Episode 6 Homes Under the Hammer

As we've witnessed, buying property can have its highs and lows

and it's not always as easy as it looks.

But there is one part of the process you can eliminate.

Getting rid of that dreadful property chain by buying at auction.

-All sorts of places come up for auction.

-And variety is what keeps us interested.

So these are the places that went under the hammer on today's show.

'This bungalow in Devon has an awe-inspiring view.'

Wow! Torquay at its most glorious!

'We revisit a cracking property in London.'

That up there is shocking!

'And I can see the potential for this house in Salford to go from rubbish tip to tip-top.'

It's a mess, but I like it.

'All these properties have been sold at auction

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

'I'm in Torquay.

'The idyllic coastline here has provided inspiration for many writers,

'including Sir Arthur Conan Doyle, Oscar Wilde and Agatha Christie.

'The English Riviera, as the area is known, is simply stunning in the summer,

'but it's also pretty nice in winter.'

So, will the property I'm here to see inspire me, I wonder? Well, this is it.

It's a two-bedroom bungalow. Looks OK from the outside. Nice that it's set up high above the road.

At a guide price of £215,000, let's take a look inside.

Actually, you don't need to go inside to see

the first fantastic thing about this property. It comes with a view!

You can even see the sea. Fantastic!

'The view alone is worth that £215,000 guide price.

'Let's take a look inside.'

So, what have we got? Straight into a porch

and then, kind of unusual, into another sort of entrance area.

Straight away, I'm thinking, not the best use of space, but not to worry.

Down the corridor there, stairs up to the second floor. That's a bit odd.

This is a bungalow, but a dormer bungalow.

Down this little corridor, you've got a living room/dining room area there.

Mm, clearly, total refurbishment required.

Kitchen, which definitely needs a bit of love and attention.

Then into a really big living room.

Views out, which is wonderful. You've got an open fire. It's a big space.

And the whole bungalow in general feels big. But it's not making the most of itself.

'This bungalow is a warren of narrow hallways and small extensions,

'from the entry porch to the small extension that sits in front of the lounge.

'And to the rear, where the kitchen also has an extension.

'The master bedroom is at the back and is large enough to add an en suite shower room.

'There will be no problem with the plumbing, as the bathroom is right next door.

'Onwards and upwards to the dormer conversion.'

So, upstairs, where you find the dormer bedroom

but an additional feature which I didn't expect, a loo. Really good thing to have.

Room itself, pretty decent size. This is the main room, then you've a little anteroom there.

I would've gone even further and extended this across the whole width of the bungalow.

Then you get an extra bedroom in.

The one thing they definitely got right in the positioning, cos, wow!

Torquay at its most glorious.

# It's a glo-o-o-orious town

# It's a glo-orious town

'Not quite as glorious as the view, but nearly as lovely, is the back garden.

'A cause for concern, though, is the condition of the roof.

'Remember, the guide price for this property was £215,000.

'I invited a local expert from the auctioneers that sold the bungalow

'to give us his opinion.'

The property is in a beautiful residential area.

It's located close to the coast,

also close to the amenities and facilities of the town centre.

This is one of the more favoured areas of Torquay.

'When done up, how much could the property be worth?'

Once this property is renovated, it could fetch somewhere in the region of between £325,000 and £350,000.

'And if rented out?'

If the property was let out, on a monthly basis,

it could be somewhere in the region of £850 to £950 per calendar month.

So, what do we think about this gorgeous Torquay bungalow?

Well, I think it's a fantastic opportunity.

Pleasant place to live. A property that you could move into or potentially develop.

A great one to go for. Let's see who bought it when it went to the auction.

Let's kick it off at 200 cos it will not make less. 200 straight in.

200. Thank you, sir. 200, we're away. 200 I've got. At 200.

210. 220.

220. Slow up a bit? 225.

230. 230.

235, he says. 235.

240. At 240. At 241.

242.

242 I've got against you. 242 is on my right.

At 242. 43. 244.

244. 245.

Are you working this out? 246.

At 246. You tell me what you want your next bid to be.

246 on my right. 247? 247.

247. 247. 250?

250 on my right. At 250. At 250.

At 250. At 250.

Not looking very happy. At 250. But there's a little smile, that's good.

At 250. 250 once.

At 250 twice.

251. 251.

At 251.

You're in, sir, at 251. All done. First time. Second time.

Third and last time at 251. Last chance. Selling it at 251.

'The successful bidders are builder Ron and his friend and business partner Graham,

'who purchased this property for £251,000.

'That purchase price means a stamp duty payment of three percent,

'£7,530 in this case.

'I met Ron and his wife Yvonne back at the bungalow.'

-Ron, Yvonne, lovely to meet you. Congratulations.

