Episode 79 Homes Under the Hammer

-Welcome to Homes Under The Hammer.

-Property auctions used to be places

where just developers and builders used to go, but not any more.

All sorts of people go to auctions to find what they're looking for.

Even in difficult times, they're still finding bargains under the hammer.

Well, even for experienced auction buyers, you need to be sure what you're doing,

cos auctions can be fairly nerve-racking places to be.

So did today's buyers keep a cool head and keep it calm? Let's see what they bid for.

'In Wiltshire, this two-bed bungalow has pipe work so bad,

'it makes your eyes water.' I've never seen plumbing that is so absolutely diabolical as that.

'This ground-floor flat in Balham, London, oozes period charm.'

I was excited outside, but now I'm inside, it's even better!

'And in this model village in Yorkshire, this three-bed end-of-terrace

'is pretty much ready to wear.' It's already screaming out very practical family house.

'All these properties have been sold at auction.

'We'll find out who bought them and what they paid

-'when they went under the hammer.'

-Well done. Thank you.

'I'm in the market town of Corsham near the spa city of Bath.

'It's a beautiful and historic place near some wonderful and interesting buildings.

'Let's hope the property I'm here to see is, too.

'One thing's for sure - it's certainly easy to get to by road.

# Drive, yeah, drive

# I'm gonna drive

# But then you get nowhere

# Baby, driving

# Is bringing me down

-Well, the property I'm here to see is a 1920s bungalow.

-CAR HORN BEEPS

But you know what? The first thing that's wrong with it - it's right by the side of the main A4.

That used to be the main London road going from Bath all the way to London, so clearly,

people honking their horns, people thundering past at all hours of the day, it's not ideal.

The property itself, though, it's not at all too bad.

Two bedrooms. It's a bungalow. Oh, there goes another truck.

Let's take a look inside.

Despite the traffic, you know how I do love a bungalow,

and this one had an auction guide price of £155,000.

So one of the first things you're going to do, of course, is fit very good double glazing,

although that won't get rid of the vibrations from the trucks.

What have we got? Entrance hall here. Standard layout for a bungalow.

Two reception rooms, although one will probably end up being a bedroom.

A few signs of damp, you'll want to check that out. Bathroom and toilet there.

Second bedroom there and then through to the rear sitting room area.

Not a bad sized space. Lots of nice views out the windows and light coming in.

-HE LAUGHS

-What on earth...is that?

Look at this! Look at this plumbing!

Fantastic!

Erm, right, well, we're in the lounge here, and as you can see,

somebody has done this magnificent job of this pipe work on the surface.

Oh, and for good measure, we've got an electricity cable going through there.

I've never seen plumbing that is so absolutely diabolical as that.

Yeah, done by Bodgit and Scarper by appointment to the gullible.

# Bonkers

'It really is a bonkers job. And the creative plumbing doesn't stop there.'

There are more classic chapters from the handbook of how not to do plumbing here in the bathroom.

This is just an absolute star. You turn the tap on and the water goes into the sink,

out of the waste pipe here, into the bath.

It's not a normal way of doing it, but hey, it works.

'Hm. Yes, and that's an interesting way to position the showerhead.

'But shoddy plumbing aside, the rooms here are a good size and nice and bright.

'Of course, the whole place needs modernising

'and you could think about moving the front bedroom to the back to get away from the noisy traffic.'

Right at the back of the property is the kitchen.

Of course, the further away you come from the road, the quieter it becomes,

so really, when we think about positioning the bedrooms, you want to bear that in mind.

But the kitchen itself, it's not a bad size space. It could do with a bit of tender loving care, for sure.

I think knock down that wall there to create an even bigger space.

The good news, of course, is these lovely views out the window. You certainly can't knock that.

It's a world away from the bustle out the front.

A great sized garden with views over the fields into the distance.

Ah, perfect for summer evenings.

# Don't sit under the apple tree

# With anyone else but me

# Anyone else but me

# Anyone else but me, no, no, no

Well, at the rear of the property, there is the potential for an extension.

The great news is, you've got planning permission already for a two-storey extension,

a loft conversion and a double garage.

That's good news. It would increase the floor area of this bungalow quite significantly.

And good news again - it's at the rear of the property, further away from the road. Is it worth doing?

You've got to look at the numbers, talk about what it would add to the value of the property

and then make your decisions. Cos you want to make sure it's worth the fruits of your labours.

# Don't sit under the apple tree

# With anyone else but me

# Till I come marching home

'We invited a local estate agent along to find out his thoughts on the bungalow,

'guided at auction at £155,000.'

It's a nice property. It offers good potential.

The main road is obviously an issue regarding the property,

but it certainly could offer someone a good bit of living.

'Does he think extending at the back would be worthwhile?'

I would certainly recommend carrying out the extension.

Looking at the resale values, it would be the better option.

'What kind of resale value could it achieve if the extension was built?'

If the planning permission was carried out and the extension was put on the property,

I'd probably look to market it somewhere in the region of £275,000 to £300,000.

'If the property was sold on with just the renovation work, how much could it get?'

If the property was renovated in its current state without the extension,

I'd look to put it on the market in the region of £200,000 to £210,000.

'Perhaps rental would be worth considering.'

