Episode 66 Homes Under the Hammer

Hello. There are property auctions held all over the UK.

It's a thriving business. Billions of pounds worth of property is sold every year.

And if you want to find out about buying and selling your home under the hammer,

you've come to the right place.

They say you should always do your research before you buy at auction, but what does that mean?

Well, you should go and see your property, find out as much as you can about it and research the area.

Yes, it pays to be prepared. So, what tempted the buyers on today's show?

'Just outside Devizes in Wiltshire,

'this house may not be perfect inside, but I think its outlook is pretty good.'

You'd buy this place just for that.

'Shh, don't tell anyone, but there's a property in South London which is better than it first appears.'

Secretly, I think I'm going to really like it.

'And I seem to have misplaced one of the rooms in this building in Colne in Lancashire.'

Only one thing missing. Where's the bedroom?

'All these properties went to auction.

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

-Your property, sir.

I'm in Wiltshire in the little village of Easterton

and a jolly splendid place it is, as well.

Despite the fact it's on a bit of a commuter route, it's a lovely, tranquil little spot.

'And you don't have to go far to experience even more remote and beautiful scenery.'

On the outskirts of the village is a three-bed semi-detached house.

It had a guide price of 155,000 quid.

I've been walking up a hill to get there, so hopefully it'll have nice views.

'Well, it appears to be pretty ordinary from the front.

'It's an ex-local authority house which always ticks a few boxes for me.

'Generally, these properties are well-built and structurally sound.'

So what have we got? Through the front door,

stairs up to the bedrooms and then into your lounge.

Obviously hasn't been touched for a little while.

Needs a new carpet, for sure.

Bit of stonework by the fireplace dates it. Just change that, you'll be amazed what difference it makes.

But it's not a bad size space. Then through to the kitchen. But look.

Seems that somebody's started a bit of restoration. These units are actually pretty nice. Very modern.

Gives you an idea of what this place could become.

And I think the real good stuff's outside.

Hang on a minute, before I even get outside, I need to tell you about this.

This, unfortunately, is the only bathroom and loo in the property.

It's basically almost out the back. Not ideal.

However, what's out the back is.

You'd hope that a house on the edge of a pretty little village like this would have nice views.

But you know what? This place surpasses all expectations.

Look at that.

Rolling hillside leading into Salisbury Plain in the distance.

You'd buy this place just for that.

# It's a perfect view

'But it doesn't distract completely from the issues with that bathroom.

'What I want to know is, can you rejig the layout of this place to fit it in upstairs?'

So, can you, can you, can you?

Well, you know what? I don't think that's going to be possible

because you've got a good size room here and then two fairly small bedrooms,

so without losing one of those bedrooms, which is going to badly detract from the value,

I think the bathroom has to stay where it is.

Still, when you do come up here, you can go back to enjoying the views.

'When the nights draw in and you start getting a bit chilly,

'there's one thing I definitely want to do with this place - install central heating.

'But that could prove a problem as there's no gas main into the village

'so you'd probably need to go for an oil-fired or electric boiler. I'd want to investigate the costs first

'as it could add quite a lot to your renovation bill.

'Well, I've certainly fallen in love with the location of the place.

'What does a local estate agent think of it?

'This house that went to auction with a guide price of £155,000

'needs a lot of work.'

The house itself has got some nice features. There's some nice fireplaces in the bedrooms.

But in the most part, I think a buyer's going to come in here

and redo a lot of the property in terms of electrics, decor, kitchens, bathrooms.

Any buyer needs to decide whether to keep the bathroom downstairs

or move the bathroom upstairs, which would be more usable.

It definitely needs a change, but it depends what the buyer does.

'Ignoring the inside work, I'm sure purchasers will see outside as the main appeal here.'

The garden's one of the biggest assets of the property.

There's a lovely big garden that backs onto open fields.

'Yes, a big attraction, but how much could it be worth once done up?'

If the buyers were to renovate the property as it stands, as a three-bedroom semi-detached house,

I think the finished value would be in the region of £200,000.

In order to rent the property, it requires the renovation, and you would achieve a rental

of £650 per calendar month.

'So plenty of things need attention in the house,

'but there's one thing you can't change, thank goodness.'

So, a good, solid little house.

Yes, you'd really like to sort out that bathroom issue,

and it definitely needs a bit of updating, but you know what?

For that view, I'd buy it!

Let's see who was equally enthusiastic when it went under the hammer.

OK, lot number four, then. Pretty little house, lovely position.

Terrific views, as you can see from the photograph.

Where are you going to start me?

150, anybody? At 140, then. At 140,000.

At £140,000 we're bid. 142. 4 now may I say?

At 142. 144.

46 at the back. 48. 50 to you, sir.

150. 52.

54 to you, sir. The bid is at the back at the left, 154.

156. 158 to you, sir. 158.

60. 62. 62.

64. 66.

£166,000 to you, sir.

It's against you there. 167.

£1,000, sir? No. At £166,000 at the back left-hand corner, first time.

Anybody else? £166,000 for the second time.

-At 166, third and last time. We're done.

-HAMMER BANGS

Your number, sir, is...?

