Episode 18 Homes Under the Hammer

Hello, well, property still continues to fascinate us,

and despite the current market conditions,

it is still possible to find a bargain.

Buying at the right price is imperative

if you want to see any profit at the end of the day.

Yeah, and one way to do that is to buy your next home under the hammer.

The properties on the show today are all very different.

But their new owners will all have the same hopes for them -

that they turn out to be good investments.

So let's see what they bought.

In the North Yorkshire, the period features

in this listed building have me on my knees.

Look at these floorboards! Absolutely beautiful.

But in Nottingham, these floorboards are home to some undesirable guests.

There they are, look.

Munching their little way through all your woodwork.

And the sloping floor

and strange staircase in this Dover terrace worry me.

That is a serious issue, I don't like this...

Not a good start, is it?

All these properties are being sold at auction.

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

when they went under the hammer.

Sold at 136, thank you.

This is Knaresborough, near Harrogate in Yorkshire,

and a beautiful spot it is too, with vistas and history galore.

There's a castle dating back to 1100,

this wonderful viaduct across the River Nidd,

and surrounding countryside to die for.

Oh, and don't forget - in June, a bed race through the centre of town.

Don't be fooled into thinking Knaresborough

is a sleepy little Yorkshire town.

It very much mixes the old with the modern.

With good rail and road links to Harrogate and beyond,

it's a thriving, busy place.

I LOVE high streets like this.

A real hotch-potch of shops selling everything and anything.

And without the kind of chains that you see in so many a high street these days.

It probably hasn't changed much, in fact, in the last 100 years, possibly longer.

For instance, the property I'm here to see dates back to 1720

and it's listed, no less.

It's a former hairdresser's with a flat above,

had a guide price of 120 grand.

Let's take a look.

So, good location which is a start.

And in terms of a commercial unit, a reasonable amount of floor space.

Now, as you can see, it's laid out as a hairdresser's.

A bit dated and possibly not up to modern standards,

but a bit of investigation has revealed that it didn't actually

close down for lack of trade, but more because the owner

or the previous owner had decided just to retire.

So, you do know that there is demand for this kind of thing here, which is great.

The property itself - it's intriguing already.

You've got this lower area here.

Up these little steps to this second area here.

Stairs down to the basement. That all looks dark and dingy there.

Obviously, some of these units and fitments, very old-fashioned.

But as a starting point, intriguing, as I said, and quite interesting.

Yes, if you were looking to run it as a hairdresser's, then,

with a bit of updating here and there, it's just about ready to go!

# I'm going to wash that man right outta my hair

# I'm going to wash that man right outta my hair

# And send him on his way. #

There's a kitchen area at the back that might need a bit more work, but all-in-all, it's promising.

Let's hope that the accommodation above,

with its separate access at the rear of the building, is just as good.

# I'm gonna wash that man... #

So, what of the flat?

Well, not a very good start, I'm afraid.

It's a very narrow staircase leading up to it, and THEN, it gets worse!

Look at this. There should be a banister here to stop people

or children, especially, falling down there.

Really, it's got to be a reasonable height to stop you toppling over it.

But, more stairs up to more rooms and more rooms round the back,

but I'm really interested in this one at the front.

It's a good-size space. I'd like to see some original features.

It would be great to see a really old fireplace.

Maybe, behind there, there is one.

But that aside, it's a nice, light room,

partly because of this BEAUTIFUL bowed window at the front. Absolutely fantastic.

-I mean, the negatives of that are...

-HE SIGHS DEEPLY

It's going to cost a fortune to get one like that to replace it,

and being listed, you're probably not going to be able

to put double glazing or something else in its place.

So, restoration required, and you may even need toughened glass

in the bottom, as it is a bit of a danger. But as a feature, I love it!

Charm and period often do come at a cost.

Not only can features like this be more expensive to repair,

but you're limited to what you can do with them.

But I'd rather live with those limitations any day.

If you like quirkiness, then this little flat is certainly

going to appeal to you.

Little tiny room, storage room if you like. Your bathroom is there.

A few issues with head height

as you enter into the kitchen.

But suddenly, wow, look at this!

As a room, it's a bit higgledy-piggledy.

Some nice cupboards, but straight away I'm drawn to this floor.