-Thank you.

-Tell me why you wanted this bungalow.

Basically, my partner and myself fancied another property to do

to try and earn a shilling.

A honest shilling. What did you like about it?

-We liked the location. We liked that view out there.

-Right.

You certainly can't complain about the view. It's amazing.

So, Yvonne, do you get involved in the business at all?

-Not really.

-You write the cheques, don't you?

-Yeah.

-THEY LAUGH

I did at the auction, write a cheque.

Now, the auction was quite interesting, because you hit the stamp duty threshold.

In fact, the bid before was the stamp duty threshold, 250,

-you bid 251.

-Yes.

-So what effect does that have?

I knew that I had to pay the extra stamp duty money, but my partner Graham didn't think

and he wanted me to go that one more.

But that one actually was one plus an extra two percent on the stamp duty.

-So it's an extra £6,000 you've got to pay.

-Yeah.

So I quietly swore at him. HE LAUGHS

'Ten years ago, Ron sold his building business to his son, Roy,

'and retired, but still likes to keep his hand in.

'I guess he'll want to keep this simple, then.'

# Take it easy

# Take it easy

-So, Ron, what are the plans for the property?

-We will take the roof right off.

-You will?

-And we're going to put a brand new roof up with three double bedrooms, three bathrooms.

-Wow.

-Yeah.

-What about downstairs?

Downstairs, there will be a double garage built.

-That will create a double patio area.

-Right.

The hallway will be in the centre, the front door will be in the centre,

-and where the old front door is will be a big dining room.

-Oh! OK.

Now, are you leaving any walls in place?

Just a few.

'Wow! That is a lot of work. So no taking it easy for Ron, then.

'He's obviously not afraid of some hard graft.'

# Time for me to go to work

# And it's hard work

'What will the budget be?'

Any idea how much all that's going to cost?

-I'm going to put £80,000.

-80. OK. Does that sound about right, Yvonne?

-I think so.

-Right.

-I shall be looking after the paperwork.

-SHE LAUGHS

-And watching how much he spends.

-Yeah.

-How long do you think it's going to take?

-I would say six months from the rubber stamp from the council.

-So you've got to apply for planning permission for all that.

-That's gone in.

-Already?

-Yeah. Six months after the rubber stamp,

-I want it back on the market.

-Sell it on.

-What will you do if you can't sell it?

-I'd move in it.

So, Yvonne, I think you're invited into this.

I'm quite happy where we are at the moment.

-So you might be here on your own.

-Yeah, he could be!

'Well, let's hope Ron has more luck convincing the council to rubber-stamp his plans

'than he's had so far convincing Yvonne to move house.

'Meanwhile, let's take a look at those plans.'

-So, these are the new plans, then?

-Yes.

-Do you want to talk me through them?

Obviously, the most striking feature is this on the first floor.

That's the master bedroom, getting the nice views down to the sea.

-Wow, so that's virtually floor to ceiling glass.

-Yes.

What a dramatic change to the property!

-You must be quite excited about that.

-Well, I will be when it's all finished.

You mentioned that you'd like to live here, and I can completely understand why,

but Yvonne didn't seem too keen.

-Well, the house we've got at the moment, she likes.

-Right.

And I've moved her about a few times.

Well, I'm really excited to see this when it's done. We'll try and leave it as long as possible.

I'd like you to come back and see it as it's finished, so I think I'll be nice.

-Yeah, I'm sure it will be. Congratulations. Good luck with it all.

-Thank you very much.

# Hard work

Well, what an amazing transformation Ron's got lined up. I can't wait to see it.

Still, that £80,000 budget won't go too far, and he has to get planning permission before he does anything.

Will he end up living here or will Yvonne get her own way and they'll sell it.

You can find out later in the show.

'Back in 2007, the London property market was in full flow

'and developers were riding a wave of escalating house prices.

'One of the most buoyant areas was Fulham in southwest London,

'which has not always been the case.'

During the 18th century, this area was known for its gambling

and prostitution. A London Las Vegas for the rich.

Now Fulham is a really swanky part of Southwest London.

It's got everything a discerning buyer could wish for.

Trendy eateries, lots of foaming lattes, a lovely river

and its very own Premiership football club,

although you may need footballer's wages to live around here.

'The property I'm here to see is in an area referred to as the alphabet streets,

'as the streets are in alphabetical order.

'It's a three-bedroom end-terrace with a guide price of £600,000.'

I really do love these old Victorian houses.

I'm quite passionate about them.

Some I've seen recently have had quite a few of these walls knocked out,

this one in particular, and I think this room would really benefit from that.

You've got the old ceiling rose up there and that gorgeous bay window.

Once that's been refurbished, it will look fantastic.