In terms of rental values, if the property was renovated but without doing the extension,

it would be worth in the region of £700 per calendar month.

Well, on the down side, the road and the plumbing.

Blimey! But on the plus side, what you've got here is a property that you could do quite a lot with,

especially with the planning permission that's in place.

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

Lot 30. Where will you start me? 150, somebody? 150, OK.

At 150. We'll go in fives to start with. 155.

160. At 160.

Now go in twos. 162. 164.

166. 168.

170 I'll take. At 168,000. It's here to be sold.

At £168,000. 170, please, anyone?

170 I've got. At 171.

172 to you, sir. 172.

And 3 may I say? At 172.

There at £172,000 for the first time.

£172,000 for the second time.

-At 172, third and last time, are you done?

-HAMMER BANGS

'And that successful bid of £172,000 came from Roger.

'He lives locally and is a builder and landscape gardener.

'So when it comes to renovating this property, he's got a head start.

'I caught up with him at his new bungalow to find out his plans.'

-Roger, congratulations.

-Thanks.

-Nice to meet you. Why did you want to buy the bungalow?

Basically, I've had a dream of building my own place for a long time.

This came up for auction and, er,

well, it's difficult to find a plot, so this is a bit of a compromise, really, cos of the main road.

But we've got the view out here, so this is why I went for it.

'Roger's not yet sure whether he'll extend the house or apply to amend the planning permission,

'knock it down and start again.

'Whatever he does, he's optimistic about coping with the noisy road out front.'

Hopefully, all that stuff is going on during the day, so hopefully in the evenings

when we're spending most time here, and weekends, that garage won't be so much of a problem.

I'm envisaging, once the house is built, high-roof level garage across there,

that'll cut out of a lot of the noise at the back.

-So you've bought it why?

-I basically want to get rid of my mortgage,

so we sold our old property, we're living in rented accommodation,

and hopefully with the money we spent on this

and what I've got left in the bank, we should be mortgage free at the end of it.

-Oh, great! So this will then be, what, your family home?

-This will be the family home, yes. We'll move in.

-Tell me about the family.

-Er, my wife, Susan, and two teenage daughters.

-Avril and Jessica. They've just taken their GCSEs.

-Oh, wow.

-Yeah.

They're not too happy about being moved away from where they are at the moment,

but they'll be driving soon, so they'll be able to get back to see their friends.

'He wants to turn this property around within a year on a budget of around 100 grand.

'If he can't get permission to knock it down and rebuild,

'he hopes to amend the existing extension plans to create a fourth bedroom above the new garage.'

# If I had your love

'Everything depends on planning permission. But one way or another,

'he'll turn this rather needy two-bedroom bungalow into a loved-up four-bedroom family home.'

# A dream house

# Just for you

And once you've spent 12 months doing this up,

is this it then, or would you sell it on? What's the game plan for the future?

Well, we're going to move in.

My two daughters are 16 at the moment.

Maybe in two or three years' time, they'll be off to university,

they'll have left home, so we'll then reassess the situation, see if we want to downsize

and then move on somewhere else, try and find somewhere we really like then.

-Are you looking forward to it?

-Oh, yeah, very much so. Yeah.

I can't wait to get started, really.

Good. We wish you all the best with it.

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

-All right.

-All the best.

-Cheers, then. Thanks.

So, Roger fulfilling his dream of building his own house on this site.

Well, I just hope that his family like it when it's done,

that he manages to get the planning permission and that he sticks to his budget.

It's going to be tight. You can find out how he gets on later in the show.

'Balham, London, for so long, the poor relation to Clapham,

'is now more than standing on its own two feet in desirability stakes.

'Its London village feel is what attracted wealthy city workers to the area

'way back in Victorian times, and after a slight dip in popularity,

'today it's stacked with bars, bistros and fabulous houses.

'It's safe to say, Balham is back and how!'

The property I'm here to see is along this line of beautiful, quirky Edwardian terraces.

And on top of that, you've got this lovely separation from what can be a pretty busy road out there.

But it's all looking good. And the guide price, well, that looks astounding.

It's a ground floor of this mid-terrace, all for £190,000.

Now, I know that's a lot of money in anybody's books, but when you hear the flat above sold a few years ago

for £423,000,

to me, that sounds like a bargain.

'But that was at the height of the property boom and times have really changed.

'Still, it's less than half of the price of the top-floor unit

'and it's got the freehold thrown in, as well.

'Time to see if this ground-floor, two-bed flat matches up to my expectations.'

Well, you've got a lovely front door there.

And, ooh, look how exciting it's going to be! Cornicing in the hallway!

It's already getting good! You can obviously see beyond the decor.

It's completely dated. But it's fantastic, I love it. Wonderful proportions.

A really lovely sized lounge in there.

A fireplace that's not in keeping with the property, so I think I'd like to change that.

But beautiful square rooms. You've got your second room here. I think this probably once was a bedroom.

Again, cornicing. A beautiful fire surround here.

You could possibly get something and install it in there, cos you never know what you'll find behind here.

You've got a lovely big window with views out onto a decked area.

I tell you what, I was excited outside, but now I'm inside, it's even better!