How fantastic is this? Look at these floorboards.

Absolutely beautiful!

Probably want to sand them off a little bit, but I wonder if the rest

of the flat has floorboards like this, because when it comes to doing

the renovation, there's exciting things to potentially find.

What there is to find, is that on the second floor,

there are two bedrooms, both rather quirky in shape and size,

but with the old fireplaces.

Then there's a small box room.

There's even the added bonus of an attic room on the top floor.

As if that wasn't enough,

there's a big bonus at the back of the property,

with both a garage and allocated parking for three vehicles.

But, rather worryingly, I've discovered some

signs of structural problems around the basement area,

which will definitely need to be looked at.

What does a local property expert make of this huge lot

guided at £120,000?

Great thing about the ground floor

is you could use it

for a multitude of uses.

You've got a mixture of uses up and down the high street,

from cafes to bistros,

individual boutiquey shops.

Whatever your wishes, it can be done.

The flat here needs a degree of modernisation,

but you're working with some beautiful period features

and you can modernise to your own taste.

It might have a lot going for it but is it a good investment?

Let's start with the flat.

I think the apartment, fully modernised,

with parking at the back for at least one vehicle, two if you can spare,

you should be looking at something

in the region of £160,000 in today's market.

And the retail unit?

If you looked at

its current rateable value of being around and about

£8-8,500 per annum,

its open market value currently

would be somewhere around and about £60-£65,000.

Altogether the value of the whole building could be in the region

of £225-£230,000.

Very encouraging.

I love lots like this with plenty of options for commercial space

and potential income from the flat,

or that would be a lovely place to live.

Work to be done, yes,

but who wouldn't want to set up a business in a place like this?

Let's see who agreed with me when it went under the hammer.

We go to Knaresborough, now

to a shop and maisonette.

Start me at 100.

£100,000 anybody bidding?

At £100,000, are you saying yes?

100. At 100, only bid.

At £100,000 I'm bid. I'll take 5.

At 100,500, 110...

Are you bidding now? 110,

15, will you, at 110, 115, may I?

115, take 2, if you will,

117, 117 bid,

will you fill him up, sir? 120, at 120 bid.

At 120 and 1 anywhere?

At £120,000, it's for nothing. At £120,000, for the first time.

At £120,000, second time,

sure, sure, sure...

Property is yours, sir, at £120,000.

Bang on the guide price of £120,000.

That successful bid was placed by West Yorkshire-based

Peter and Shirley.

Peter is a car tradesman

while Shirley is a qualified beautician.

I was intrigued to hear their plans for the building.

-Peter, Shirley, lovely to meet you both.

-Pleased to meet you.

-Congratulations.

-Thank you.

-What a quirky little property.

It is. Very quirky.

I love it. It's wonderful.

What were you looking for, specifically?

Mainly a property that would give us a residence,

but this came up with a shop to include a hairdressing shop

for my daughter. It was a good price so we went for it.

Tell me about your daughter, what she does and what she's been doing so far?

She's taken her college exams doing hairdressing,

and now she's qualified so obviously

she'd like to have her own shop to do hairdressing in

and it's perfect for her.

This will be her own shop?

-Mmm.

-Wow!

-Yeah, wow!

What a fantastic thing to do.

With support like that, what more could Sarah need as she

starts her very first hairdressing salon at just 21 years old?

# When you begin to smile

# You change my style

# My Sarah... #

But before she can start snipping,

there's a lot of work to do here.

Let's start with the shop downstairs for a start.

-What are you going to do to it?

-The first priority is the shop,

to get it up and running,

hopefully within six to eight weeks,

before if we can do it,

and it's going to be stripped out

-and then refurbished.

-What about the budget for the work?

It's coming in between 5 to 10,000.

-Is that including the new fixtures and fittings?

-Uh-huh.

-OK.

Let's move on to the flat.

Obviously, it's wonderfully quirky

but when it comes to restoring those kinds of properties,

there are often hidden things, aren't there?

-Tell me what you're planning to do to it.

-Get it all completely

stripped out and replastered, so it's a new finish.

Properly central heating as well, radiators. There's no heating there.

What about the budget for the works in here?

Could be anything between 10 to 30,000,

depending on how far you take it.

As well as the plans for the flat and shop, there's the basement.

