Episode 4 Homes Under the Hammer

People buy properties for all sorts of reasons, to live in

-or just to do up and sell on.

-Whatever the reason,

the main concern is value for money. So how do you do that?

One way would be to buy your next house under the hammer.

You need to do your homework if you buy at auction.

But once that's done, you can get yourself a real bargain.

Here's a look at today's potential money-spinners that sold under the hammer.

'This London property dates back to 1872

'and is full of original features.'

With some money and some imagination, it could look fantastic.

'There are some rather odd surprises when I visit this semi in Derby.'

Fairly standard layout so far. Stairs up to the bedrooms. Down the corridor, what is that?

'And in Gillingham, Kent, you'd have problems moving large furniture about in this frustrating property.'

Look how narrow this place is. It's just not wide enough!

'All of these properties went to auction

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

'For the first property that went to auction, I've come to Forest Gate in East London,

'a vibrant and bustling part of the city.

'With the 2012 Olympic stadium only minutes away, this part of the capital is tipped for big things.'

I'm here to see a substantial house with a modest guide price.

The average property price on this road is £360,000

and the guide was set at just £235,000.

Now, the house has been in the same ownership since 1872,

so I'm hoping it's been refurbished since then.

Let's go inside and see what it's like.

'It's clearly benefitted from double glazing at some point, and it looks as though there's a new roof.

'Not sure when it was last painted, but surely it's had a coat since 1872! Or has it?'

Oh, now, it is a little disappointing on the inside,

but if you can look beyond all the peach wallpaper and the yellow trimmings,

you've actually got the bones of a really nice house here.

You've got lovely high ceilings, beautiful cornicing

a nice fireplace, you've got a ceiling rose.

And I'm not sure whether I do like the double doors leading through to the next room

or I would prefer a nice, big, square arch.

Let's see what's on the other side.

Ooh, it's looking good. Now, look at this!

Now, this is when I get quite excited.

If you look at both of these rooms as one large room, it's fantastic.

You've got so much light, you've got windows at both ends and another beautiful fireplace.

OK, this house needs a lot of love, a lot of tender loving care,

but with some money and some imagination, it could look fantastic.

It's got great bones.

I'm quite excited about this one.

# I'm so excited

# And I just can't hide it

# I know, I know, I know, I know, I know...

'Down the colourful hallway, there's a second reception room and a disappointing kitchen.

'Imagine this as one large room, though. It could be a really great family kitchen.

'Upstairs in this house, that went to auction guided at £235,000, there are two good-sized bedrooms.

'The master bedroom at the front has this wonderful window.

'There's so much light here, and the floorboards look as though they'd sand down beautifully.

'The second bedroom has another brilliant fireplace,

'plus all the original carpentry that a house this old often has.

'There's also a loo up here.

'And two more rooms at the back, one is obviously bedroom three

'and off that is a fourth room which might have been a bathroom at some time.

'It has a door leading out onto a most curious roof terrace.

'I'd get that checked out. But a word of caution now.

'With no bathroom up here and no working kitchen downstairs, this house looks to be uninhabitable.

'So there's little chance of getting a mortgage on it in this state.

'And remember the loo upstairs? Well, I've found another one.'

Now, this is the oldest toilet I've ever seen on Homes Under The Hammer.

'A bit of a museum piece which will remind many viewers of their younger days,

'when outside loos were surprisingly common.

'Outside, there's a lovely leafy garden. It needs taming, but could be perfect for al fresco dining.'

Landscaping a garden can add up to five percent on the end value of a property,

and if you're frugal, you could tidy this little lot up for as little as £1,000.

Now, if you're thinking low-maintenance garden, it could be better suited,

or you could put some decking out here and you would seriously need to get the clippers out

on this cherry tree, because as it stands, it just dominates most of this garden.

My advice, though, do not overlook your garden area,

because outside space is always desirable, and so do your best to showcase it.

# I came across a place in the middle of nowhere with a big, black horse and a cherry tree

# Whoo-hoo, whoo-hoo

'This could make an ideal family garden.

'Back inside, once you've restored the house to its former glory,

'hopefully retaining lots of the original features,

'the next thing to think about is the colour scheme. And I've got some advice.'

Magnolia or colour? The debate rages on.

Now, beige won't offend, plus it's easy to change.

But with an influx of properties on the market, isn't it best to add some colour or pattern

to differentiate your home from other houses?

And when I say that, I don't mean something like this.

'I mean soft greys, muted greens, maybe one accent wall with a bolder colour.

'Just something to make your home more memorable.

'I asked a local estate agent to take a look at this house,

'which went to auction at a guide price of £235,000.

'With so many original features remaining, he's convinced about the appeal of this place.'

It's a developer's dream because it has got a lot of potential

and it's on one of the very popular roads in the Forest Gate area.

'The property's actually an end of terrace. On one side is a residential house,

'on the other is a disused London Transport depot.

'What about the overgrown garden at the back?'

I think the garden just needs to be chopped down, but I do like the tree in the middle.

# Cherry, oh, cherry, oh, baby

'Let's talk figures. How much income could the house produce once renovated

'if the new owner was successful in finding a tenant?'