# Better things will surely come my way

'Two rooms down and so far, so good. This flat needs tons of work,

'but the bones are here, and it has period features that are very much in fashion at the moment.

'Moving further down the hall towards the back of the flat, and the bathroom's a tad small.

'It would need ripping out, although I reckon a reclamation yard would be interested in some of the fittings.

'But just as it's going swimmingly...

'..this is the second bedroom. Talk about bijou!'

That little bedroom there is too, too small.

You really need to do something about that.

You can see here, we're at the back of the property, we've got two really nice windows

leading out to a little decked area, and you've got the kitchen over there.

Now, my idea is, to really make the most of this property,

I think you've got to tweak the internal layout,

maybe more than tweak, because I'm thinking this wall has got to come down.

I think it's a load-bearing wall, so you may need to get into all sorts of complications, RSJs, et cetera.

But by taking that out, you could really, really open this space up.

So you could call this your sort of living/dining area, it comes straight off the kitchen.

Then you would have a nice, big space to the back.

You could incorporate lots of this hallway which, at the moment, is wasted space.

Now, that would allow the front beautiful reception room to be turned into a bedroom.

As much as I hate to do that, I think it would work,

because then you would have two good size doubles in this flat

and I really think, for the sort of money you're paying for a property like this,

you need to give two double bedrooms, because if you don't do it,

somebody else is going to come along, do exactly that, and get the money for it.

'This is a very modern way to make the most of an old-fashioned layout.

'But before we get all involved with rearranging the inside,

'we need to check out the bizarre layout outside.'

Because this isn't just your garden.

Well, this bit is, this bit isn't, and that bit is. It's a nightmare!

The problem is, the top floor flat gains access from this door here,

right in the middle of the garden. You could split this garden here,

so this part belongs to upstairs, but then they'd be peering through these windows while you're eating

or getting changed. It's not going to work.

You are left with two fragments of the garden on opposite sides of the flat.

There is no easy way around this one,

and whoever takes this flat on needs to get friendly with upstairs

and find a solution that's fair and feasible.

Because at the moment, it's flipping annoying!

'I'd think of talking to upstairs about buying their patch. If they're not keen,

'you'll just have to put up with a garden of two halves.

'At least you could follow the sun throughout the day.

'We asked a local estate agent for her thoughts on the flat.'

The space is very good. I think it would work better if it was reconfigured.

I think it would make it far more saleable and rentable

if you had two big doubles bedrooms.

'What about a resale value?'

If it's reconfigured, then £375,000, £380,000.

-'And for rental?'

-If you have the two double bedrooms, then easily £1,400 a month.

I can only assume the guide price was set so low

to tempt the wary into the auction room.

This is a cracker of a flat, but in need of some work

and it's begging for walls to be moved and the whole space improved.

I can't wait to see who bought this at the auction.

Right, lot 55.

Who's here for this? I've got a dead low reserve on this.

Phone bid, 200. Who wants to go a bit more than that?

How much?

I've got 220 in the room. 225?

If not, it's going at 220, if no-one else has bid.

First time. 225.

If you don't get your hands up, you're going to lose it. 225. 230.

'Prime property like this was never going to go for £225,000.

'So bidding quickly escalated. We rejoin it at £307,000.'

307 with you. 308?

If not, 307.

308. 309.

309. 310?

311? 312?

Anyone else? 311, first time. Second time.

-Third and last time, if you're all done.

-HAMMER BANGS

Sold, 311. Well done. It's a good buy, that.

'The successful bidder was property investor Claude, who bought the flat for £311,000,

'121 grand over the guide price.'

Claude, congratulations. That was quite an interesting auction, wasn't it?

You actually sat back a few times and didn't continue to bid.

I did. That was part of the policy of trying to buy at auction.

People never know how much you're going to bid and where you're going to stop.

So to stop anybody trying to bid you up,

I sometimes do stop and say, "No, that's enough" and see if anybody else wants to carry on.

-Ooh, so you were playing a few mind games, were you?

-There's always mind games in the auctions.

-What do you do?

-Well, I'm principally a property investor.

I normally buy properties, refurbish them and then let them out.

-Is this something that you've enjoyed doing over the years?

-Oh, it's terribly rewarding.

At the end of each day or each year, you can reflect on what you've achieved

-rather than shuffling paper around.

-So did you used to shuffle paper around?

Oh, I've done a few things in my life. But yes, I did, I'm an accountant by training.

And I can imagine from being an accountant that you're meticulous with everything.

-I bet nothing goes unmissed.

-I'm pretty good at keeping the records, yes.

But don't ask what the budget is. I work to a quality standard, not a budget.

'I'll come back to you on that one, Claude. Bet I can get a budget out of you.

'He has a portfolio of around 25 properties.

'This one is really to keep him out of mischief while planning his next renovation.

'He's not convinced there'll be a lot of profit here

'and he's probably right given the amount of work.'

I'm going to gut the whole thing. All the ceilings will come down,

plaster will come off most of the walls. I shall then be able to tell

when I've got all the ceilings down how the construction is

and that will determine whether I'm able to do what I'd like to do,

which is to knock between the dining area and the second bedroom and open that all up,

including into the kitchen. At the moment, you've got the kitchen at one end of the flat

and then reception room at the other end, and that doesn't really work for modern living.