'The successful bid of £166,000 was made by Dennis, here on the left,

'and his stepson Spencer. Dennis used to run a nightclub

'and has always had a passion for property. He's bought five buy-to-lets in the past

'and he and Spencer ran their own kitchen-fitting business for three years.

'Spencer then worked in the building trade,

'but they've recently teamed up again to undertake some joint renovations.

'This will be the third property for the duo.

'I met up with them to hear about their plans.'

-Dennis, Spencer, lovely to meet you both.

-Nice to meet you.

-Congratulations.

We had to talk in the garden, didn't we?

-Of course, yeah.

-Is that why you bought this?

-Obviously, yeah.

-Partly, yeah.

-Fantastic, isn't it?

When we first came to look at the property, as we walked round, that was the first thing I saw

-and it was just like, "Wow, never mind the house, just look at the view".

-It sold it to us.

Apart from the view, tell me why you wanted to buy the property.

We wanted a project for Spencer

so we bought it and Spencer's going to do the work

-and we'll split the profits.

-Right.

-So the relationship between you two is...?

-Spencer's my stepson.

Great. So is this the first time you've worked together on a project?

No. We've worked on several projects in the past,

and also together, cos I'm predominantly a kitchen fitter, bathroom fitter,

so I do electrics, plumbing, and we've worked together as kitchen fitters in the past.

Tell me a bit more about what you two did before you started getting into this.

Well, Spencer was a policeman.

-Oh, wow!

-And when he left the police force, he found that he wasn't skilled in anything else

except police work, which apart from being a security guard, there's no call for it.

So I thought, "What do I know? I'll teach him kitchen fitting."

So we set up together and we worked together for three years as a partnership.

'So from the police to pipes and plumbing. Quite a change.

'So there should be no worries about the kitchen, then. But what about the rest of the property?'

You see this as a "tart it up and sell it on" or what? What's the plan?

That's one of the scenarios.

We're not absolutely decided yet,

but plan A is to do it up as it is and then sell it on.

Right. What would plan B be, potentially? Possibly?

Possibly, because of the nature of the ground and everything,

we could look to put an extension on, gain an upstairs bathroom.

Cos obviously, at the moment, the bathroom downstairs isn't anything great,

so it could be a possibility to turn one of the bedrooms upstairs into a bathroom.

-Although it would reduce it to two bedrooms, it would affect the sale.

-Talk me through the costings

for plan A and what you've found out about how much difference it makes losing that bedroom.

One of the things we've been told by one of the agents we saw

-was that that third bedroom could be worth £30,000 to us.

-Wow.

So, obviously, that's a big consideration.

What are the costs?

Well, we've made an estimate of about £12,000

with all the things we costed into plan A.

Any idea how long it's going to take?

-I would've thought about eight to ten weeks. Would you agree?

-Yeah.

-You're doing the work. It's down to you.

-Yeah. Depends how quick I can go.

-Congratulations.

-Thank you.

-I look forward to coming back and seeing how you got on.

-Thanks.

-Look forward to it.

-Thank you very much.

-Thank you.

-Good luck.

So, Dennis and Spencer recognising the potential of this place

and they've certainly got the experience to make a success of the project.

All they have to decide is exactly what they're going to do.

You can find out what they choose later in the show.

'I'm in New Cross, Southeast London,

'a vibrant area which recently benefited from the expansion of the East London over-ground line.

'This means you can now get from here to Central London in around ten minutes.'

This part of London is also home to Goldsmiths College,

which has been part of the University of London for 100 years.

So straight away, I'm thinking possible student let.

Now, on paper, it's got potential.

The guide price was £180,000 plus.

You can see here, it's a four-storey mid-terrace, it's very close to the college.

Lots of potential for letting rooms out.

But, come on, let's face it, from the outside, it looks like a right old mess.

You've got boarded up windows, it's very run down.

But let's see if the exterior matches the interior. I'm going in.

'I know you should never judge a book by its cover,

'but from the outside, this property looks distinctly dog-eared.

'At one time, it was the office of a charitable organisation.

'But when they moved out, some less than charitable squatters moved in.

'So security shutters were put on and it's been empty for a while now.'

I tell you what, it's quite noisy and hectic out there.

And when you shut this door, ohh, lovely and silent.

It's exactly what I would've expected to have seen on the inside.

You've got graffiti everywhere, it looks like it's been vandalised, you've got woodchip wallpaper.

But you have got a few nice little bits and pieces here, like this banister,

you've got this nice little bit of panelling here.

I'll be quite excited to see if there's some nice hidden features.

Overall, secretly, I think I'm going to really like it!

'And there's quite a lot to like, with several rooms spread over four floors.

'There's what was almost a kitchen, a nearly bathroom,

'because there are no fixtures and fittings,

'and three rooms with decor that's, er, not to everyone's taste.'

# But I see the writing on the wall

# The love light's gone from your eyes

'But not totally, because fortunately,

'there's less graffiti in the three rooms on the first floor.

'And up above on the second floor, there are two more large rooms.

'Finally, up on the top floor, there are two spacious rooms

'with great views across the city.

'But it's the inside views that are upsetting

'in that so much charm and character has been spoiled by neglect

'and in some cases blatant vandalism.

'It's dispiriting to see the house in such a sorry state.

'The only remedy would be to renovate it from top to bottom.