We would be able to rent this out for around £1,400 per calendar month.

'What could the value of the property be after a good-quality refurbishment?'

As it is, I would put it on the market for £250,000, as it does require some work.

Potentially, if you develop it as a three-bedroom, then you're looking at close to £325,000.

If you were to add the fourth office/bedroom, then you're possibly looking at

around £350,000.

So what do I think? Well, no bathroom and no kitchen equals no mortgage,

so this one was for the cash buyers.

Let's find out who was cash-rich as we go to auction.

Lot three, a good-sized end-of-terrace house, bay fronted,

requires some upgrading. Where can I kick off? I think I know what it is.

200 anywhere?

200. 200.

205 anywhere? 205.

210? 210.

215. 220.

220 with you. 225 elsewhere?

225. 230.

230. 235. 240.

240. 245. 250.

246? 245 with you.

246 elsewhere? If not, 245.

First time, second time,

third and last time, if you're all done. 245.

'That final successful bid of £245,000 came from Wayne.

'Originally from New Zealand, Wayne's a lecturer in law who lives in the East End of London.

'I met up with him back at the house to find out why this property fitted in so well to Wayne's world.'

Wayne, congratulations.

-You spent £10,000 over the guide price.

-Mm-hm.

-You must be quite happy with that.

Yeah, that was within what I was expecting.

What did you like so much about this house to bid for it?

Well, the character. As we can see, the original features.

But also, the potential for a really large loft conversion.

It's nearly three metres of head-height up there.

And by the time we add 40 cubic metres of allowable extension,

we'll be able to have one large room at the front and then a shower room

and then another bedroom at the back on the dormer.

And that will... By the end of this, this will be five bedrooms, two bathrooms and a downstairs toilet.

'The issue about getting finance on the house when it didn't have a bathroom or kitchen wasn't a problem

'because Wayne's remortgaged his own property to secure the funds.

'It's quite an ambitious project that he's taken on here, especially when you remember

'his background is in law. So how is he going to do this, as well?'

I'm a university professor, I'm on sabbatical at the present time

and I've always wanted to get a rundown property

and, at the present time, I go back to my lecturing in October,

-so I thought now is the time.

-Have you ever taken on anything like this before,

like a whole house in need of complete renovation?

Not really. I have renovated the house I've been living in

and recently done a full loft conversion

and, at the same, renovated virtually everything else in the house,

like changing the bathrooms round, pulling down ceilings, relaying floors.

That was quite a fun experience

and the thing that actually got me going about picking up my interesting and doing a rundown house

was the team of builders that was associated with that job.

So I thought, "OK, we've got a good group of guys here,

"we can use them for another project." And they're all on for it.

-If you find a good team of builders, hold onto them!

-Yeah.

'So, Wayne's going to project-manage the team of builders who renovated his current house.

'He intends to convert the loft and also extend into the area within permitted development rights.

'He'll need to obtain building regulations, but not full planning permission.

'He paid £245,000 for the property but that's only the beginning,

'because there's lots of work needed here and a hefty budget, I suspect.'

How much money do you think you'll need to spend to take it to the next level?

-Well, my working budget is £70,000.

-OK.

I could go a little bit more than that, but then I'd have to sell of couple of valuables.

-Which you don't want to have to do.

-Not really, no.

Let's talk about your garden. You've got a really pretty garden, if you could see it!

You've got this whacking cherry tree, which is beautiful.

-What are you going to do with that tree?

-I really like it.

I'll trim it back a little bit, but I'm certainly not going to get rid of it.

I was told by a person who knew the family that lived here

that originally, every house had one of those, and they've all taken them out, so this is the surviving one.

# I came across a place in the middle of nowhere with a big black horse and a cherry tree

# Whoo-hoo, whoo-hoo

'In the loft space, he hopes to create two bedrooms and a shower room.

'He's also hoping to add a corridor between the two back rooms,

'gaining the extra space by removing the chimney breasts.

'He's also going to build a new bathroom upstairs.'

So, how long do you think it'll take you to get it all sorted and finished from top to bottom?

Well, I think, from the beginning, I've got to get the architect to draw up some plans

and we won't be requiring planning permission, because it will be within allowable requirements.

So as soon as the architect's got them drawn up, I think we can start.

I would hope three to four months.

Wayne, it's been great meeting you. Good luck and I hope you manage to stick to your budget.

-So do I!

-Thank you very much.

# And cherry tree

# I can't quite get there cos my heart's forsaken me

Will £70,000 be enough to renovate this house

or will Wayne have to sell his valuables in order to complete this job?

You can find out how he gets on with this huge challenge later on in the programme.

Well, I'm on an ex-local authority estate about three miles south of Derby city centre.

1930s houses predominantly built to house the workers from the Rolls Royce factory which is nearby.

What I'm here to see is this. A three-bed semi. Guide price was 50,000 quid. Let's take a look.

'The Rolls Royce factory has long since closed,

'but the 22-acre site is to be redeveloped.

'In the long term, that could lead to a rise in property values around here.'

So, what have we got? Fairly standard layout so far.

Stairs up to the bedrooms there. And down the corridor, what is that?