But if it's going to be difficult for technical reasons,

then that will be the reason why I don't do it.

You must have an idea of how much you want to spend on this.

I've got a ballpark figure. I reckon it's going to cost £40,000 to do it.

'See? I knew I'd get it out of him.

'By the time you add up the figures, including over £9,000 in stamp duty,

'and any other fees or expenses,

'his profit margin could start to shrink to around £10,000 to £20,000.

'Claude won't get sentimental about this place and hopes it'll be done and dusted in around four months.

'But hang on. What's he going to do about the garden?'

I'm fortunate in that I'm the freeholder of the whole block

and the upstairs flat is a leaseholder.

But they're deemed within their lease to have exclusive use of a portion of the garden at the back

where they've got a table and chairs.

So can you not swap the parcels of land around

and say, "There's my back door, I'll have that chunk and upstairs can have that chunk"?

I think because of where their back door is, it's going to be a bit complicated to do that

and it just all ends up being more money for the lawyers, frankly.

I don't honestly think there's a lot one can do

and I don't think it's going to make a great deal of difference.

Are you quite excited about turning this place around?

Yes, I think it's going to be very rewarding. The worse it looks when you buy it,

the more rewarding it is at the end of the day.

It also makes it an awful lot easier when you just give the instruction to rip everything out.

Because when it's in halfway decent order,

you feel, "Ooh, what have I spent all this money on?"

-Claude, it's been lovely meet you. Good luck and I hope the refurb goes really well.

-Thank you.

So, it's the condition of the flat itself that will make up Claude's mind

about what to do with the layout.

And I am now completely torn!

You could lose this lovely living room or make a marvellous open-plan area at the back.

It's going to be a very interesting one. Find out what happens later in the programme.

'Coming up in South Yorkshire, the icing on the cake for this end terrace is the garden.'

A real bonus to what is already a really nice little house.

'Claude's renovation in Balham, London, turned out to be a real can of worms.'

Every risk I took went bad.

It was far worse than I ever imagined.

'But first, in Wiltshire, Roger is dreaming of living the good life.'

We're going to have ducks and chickens, so it's going to be a nice space.

'Time now to head back to Corsham where earlier we met Roger.

'He purchased this two-bedroom bungalow at auction for £172,000.

'It was a bit noisy as it was close to the main road, but that didn't stop Roger.

'He lives locally and is a builder and landscape gardener by trade,

'so definitely the right man for the job. But why did he buy this place?'

I've had a dream of building my own place for a long time.

This came up for auction and, well, it's difficult to find a plot

so this is a bit of a compromise, really, because of the main road.

But we've got the view out here, so this is what I want it for.

'Roger wanted to turn this property round within a year and on a budget of around 100 grand.

'If he couldn't get planning permission to knock down and rebuild,

'he hoped to amend the existing extension plans to create a fourth bedroom above the new garage.

'So, nearly 11 months later, has Roger managed to fix up this tired and rather quirky two-bed bungalow

'and turn it into a four-bedroom family home?'

# And I will try to fix you

'Roger's kept some of the existing building,

'but already from the front, you can see it's much bigger. What's it like inside?

'What a difference.

'Compared to before, the new open-plan kitchen, dining and living room looks vast!

'It looks more like a complete rebuild,

'as Roger's ended up knocking down most of the original building.'

This is the new extension.

This is a kitchen/diner.

We'll have a sofa over here,

table and dining chairs where you're standing,

and over here is the kitchen. I think we'll probably be spending most of our time in here.

It's a nice room. It's got a nice view over here.

I'm very pleased with how this room's turned out.

'Roger has clearly been very busy. Double-storey extension at the rear, double garage, new roof,

'new windows, oh, and not forgetting that disastrous plumbing.

'Glad to see that's been sorted.

'Roger really is a master builder.'

# So, friends, do you know

# The master builder?

This is the master bedroom. We've got an en suite here.

A dressing room over there. Quite big. Get a dressing table in there.

Then we've got double doors, Juliet balcony looking out over this view.

Erm, it's very nice.

'The garden looks great, but it seems a little bigger than I remember.'

We bought a bit of land at the back.

It's made the garden twice as big as it would've been if we hadn't bought the land.

We've planted wild flowers on one side of it, we'll have ducks and chickens there.

So it's going to be a nice space. And, of course, it extends into the field, as well.

'A huge amount of work has gone on here,

'but there's still quite a lot left to do.'

Upstairs, it's mainly decoration. There's the family bathroom to be tiled

and the en suite to be done.

After that, it's mostly painting.

And then downstairs, a bit more plastering to do,

the utility room to sort out and, obviously, the kitchen to be fitted.

On the original planning permission, there was just an empty roof space above the garage,

so we applied to put a bedroom over the top,

which meant raising the roof line by about two foot.

That went through OK, actually. We got permission to put the bedroom in,

which has turned out to be one of the best bedrooms in the house, really.

'Roger's daughters weren't so keen on the move before.

'Have they changed their minds now it's nearly finished?'

Yeah, they're coming round to the idea of living here. They like the rooms that they've got,

they like the space, the big garden. I think they're looking forward to having lots of parties here.