'But before that, let's consider what's the best way forward for this old property.'

We have two options here, I think. One option is to do this place up

and let it as individual rooms, probably to students.

But then you enter the realms of the HMO, which is house of multiple occupancy,

and there are all sorts of guidelines and conditions attached

concerning fire safety and also facilities, like the number of bathrooms.

And you also have to be licensed as "fit for use" by the local council.

'Converting it into an HMO could be quite expensive.

'You need to fit fire alarms and fire doors, and with at least seven letable rooms,

'that could be a logistical nightmare.'

The other option is to divide this place up into individual flats.

Now, you would need planning permission for that and that is never guaranteed,

but if you did get permission, I reckon you could fit four flats in that property,

one on each floor, and this ground floor flat could be fabulous!

You could extend right the way out here, have big bi-fold doors

opening out to this lovely little garden here.

Four flats in this area, that could really stack up financially.

'Or if you like this kind of house, you could renovate it as a single family home.

'There are certainly a number of options for this four-storey house

'that was guided at £180,000.

'Time to ask a local estate agent what's the best way forward.'

A house would probably be the least favourable

because I think the busy road may be too much for a family.

'The New Cross area is in desperate need of flats for students and young professionals

'so letting out rooms here would be a good idea.'

Students lets are very good to let out,

however, only for ten-month periods.

You could achieve, for a room with the utilities in,

depending on the size and the furnishings,

approximately £450 to £500 per month.

'So with seven rooms, the investor could have a monthly rental income of £3,500.

'But the estate agent reckons converting into flats and letting them out

'could earn a possible £3,900 a month.

'So there would be more for flat rentals than student lets. But what if it was sold?'

As one entire building, as a family home,

taking into consideration the very busy road,

I would anticipate for it to achieve around £500,000 to £520,000.

'But if the house was converted into four flats,

'two two-beds and two one-beds ones, the final approximate sale figure

'could be £940,000.'

This property has that word beloved of estate agents - potential.

You could let to students here, you could divide this up into flats,

but you should never underestimate the amount of work that is to do here first.

So who was tempted, not intimidated, by the scale of this project?

Let's find out when we head to auction.

Who wants to start me off on lot 83?

200,000, anybody?

Thank you. 200 I've got. See where it goes from here.

Thank you, how much? 205? 205.

210. 215. 220.

225. 230. 230.

235. 240.

245. 250. 255.

260. 265. 270.

270. 275. 280.

276 if it helps.

-Yeah? Still cheap. 276, yeah?

-280.

-OK, 280.

'That initial guide price of £180,000 has now been left way behind.

'We rejoin the auction with the bidding at £325,000.'

325. 326.

Back to you. It's with you at £325,000.

Against you, straight ahead. 325 for the first.

325 for the second.

325. 326, back in.

Nearly. 327. 328.

329. 330.

331. 332.

He said that last time. 331 for the first.

331 for the second.

-331 for the third and final time. Are we all done?

-HAMMER BANGS

Sold for 331. Well bought.

'That final successful bid was made by 28-year-old property entrepreneur Sean.

'He got it for £331,000,

'151 grand over the guide price.

'I met him at the New Cross house to hear why he was so keen to buy it.'

Sean, congratulations. What appealed to you about this property?

-It's on a very busy main road.

-Yeah, it is, but it's the area and its potential.

You've now got an East London line, so you can be in Central within four to six minutes, so it's perfect

for the first time buyer and the young professional.

The size of the property, it's got so much scope for what we're looking at,

-a HMO or convert it to four flats. A lot of potential.

-So you looked beyond the dust, the dirt,

-the grime, the graffiti, the wallpaper. I mean, it's in a right old state.

-It is.

-It needs a lot of work.

-Tell me about your property portfolio

-and how you've been going over the last few years.

-I started when I was 16.

My father lent me some money to get me going, I put a deposit on a property, bought a flat, renovated,

before I went to university. At university, I bought two properties with the funds from that property.

I didn't really have time to do much when I was there, but I dabbled a little bit to keep me going.

I came out of university, back into banking, did that for three years

and then left banking and now I'm full-time.

'Sean's certainly been busy. The portfolio he built up was based in Bournemouth, where he studied.

'But since moving to London, he's sold most of it to concentrate on buying in the big city.

'12 years on from his first property purchase as a 16-year-old,

'he now has his own development company. What drives him?'

# The only living boy

# In New Cross

I worked in banking, but it's not rewarding. The money is great, but the rewards aren't great

and you don't get to see anything for your end product. Property, you see everything.

You see the transformation from beginning to end and when someone buys your property, it's rewarding.

-What do you think you're going to do with this? Convert it into flats?

-I think so.

I'm speaking to the council. The best option at the moment would be to do four flats.

Give me a rough layout of how the flats are going to be.

We're working on open-plan layouts on the flats.

With the ground-floor two-bed flat, an open-plan sitting room/dining room opening out to the garden.

The first, second and third floor all mimic each other, open floor living to the front,

-bedroom and bathroom to the rear.

-Will they be one-bedroom flats apart from the ground floor?

-Yes.

-The first, second and third floors, one-bedroom flats.

-What do you do to give them that wow factor?

Have you got a trademark, something you do?