The basement is probably

the last thing we do, because it's very untidy down there.

Some structural work needs doing down there. Wants new windows.

There's the possibility you could make it a self-contained flat.

It goes the full length of the shop.

There's quite a lot of room down there,

but there's a lot of work to do as well.

With those structural issues, they might find they need

to look at the basement sooner rather than later,

but at least they're aware of them.

Sarah will eventually move into the flat with her young son, Kai,

and her boyfriend. So along with the salon,

this is a big step for her just fresh out of college.

How does she feel about it?

-So, Sarah, this is going to be your salon.

-Yeah, very exciting!

Tell me a little bit about your experience, where you're at now

and what you're going to do.

Well, I've got experience in the hairdressing and beauty therapy.

At the moment, we're focusing on the hairdressing and hopefully,

we'll be expanding into some beauty treatments and different things.

-So, you've worked in a salon before?

-I have worked in a salon, yes.

-But not run one?

-No, no!

-How do you feel about that?

-Scary!

Yeah.

No wonder she's scared, however,

Sarah's going to build up the business gradually, with herself as the only stylist,

another girl doing nails, and of course,

her supportive mum as beautician.

So, what about the flat, what do you think of that?

I really like the flat. It needs a bit of work,

but it's really nice, nice feel to it.

Congratulations, good luck and we look forward to seeing a stream

-of customers here in the not-too- distant future.

-Thank you.

Exciting times for Sarah,

and of course Shirley and Peter, as well.

Lots of work to be done

and I know that the basement is low on the list of priorities,

but I think they need to address potential structural things there

before they plough on with the rest of the refurbishment.

Still, it'll be really exciting to see what happens to the flat

and the hair salon in the future.

You can find out later in the show.

This is Newthorpe, to the east of Eastwood in Nottinghamshire.

Eastwood is the birthplace of novelist DH Lawrence,

so will today's property be a modern classic or something of a write off?

I am here in Newthorpe

to see a traditional two-bedroom terrace.

It was up for auction at a guide price of £48,000.

I've checked and found out that the exact same house

sold for £70,000 and that was in 2005.

So, it just goes to show you how the property market round here

really has been affected by the recent crash,

but even today, there may still be money to be made.

I'm going to go inside and check it out.

Only people with long legs need apply for this property.

Hup!

So that's what you have to do just to get in.

So a little bit of a step needs to be thought about, there.

On the upside, you've got a good-sized living room.

It's incredibly dated, you can see it's untouched -

no central heating,

no luxury comforts at all.

You have got double glazing here,

which I suppose is a bonus,

but it all just needs decorating.

You've got to think long and hard

about how you'll turn this place around.

It is not a bad-sized kitchen.

This is the sort of house that will really scrub up well.

Once decorated, it could look amazing.

Something that's worrying me - look at this. Tell-tale signs of damp.

Look. It's just literally flicking off the walls.

I'd definitely recommend getting a survey done there.

You've got nice big windows to the garden. The back door there.

-And...

-SHE LAUGHS

-..right I'm going to need a hoist and some climbing gear.

And that's because these stairs are so incredibly steep.

I've only got a size 4 foot.

Look at my foot on the tread.

They are steep, but also lovely and wide,

which, of course, I really like.

# I'll build a stairway to Heaven

# Cos Heaven is where you are... #

OK, so, it's not heavenly quite yet, but you've got to start somewhere.

There are two good-sized bedrooms

and the bathroom, which could do with some divine intervention.

But holy-moly, what have we here?

Now, take a look at this. The floorboards here

have lots of little holes

and it's the result of wood-boring beetles, commonly known as woodworm.

There they are, munching their way through all your woodwork.

Now the beetles may no longer be active,

but, if they are, you need to get this house treated.

Usually, you can just brush or spray on a chemical pesticide.

Otherwise, I'm afraid to say,

this property might eventually just crumble away.

# A worm's life can be easy... #

If you want to make life tough for woodworm,

you can treat small areas yourself.

But if the woodworm is widespread, best to call in the professionals,

which could cost you the best part of £1,000.

But it's really not something you can ignore, that's for sure.

Out the back, you have this lovely, long garden.

It certainly needs a tidy up and a bit of a mow,

and of course it needs a fence to divide it

from the neighbour, but it's always nice to have your own outside space.