What a... That just doesn't work for me,

to have the only loo and bathroom there at the end of this corridor.

I don't like that you see it when you walk through the door. Is it any worse than having it at the rear?

Maybe not. Ideally, you want that upstairs, keep that as a second loo.

You've got a living room area there and then through to the kitchen.

It's tired and dated, needs to be redone,

and worse than that, it's very dark and dingy.

That's partly because there's this conservatory lean-to on the back.

So needs to be played around with, definitely improve the lighting, change the units,

and already I'm thinking there's quite a lot of work.

# I'm a big mess

# I mean a really big mess

# A big, big mess, he was all mixed up in a big mess

'Looks like a lot of work downstairs. Let's take a look up top.'

Upstairs, pretty simple really. Just three bedrooms. The obvious question is,

would you bother bringing the bathroom from downstairs up here?

There's space, you could put it in this room, but you lose a bedroom,

which, if you're thinking about renting this place out, is going to have a significant impact.

So, thinking it through, I think the toilet and bathroom are probably going to stay where they are.

'At the back, there's a large garden.

'With a lot of work but only a little spent on it, that could be a real selling feature here.'

Bodged onto the rear of the property is this extension.

I actually think this detracts from the property quite a lot,

so either take it down or put something more substantial in its place.

Before that, look at the value. The ceiling price of properties like this here is around £85,000.

So you have to be very careful with your budget.

Extension like that, how much will that cost? See if it's worth doing before you make the final decision.

'The guide price for this house was £50,000.

'Time to ask the auctioneer who sold it what he thinks.'

Actually, although superficially it's a bit dog-eared,

structurally, they're quite sound houses. They were well-built

and they're the sort of house you can renovate and know that you're

dealing with a sound property.

'What about that downstairs bathroom?'

You can move it but you're going to sacrifice a bedroom,

so a three-bedroomed house becomes a two-bedroomed house.

What does that do to its value? It probably restricts it reasonably significantly.

So most people would keep it as three bedrooms and a downstairs bathroom.

'What's the best option for a would-be investor, to do it up and sell on or renovate and rent out?'

If this was upgraded and then offered on the rental market,

the rental would be about £500 per calendar month.

'That's an annual income of £6,000,

'which makes the rental option a strong possibility.

'What about the potential sale price once renovated?'

The market for sale here is slightly difficult.

They don't sell readily.

And on today's market, the maximum you'd get for this as a three-bedroomed house

would probably be somewhere between £85,000 and £90,000.

You could ask for more than that, but I think that's probably what you'll end up getting.

If it became a two-bedroomed house,

you could probably take about £8,000 or £10,000 off that expectation.

There are some internal modifications I'd like to make to this place,

but before I did anything, I'd check the ceiling price

and make sure I kept a tight rein on my budget.

Still, a good property to go for. Let's see who did so at the auction.

Lot number five. Three-bedroom semi. 52,000.

48 if you like.

48 I've got, thank you. At £48,000.

49 somewhere else?

49 is bid in the middle. 50 on the left.

51. 52.

53. 54.

In the middle at 55. 56 somewhere else.

We're selling it. It's going to get sold. 56. 56,500.

57. 57,500.

58. 58,500.

59. 59,500.

60,000. 500.

61. 500.

62.

62,500.

63 is bid.

63,500?

63,500.

64,000.

64,500. 65,000.

500. 66?

At 65,500. 66. Stick with it.

66,500? No.

£66,000. 500 somewhere else?

At £66,000. Second thoughts, quickly.

For the first time. 66 for the second time.

Third and... 66,500.

67?

66,500 I'm bid. 67?

67.

67. One more?

At £67,000, then. Once.

Twice. Third time. Sold at 67,000.

'The new owners of the semi, who paid £67,000 for it,

'are Nabil and his cousin.

'Nabil is from London, but his cousin lives locally.

'They're first-time developers.

'I met Nabil at the house to find out about their plans.'

-Nabil, good to meet you.

-Nice to meet you, too.

-Congratulations.

-Thank you.

-Why did you want to buy it?

Well, we wanted to get onto the property ladder and house prices are too expensive in London,

so we thought we would try somewhere north. My cousin lives over here.

He's my partner. He's purchased the property with me.

So we found a cheap property and decided to go for it.

Certainly, compare to London prices, it's...

Yeah, you could probably pick up four or five semi-detached houses up here!

-Right. So, what tempted you into the world of property investing?

-It's better than working nine to five.

-Right. What do you do at the moment?

-I used to work in a bank

and my partner, my cousin, he works in security.

But we were thinking we need to get onto the property ladder and move forward,

cos we can't just work nine to five and pay the mortgage and bills,

-we want to get up there like everyone else.

-And have a portfolio and have it earn you money.

-Yeah.

-So this is property number one.

-Yep.

-What's the bigger picture plan?

-Property two and then three and then four.

We have strict schedules. We want three properties by the end of the year.

-And we have strict deadline, as well.

-Right.

-So we've got goals.

'Nabil's certainly not lacking in enthusiasm or confidence.

'He hopes this will be the first in a portfolio of buy-to-lets.