There's a fake fireplace over here. I think something more traditional and in keeping would look good.

But that up there is shocking.

There's the biggest crack you've ever seen.

That needs to be looked at by an expert straight away.

'Not the best of starts structurally,

'but there are signs of plenty of character.

'Those continue down the hall, where there's another reception/dining room and beyond that, the kitchen.'

Well, this kitchen really is a plus point to the property.

It's a huge family space.

I think this area would originally have been the third sitting room

and through here, the scullery.

But as it is at the moment, it's set up in a very sort of mock-Tudor style.

It's certainly worth ripping the whole thing out

and putting something extremely top-spec in.

'This kitchen area could be fantastic.

'It's a good space and could be transformed into an area

'with a real wow factor. Which is more than can be said for the garden.'

So far, it's all looking rather good in this house,

although I do think, as it is, it's a family property,

and this backyard is clearly too small.

There ain't a lot of space out here. And if you come round here,

you can see, there's a whole area, a big side return, that's just wasted.

Nobody's going to use this space.

I think it might be a good idea to think about extending over here.

A lot of the neighbours have already set a precedent and done this in the street,

and if you knock down what looks like an old bomb shelter,

you could increase the square footage of the back yard.

'So this area needs to be thought through, with every inch utilised to maximise the space.

'That's also true upstairs, where there's a relatively small bathroom and three bedrooms of varying size.

'There are also more cracks and signs of damp.

'I think by losing the smallest bedroom and rejigging,

'you could get a decent-size bathroom and two good-size bedrooms.

'maybe even one en suite. And there may be a way of then getting back that third bedroom.'

I really hope the potential purchaser has a good old look up in the loft,

because one great way to enhance a home is to create space where there was no living space before.

Now, in some instances, it's cheaper to build up than have an extension out the back,

and in this part of London, when you add square footage, you add value.

'With a loft conversion, you might get enough extra square footage to split the house into flats.

'But then you'd be in the hands of the planners and the costs would rise.

'In 2007, there was strong demand for properties like this.

'At auctions, where the atmosphere was electric,

'they could easily command high prices of around £600,000.

'So let's see who bought this one and for how much.'

I'll hand it over to you. Where do you want to start?

5? Yes? 500.

510 anywhere? 510. 520.

530. 540.

550. 560.

570.

580.

590. 600.

610. 620.

625?

625, sir? Or 621?

Yeah, 621. 622, madam?

623. 624.

623 with you. First time. Second time.

Third and last time, are you all done?

-HE BANGS GAVEL

-Sold. 623. Well done.

'The final bid of £623,000 was made by experienced property developer Baron.

'Originally from Iran, Baron has been property developing for about 15 years.'

Now, Baron, you paid £23,000 over the guide price at auction.

-How do you feel about that?

-Well, if I'd have seen the place,

perhaps I wouldn't have paid that much over the odds,

but give and take, perhaps I would have.

What was your initial reaction when you opened the front door and you walked in here?

In fact, I was quite happy to see they've got a good-size kitchen here.

Most of the places you find are small and you cannot turn a cat around.

-We mustn't override the fact that there is a whopping great crack in the front room.

-Yeah.

-What's the history with that?

-It's just movement and it's just on the ceiling.

I wouldn't read much into it. We'll be taking all the ceilings down, treating all the woodwork.

It doesn't mean much to me.

'Although Baron has been property developing for many years,

'that was not what he planned to do when he first came to the UK over 25 years ago.'

What is your background? Have you always been involved in property?

No, as a matter of fact, I was nothing to do with properties initially

and I was trained originally to become a ship's captain

and I was trained here in the United Kingdom.

That's quite a difference, moving from a ship's captain to property developing.

-What happened?

-The thing is, when I had my first child born to me, my wife didn't want to go back to sea,

and being as I'm a seafarer, it's perhaps difficult for the life I had with my wife,

and once we were here, we settled down here and I've not been to sea at all since.

'He certainly seems to have found his land legs in the property business.

'He has an extensive property portfolio now.

'But is he all at sea about which approach to take with this house?'

Baron, I really see this as a family house,

but I have a massive problem with the fact that you've got such a small garden here.

I really think that's going to hold the sale of this house back.

We do seem to have a small garden. We'll take the shed away. It's a bomb shelter, I suppose.

Once we do take it away, we'll have more of a garden.

But in this street, all of these houses have got the same garden,

so you can't just say this particular one has a small garden. I don't think so.

-Baron, you've got this side return down the side of the property.

-Yes.

Is it likely that you might convert that?

I have the intention of asking the planners if they'll allow me to extend to the side.

I think it's advisable to do that, because it will create more space.

'Baron's keen on the idea of a side extension

'and he's also considering a loft extension, which will give him two options for the house.'