'11 months have passed. Will Roger manage to finish within the year, as planned?'

Well, we are going to move in in about a month.

I mean, it doesn't look like it's ready, but we are going to get enough ready for us to move in.

We'll have a kitchen ready, get one of the bathrooms ready.

The bedrooms only need decoration and the rest of it I'll do when we've moved in.

'What about the budget? Did Roger stick to £100,000?'

We have gone over budget. We've upgraded various things and, of course, buying the land at the back

cost more than we were planning to do.

So I think, on the build itself, we've gone about £30,000 over budget.

'Roger's spend of 130 grand means he's not quite mortgage-free, as he'd hoped,

'but he is now borrowing less than before.'

'Including his purchase price of £172,000,

'Roger's outlay to date is £302,000.

'But he reckons there could be another £30,000 of work still to be done,

'including fittings and furnishings.

'Let's see what two local estate agents think of his work.'

It's different from what I expected. He's changed the plans

from the original plans that he had in place,

but he's done a nice job. He's got all bedrooms upstairs

-and there's some really good size accommodation.

-He's transformed it

from what it was, as a small detached bungalow,

into what is now a sizeable family house.

'What rental income could this place achieve?'

It's at the top end of the market, so in the region of £1,250 per calendar month.

We should achieve in the region of £1,200 per calendar month without too much difficulty, maybe £1,250.

Well, that sounds like a good income, actually.

If we were going to rent it, I think I'd be happy with that.

'And resale value?'

I would recommend a guide price in the region of £375,000 for the property.

I would recommend an asking price in the region of £350,000 to £375,000.

Well, my total spend at the end of it is going to be 330,

so we have made a profit on it.

Probably would've liked a little bit more,

but house prices as they are at the moment, probably that's not bad.

'That would be a potential pre-tax profit of between £20,000 and £45,000

'minus the usual taxes and expenses.

'Does Roger think his family will be happy living here?'

Yeah, I think they're going to enjoy it here eventually.

It's got plenty of space, plenty of light, we've got a big garden,

so, yeah, I think we're going to settle in here quite nicely.

'Doncaster, or Donny to those in the know, was once a coal-mining centre and industrial powerhouse.

'More recently, Donny has been playing the regeneration game and winning,

'with a new riverside college campus and plans to build lots of new homes.'

Well, the property I'm here to see is in Woodlands.

That's a model village about three miles north of Doncaster centre.

Well, when I say model village, I don't mean small houses and train sets and windmills,

I actually mean it was built in the early 20th century

to house the workers of the local colliery.

And what a great space it is, built around this large area of grassland and trees.

The houses themselves, really pretty, on the edge, lots of open countryside.

This is the one I'm here to see, right on the end. It had a guide price of 50,000 to 60,000 quid,

which for a three-bed sounds good, especially in this kind of place.

'At a time when most coal miners' houses were traditional terraces,

'this former coal miners' estate is charming.

'Backing onto woodland and with a large garden at the rear, it's impressive now.

'In the 1900s, this place must have felt like paradise.'

# Oh, think twice

# It's just another day for you

# You and me in paradise

So what have we got? A little porch area there and then into your front living room.

Now, bit unusual, this, because it's separated this way

as opposed to this way, that you might expect and is more normal.

But I quite like that, because you get a double aspect,

you get a view over the green that way and out that way, more light coming in, which is really good.

The only thing is, they've put these very dark cabinets in and bookshelves,

which don't really help to lift the light in the room.

But the old quarry tile floor and it's a good size space, so all in all, a bit of a tick for that.

And then through into your kitchen. Bit of a surprise here.

Not bad condition. It needs some units, a cooker, et cetera,

but I think a bit of cleaning up in here and you could actually make it quite presentable.

Deal with the walls somehow. A bit of a wedding cake scenario going on there.

But more practicality as you come through the kitchen. At the back, you've got a downstairs loo

and a utility room. So all in all, it's already screaming out very practical family house.

# It runs in the family

# All the things we are

'Up the slightly oddly-positioned stairs and there are three double bedrooms suitable for Goldilocks.

'One a tad small, one just right and the other almost too big.

'But I have a cunning plan. You can only get to the bathroom via this large bedroom.

'I'd suggest creating a corridor, allowing the bathroom to be more accessible.

'The cherry on the cake is the loft. It's currently used as an additional bedroom

'but couldn't be marketed as such unless proper stairs were put in.

'And that would put a big dent in your budget.'

Well, at the rear of the property, you've got this little bit of garden and this access road,

which is actually quite convenient because, good news, this is your garage.

It's a double garage. And also you've got this little storage area there.

So, pretty good. But that's not all. Follow me. This is fantastic!

This is almost like a hidden garden. It's clearly not directly attached to the property,

but you come down this, heading towards all this woodland in the background,

and you've got this lovely, lovely area of, well, garden space, whatever you wanted it to be.

A real bonus to what is already a really nice little house.

'This house is full of surprises, but none so big as the one lurking in the legal pack.'

Now, the legal pack states that the property was bought around three months ago

by somebody who's decided to sell it on. Anything to worry about with that?

Well, actually, yes, there is, because mortgage companies do not like properties

that have been owned by somebody for less than six months.