'But back to square one now. What are his plans here?'

We're going to start by stripping everything out.

Everything's going, the kitchen, the bathroom, the flooring. We'll strip everything out and start a fresh.

And the conservatory, as well. It really needs restructuring,

the floor needs to be re-concreted.

-And that's really it.

-OK. Fairly major job, though.

-Yes, it is.

-So, what's the budget.

-It is a strict budget of about 3,000.

-Three?

-Three. But we've worked out the figures.

It is surprising. And if I told somebody else, they'd be just as surprised.

But I'm hopeful and I'm a pretty sure that we will stick to the budget

and I know, in many cases, it does go over.

-But even going over by £1,000 is fine by me.

-When you've finished, will you do one of my properties?

-No problem.

Central heating, bathroom, kitchen,

-conservatory, full rewire.

-Yes.

-And painting, decorating, cleaning up.

-Yes.

-Three grand.

-Yes.

-And timescale?

-Two and a half weeks.

-Now, you are having a laugh, aren't you?

-I've planned everything out. It's my first property

and I've spoken to all the right people

and this is exactly what I've written down on paper,

deadlines, times, schedules, cost,

and hopefully, in two and a half weeks, we'll have this house completed and you can come back

and have a look and you'll say, "Hold on a minute, Nabil,

"I'm actually quite surprised."

-I'll eat my hat!

-I'll bring one for you.

-Thank you very much!

'Nabil's got his renovation planned with precision, which is vital if he's to stay on-budget.

'He's getting lots of work done by family members who work in the building trade.

'But even so, I think I will be able to leave my hat firmly on my head.'

# You can leave your hat on

Why such a mad scramble to get it done?

Cos I want to move on to the second property.

I know I haven't got much experience in this, but I don't want to waste time. House prices are rising.

Some properties are very cheap in areas and we want to get in there and take them.

Right. Well, heck, you've set yourself a bit of a challenge.

-Yep.

-But I wish you all the best with it.

-Thank you very much.

-We'll be back in two and a half weeks.

-I hope to show you a nice property.

-Good luck.

-Thank you very much.

# You can leave your

# Hat on

So, a two and a half week timescale and £3,00 budget? What do you think?

If I was a betting man, I'd be off down the local bookies

putting £10 on the fact that Nabil won't meet either of those.

Still, you never know, I could be eating my hat later in the show.

'If you're thinking of splashing the cash in this Kent house, a word of warning.'

If you overspend on this property, you could be out of pocket.

'We return to Derby to see how Nabil got to grips with project management.'

I haven't stayed on top of the builders. They've been left to do it how they want, with my instructions.

'But first, it's back to London, where some hard decisions have been taken.'

Of course, the dilemma was the cherry tree.

'Earlier in the programme, we were in Forest Gate, East London,

'where Wayne had bought this semi-detached property, dating back to 1872,

'for £245,000. He's a professor of law and had taken a year's sabbatical.

'He'd already done a full refurbishment on his own house,

'and his team of builders were about to tackle this one.'

What did you like about this house enough to bid for it?

Well, the character. As we can see, the original features.

But also the potential for a really large loft conversion.

'The work's taken less than three months

'and Wayne's invited us back to show us how much the place has changed.

'Well, the outside paintwork has clearly had some attention.

'Through the front door, and the hall has now lost that multi-coloured scheme

'and a feature's been made of the floorboards.

'It's great to see that large living room has retained the two fireplaces and architraves,

'and again, the floorboards look stunning.

'At the back of the house, the former dining room and kitchen have been opened up

'to make one stunning kitchen/diner.

'The outside loo has been turned around and is now inside

'and patio doors lead out onto the garden.

'From here, the size of Wayne's loft conversion can clearly be seen.

'There's a small rear bedroom, a bathroom and more stunning timber on show.'

Well, this was actually part of the reason I bought the place, cos I could see the potential of this.

Structurally, this was about the easiest part of the house to refurbish.

I'm very pleased with the standard of work. A lot of light. Two large Velux windows,

large French doors and balcony.

I would've liked the small room at the back to be larger, but we had to work out where to put the plumbing.

It's a large-scale plumbing system, so we had to work out where to put it. But this is a very large room.

'If you head down one flight of stairs from the loft,

'the front master bedroom has been totally refurbished.'

Well, this room, I tried to keep some kind of character to it

and I decided to leave the brickwork exposed.

The problem with that is, you have to have brickies basically relay it

and redo all the pointing and then put it with a proper mortar

so that it's not a damp issue.

I definitely think the work's been worth it.

'The room's delightful and the original features in bedroom two also remain and have been restored.

'But refurbishing a property this age inevitably throws up problems.

'The water main into the house was the original Victorian pipe,

'so that had to be relocated across the road.

'That meant a nasty extra bill of £4,000.

'So how much has all the work cost?'

Well, originally, I'd hoped to get by with the building work for 70 to 80

and then allow another 10 or 15 to produce things like the kitchen units and the painting.

So it was higher than that. It's gone to about 110 in total.

'Well, you can see where the money's gone. Like the kitchen.

'The bathroom suite on the first floor is clearly of a high specification.