Do you see yourself developing this as a family home?

Because you have got the option of two flats here.

I'm inclined, myself, to go for two flats.

It's my gut feeling telling me to go for two flats, cos I want to keep the property rather than sell it

and then we'll get better return on the rental income in comparison to one house,

which will not give us much income.

How much do you think you'll need to spend on this to convert it into two flats?

I think 120, 60 apiece, perhaps.

It's going to be really interesting coming back and seeing, is it going to be flats or a family house?

'Well, that was in March 2007.

'When we first returned, three months later in June of that year,

'the house was undergoing extensive renovation.

'Baron was taking it back to its bare bones

'and also reconsidering his options.'

Initially, I thought I would put this as two flats.

It was just an idea. Then, having spoken to two or three agents,

they told me that I wouldn't get my money back.

Then I just decided to go, on the advice of the estate agents, as one dwelling.

This was a three-bedroom house, supposed to be three-bedroom. One of the bedrooms was very, very small.

We are going to do the loft. We're going to have a loft conversion here.

As such, it will be four-bedroom and we have changed the position of one of the smaller bedrooms

with the bathrooms and then we're going to have a through-reception here

with a much bigger kitchen to come with it.

'So, having opted for plan B, Baron pushed on to finish off

'what would now be a four-bed house in Fulham.

'That was over three years ago, and you can see if all his investment and work paid off later on.

'Coming up, you'll need to put your developer's goggles on for this house in Salford.'

See through what's here to what it could become.

'We revisit former ship's captain Baron,

'who's finding the choppy waters of the property market hard to navigate.'

We were hit by this downturn in the property market.

'But first, Ron's renovation in Devon seems to have impressed the experts.'

It's an amazing property and what they've done is an absolute classic.

'Let's take a trip back to Torquay...

'..where, on a cold and frosty winter's morning, I met builder Ron and his wife Yvonne.

'They'd purchased this two-bedroom bungalow, along with silent partner Graham, for £251,000.

'Ron retired ten years ago and passed on his building business to his son.

'As Ron says, he likes to keep his hand in, so I assumed he'd want to keep this renovation fairly simple.

'How wrong could I be?'

-We will take the roof right off.

-You will?

-And we're going to put a brand new roof up

-with three double bedrooms, three bathrooms.

-Wow.

Downstairs, the hallway will be in the centre,

the front door will be in the centre, and where the old front door is will be a big dining room.

Are you leaving any walls in place?

Just a few.

'Just about all Ron would be keeping was the view.

'So, nine months after our first visit, we're back.

'Wow! What a transformation!

'Their living room has remained relatively unchanged.

'New French doors to the back garden.

'And in the front, a large new patio area.

'But as for the rest of the ground floor,

'the kitchen and the master bedroom have been combined with an extension

'to create what will be an open-plan living and kitchen area.

'This bungalow is unrecognisable from our last visit.'

It's an entirely different place. Beautiful. I like it.

'The dining room is now the entrance.

'The narrow and dark hallways have been opened out,

'allowing easier movement and more natural light into the property.

'With a dining room created in what was the entrance porch,

'this renovation proved a challenge,

'with structural issues relating to the foundations.

I call it my nightmare job, because I'm more used to building brand-new properties

than I am doing renovations. I'm not a renovation man, really.

It's been a lot harder, more stress, but it's coming to the end.

'Four weeks after work began, a couple visited Ron on site.

'They were interested in buying the bungalow and have now purchased it as their new home.

'Ron has had to change his plans to meet their preference

'for this large, open-plan area.

'So there is now no downstairs bedroom, as he had originally planned.'

'Let's take a look upstairs, where there was one bedroom with a small anteroom to the side.

'This cathedral-style window offers a view to worship

'and is another graceful touch to this magnificent renovation.'

The cathedral front has turned out fantastically, and I wanted that in the beginning,

and I think it's marvellous. Absolutely marvellous.

'A Juliet balcony will be added, perfect for enjoying the sea breeze on a summer's evening.

'There are now three bedrooms on this floor, each with its own bathroom.

'Ron has done the renovation with his son, Roy, and his team of builders.

'Although the work is yet to be completed, the quality of their craftsmanship shines through.

'This property is an undoubted triumph.'

My son has worked with me for years

and, basically, I'm getting older, he's taking over.

Really, he's the backbone of the business now.

'And how does Roy feel about working with his dad?'

It's not too bad. I've worked with him since I was 16,

so I've got used to it now. I take the brunt of everything, but you get used to it.

'What's his opinion on this renovation?'

It's most probably one of the best ones we've done so far,

but hopefully the next one might be better.

'Right, lads, no time for tea breaks. You've a schedule to meet.'

'That's more like it!