Yeah. It's the quality of the finish.

Materials don't always have to be the highest material costs

but the finish is what... I'm a perfectionist

so from paintwork to carpentry and all that sort of thing, we want it to look top spec.

-What happens if something doesn't look good? How do you react?

-Ripped out and start again.

-So you really are a perfectionist.

-It is a bad, bad trait, yeah.

Is that just through working in property?

I think it's my engineering degree, as well. It has to be pretty much spot-on.

I brought that degree into the workplace where maybe, in property,

you shouldn't be like that, but I can't help it.

So you're an absolute nightmare to live with.

To live with and to work with, yeah.

'It sounds like this house could be emerging from its own nightmare into a dreamland comparatively.

'But for that, Sean has to get planning permission to change its use from commercial to residential.

'If successful, he's got a budget of £120,000 to £150,000

'to get the flat up and running and add that wow factor to attract buyers.'

We always go for corporate lets if we're renting, which is the higher end of the market,

or if we're selling, we go for the young professional.

It sounds like you know exactly what you're doing. Are there are worries?

Anything you're a little bit, "Shouldn't have done that"?

I think it's just timing. We've got so many projects on the go at the moment.

Ideally, we want to get it finished in six months,

but it's a case of juggling the other projects to fit.

-Do you think you'll fancy one of these flats yourself?

-I have bagsied the ground floor one potentially.

-It's a nice area, but I don't know if it's for me just yet.

-Good luck. I can't wait to see what you do

-and see whether you move into the ground floor or the penthouse.

-Maybe.

-Good luck.

-Thanks. Bye.

Sean caught the property bug at a seriously young age.

Buying your first house when you're a teenager? Wow! That really is something.

But this is a big project for him and potentially more problematic.

It all hangs on getting that planning permission to convert this into flats.

Will he get the planning consent he needs and will the work really be done in just six months?

And will he move in? You can find out what happens later on in the programme.

'Coming up, in the Lancashire town of Colne, I'm in for a little surprise with this place.'

You've got to be kidding.

'In the New Cross area of South London, it seems Sean has gone right back to basics with his purchase.'

We have gutted the building from top to bottom.

'But first, we return to Wiltshire to see if this three-bed semi is now a hot property.'

Before we had the central heating put in, it was pretty bad.

'Just outside the Wiltshire town of Devizes, I came across a three-bed semi-detached house

'that was pretty ordinary on the inside

'but outside it had some fantastic views across Salisbury Plain.

'It was a combination of the views and the house's potential

'that attracted property developing team Dennis and Spencer

'to part with £166,000 to buy it at auction.

'Even though this stepfather and son partnership

'were not 100 percent certain of what they were going to do with it.'

# Oh, you've got to have a plan

Plan A is to do it up as it is and then sell it on.

Right. What would plan B be potentially? Possibly?

Possibly, because of the nature of the grounds, possibly look to put an extension on.

'But whether it was plan A or plan B,

'the plan was that ex-policeman- cum-bathroom-and-kitchen-fitter Spencer did the renovation

'while Dennis predominantly project-managed the work.'

'But eight months on, which plan did they opt for?

'Well, by the look of things, they've come up with a plan C.

'Spencer and girlfriend Judith fell in love with the place,

'the views in particular, and decided to make it their home.'

# Then it all changed

# You know when something's worth hanging onto

# Anyway...

'But however lovely the views, you can't live in a view,

'and the house needed a lot of work.

'There was no central heating, a downstairs bathroom and dated decor.

'So Judith was keen some changes were made right away.

Before we moved in, I did kind of insist that we needed to get some decent carpet in,

because when we pulled it up, it was so old, all the underneath of it pretty much came away.

Well, living here, it was pretty cold.

Before we had the central heating put in, it was pretty bad.

The lounge, Spencer went to quite a lot of trouble with his mother, who came over to help.

They'd done all the lounge, so it felt like at least we had a nice room that was ready.

We could sit there and it would be peaceful while the rest of the house was in a little bit a chaos.

'Having established a base by having sorted out the lounge,

'they started to tackle the rest of the house.

'For now, they've just spruced up the kitchen

'and Spencer's concentrated his skills on creating an upstairs bathroom.'

So, this was our third bedroom

and it's a small bedroom, but it's a good size bathroom.

The bathroom downstairs is single-skinned, it's very cold, the walls get quite damp,

so we decided to put the bathroom up here and forsake a bedroom.

It's heaven in comparison to what we were having to put up with before.

'And it does make a great bathroom.

'And for Judith and Spencer, two bedrooms are fine for the moment.

'With the central heating installed, a rewire and walls replastered,

'those remaining two bedrooms are just a lick of paint away from being finished.

'They've even found space for Judith's two rabbits, Jack and Henry.

'They will eventually be moved to improved accommodation in the garden once it's fox-proofed.

'But when will Judith and Spencer improve their accommodation?'

I guess the long-term plan would really be to extend,

to put in a garage and then perhaps gain that third bedroom back above it

and then even outside, to have a small conservatory, extend the kitchen out.

So they could be long-term plans. But, obviously, it depends on how far we get with the property.

'Given the change in circumstances, the couple have come to an agreement with Spencer's stepfather Dennis.