'The challenge at the back of the first floor was to create a separate access to the two rooms.'

This was two rooms and there was a very small Victorian toilet.

We knocked it all out. And there were two chimney breasts, which we took out.

The problem was that the exterior wall was bowed.

We took the roof off at this stage and re-bricked the entirety of the outside wall

from about here up to the top of the roof.

And it has the largest door of the house, so what we're trying to achieve

is a flow of light from the front windows all the way through to the balcony.

'From the roof terrace, you can see how much work was needed to tidy up the garden.'

Well, of course, the dilemma was the cherry tree.

And we had numerous cherry-picking parties. The birds got most of it.

I did get in a tree surgeon who looked at it and said it was 70 to 80 years old,

and that if we trimmed it back, we could get another 25 years out of it.

# With a big black horse and a cherry tree

'What are his plans for the property?'

I doubt whether we'd be selling it in the short term.

It'll probably go for rent and then see what it's like in two or three years.

'Time to see what two local estate agents think of the house

'that Wayne's refurbished.'

It's a good-size property in quite a sought-after location.

It's got a good-size garden which is quite rare in this location.

And it's got three storeys, which is very unusual.

He has done a really nice job to it

and he's fitted it to a really nice standard with wood flooring,

and did the loft extension, as well, which adds another dimension to it,

and cleaned up the garden.

I think the extra bathroom definitely makes a difference.

You also have a downstairs WC, which is also a good feature.

I definitely think it does work well as a family house, because you've got the two reception rooms

or the opportunity to have two reception rooms or a large through lounge.

'So, has Wayne's investment here been worthwhile?

'Remember, he paid £245,000 at the auction and spent about £110,000 on the work,

'making £355,000 in total.'

I believe, in the current market, we would market this property for £425,0000.

I would suggest an asking price for this property around about £500,000.

'That range of £425,000 to £500,000

'would produce a gross profit, before the usual selling expenses,

'of between £70,000 and £145,000.

'Wayne reckons that the upper valuation only reflects what the house could raise

'if it attracted buyers from more expensive areas.'

That's quite a big discrepancy. Myself, I was tending towards the lower one.

It is actually on the market for slightly more than the lower one.

'Wayne plans to put the house up for sale for a couple of months to test the market

'and if he doesn't find a buyer, then he'll look at renting.'

I think this property would rent for £1,600 per calendar month.

I would expect it to achieve around about £3,500 per calendar month.

'Well, quite a difference. What does Wayne think of those two valuations?'

Well... Well, upper one... What's their number?

No, I think the upper one, again, is thinking of a niche market there.

'So Wayne's year off from his law lecturing job

'looks to have been a success. Does he fancy another project?'

Well, I would quite like to do it again, yes.

Not for six months, though. I have to catch up on some academic work.

'For the next property that went to auction,

'I've come to one of Kent's Medway Towns, a couple of miles from Chatham.'

Gillingham in Kent has a very bright future indeed.

The ambitious Medway waterfront renaissance strategy

is a 20-year plan for the redevelopment of up to seven miles of waterfront

all along the River Medway. Now, this project will create 6,000 to 8,000 new homes and 8,500 jobs.

So that's good news for Medway, good news for Gillingham.

'The property I'm here to see is in this street of terraces.

'On auction day, it had a guide price of £80,000 to £85,000,

'and from the outside, it seems in pretty good order.

'The windows and door look like they're recently been replaced, so the outside is promising.'

Let's go inside and see what you get for that £80,000 to £85,000 guide price.

So, straight from the street into the lounge.

Bit of a step there. I'd probably try and get that sorted out.

A little bit disappointing on the inside.

It's really tired, really dated. Not a bad space.

You've got to put your rose-tinted glasses on when you walk in

and think about what this room could look like,

but so far, I'm not terribly impressed. Let's have a look through there.

So, you've got much of the same decor in here. Same size room.

But, again, you've got lots of Artex, the curtains and the carpets all need to be dragged out

and it just needs a big old freshen up.

What I do like, though, is the fact that there's a nice big doorway leading out to a patio space.

That really is a plus point. And the kitchen, again, a real negative for me.

I mean, look how narrow this place is. It's just not wide enough.

If I were to take this property on, I'd like to take some of this wall out to really open this area up.

And right down the end there,

downstairs bathroom. Not ideal.

'I hope that the layout of this property upstairs could accommodate moving the bathroom up there.

'The house is also rather grubby and needs a good clean,

'but the kitchen and bathroom at the back do add extra space. And it doesn't stop there.'

And outside, the garden is huge!

'What a bonus! Yes, it's a wilderness now, but what an opportunity

'to add value to the property.

'Upstairs, unfortunately, the space isn't great.

'So my suggestion of relocating the bathroom looks unlikely.

'This is a classic two-up, two-down property with a front and back bedroom,

'but there may be an answer to getting more space.'

Upstairs, there's a loft area

and I'm always in favour of converting unutilised spaces,

but in this property, I think I would leave things as they are.

Planning the loft into a habitable space, it may make this property more saleable.

You can see people have even done it out there in the street.

But it won't increase its value.

The ceiling price on this is just over £100,000.

