the resale market,

giving Parminder a pre-tax profit of between 16 and £21,000,

but his intention is to add this

to his growing portfolio of buy-to-let properties.

So how much could it make if he rented it out?

I'd suggest to a landlord in today's rental market,

you'll be putting this on for around £495 to £525

per calendar month.

I'd put this on the rental market for £525 per calendar month.

Those figures would give Parminder

an impressive rental yield of between 10 and 10.5%,

so it seems his calculated risk will earn him his reward.

Is he satisfied with the job well done?

Yeah, definitely got a job satisfaction.

You can see where it started and the finished product.

There was no real major problems, and it's been really good, actually,

so I'm satisfied, definitely. It's very good.

We hope you've enjoyed seeing today's property portfolio.

Join us next time for more Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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