'It means that while he paid for the house, they will cover the renovation costs and will pay rent

'to compensate for interest he would've earned had he kept the money in the bank.

'The long-term plan is for Spencer and Judith to buy the house outright themselves.

'So what are the costs so far?'

I think, in total, the biggest costs have been the rewire and installing the central heating,

so I think to date we're probably looking at about £8,000 to £10,000.

That includes the bathroom and all the decorating, plastering.

'Adding the initial £166,000 purchase price

'to their approximately £10,000 spend,

'their outlay on what's now a two-bed house would be around £180,000, including costs and fees.

'Is that a good investment? What are the views of two local property experts?'

The work they've undertaken to date is of a good quality.

I particularly like the bathroom.

I think that if they continue to finish the house to this high standard,

it will be desirable in the market.

At the moment, what they've done they've done really well.

They admit themselves that the property does need finishing off.

It perhaps could benefit from an extension.

'It's Spencer and Judith's new home, so they're not looking to rent it out.

'But does it have good rental potential?'

I would consider a rental value in the region of £600, perhaps £625 per calendar month.

A two-bedroom property of this style in this area

would rent for £625 per calendar month.

'Perhaps a four percent yield on rental is reasonably OK.

'But would their £180,000 investment do better if it was resold?'

I would recommend a guide price of £200,000

and expect possibly to receive offers based on that.

If you put the property on the market at the moment, with finishing off to be done,

I'd suggest a guide price of £180,000.

If the property was extended, then I would consider a guide price of £250,000

would reflect the work they've undertaken.

If you were to extend the property and create a fourth bedroom, a more comprehensive extension,

I would imagine you'd reach the stamp duty threshold of £250,000.

-Yeah, good, good.

-Very good.

-Yeah.

-Goes to show there's a lot that can be done here.

-Yeah. Well, it's always had potential.

'Certainly the resale figures give plenty of encouragement,

'not only to finish off the house, but to go ahead with an extension.

'Now they've lived here a few months, have the views lived up to expectations?'

Well, fantastic, really. Throughout the year, you can see it change.

Mm. The seasons. It's lovely with the seasons.

# There is a season, turn, turn, turn

'Perhaps like the seasons, this house has surprised them

'by turning from a development project into their new home.'

'Today I'm in the sleepy mill town of Colne in East Lancashire.

'Once known for its mill industry,

'there's plenty of evidence for its glory days in the heart of the Lancashire cotton industry.

'It's also the birthplace of Wallace Hartley,

'who famously continued playing as the doomed unsinkable ship the Titanic sank.

'It's not far from Manchester and Leeds and the Lake District beckons to the north,

'but this is a quiet little town with loads of shops, a couple of markets

'and you're never far from a bank.'

The property I'm here to see is the rear of a bank.

It's been converted into three flats. The guide price was 65,000 to 70,000 quid.

Big question is, will it be worth a mint one day? Who knows?

Good news - there's lots of renovation going on nearby.

Let's see if it's mintier inside.

'Sitting right on the corner, this is the back end of the rather impressive bank building.

'They used to say, "Put your money in a bank, it's as safe as houses".

# My daddy was a bank robber

# But he never hurt nobody

'Could this building, with three self-contained one-bedroom flats,

'guided at £65,000 to £70,000, be a steal?'

I don't know what you'd do about that, but that is a massive space that's a bit wasted in the entrance.

But into the first flat and, well, one big area here, very high ceilings

which definitely gives a small flat a lovely feeling of space.

Kitchen looks recently refurbished. That's good. Bathroom at the back.

Only one thing missing. Where's the bedroom?

You've got to be kidding. This is absolutely tiny.

Just about big enough for a single bed, I would say.

And it smells damp. That's not good, is it?

'Hm, small isn't the word.

'The bedrooms are tiny and the flats, well, they're really just apartments.'

# The small things make the big things what they are

'All three of them are the same compact size.

'From the middle floor to the top floor.

'But from an investment point of view, this could be a case of small is beautiful.'

# The small things make the big things what they are

'What does a local estate agent think?'

This property, there's not much that probably could be done with it,

apart from a lick of paint and a re-carpet.

But someone will take this on and make it into a decent property.

'If there's not much you can do with them, can you still do enough to get any financial uplift?

'Remember, this place was guided at £65,000 to £70,000.'

Once renovated, I would expect these flats to go for £40,000 to £45,000 each.

I expect each of these flats to rent out for £200 per calendar month.

'That rental return would be £600 a month in total

'or £7,200 a year.

'On a property that was guided at £65,000 to £70,000, that could mean a ten percent yield.'

Well, the flats aren't huge, but they don't need a lot of work to sort them out

and I reckon they could be a good little earner. Let's see who fancied it when it went under the hammer.

Lot number 152.

Part former bank premises, converted into three self-contained apartments

offered with vacant possession. Looking for 30 to start me.

£30,000. 30 there. Can I say 35?

35,000. 35 I've got here. 40.

Another 5. 40 I have.

45 now? Got it.

Can I say 50? 50 I have.

55. I have. 60.

60, yes? 60 I have. 65, then.

No? Would 61 help?

No, it doesn't. At £60,000 on my right.

Looking for 61. Are we finished at 60?