If you overspend on this property, you could be out of pocket.

'Time to get some expert advice from a local estate agent

'familiar with the housing market around here.'

'The downstairs layout is not ideal,

'so might that put some people off?'

It's not ideal, having a galley kitchen

and the bathroom being downstairs, but for this area, it's normal.

Shame there's only two bedrooms, cos there's a lot of three-beds round here to compete with,

but downstairs is a decent size.

'Let's talk figures. For buy-to-let investors tempted by this place,

'what level of rental income could it generate once refurbished?'

For a property in this location, we'd be looking to achieve in the region of £600 per calendar month.

'And what about resale? What could this house, that went to auction guided at £80,000 to £85,000,

'be worth after a full makeover?'

There is a ceiling price, with it being a mid-terrace and being a two-bedroom.

Absolute top price, in stunning order, would be £115,000

but realistically, it would probably sell for in the region of £105,000 to £110,000.

Well, it doesn't look like the bathroom's going anywhere.

'But with such a great garden, maybe that's not such a problem.'

'I have to admit it, I am not wild about this terrace.

'Let's go to the auction and see who wanted this.'

Right, lot 59. It's a vacant house for improvement.

It's got glass heating, lots of double glazing.

Ideal for letting or occupation.

Where you going to start on that one? Can I start at 75 for that one?

75. Start me where you will. Give me 70, then.

£70,000 bid I have. And 2. 72.

72. 75. At £75,000. 7 I'm looking for.

Are we all done at £75,000? 77.

And 80. And 2. And 4. And 6. 86.

88. And 90.

At 90. And 2. 92. And 4. 94.

94. And 6. 95. 95.

He's getting a little bit tired of it. 95. 96?

First time at £95,000, then.

Second time at 95,000. 96. I'm obliged. 97 I'm bid.

98. It's against you again. At £97,000 for the first time.

£97,000 for the second time.

With you sitting down, sir, at £97,000.

Definitely out of it. Third and final time at 97, then.

£97,000. And a number, please.

'That successful final bid of £97,000 was made by Brian.

'He used to work in insurance, but nowadays, feels more assured working with property.

'I met up with him back at his new purchase

'to see if this was going to be a premium buy

'even though it's got an excess amount of work to do.'

-Brian, congratulations on your purchase.

-Thank you.

-How well do you know Gillingham?

Not very well. I have another property here in the lower part of Gillingham, which I've had some time,

-and that's going quite well.

-What were you doing at the auction? Were you looking for a property?

-Was this the house you were after?

-No.

We rely on either rents or deposited money in building societies or banks

and it's so miserable, the rate you get,

that I collected about 90-odd thousand and I thought it better go into what I know,

-it better go into property.

-You sound like you're quite knowledgeable about property.

-Is this something you've always been interested in?

-Well, when Jo and I got married in 1959,

she had 300 quid, I hadn't got a bean, I'd spent all mine, the usual,

so she'd saved up 300 quid.

There's not much you could get for 300 quid,

so we took a mortgage on a terraced Victorian house, three floors,

and in four years, we'd done well enough to buy the house next door

and converted it to two flats and moved next door. Then we moved to the next street.

-So for how many years have you and your wife been buying and selling and developing?

-Since '59.

-How many do you think you've bought and sold?

-40.

'Wow! That's what I call a serious developer.

'He owns several buy-to-lets in the Kent area, and amazingly,

'is still full of ambition in his 78th year.'

# I just can't get enough, I just can't get enough

# I just can't get enough, I just can't get enough

What do you do? Do you deal with your tenants on a day-to-day basis?

Yes, I do the lot. I don't like putting it out to other people to do. I like to do it myself.

So you're still buying, you're still about to renovate. Aren't you supposed to be taking it easy?

-I am taking it easy.

-Are you?

-You don't look like you're taking it easy to me!

-I don't tear around as much as I used to.

What are you planning to do with this house?

I haven't really had a chance to look cos the electric wouldn't go on.

-I'm going to get rid of the smells and the carpets.

-It's a bit smelly.

Paint it from top to bottom. Repair a couple of doors I happened to see which are not too good.

How far are you going to take this? Because you've got plasterwork, swirling patterns on the ceiling,

the kitchen's a bit narrow, we've got a downstairs bathroom. How far are you going to take this?

I'm going to use some common sense, really. I'm not going to spend a fortune.

-I hope to get out under £5,000.

-And what are you going to do for that?

Erm, redecorate throughout. Look at the wiring.

-Tidy up the kitchen.

-Not change it?

Might change it. It depends how well it cleans up.

There's nothing wrong with the units, they're just filthy dirty.

It wants a new worktop, perhaps, and a new sink.

We'll decide as we go. But it's got to look a lot better than this.

'Nowadays, Brian project-manages to work and keeps an eye on the builders.

'He used to do all the heavy work himself, but now leaves that to the professionals.'

So, Brian, what is the timescale? How long is it going to take you to knock this place out?

Well, I don't know whether we'll achieve it, but we're going to try and do it in a month.

-Cos I want to go on holiday.

-Ah! So it's all about the big holiday!

-I've got to have some reward.