One problem.

This was raised in the legal pack.

This house actually goes over the shared-access passageway,

which is here. This is called a flying freehold.

Basically, part of your property flies over the land

that doesn't entirely belong to you.

So not a big issue you'd think,

but some mortgage companies just don't like it

and often won't lend in such situations.

But if you shop around, you should be able to find a lender.

If you are in any doubt about a flying freehold,

speak to a solicitor and they should keep you right.

The property and its flying freehold went to auction

with a guide price of 48,000.

We asked along a local estate agent to give us his thoughts.

The property is in need of complete modernisation.

It needs a new heating system, new kitchen, new bathroom,

it needs a rewire.

It needs a damp course. So it needs completely doing.

Once done up, what kind of rent might you charge for the property?

I think the rental you can achieve is £450 per month.

And, if the purchaser wanted to sell it on?

When the property's all done up, it could sell

for in the region of 75-80,000.

Well, this house isn't without its problems.

It needs updating, that's for sure.

It needs central heating and that woodworm needs sorting.

But, if the new owner is careful with the budget,

there might be a small amount of profit in this property.

So who spotted the potential? Let's go to auction and find out.

Lot 75.

A two-bedroom terraced house.

Needs some upgrading and improvement.

What will I say for this one?

44,000? Yep.

44,000 here, thank you.

At £44,000. 44. 45 I need.

45 in front of me. 46 on the left.

46. 47.

47. 48.

48,000, 49, sir, 49.

At 49. At 50.

It's in the market, we're selling. The bid is 49,000. 50, quickly?

At 49,000 it goes.

At 49,000 for the first time.

At 49 for the second time. 500.

For 50,000.

50½.

51. And a half. 52.

And a half. 53?

53. And a half.

54?

No? At 54,000, then, once.

Twice. Third time.

Down it goes at 54,000. Thank you.

That successful bid of 54,000 came from local lad Paul,

who trained as an accountant.

# If you need someone to count on

# Count me in... #

Paul is taking a break from the world of accountancy

and has his heart set on becoming a property wheeler-dealer.

I met him back at the mid-terrace to find out more.

-Paul, congratulations.

-Thank you.

What's the story behind you wanting to buy this terrace?

I move every two years.

Last year, I got made redundant, but it was just

a break point to say I'm going to make a change.

So I sold my last house, moved to France for three months.

Thought I was going to move there to stay.

And, erm, didn't like it, missed home, missed family,

missed the UK, so I decided to come back

and thought I'd get back into the property game again.

Wow, so you're a busy man hopping all over the shop!

-I like to keep moving.

-Tell me a little about yourself.

I'm an accountant by trade. I will put my hand to anything.

-I'm the youngest of ten children.

-Wow!

-I am, yes.

I think it was that that started me on the road to DIYing,

because watching my dad around the house

doing his thing around the house, electrics, windows, etc.

It'll all be me.

I don't have family, so it's just me doing the work

and nobody to tell me to come home,

so I'll be working here to probably midnight most nights.

That's the spirit, Paul, no rest till the place is transformed.

For a first go at an investment property,

there's a lot to do here,

but Paul's clearly up for the challenge

and his accountancy background could prove useful.

Tell me, what sort of budget have you got to do all the work?

I budgeted about 6,500 for the renovations.

It was at 4,500, but I had a 3,000 contingency,

which I've now got down to 1,000.

Because, having gone through the house,

I've realised things are a little more expensive than I was anticipating.

At the end of the day, I'm an accountant by trade,

so I like my spreadsheets, I like to keep things in budget

and it's almost like a game I've got to get within my budget.

So, yeah, I've covered about 3,500 on the legal and selling costs.

-The figures are in your head. You know what you're doing.

-They're on paper.

My only problem with this is £6,000 sounds a little bit

-on the lean side to do all the work you need to do here.

-It is.

I mean, everything. Every single thing needs doing

from the bottom to the top of the property.

How do you think you're going to manage to do it on that?

I'm being very cautious on the spending.

I'm buying through auction websites in order to buy everything.

Two minutes ago, I won a kitchen on the website.

Hurray, fantastic!

I think it's probably a year and a half old,

but there's more than enough units than I need for the kitchen.