61 there, sir. 62 now.

63, sir. 64. Another one?

I've got it. 65. 66.

No, looking away. At 65,000. Centre aisle.

Are we finished at £65,000? I'll sell it for that figure.

First time at 65.

-Second time at £65,000. Are we finished?

-HAMMER BANGS

Yes, we are. It belongs to you, sir. Could I see your paddle number, please?

'Hidden from view, for £65,000, the successful bidder was Howard.

'He is, appropriately enough, a retired banker.

'He joined me, along with his wife Karen, to tell me why he thought

'the former bank building was a good investment.'

Howard, Karen, lovely to meet you both. Congratulations. Tell me why you wanted to buy this place.

What first interested me in the building was

it was owned by the bank that I used to work for when I first left school.

Oh, fantastic! And anything else about it that initially struck?

Yes, well, when I go to these auctions, I always have a look at the last conveyance in the pack.

And I noticed that this property that I bought for £65,000

-changed hands two years ago for £105,000.

-Oh!

-So a 40 percent reduction is quite good.

-Being a banker, I tend to look for a yield of ten percent return on the capital, you see?

-Right.

And I think, with these flats. I could probably get a good ten percent, maybe 15 percent yield.

-Definitely. For sure. And Karen, what did you think when you saw it?

-I didn't see it till today.

Howard comes back from these auctions and says, "I bought you another present."

Present in inverted commas. I'm never really sure what he's bought.

-THEY LAUGH

-So I'm quite pleasantly surprised.

-Does he ever gift wrap them?

-No.

-A bow on the door, perhaps?

-Should do.

-THEY LAUGH

'Well, some women get diamonds and pearls from their husbands,

'but it seems Karen gets an investment property.

'They plan to add this building to their small portfolio.'

So tell me about you two. Are you local or what?

Well, I was born in Bolton. We both live in Lytham St Annes now.

-Oh, right. So the other side of the country.

-I've retired from banking now.

We both got involved in local politics. We're on the council.

-Yes, Fylde Borough.

-Lytham St Annes.

-Oh, wow. OK. What kind of level have you attained on that?

-Well, I'm leader of my party.

-Right.

-Fantastic!

-After being on 16 years.

-Great. Does that mean you have aspirations to be more?

-Mm. Well, if things go right, I may be given the mayor of the borough next year.

-Oh, great!

-Oh, fantastic!

-If I get re-elected.

-You get to wear the chain and everything.

-Yes.

-Wonderful.

-And I have to wear hats.

-You have to wear hats. Marvellous.

-And what do you do when you're not doing this sort of thing?

-Erm, I'm a magistrate and a school governor.

-I'm chairman of our local music festival.

-Wow!

'So these two really are pillars of their local community.

'I'm sure they have clear ideas of how they're going to proceed with their flat triplets.'

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

Tidy it up, basically. Fill in all the cracks, the holes, get all the wiring checked.

Some of it looks suspect. Some of the wiring and the pipes.

There's no heating that I can see. So that has also got to be sorted.

The kitchens and bathrooms look in a reasonable condition.

Erm, apart from that, just general tidying and cleaning.

So what kind of budget have you got set aside for sorting it out?

-I wouldn't say it would cost more than £10,000 at the most. Maybe five.

-Right.

And in terms of timescales, to get it back and sorted?

-I'd say four to six weeks.

-Yes.

-No more than that.

-Yes.

-So who's going to do the work?

-Guess.

-I don't know, you?

I won't be doing the work but I'll be organising it.

-Right.

-I'm the practical one of the partnership.

-I'm afraid I'm not much of a handyman, you know?

-You won't be out round here with your roller or your drill.

-No!

I look after the house finances, Karen is the more practical one.

-Well, listen, congratulations.

-Thank you.

-Good luck with it. I look forward to seeing how you get on.

-Thank you.

-Thank you.

'Well, as Howard continues his ambition for high office,

'I suspect this high office should be slightly easier to achieve the end results that he hopes for.'

Well, Howard and Karen certainly seem to know what they're doing and the figures do stack up,

so Howard will be delighted.

I'm a bit concerned that there will be more work to sort out these flats than they think.

Because people do demand a lot these days.

Still, you can find out how they get on later in the show.

This is the part of the programme where we find out if all those dreams came true.

Yes, did our buyers achieve what they wanted? Or were there hazards in their way?

Let's return and find out.

'In the New Cross area of South London,

'a large, four-storey, seven-bedroom mid-terrace property went to auction.

'But this former office block had been empty for a while. Not only had it fallen into disrepair,

'but it had been used as a squat and was covered in graffiti.'

# Have you seen the writing on the wall

# Reaching out for your calls?

# Have you seen the writing on the wall reaching out for your calls?

'But none of this put off 28-year-old developer Sean.'

# Writing on the walls

'He paid £331,000 at auction. After all, he is an old hand at this game.'

Basically it started when I was 16. My father lent me some money to get me going, a deposit on a property.

Bought a flat, renovated, before I went to university.

At university I bought two properties with those funds from that property.

With studies I didn't have much time to do much when I was there, so I dabbled to keep me going.

Came out of university, back into banking, did that for three years.

Then I left banking and I'm full-time.

'With his latest purchase, he hoped to convert the building into four flats.