'Changes to the building plans instigated by the new owners

'mean Ron's six-month schedule will now be ten months, but has he stuck to his budget?'

The original budget was £75,000 to £80,000,

but I would say double that and we're about right.

'That is a huge overspend!

'Ron paid £251,000, plus a £7,530 stamp-duty payment for the property,

'and around another £160,000 on the building work.

'That's a massive total outlay just short of £420,000.

'Let's hope he got a good price from the new owners.

'We invited along two local property experts

'for their opinions on Ron's renovation.'

My first impressions of what he's done so far are amazing.

The transformation is unbelievable.

The extension work on the kitchen/breakfast room area,

the extension upwards to create what is three bedrooms with all en suite

is an amazing transformation.

I think the quality and care and attention that's gone into it

is very good and anybody buying this house should be very proud of it.

Personally, I love it. I'd certainly live here. It's an amazing property

and what they've done is an absolute classic.

'The experts are impressed with the house,

'but let's find out the sell-on value they believe it could achieve once completed

'and how much Ron sold the property for,

'bearing in mind his investment here is just under £420,000.'

I would advise putting this on the market somewhere in the region of £500,000 to £550,000.

I would expect this property to go on the market at around £500,000, to achieve very close to that figure.

The couple that came along wanted it straight away

and I put a value of 500 on it and they accepted it.

I have had people, after that, who would give me more for it,

but I wouldn't let the young couple down.

'Well done, Ron. Ron described the renovation as a nightmare job,

'but his hard work and that of his son and their team of builders

'have certainly made this house a dream home.'

'I'm in Little Hulton, a suburb of Salford.

'Until the 1950s, this was a small village. However, in the 60s,

'3,000 homes were built in the area

'and a large proportion of the Salford population were relocated here.

# Life in a northern town

The average price for a terraced property in the UK is £180,000.

Well, here in Little Hulton, you could buy four properties for that money,

because I'm here to see a three-bedroomed mid-terrace,

it had a guide price of 40,000 quid.

The state from the outside gives an indication as to why.

Let's see what it's like inside.

'Boarded up and broken down. Fingers crossed for better inside.

# Been beat up

# Been broken down

# But there's hope for this underdog

OK. Well, it's in a bit of a state.

It's one of those properties where you have to use your imagination.

Big living room area there. Hallway here, lots of rubbish.

Stairs up to the bedrooms. Interesting that the banister's gone, which is a bit odd.

Through to the rear of the property, where there is a kitchen, in terms of this is where a kitchen would be.

There aren't actually any units in here.

But I suppose, on the positive side, if you were to refurbish this place,

you'd want to replace the kitchen anyway, so the fact there isn't one, maybe that's a positive.

Nice utility room area there. And, if I'm being positive,

that's because, in terms of layout, I like this place! It's a mess, but I like it.

# That's the way

# Oh-oh, I like it, call me the underdog

'Yes, you heard me right. I like it!

'No sign of damp or structural damage means there is potential for a property developer to clean up

'if purchased for the right price.'

Well, upstairs, it doesn't get better. In fact, it gets worse.

Floorboards have been lifted and the copper pipework has been removed

and also all the electric cables have gone.

Not brilliant. But, anyway, separate loo and bathroom there

and in terms of the actual space, and that's what you've got to keep thinking about, it's not at all bad.

It's three bedrooms, and even the smallest bedroom is a reasonable size double.

The other main bedroom on the front of the house here, a really good size.

Considering the footprint of the house, it makes good use of space.

So, see through what's here to what it could become.

'The guide price for this property was £40,000

'and the ceiling price for houses like this around here is around £70,000.

'But the sell-on market is currently stagnant.

'However, if you kept control of the budget, which would have to include new electrics, plumbing and glazing,

'and renovated for the more stable rental market, this could be a nice little earner.'

At the back of the property, a garden that clearly needs a bit of tender loving care.

In general, then, is this place worth it financially? I think it might be.

Buy it for around the guide price of 40 grand, spend around £20,000 doing it up,

and I think you could easily do it for that, £60,000 investment,

you might not be able to sell it for a lot more than that.

However, if you came to rent it out, something like this will get you between £400 and £450 a month.

That's a nine percent yield.

You know what? It's better than a slap in the face with a wet kipper.

'I asked a local estate agent for the lowdown

'on this beaten up house.'

First impressions, the property does need some work doing to it.

However, bought at the right price, I do think there would be definitely

some money to be made on it.

'If this place was transformed from a tip

'to tip-top, how much could it make on the resale market?'

I would look to sell it around £65,000 to £70,000,

depending on the specification of the finish.

'And if rented out?'

The property itself would rent out fairly easily.

And as a rental value, I would look to achieve around £475 per calendar month.