It's to stop unscrupulous investors basically buying property

and then flipping it on at an inflated profit.

So what we learn from that is that the person who bought it probably had to have cash to do so,

and if you weren't prepared for it, you could score yourself a bit of an own goal.

'Despite that rather sticky stipulation, the house has a lot going for it,

'especially for its £50,000 to £60,000 guide price.

'We invited a local estate agent to give us his thoughts.'

The first impressions are it's a good purchase.

It's got lots of potential. It's not a bad basic shell.

It just needs modernisation.

'Is the resale market a good option for this property once renovated?'

If the property is done up properly, then I would put it on the market for around the £90,000 mark.

'What about the rental returns?'

Per calendar month, the rent I would expect would be £400 to £425.

So, a model house in a model village?

Well, almost. Not really that much work to do

to turn this into a lovely family home.

And you certainly can't complain about the setting.

Let's see who snapped it up when it went under the hammer.

Guided at 50,000 to 60,000. Where are you going to be for this one?

£40,000 the bid. Start at 40,000.

42. 44. 46. 48. 50,000.

At 51. I have 51. 52.

53. 54. 55 for you?

New bidder, 55,000. 56.

57. 58.

59,000. 60 for you?

£60,000 I'm bid. 61,000 there.

And 62 if you're going. 63.

64. 65. 66.

67. 68.

69 for you? 500 if you like.

Is it 500?

At £68,000.

For the first time. Second. Third and last time at £68,000.

-Any more bids?

-HAMMER BANGS

-Well done. Thank you.

# Young girl

# Get out of my mind

'Successful with her £68,000 bid was 26-year-old Hannah.

'She may seem relatively young to be bidding at the auction, but appearances can be deceptive.

'She's a seasoned property developer who knows how to spot a diamond in the rough.'

Hannah, lovely to meet you. Congratulations. Tell me why you wanted to buy this place?

-Well, I know quite a bit about the area. I've already got two properties within the same square.

-Oh, right.

They rent out really well. They're nice people in the area

and the houses themselves dress up really nice.

It's a lovely little spot, actually. It's almost hidden away there. It's this oasis of, well, loveliness.

-Yep.

-Right. So tell me a bit more about you.

-Well, I'm a full-time property developer.

I started when I was 18, bought my first property,

and then just did one at a time as I was working full-time, as well.

I did a degree in theatre, film and television.

-Wow!

-About halfway through, decided it was property I wanted to get into.

-I got the bug.

-Right.

-And then... So I was working... When I came out of university

I started working as an estate agent to get a bit of background knowledge.

When I left the estate agency, bought a property with a view to doing it up and selling it.

Erm, which I did. And it worked quite well, so...

'It certainly has worked well because Hannah now owns nine properties.

'And with successful property developing parents

'to set her off on the right track from a young age, she's had great mentors.

'At the same time, Hannah did fall foul of that issue that was hidden in the legal pack.'

I had a bit of a problem with this property because I wasn't aware that the majority of mortgage lenders

won't lend on a property that's only been owned by the previous owner

for less than six months.

-So what did they say?

-No. I had the finance in place before I went to the auction. No problem.

Paid the ten percent deposit on the day and signed the contract

to complete within 28 days, which is not normally a problem.

I then went back to my mortgage broker, and he tried finding different lenders,

just none of them would even look at it.

But because I'd signed the contract to exchange within 28 days,

erm, there was no way round it. They wouldn't extend their completion date.

Erm, and the financial implications of not completing

on the date that you've signed the contract for is insane. Quite frightening, really.

# You make me scared.

-# That's what you do

-'It's a scary situation to face.

'If Hannah had failed to complete, she would have forfeited her £6,800 deposit,

'incurred costs and would have been made to make up the difference if the house then sold for less.

'Fortunately she was able to secure short-term finance from a private investor,

'at a cost of £5,000. And that's eaten into her original 12 grand budget for the work.'

'But with £7,000 to play with, Hannah's got plans.'

-So what are you going to do to it?

-Well, just tidy it up, really.

There isn't a great deal that needs doing to it.

I want to plaster, get rid of all the Artex. New carpets. Lick of paint throughout.

The tiles, I'm not keen on the tiles, so I'll make them a bit more neutral.

-And how quick to get it sorted out?

-Hopefully just a couple of months.

-And then rent it out or sell it?

-Hopefully rent it. That's the plan.

-What kind of rent are you expecting?

-I know I can rent the properties out for £575,

but most estate agents would say less,

but because of the condition of the properties when they're being rented out,

people are happy to pay a bit more for a better quality property.

Well, it's lovely to meet you. Congratulations. And we can't wait to see how you get on.

-Thank you.

-Take care.

-Thanks.

Well, it just goes to show that success doesn't always come with age.

Hannah's worked really hard and put lots of enthusiasm into developing that property portfolio.

But it also goes to show that even with experience you can get caught out.

That mortgage issue was a really nasty one and a lesson to us all.

Still, how is she going to get on sorting this place out? You can find out later in the show.

Once you've bought the property, the hard work really starts

and you need to be prepared for a few surprises along the way.

So has it all gone smoothly for our buyers?

Or have they unearthed all sorts of problems? Time to find out.