'But even with his experience and enthusiasm, this large building was a daunting task.

'What's the writing on the wall for this former office block?

'Well, eight and a half months later, we're back.'

'With the security shutters off, new windows and doors and fresh paintwork,

'the outside shows promise. What about inside?'

The only four walls that remained were the outer four walls.

We have gutted the building from top to bottom.

'By ripping it back to a shell, Sean was able to reconfigure the whole building.

'It was the ground floor where the most significant changes occurred. as it was converted

'into an amazingly spacious two-bedroom flat

'by adding a large, single-storey extension.'

OK, so this is the ground floor extension that we've newly built.

We've increased the floor area of this flat by 100 percent. Had a few issues with planning.

The way we navigated around the planning issues is by incorporating a courtyard area

into this flat which allows ventilation and light into the back bedroom.

Really happy with the extension. The turnout is a good spec.

We still have to do the floor and the kitchen, which will be a galley kitchen.

But really happy so far.

'If that extension wasn't enough extra room,

'the ground floor flat not only had sole access to the garden,

'but Sean had also built a separate annex at the bottom of the garden,

'perfect for a study or an office.

'Whereas upstairs, on the first and second floors, there are two one-bedroom flats,

'both in need of some finishing off, but well on their way.

'All the flats have solid wood flooring and fully-fitted kitchens.

'And on the top floor, there is another one-bed flat.'

So this is the front living-dining room for flat four on the roof, on the top floor.

Kitchen has solid oak worktops, high white gloss units, erm, stainless steel oven and hood.

The same spec throughout the whole building. It works well. Quite happy with the finish. It looks good.

'Sean did have some delays with planning, sorting out the skylight windows on this flat,

'and he's also been busy on other projects, but generally it's all gone pretty smoothly.

'Sean is a self-confessed perfectionist, so as project manager, was he very picky?'

Extremely picky. Honestly, to the last details, finish, paintwork.

Paintwork is the finished object. If you walk into a flat with poor paintwork, it's noticed.

That's one of my big issues. Also bathrooms and tiling, it's a case of a tiler can do a great job,

and the person behind them doing the silicone can do an awful job and the bathroom can look shocking.

So, overall, yeah, it's a case of I'm very picky. And I think it's noticed when you see the units.

'And he's right. So far it does look like there's going to be a good standard of finish here.'

# I only want to make things right

'That is so important in the ultra-competitive London market.

'But getting a quality finish doesn't come cheap.'

# Only want to make things right

We've actually come in at 155. With the finishing touches, probably about another 10,000 to go.

So we're looking about the 160, 165 mark in total on this project.

'£165,000 spend on top of the £331,000 purchase price,

'plus costs and fees, would take Sean's investment here to a cool half a million pounds.

'So can his four flats still add up to making a profit? What do two local estate agents think?'

Very, very good. What was a derelict building

is now a very well-developed block of flats.

I feel the flat has been decorated to a very good standard.

Er, neutral decor, great finishing on the kitchen.

And will definitely appeal to the young market in this area.

'At present, Sean plans to sell two of the flats and rent out two of them.

'So how could that work financially?'

Looking at the one-bed flats, I believe you'll get between £800 and £850 per calendar month.

However, the top floor one will get less because of the size. It may go down to £750, £775.

The two-bedroom flat I believe will get around £1,100 per calendar month mark.

For the two-bedroom downstairs, I believe we could achieve up to £1,100 per calendar month.

And for the one-bedroom flat, between £800 and £850 per calendar month.

The top flat is slightly smaller. I believe we could achieve between £700 to £775 per calendar month.

'Even on the lowest estimate, that's an annual income from the four flats of £31,000.

'Or a respectable six percent yield.

'But with around £500,000 invested here, how would they fare on the resale market?'

The sales market for the properties, the two-bedroom flat would pretty much pan out at £250,000.

However, with a good wind, he may break that barrier.

So if I was him, I'd be a bit cheeky, put it on for £265,000, £270,000 and take offers from there.

In regards to the one-beds, I believe the first and second floor one-beds would get around £180,000.

And the actual top floor flat, I think that's going to be £170,000,

I'm afraid, just cos of the sheer size of it. It will be the last flat to go, or he may keep it to rent.

Right, I believe the two-bedroom would achieve between £250,000 to £275,000.

And the one-beds would be about £180,000.

But the slightly smaller property at the top would be between £165,000 to £175,000.

'Well, that little lot adds up to values of between £775,000 and £810,000.

'Or a potential pre-tax profit of around £300,000.

'Wow! Sean must be happy with those figures.'

It's been a longer project than we expected. But on those figures, it's all good.

'Undoubtedly another successful project for Sean.

'Does he still see his future in property?'

Yeah, as a naive 17-year-old, I said, "At 30, I'll be retiring". So it's a couple of years away yet.

But it's enjoyable, it's fun and it's rewarding when you've got this at the end of the day. We'll see how we go.

'He may not be planning to retire soon, but with over ten years experience already as a developer,

'he certainly seems to have an old head on young shoulders.'

# We are young, we are young

'It was in the Lancashire town of Colne that we came across

'a property where you got three for the price of one.