Well, this house might not be very pretty at the moment, but it could be a very clever investment.

Spend a bit of money sorting it out and you could be onto a real winner.

Who fancied it when it went under the hammer?

The guide is 40,000 plus.

Give me £40,000. 40,000.

30, then, if you're here to bid. £30,000.

30,000.

Bid. 30. Gentleman on my right at 30.

35 anywhere, then? Your bid at 30. I'll take 35.

A bid at 35. 35,000 at the back, then. Do I see 40?

40,000. 40,000 I have now. 40,000. Do I see 45?

41. 41,000. 42?

42. 43. 44.

44 and a half. 45. 45,000. 45 and a half?

45 and a half. 46?

46,000. 46 and a half?

46 and a half. 47, sir?

47,000, then. At 47 and a half may I say?

No? At 47,000, then, for the first time.

47,000 for the second time. Are we all done at £47,000?

-Your property.

-'It was Sher who made the final successful bid of 47,000.'

'He's a full-time property developer with a portfolio of over 30 properties

'and also a qualified heating engineer.

'This will be the very first time he's seen inside his new investment.'

-Hello, there. Good to meet you.

-Nice to meet you.

-This is your house.

-This is my house.

-Do you want to go and have a look?

-Thank you.

'I fear he may be in for a bit of a shock.'

# Shock to the, shock to the

# Shock to the system, now

The moment of truth.

Right.

It's a lot of work for me. HE LAUGHS

Well, I've seen worse, but I think this is quite bad, as well.

-Yes. A few windows broken, I'm afraid.

-Yeah, yeah.

-Right.

-So, what were you expecting?

This is quite bad because, obviously, it's a lot of...

..damage.

-There's nothing in the kitchen at all.

-No.

That's very helpful, really, in a way.

-Oh, it's helpful! I like that you've put a positive spin on it.

-I don't have to have too many skips.

There you go! Put a positive spin on things.

-A utility room here.

-That's the utility room.

-What do you think, then?

Well, for the price I paid, I would say it's a bit dear.

THEY LAUGH

-I love the fact you're still smiling!

-I think it's a bit dear.

-The reason is, because I've got some properties like this a little bit lower.

-Oh, OK.

I'm going to leave you to have a look round

-and then join me outside in a few minutes.

-I will do.

-Right. Have a nice wander.

'Sher's no novice, but has made a beginner's mistake

'by not taking a peek inside the property.

'But there's no turning back now for Sher.'

# If I could turn back time

# If I could find a way

-You've had a chance to fully look round now.

-That's right.

-What do you think?

-Er, a lot of work.

Worse than you thought or better than you thought?

A little bit worse, I would say. Well, when you go for that sort of price, you don't expect a miracle.

THEY LAUGH

'Well, miracles, maybe not,

'but for £47,000, you can usually expect plumbing and electrics.

'Sher's originally from Pakistan, but now lives in Burnley with his wife

'and near to their three children and one grandchild.

Tell me exactly what you're going to do to sort it out.

I think it would be going for the electric wiring first.

And water. Because that's a necessity, as well.

-And then?

-Then we get on with the walls, structurally,

and all the rest of it, and kitchens and everything.

And the last thing we'll do is the garden.

-What about the windows, replace all those?

-Replace the damaged ones.

Yeah, I think some of them are damaged, you can tell.

What's the timescale for the work?

I can't really put a timescale on it. I think I will do it as quick as I possibly can,

because I have some other commitments, so I will do it...

-I will straightaway make a start.

-And who's going to do the work?

A lot of it is me. I'm a plumber, so I have to get down to doing the piping first.

Structurally, I have a couple of lads

and they will do the walls and the plastering and all the rest of it.

What kind of budget have you put aside for sorting it out?

Er, £12,000, £10,000 to £12,000.

So what's the idea? Is it to do it up and sell it on or what?

Er, I'm undecided about that.

-If I get the right price, I will do.

-What would be the right price?

Well, if I make a bit of money on it, that's the right price. I don't know!

-THEY LAUGH

-Listen, congratulations. You're a brave man.

-And I love the fact you're still smiling.

-Thank you, sir.

-Lovely to meet you.

-Thank you.

Well, it's just as well that Sher wasn't hoping for a miracle because he certainly didn't get one.

However, I think he has got himself a very decent potential rental property.

Lots of work to do to get it sorted out, but at least he's still smiling,

which is a very good start. Find out how he gets on later in the show.

It's been a while now since we last saw those purchasers. Have they been busy bees?

Or have they been stung and the project's ground to a halt? Let's go back and find out.

'It was back in March 2007

'when I first saw a large three-bedroom end-of-terrace house in Southwest London.