-Do you think you'll achieve that?

Looking round now, it's going to be a tough one. But we're going to try.

It's been so lovely meeting you today. Good luck with this project.

And you've got to slow down. I'm telling you that.

-Everybody tells me that.

-Do they?

'I reckon Brian's certainly up there with the more experienced developers we've had on the programme.

'He's certainly earned his holiday.'

Will Brian and his wife get this finished in time to go on their holiday?

It's their plan to have it renovated and rented out by then. And that is only a month away.

Well, it's been a while now since we saw those properties.

Mm. Do they look any different? Has all that time and money been well-spent?

Let's go back and find out.

'We return now to Derby, where I visited this three-bed semi-detached

'and met 27-year-old Nabil.

'He'd previously worked at a bank, but was now beginning a career as a property developer.

'This house would be his first renovation

'and he planned to use family contacts in the building trade to do the work

'while he project-managed.

'Nabil wanted to renovate that tired and tatty kitchen.

'The ground-floor bathroom needed to be ripped up and thrown away.

'The bedrooms could do with being refurbished and decorated.

'And Nabil proposed to do all this on a super-speedy schedule and a teeny-weeny budget.'

-So what's the budget?

-It is a strict budget of about £3,000.

-Three?

-Three.

-And timescale?

-Two and a half weeks.

Now, you are having a laugh, aren't you?

In two and a half weeks, we'll have this house completed and you can come back

and you'll say, "Hold on a minute, Nabil, I'm actually quite surprised."

'Surprised? I'd be astonished.

'Well, not two and a half weeks, but 12 weeks later, we're back.

'Surely the house will be finished by now.

'Well, there's not much change on the outside,

'apart from a pallet of breeze blocks, which I don't believe to be an ornamental garden feature.

'In the lounge, the ceiling and the walls have been replastered,

'spotlights fitted, and I do like the new woodwork.

'In the kitchen, the units have been replaced, but there's still a lot of work to be done.'

'The oven needs a hob and the sink could do with some taps.

'It would appear Nabil has fallen just a tab behind schedule.'

Realistically, I've only had the builders in here for four weeks, and that's unsupervised work.

I haven't stayed on top of the builders. They've been left to do how they want, with my instructions.

The only thing we've got left to do is a little bit of touch-up here and there.

'Off the kitchen was a beat-up and broken-down lean-to,

'which Nabil decided to replace with an extension.

'I think this needs more than a touch-up here and there.'

Well, the original extension was in a very, very poor state.

We decided to take it out further and extend it across to the bathroom.

We're having new double glazing all the way across, new roof.

We now have to re-cement the floor, re-concrete it, flatten it out,

cos the original was in a real bad state.

At the moment, we still have a few things left to do.

The walls need to be pushed all the way back up, plasterboarded, skimmed for it to look in a beautiful state.

'I'd agree that getting rid of the lean-to was a good idea,

'but Nabil's created a lot of extra work for himself.

'The new extension should eventually improve the look of the house and hopefully the value, too.

'Let's take a look in the bathroom, the entrance to which was directly ahead of the front door.

'Most definitely not the best sight to welcome you upon entering.

'Nabil has cleverly moved the entrance along and refitted the whole bathroom.'

We decided to extend the bathroom out into the kitchen

and put the bath up against the wall, we put a new double-glazed window,

new toilet, new sink, new flooring.

The original one was quite small.

It did have a direct view in front of the entrance, so we decided to extend it out here,

nice door on the side, out of sight.

Nice shower in the corner. And it's much more roomy and much more spacious.

'Nabil's changes to the layout work well.

'Let's head up the new staircase to the bedrooms.

'All three of them have been replastered and had new carpets laid.

'The schedule for getting this house ready to rent out may have ballooned from two and a half weeks

'to three months, but has he kept control of his original £3,000 budget?'

We had to go over due to the extension.

And it may sound insane, but we only spent about £5,500.

'Nabil thinks he won't actually have to spend any more money to complete the work here.

'He's gone over-budget, but it looks like having family in the trades has helped keep the budget down.

'All that remains is to get this finished and let out.'

I've had quite a large interest from the local area,

people knocking on the door, asking, "When it is going to be available for rental?"

I've got somebody who's actually put an offer in of £550 per calendar month.

And I'm just waiting for the house to be completed.

'Including their £67,000 purchase price,

'Nabil and his cousin have invested a total of £72,500 here.

'We invited along two local estate agents to get their opinions on it.'

When you first come in, it looks a big improvement on what was here before.

As you look around, you see there's a few things that need finishing off

and it's quite probable that there are little things

that haven't been done as well as they might have been.

The bathroom being downstairs can be a disadvantage,

so making that bigger and having a separate shower makes a difference.

'Nabil estimates that his total outlay will be £72,500

'and the experts believe it could have a sell-on value of between £80,000 and £85,000.

'That's a potential pre-tax profit of between £7,500 and £12,500.

'This has always been a buy-to-let investment.

'Bearing in mind Nabil's rental offer of £550 per calendar month,

'let's find out what this property could achieve on the rental market.'

It would have a rental value of around £500 per calendar month.