'Back now to Balham in South London to catch up with veteran property developer Claude.

'He purchased the ground-floor flat of this attractive mid-terrace

'for £311,000 at auction, and hoped to reap the benefits.'

-Are you excited about turning this place around?

-Yes. I think it's going to be very rewarding.

The worse it looks when you buy a property, the more rewarding it is at the end of the day.

'Famous last words or voice of experience?

'Claude planned to turn this place around for £40,000, in three to four months.

'Seven and a half months later, we're back.

'The flat looks absolutely stunning, clean and contemporary.

'And with the small second bedroom now the kitchen,

'the back of the property is now an open-plan kitchen, dining and living area.'

Well, here, what we've done is we've removed the wall here, which was the second bedroom,

and converted this into a kitchen area, and opened it all up into this reception room,

so you've got a kitchen leading into a reception room which works so much better today in modern life.

And has the benefit of the French doors looking straight out onto the garden.

It is a slightly small reception room relative to the size of the bedrooms.

But that was a compromise I had to live with.

'Speaking of the bedrooms, the former master bedroom has had a complete makeover.

'And what was once the damp and dingy lounge at the front of the building,

'is now the new master bedroom.

'The back garden has been beautifully landscaped.

'It's still divided between upper and ground-floor flats, as before,

'but the ground floor access through the new French windows is a real bonus.

'Claude also made the most of the outside space at the front of the flat by creating off-street parking.

'I think this will be a huge selling point.

'The bright idea was inspired by solving one of many issues this property had in store.'

I had a major problem with the water mains.

We had to completely replace that so I had to dig the front garden up.

And I thought, "Well, if I'm going to spend money ripping up this grass and putting a trench in,

"why not convert it into off-street parking, because that's a real boon round here?"

And I consulted the council, got consent, and they'll be dropping the kerb in the next month or two.

So I created an off-street parking area.

'And a fabulous and practical creation it is, too. But not everything went as smoothly.

'Unfortunately, Claude was plagued with problems throughout the renovation.'

When I first bought it, I knew that it was in bad condition.

That was a given. And I took a few risks, but I have to confess, every risk I took went bad.

It was far worse than I ever imagined.

There was wet rot, dry rot,

penetrating damp, rising damp, even rats under the floor.

It became totally apparent that the floor had to go,

because everything, all the timbers were rotten underneath, particularly where they met the outside.

Virtually all the internal walls had to be completely rebuilt.

'Removing floors and walls is a challenge at the best of times.

'When buying a ground-floor property you need to be sure the flats above are not affected.'

There was one point when you could literally stand at the front door

and look right the way through to the back of the property, as every single wall had been removed,

and we had a forest of acrows, which are these props that prop up all the floors above.

'Of course, knocking things down had a knock-on effect on the budget.'

Well, they say in the military, the first casualty of war is the plan.

And frankly, on this project, the first casualty was the budget.

That went in the first week when I realised that we were going to have to rebuild all the walls

and rebuild the entire floor, because that just wasn't in the budget.

A certain amount was, but not all of it, certainly.

And I didn't have a breakdown of the budget, it was just... You just kept going.

There isn't an option, so there's no point in analysing the budget in microscopic detail,

because it will only depress you, and that does you no good at all.

'Claude did, in fact, spend £53,000 here, 13 grand over his original estimate.

'Even so, his costs were reduced as he did much of the work himself.

'Add that to the £311,000 purchase price, plus stamp duty of just over nine grand,

'and you're talking a total outlay just short of £375,000 plus fees and expenses.

'Was it money well-spent? Let's see what two local estate agents think.'

The owner has done an amazing job here.

I like the way they've reconfigured the property

because you've then got two very good double bedrooms.

Off-street parking is inspired in this part of London.

And I'm sure it will be planted up and look fantastic

and that will give the front room more privacy, as well.

First impressions walking round, it's incredibly spacious.

Very light, in very good condition,

and presented to a very high standard.

'High praise for the finish, but what about the finances?

'Claude often does properties to rent,

'but with his higher than planned spend here, would renting be worthwhile?'

Renting this property out, I would recommend between £1,700 and £1,800 per calendar month.

£1,650 to £1,700 per calendar month.

They're on a par with what I think they should be,

but the yield is going to be around four percent. Quite frankly, it's not a great rental investment.

'So with Claude turning his attention to selling, what kind of price should he be expecting?'

We would be putting it on the market in the region of £430,000, £435,000,

and expect to achieve well over £420,000.

Putting it on the market, I would suggest the values would be between £420,000 and £430,000.

That's pretty well on a par with what my expectations are.

I know it's a lot higher than perhaps it was at the beginning.

But I was pretty confident that, with the standard of finish that I normally do,

that that was going to be the in-price as long as the market was relatively stable.

'Resale does seem to be the way to go here, and in fact,

'since filming, the flat's now under offer at £435,000.

'If all goes well, that will give Claude a pre-tax profit

'of around 60 grand, minus selling expenses.

'But does this make up for the problems he had?'

With the benefit of hindsight, would I have bought this property?

I'm not entirely sure, but you have to take the rough with the smooth,

and I think I'm coming out of it all right.

'We're back in Woodlands near Doncaster.