'The house was bought for £623,000 at the height of the property boom

'by former ship's captain turned property developer Baron.

'He was trying to steer this three-bed property

'from its current berthing arrangement to something more substantial.'

I'm inclined, myself, to go for two flats.

It's my gut feeling telling me I should go for two flats

because I want to keep the property, not sell it.

'When we first returned three months later, it was full steam ahead,

'with radical work going on throughout the house.

'Where there were once rooms, now there were just wide open spaces.'

# Wide open spaces

# Room to make her big mistakes

'Having spoken to local estate agents,

'Baron realised it would be a mistake to go for the two flat approach,

'so he opted to keep it as one house,

'but with a loft extension to make it four bedrooms

'and to add a side extension.'

What's happening is that we have the intention of, as you can see,

we've taken the corner off, we're going to put a pier down here

and then it will have a glass roof here, which will throw a lot of light in and make life all the better.

'Having decided to make it into a four-bed house by using the loft space,

'and armed with £120,000 budget,

'Baron set about a comprehensive renovation.

'Now, just over three years after that, we're back to see how he got on.

'Although judging by first appearances at the front, it may not have changed very much,

'a glance at the roof does show signs of a loft conversion.

'At the back, not only is there now a dormer extension, but Baron's now completed a side extension.

'So what effect has that had on the interior layout?

'Wow! The downstairs really has been enlarged,

'with both reception rooms combined into one big open-plan space.

'And as for that old kitchen area, well, that side extension has transformed it!

This used to be an enclosed space kitchen basically.

There used to be a wall in this space, all the way along here.

And this used to be a slight outside wall.

We took the walls to the outside wall boundary

and then we created skylights to draw a lot of light into the kitchen.

And also, at the same time, we extended the rear of the kitchen,

as you can see, by at least six feet.

So it created a nice dining-cum-kitchen area.

'Baron has managed to maximise the living area here, making up for the limited outside space

'with light, airy, open rooms inside.'

I tried to get as much space as possible.

For everybody nowadays in London, space is the utmost thing.

The standard of the work, we always do it to this standard.

'Along with solid wood floors and modern fireplaces, there's even a cloakroom under the stairs.

'While upstairs, the layout has been considerably altered.

'So not only are there three well-proportioned bedrooms on the first floor,

'but there's a much-improved family-size bathroom.

'And then there's the top floor.'

Basically, everything has changed here.

There was no room here at all. It was loft space.

We created all this space here with its own cupboards and its own bathroom,

which is a bonus for a family,

for the parents to have their own bathroom inside and not to share anything with the others.

'Along with the en suite double bedroom and the three other bedrooms,

'plus much improved bathroom space,

'Baron's achieved the four-bed family house he wanted.

'He completed the refurbishment in January 2008 after spending over £140,000 on it.

'Then he was left with the tricky decision of what he wanted to do with it.'

We were in two minds whether to sell it or not to sell it.

Then we were hit by this downturn in the property market and we decided not to sell it.

We would not have covered our costs at the time.

Then we went to rent the place, basically.

Maybe in five to ten years, when the market changes,

then we might give it a thought, whether we want to keep it or just sell it off.

'The tide had turned against Baron.

'As a former ship's captain, he recognised that in the current choppy conditions,

'it was best to drop anchor and wait out the storm.

'He just hopes that in the long term, all the work and money he's sunk into this place won't be lost.

'So how is it fairing in the current climate?

'Baron bought the house for £623,000 at auction

'and spent £140,000 renovating it.

'So, with costs and fees, he estimates he has around £800,000 invested here.

'So has the downturn in the market cost him dear?

'What do two local property experts think?'

It's a good house, they've done a good job,

nice and open, very bright, good location, good room sizes.

I've seen many styles on this street and this is excellent. I wouldn't change a thing.

I think it's been particularly done well. Nicely refurbished.

I think they've maximised the living space, good for families.

'Back in 2007, a four-bed house in Fulham had a value in excess of £800,000.

'And as Baron invested nearly 800 grand here,

'he needs at least that level of valuation to see any profit.'

If he was looking to sell this house, I would look to market it at £850,000,

looking to achieve £825,000 in the current market.

I believe the open market value for the property currently is somewhere between £800,000 and £825,000.

I was hoping for a bit more than this, 850 to 875,

to be very honest, in this property,

because our costing here is near enough to 800.

'Despite prices starting to return to pre-credit-crunch levels,

'Baron still wants to keep this as a rental investment.'

If you were to rent this in the family market, which is very strong here,

I'd look to rent this at £3,300 per calendar month.

I believe the property should achieve somewhere between £3,250 and £3,500 per calendar month.

Around £3,200, £3,300 is fine.

'Baron has, in fact, rented it out for £3,350 per month, which gives him a five percent yield.