'Originally owned by the bank it was attached to,

'this tall, imposing building had been converted into three self-contained flats.

'They were, to say the least, rather compact.

'But despite their size, retired banker Howard and his wife Karen

'thought that actually these small apartments could give big returns.

'For Howard, it was all about the money.'

# I need a dollar, dollar, dollar is what I need

-Being a banker, I tend to look for a yield of ten percent return on the capital, you see.

-Right.

I think with these flats, I could probably get a good ten percent, maybe 15 percent yield.

-Definitely. For sure. And Karen, what did you think when you saw it?

-I didn't see it till today.

Howard comes back from these auctions and says, "I bought you another present."

Present in inverted commas. I'm never really sure what he's bought.

'Howard and Karen are based 40 minutes away in Lytham St Annes, where Howard is a local councillor.

'And surprise present or not, this purchase was all about getting a decent return on their investment.

'With a budget of between £5,000 to £10,000 for all three flats, they set about their task.

'Just under three months later, we're back.

'So, how's it all been going?'

Howard bought it at auction about three months ago,

right at that time we were suddenly projected into the electioneering for local councils,

so we had to find someone to take it on.

And you asked your nephew, Daniel, to act as the project manager.

He came and we came with him and talked about what needed doing.

'So did Howard's nephew Daniel manage to deliver the goods?'

'Certainly the flats have been spruced up. New carpets, curtains and paintwork.

'And the place has been given a good clean. So it appears as though it was all fairly straightforward.'

Well, the only problems we encountered was when we spoke to the pub landlord next door.

He told us, he said, "Do you know the history of the place?"

And then we found out there had been a fire about three years ago

and there'd been a flood and the bottom flat, apparently, was three feet high in flood water.

'So, it seems the flats came with a bit of a chequered past.

'But those problems seem to have been washed away.

'And having removed any sign of damp by replastering in the ground floor flat,

'they also tried their best to improve the bedroom area.'

We thought it was rather dark in there,

and we've put in these windows above each door,

which means that it has natural light in there and is not so much of a cupboard.

'Well, the bedroom might be brighter, but no bigger.

'However they did find some additional space elsewhere.'

This yard is... When I bought the property, I didn't realise this is an extra

because we have access over this, right of access over this yard.

And I think we could do something with it.

We tidied it up. It's much better than it was.

But I think if we paved it and put a few hanging plants from this wall,

and use these steps as a bit of a feature, I think it could make quite a difference.

And it could be a smoking area for your guests, as well.

'Any outside space is welcome in a flat. Especially when they are as compact as these three.

'So making this space accessible to tenants certainly gets my vote.

'But did Howard do it enough in his local elections to get what he hoped for?'

Most of our time was given to canvassing, knocking on doors,

reminding people of the 16 years he'd given to the borough.

And he came back in top of the poll with an increased majority.

So he is now mayor of the Fylde Borough Council.

# Hello, citizens, all right, follow me

# And vote for Mr Bishop's jamboree

'So with the chains of office hanging proudly round their necks,

'they got back to work on the building.

'Did the work carried out by Howard's nephew Daniel get their vote?'

I think a woman would probably have been a bit more pernickety about the finish.

But for a young man, for his first project, I think he did well.

'So in the last few weeks they helped with the finishing touches, such as curtains and lampshades.

'Has it cost them more being more hands-off than on?'

We decided between £5,000 and £10,000.

It's come in around £7,000 for the basic work.

'They paid £65,000 at auction for the three flats,

'spent £7,500 with costs and fees,

'so that means a total outlay of just over £72,000.

'Has that added up to a good investment? What do two local estate agents think?'

The property is actually very nice.

The purchaser has done a little bit of work to it.

A bit of titivation, they've painted, put new carpets in, spent a bit of money on the kitchens,

which is good. So they've done a respectable job of the renovation.

Compact. It's got everything that somebody would need,

bedroom, sitting room, kitchen, bathroom.

It ticks all the boxes as far as that's concerned.

'This purchase was aimed at the rental market.

'But having invested just over £72,000, how much could it be worth if sold?'

Investment would be anywhere between £100,000 and £110,000 for this property.

In the current market, I would expect the properties to achieve

in the region of £90,000 to £100,000.

That's brilliant. Brilliant.

For a total investment of about £72,000, that's not a bad deal.

'That's potentially a pre-tax profit of around £30,000.

'So could it fare just as well as a rental?'

Individually, these properties should rent for anywhere between £55 and £75 a week,

which is anywhere between £250 and £300 per calendar month.

In the current rental market,

I'd expect to achieve in the region of £70 to £75 per week, per flat,

in the order of £275 per calendar month.

-That's very good.

-Very good, yeah.

-Good return.

'Even a £275 monthly rental

'would bring in a total annual income for the three flats of £9,900.

'On an overall investment of around £72,000, that would mean a yield of nearly 14 percent.

'That's slightly above what Howard was aiming for. Does that make him keen to do another property?'

I certainly would. Especially now that I've got my nephew Daniel involved.

He's very keen to start up a family business in investment properties like this.

Well, we'll be back with more stories from the world of property for you next time,

some successful, some less so, but always jolly interesting to watch.

-See you then for more Homes Under The Hammer.

-See you then, goodbye.

-Goodbye.

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