'Here property developer Hannah purchased this former Coal Board house at the auction

'for the fine price of £68,000. But with a technicality hiding in the legal pack,

'she came up against her first problem when it came to the finances.'

I had a bit of a problem with the property

because I wasn't aware that the majority of mortgage lenders won't lend on a property

that's only been owned by the previous owner

-for less than six months.

-So what did they say?

-No.

'But Hannah wasn't taking no for an answer.

'She managed to get help from a private investor at a cost of £5,000.

'Her plan was to renovate the house fully within a couple of months

'on a budget of around £7,000, with a view to renting it out.

'Four months later we're back to see if she's been plagued by problems

'or saved by an unexpected solution.'

Since you last came, I was approached by some previous tenants of my parents.

And they were looking for another property that was a bit bigger than the one they were living in,

in a different area, and this was the only one I had available at that moment in time.

So I showed them the property just to engage their thoughts

with a view to renovating it and then being able to move in at a later date.

But when I showed them round the property, they absolutely loved it and decided to take it on as it is,

and they would do any work that needed doing themselves. So it's currently let out.

'So Hannah rented the house out to local couple Lisa and Mark,

'who were happy to turn this house into their home, and at their own expense.

'The main jobs to do here were re-flooring and re-carpeting throughout,

'as well as dealing with the decor.

'After clearing and cleaning the property from top to bottom,

'Mark and Lisa put down laminate floors and carpets and got their paint brushes out.

'But why were they happy to do this in a house they don't own?'

If you are a tenant, and you're renting somewhere, I think it's nice for the tenant and the landlord

that both have a bit of input and keep the property nice.

A lot of properties, when you're renting, I think, are done up to how the owner wants it.

But they said we could do what we want, so that's great.

'So this way Lisa and Mark get to live where they want to

'and make it home in a way most tenants can't.

'Lisa has two children who visit regularly and two that live at home.

'The layout of the upstairs, which was slightly odd

'with the bathroom and loft only accessible from one room, actually suits them down to the ground.'

Well, this is the children's bedroom.

As you can see, this is the bathroom

off the children's bedroom, which is great because this isn't our room

so we're in and out and we know what the kids are doing.

Up there is the attic, which the children use as a playroom.

'And it's not the only place for play.

'The additional garden behind the garage was a fantastic space

'which Mark and Lisa have already started making the most of.

'Anyone for a dip?'

Right, this outside area is ideal for us

because what we are going to do is clear in between the shrubs and all the plants,

replant, look at what's here, and try and build on it.

The other thing that we're going to do is put a bar in here,

and there will be a seating area and sun loungers and that type of thing.

So it's ideal for the kids and that, and myself and whatnot.

It's a space away from... Even though we've got space at the front,

it's further developed space that we could utilise again.

So I'm just really happy with it. It's fantastic.

'Lisa and Mark are clearly very happy here. But what does Hannah think about what they've done?'

I think they've got it looking really nice. They're ideal tenants, they always pay their rent on time,

they look after the place, they let me know if there's any problems,

and also because I haven't renovated the property myself and I haven't lived in the property,

things came up, like the boiler wasn't functioning,

but I didn't know that until they started living and using it properly.

So it's a perfect solution for us both, really.

'So everyone's a winner.

'We asked two local estate agents along to the property

'to get their take on it. Remember Hannah paid £68,000 for the house,

'plus an additional £5,000 arranging the finance privately.

'Which makes the total outlay of £73,000.'

First impressions, it's nicely done out, it's nicely decorated,

it's clean, nice kitchen, good sized living room.

First impressions are good, it's a nice location here,

you're overlooking the park to the front.

The property has been done up to a reasonable standard.

And it's probably based for the rental market, I would have thought.

The rental value for the property I would estimate £495 at a push,

but probably more realistic, £475 per calendar month.

The rental valuation for this property is £500 per calendar month.

Well, the current tenants pay £525. So I get a bit more than that.

'With Hannah receiving £525 a month

'and her total spend here being around £73,000,

'that's an impressive rental yield of over 8.5 percent.

'If she were to consider selling, what could it make on the resale market?'

If we were going to be selling this property, I would suggest an initial marketing price of £89,995,

with a view to achieving £85,000.

I would value this property at £95,000.

OK. Well, that's good news considering I haven't actually done anything to the property myself.

I do think if I had renovated it completely, and done it how I normally do it,

I think it would have valued up higher. But I'm more than happy with that valuation.

'As well she should be.

'If Hannah did decide to sell and given that she hasn't had to dip into her renovation budget,

'she could be looking at a pre-tax profit of between £12,000 and £22,000

'minus the usual selling expenses.

'This has been a great purchase for Hannah, and based on her own experiences,

'she's got some sound advice for any would-be auction buyers.'

There's no reason whatsoever that buying at auction is a bad thing,

providing you are well-prepared and you've got your finance in place beforehand,

and you do the research, as far as the legalities.

And I would always make sure that you view the property well in advance of the auction,

so that it's not a rash decision. You can think about it properly and make sure it's the right choice for you.

We look forward to seeing you soon for more Homes Under The Hammer.

-Yes, join us next time for more auction action.

-See you then.

-Bye.

-Goodbye.

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