I've purchased a sink, a bath and I'm trying to find a toilet.

Excuse me, is this while you've been here talking to me today?!

-You've been secretly bidding in the kitchen!

-In the garden!

That's fantastic news. You're being savvy with your spending.

Absolutely. Yes.

He may be winning at the online auctions,

but when he lived in France, Paul lost out on a property purchase.

However, in the process, he got lumbered with something

that might help him on this side of the Channel.

I bought a house that had a massive area of rendering

on the exterior of the property.

So I bought 90 litres of exterior paint, which,

because the house sale fell through, I've got 90 litres of paint.

I'll just keep buying houses with rendering, so I can use the paint.

-Hopefully, it's a neutral colour.

-It is neutral, yeah.

Buttermilk everywhere. Every buttermilk house you see is mine.

# Ol' buttermilk sky

# Don't you fail me When I'm needing you most

# Hang a moon Above her hitching post

# And hitch me to the one I love... #

Paul will get help with the central heating, electrics and woodworm.

But he's going to have his hands pretty full

keeping on top of all the other work that needs doing.

Don't forget, this is what he hopes is just the first rung on the ladder

to a lucrative new career in property development.

So what sort of timescale are you giving yourself?

I'm looking at... Originally, I was looking at a month.

Then I took a reality check in terms of what needed doing,

so I've pushed it out to two months, but as I'm working on it full-time,

I think that's a reasonable time frame.

The intention onwards from that is to sell this one.

-I've put myself a plan together of 14 houses in five years.

-Wow.

-To make, hopefully, half a million on the properties.

-So you've set the bar.

-That's the bar.

-You know exactly where you're going.

Just hope this will work out.

This is the first one, so this is the worrying one, really.

It's been fantastic meeting you. I cannot wait to see this house in all its buttermilk glory.

I'm very excited. Good luck with this project.

-Thank you very much.

-Thank you.

Being an accountant, let's hope Paul is good with his figures

because with a budget of just six and a half grand,

he will have to watch every single penny.

He's also giving himself quite a tight deadline.

Just two months to get this place spick and span

and like a buttermilk beauty.

Will he do it on time and on budget?

You can find out later in the show.

Coming up, I have my eyes opened by the lay out

of this end of terrace in Dover.

Oh, wow! Well, that is pretty open plan.

In Nottingham, has accountant Paul kept a close eye on his budget?

I also have a folder full of every single receipt

that I've spent on the house.

But, first, work on this North Yorkshire listed building

is going too slowly for Sarah's liking.

It's still a work in progress with a lot to do.

Back now to beautiful Knaresborough in North Yorkshire,

where this former hairdresser's with cellar below

and flat above was bought at auction for £120,000 by Peter and Shirley.

Their plan was to spend around £10,000 refurbishing

the hairdressing salon, so that daughter Sarah could take it on,

and then turn their attention to the flat upstairs.

The building is Grade II listed, with lovely original features.

Peter and Shirley were going into this with their eyes open.

So what about budget for the works in here?

It could be anything between 10-30,000,

depending on how far you take it.

They planned to turn the salon around in six to eight weeks

and gave themselves six months to sort out the flat.

Almost five months after our first visit, we're back

to see if it's cut and dried,

or if it's been a series of bad hair days.

# My parents taught me What life was all about

# They said my friends were Just an unruly mob and I should

# Get a haircut and get a real job

# Get a haircut

# Get a real job

# Get it together

# Like your big brother Bob

# Why don't you get a haircut And get a real job? #

Well, the hair salon is definitely looking the business

and, with a little help from beautician mum Shirley,

things are clipping along nicely.

It's gone to plan.

We designed it and I think we'll always progress

and do some changes with it, but we're happy with it at the moment.

The salon was up and running pretty much on time

and at the top end of their £5-£10,000 budget.

But there's still quite a bit to do before Sarah, her partner

and son Kai can move in upstairs.

We're going to move into the flat soon.

It's still a work in progress with a lot to do.

So why the delay?

Well, the building now benefits from central heating throughout,

but, just as I'd thought, before he could do anything,

Peter had to see to those structural issues in the cellar.

The biggest problem we had in when we first acquired the property

was the cellar. Structural problems down there.