A rental valuation for this property would be £450 per calendar month.

'But, despite being over-budget and behind schedule,

'Nabil is having the last laugh.

'Since filming, a tenant has moved in and is paying £525 per calendar month.

'Nabil hopes house prices will drop even further and is considering buying his next property in London.'

This has given me a boost to carry on and purchase my target of three properties by the end of the year

and maybe next year carry on and buy a few more.

'Time now to return to Gillingham in Kent.

'Earlier in the programme, Brian, a seasoned developer in his 70s,

'had paid £97,000 for this mid-terrace property

'to add to his buy-to-let portfolio.

'Brian was going to project-manage the work.

'He intended to give the house a complete cosmetic facelift

'but keep the kitchen and bathroom if possible. He'd set himself an ambitious timescale.'

How long is it going to take you to knock this place out?

Well, I don't know whether we'll achieve it,

but we're going to try and do it in a month. Cos I want to go on holiday.

# Holiday

'Well, it's now four months later.

'We met up again with Brian to discover why the work had taken longer than expected.

'The dated decor has gone.

'The neutral shades continue through to the back room, as well.

'Upstairs, and again, the two bedrooms have been toned down.

'But Brian quickly discovered he'd taken on a project

'that needed all his developer's expertise to turn it around.'

It's been a bit more of a headache than some.

On first glance, it looked OK.

It looked as if it was a quick refurbishment.

But when you got into it, the walls and the doors were crooked, the ceiling was bent

and you can't patch them up. I can't do bodging.

I have to do it so that it's right.

'Brian's team had to replace the ceiling in the bedroom and replaster the walls.

'The whole house has been rewired. But what about the kitchen?

'Remember that Brian wasn't sure if he would replace it or not.'

We decided, in the end, to replace the lot.

It's a completely new kitchen, flooring and everything.

And it's now a decent kitchen, I think.

I'm quite proud of it, anyway.

'The bathroom has also benefitted from a major refurbishment and Brian hopes it will appeal to every age.'

We decided to put in a shower-bath, because young people prefer showers rather than baths,

but then if we get an elderly person, they prefer a bath, so it's a bath-shower.

'The extra work the property needed meant that Brian had to put the work on hold,

'as he and his wife Jo had a holiday planned in the States.'

'But now he realises he'd set himself an unrealistic timescale.'

I was a bit optimistic, I'm afraid. I think this has taught me a lesson.

I'm not as strong as I used to be, not as fit, not as able. I'm pleased with the whole project now.

But I wouldn't have tackled it if it'd known.

# Hard work

'Amazing. Full marks to 78-year-old Brian.

'He puts many younger men to shame.

'I've seen people half his age struggle to get a project finished.

'So the timescale shifted. What about the budget?

'Five grand now looks very ambitious.'

We're a bit over £10,000.

That's not taking my labour or time into it.

I expected £5,000 for painting, decoration and cleaning.

It's been new walls, not new wallpaper.

As we spent so much on it, I don't think that the market is strong enough to resell.

So it was back to the original idea that we'd do it up to let.

'Time now to see how much rental income two local estate agents

'estimate this house could generate for Brian.'

The owner has done exactly what's needed for a property like this.

There's very little more to be done.

The decoration is neutral all the way through, white kitchen,

bathroom's perfect with the shower-bath.

The kitchen absolutely was the right choice to replace

and it's modern and fresh and what buyers or tenants are looking for.

The bathroom's very light, very airy. At the back of the property,

it's always going to be dark, so it's nice to have an open feel.

The garden still needs some work, but it's a nice size

and it's facing the right way for the sun in the evenings.

'Brian now thinks he'll go for the rental option.

'So what income could he achieve for that?'

If the property was available to rent, I'd expect it to achieve £600 to £625 per calendar month.

This property should achieve in the region of £575 per calendar month.

'So, 75 quid difference between the potential rental range of £575 to £650 per calendar month.

'Is he happy with those figures?'

Fine. I think the top one is a little bit high.

I like to keep my rentals just below what's possible and keep my tenant.

'What's the property now worth? Remember, Brian paid £97,000 at the auction

'and his budget went a bit over £10,000,

'so his total outlay is just over £107,000.'

I'd be looking to sell this property between £110,000 and £115,000.

If I were to market the property, I would expect it to achieve in the region of £115,000 to £118,000.

'That range, from £110,000 to £118,000,

'would provide him with a gross profit, before the usual selling expenses,

'of between £3,000 and £11,000. Not a massive amount, but what does Brian think?'

Well, fine, considering the market. It's a bit depressed at the moment.

Not quite so good as when we set out on the project, but OK.

# I just can't seem to get enough

'So will Brian be doing up yet another property before he's 80?'

I think it's unlikely. I think, if I did any more, I'd keep it strictly for investment.

Find a place already done, if I wanted to do any more, but I've had enough, really.

-'But what will you do?'

-Retirement.

I should've done it years ago. HE LAUGHS

We hope you've enjoyed watching Homes Under The Hammer and learnt some useful lessons.

We'll see you next time for more hot properties

and probably some that turn out to be a bit more lukewarm.

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd

E-mail [email protected]

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