'The project has been far from plain sailing for him.

'There have been some ups and quite a few downs.

'But in the end, he's managed to steer the house

'through the turbulent waters of the current property market.

'It does appear that the tide is turning for him,

'with prices returning to nearer the 2007 values.

'So, in the end, the outcome for Baron isn't far from what he'd hoped when he started this project.'

# We gotta get right back to where we started from

'Let us return to the Salford suburb of Little Hulton.

'Where I visited this dilapidated and decaying three-bed semi-detached.

'The house was purchased by property developer Sher for £47,000.

'I joined him for his first ever look inside.'

# Shock, shock, horror

A lot of work for me. HE LAUGHS

'Ever the optimist, Sher took the poor condition of his investment in his stride.'

-What do you think?

-For the price I paid,

it's a bit dear. THEY LAUGH

-I love the fact you're still smiling!

-I think it's a bit dear.

-# You gotta keep smiling

-# You gotta keep smiling

# Cos things can't, things can't get much worse

'Five months later, has Sher transformed this semi from shocking to stunning?'

# Things can't get much worse

'The house is looking better already.

'Sher renovated on a tight budget, aiming for an acceptable finish for the local rental market.

'In the kitchen, he's fitted new units and installed a boiler for the new central heating system.'

The kitchen, that was one of the poorest parts of the house.

So we gave it a bright colour, we put new units in which were bright, as well,

and we put in a brand new window, as well,

so that gave it a very nice look.

'Sher has already let the property out.

'He had been keen to sell, but was unwilling to leave it empty,

'as he'd suffered three break-ins during the renovation,

'with thieves stealing the copper piping and wiring that he'd installed.'

We kind of got into a bit of a nightmare then, but we got through it.

When we started the property, they came in through the kitchen window, which is a big window.

And there were some boards. They took it from there and they came in, damaged the pipes.

We did it again, we secured the window again with a stainless steel sheet.

And then they were coming in again and they took all the sheets out

but it took them so much effort, they couldn't take the wire. They damaged the pipes again.

So that was another bad thing, really.

We were a little bit set back, but we were not giving up.

'Well, he's still smiling, despite the challenges of this tough renovation.

'The ceiling price for properties in this area is around £70,000,

'so Sher had to keep the budget under tight control

'to ensure a decent return on his investment.'

Originally, I was thinking I would be spending something like £12,000.

It came to £8,000.

The reason is because I haven't finished yet.

There's quite a bit to spend yet on the back garden, the fencing.

The property we did, generally, just to make it nice and liveable.

But that's not the end, and I'm sure it'll cost us a couple of grand more.

'Sher let the flat out four months after purchase.

Despite his jovial character, he's a serious businessman

'who's bought more properties to renovate and will continue to work, aided by his cheery attitude.'

Well, I enjoy life, like I will do. HE LAUGHS

But then again, work is work and you take it seriously and responsibly.

But I do enjoy my work, and that's what I've done always, and I like it a lot.

'Sher now has a portfolio of close to 40 properties,

'which will give him an income while he pursues his boyhood dream of becoming an aeroplane pilot.'

This pilot course has been my childhood ambition.

When I was little, I always thought I was going to fly aeroplanes one day.

And that ambition never came. HE LAUGHS

Thank God and thanks to England that I came to this country

and I think I can do it now and I'm going to do it.

'Sher's total spend on this property will be about £57,000.

'We invited along two local estate agents

'to give us their opinions on his handiwork.'

The standard of finish is adequate for a tenancy property.

There is plenty of room for improvement,

but it's a dilemma for the landlord whether they want to spend the money

and put in the extra effort for no more rent.

I think the property is well proportioned and spacious for a three-bedroom home in this area.

I think it's been renovated to an acceptable standard

suited to a property for rental or sale within this area.

I think a little bit more could've been spent on the paintwork and certain of the carpeting.

'What could this property achieve on the rental market?'

I would put this on the rental market for £450 per calendar month.

In the current market for rental, I'd put this property on the market for £450 per calendar month.

'Well, Sher has let the house for £435 per calendar month,

'which gives him an impressive yield of nine percent.

'What about sell-on values, bearing in mind his total outlay of £57,000?'

I would suggest a resale valuation of £65,000

and I would hope to achieve in the region of £60,000.

I think, in the current market, I would probably market this property for sale at about £65,000.

'Sher feared he'd overpaid for this property.

'So how does he feel about the fact that there's potential for a profit if he sells?'

That is good news! Definitely!

I was thinking it would be about 60. Very good.

# I just want to fly

That's it for now. We'll be back next time with more action from the auction.

Will the buyers make huge profits or a loss? Will you be jealous or relieved?

-You can find out next time on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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