There was a window that was falling out.

Lintels, we had to put five lintels in, re-plastering, knocking out.

That was the first priority, to make it safe.

Yes. Always make it safe where you could end up with a pile of rubble.

Upstairs, the flat has been updated

and, while I'm sad to see the original floorboards covered with laminate,

I certainly don't remember a staircase in the kitchen last time.

Turns out that in pulling out the old kitchen,

they discovered access to a whole room nobody knew anything about.

# One way or another

# I'm gonna find ya

# I'm gonna get ya Get ya, get ya... #

Previously, there'd been a staircase up here.

We opened it up, got a plasterer in, re-plastered it, put a new floor in,

had it rewired and it's turned out as an extra room and it's great.

Oh I do love a hidden room!

What a fantastic find. They've still got to look into replacing the window

in the living room and, because the building is Grade II listed,

that's not going to come cheap.

But when it's finished, this will be a lovely room.

# All I want is a room with a view

# Oh, oh, oh... #

The bedrooms have been spruced up

and the box room now makes a perfect home for the pet rabbit.

The other big change here is that the attic space

has been turned into more useful accommodation.

This was the attic bedroom and it was completely run down, virtually derelict.

And, as you can see, it's made a nice en-suite bedroom

and quite a large room, really.

So we're really pleased with it.

So far, Peter and Shirley have spent £13,500 on the flat

on top of £10,000 on the salon.

They reckon it could take another £15,000

and a further six months to get everything just right.

If their final outlay on the renovation

does come in at 38,500, they will be on budget.

Their total spend, including the purchase price,

will be 158,500.

We asked along two local estate agents

to see what they make of the place.

The shop is now up and running.

It's a nice conversion. Work still to do in the basement,

but it should be a good commercial unit.

I think the changes have been superb.

It's still a work in progress, obviously,

but we're heading in the right direction certainly.

The plan from day one has been for Sarah to run the salon

and live in the flat upstairs.

But if they were to sell it on, the estate agents recommend

selling the flat and shop separately to get the best return.

With the value of the shop being somewhere between £85-95,000,

the value of the flat being 150-160,

you're looking at a far greater combined total

than if you sold it as one.

As a combined building, you're probably looking at

a value of somewhere around 200,000.

If you were going to market the shop,

you'd look at a figure probably in the region of £75-80,000.

The apartment would be somewhere in the region of £150,000.

If you decided to sell them as a unit,

you wouldn't realise the full potential

and you're probably looking at figure in the region an £200,000.

Interesting.

Selling the flat and shop separately could generate a pre-tax profit

of between £66,500 and £91,500,

which really is a cut above the norm. What about renting them out?

I think rental potential for the apartment would be

around £600-650 per calendar month.

You're probably looking at something in the order of about

£750 per calendar month.

For the shop unit, probably somewhere £7,500 to £8,000 a year.

The shop you could rent out

for something in the order of £8,500 to £9,000 per annum.

Those rental valuations could mean

a yield of between around 9½% and 11½%, which again is streets ahead.

But this has always been one to keep in the family,

so how have they enjoyed the whole process?

We've all had our own little bits to do, own roles.

I think Peter has done the majority of all the hard work.

-Erm...

-SARAH: Hm.

We've all had a good input, haven't we? We've all worked really hard.

Enjoyed it. Good.

THEY LAUGH

I'm in the far south-east of Britain, in Dover,

fondly known as White Cliffs country and you can see why.

It faces France across the narrowest part of the English Channel

and, for years, it has been one of the busiest gateways to Britain.

'And with its white cliffs, castle and seaside location,'

Dover attracts its fair share of visitors.

Being a busy working town, it's also a popular place to live.

The house I'm here to see is a two-bedroom end-of-terrace,

which is on a good bus route into town.

There's a hospital nearby and where there's a hospital,

there will always be doctors and nurses looking for accommodation.

This could be the ideal property for them.

It's a two-bed end-of-terrace with a guide price of 60-65,000 quid.

Let's take a look.

So what have we got?

Oh, wow! That is pretty open plan, you have to say.

-HE LAUGHS

-But what is going on there, why put the staircase like that?

I mean, that's just silly.

If you're going to have a staircase like that, switch it round

so it's against the edge, then you really can go for this open-plan feel.

Um, but I don't know. I'm getting a feeling

that maybe the standard of work on this property

hasn't been as high as you might like.

I don't know why, but you can judge by the floorboards and the edging.

Much more serious, when I come back here,

what's going on with the floor?

It's definitely angled down to me here. That is a serious issue.

I don't like this. Not a good start, is it?

'Alarm bells are starting to ring.'

This is all slightly scary.

Clearly, the wall dividing the room has been knocked down.

There's no RSJ across the ceiling and the wobbly floor suggests

no attempt to level the old floorboards.

So goodness knows what lurks under there.

This really needs a structural engineer to check out what's

going on and it's not just this room that needs looking at, either.

Through to the kitchen.

Not a bad-sized space with a decent view out to the garden.

Er, could you make this work?

Possibly, certainly the carcasses of the units with tidying up

would be fine, but, again, it's difficult to describe,

but the floors feel like they're not quite right

and there's just that feeling you get.

MUSIC: "Tubular Bells" by Mike Oldfield

I really don't like this.

Holes in the ceiling, uneven floors, oddly positioned stairs.

Let's hope things improve elsewhere in the property.

So, upstairs, two bedrooms, one at the front, one at the back.

But then the lay out starts to get really unfortunate,

because to access the only bathroom

you have to come through this bedroom

where the bathroom itself is.

Down the steps. It looks to me as if somebody has started renovation work,

but what they didn't think about doing was before you do any work,

think about putting a corridor here to make it so you don't need to go through the bedroom to get here.

They've started with some of the obvious stuff, like putting a new bath in,

but haven't thought through the bigger picture.

Another thing, here's the water-heater cylinder thing.

I'd take that out, replace it with a combi boiler.

You would get a whole extra load of space

enough, certainly, for a shower cubicle.

That's what you want start to do.

So, really, whoever buys this,

they've got to be starting from scratch,

ripping out what's here and making sure the structure

of the building is sound

and starting to put it together again properly.

# Save me... #

Yes, this house needs someone to come and save it, but I don't think it's too late

because there are some positives here.

# Somebody save me... #

The bedrooms are a good size.

There's central heating and double glazing

and the kitchen units aren't too bad either.

I also think there's a really attractive garden to be found underneath all that undergrowth.

But would it be worth taking a chance on this house,

guided at 60-65,000?

What does a local estate agent think?

Nice little terraced house.

It is desperately in need of some renovation and repairs.

It does look as though someone has had a go doing some renovations.

It's got a lot of potential for a nice little two-bedroom terraced house.

There is a lot of work here,

but the two-bed house was guided at just 60-65,000,

so could it actually make healthy returns on the resale or rental markets?

In valuing the property when it was renovated,

I'd say you'd be marketing at somewhere between £110-115,000.

Rents are relatively low in this part of the country,

but we could easily achieve £495 per calendar month.

So, provided the house is structurally sound,

it could be a promising investment.

Well, it's a nice enough house, but I do think it's going to require

quite a lot of work to get it sorted out and I'm a bit concerned

about what hidden horrors you might uncover once you start to do that.

Buyer beware, I think. Let's see who bought it when it went under the hammer.

Lot 138. Needs some improvement. It's got two bedrooms.

Start me at 55, then.

55. I should think so, too. 55 I'm on the way. At 55.

And 58. 58. And 60.

And 60. And 60.

And two.

62 I've got down in the room. 62. And 64?

64? At 64.

64 standing. And 66 in the front. And 8, it's against you.

67 I'll take, if it helps anybody. At 67, it did.

68, it's back with you again.

68 and 9. 69. 70.

At 70. 70 says yes.

71 it's back with you, if you like.

At 71. And 2.

72. 72 I've got sitting down. 73, it's against you. 73.

73,000. 73, it's with you. And 4?

73½ I'll take. 74.

With you at the back, 74 is there. 75?

He's shaking his head. You might have it. At £74,000 for the first time.

At £74,000 for the second.

Third and final time, if you've all done. You've all had a fair chance.

Well done, sir, it's yours at 74.

For £74,000, the successful bidder was Tom,

who lives 35 minutes away from Dover in Whitstable.

So I was intrigued to know why he was buying a two-bed house in Dover

'with more than its share of problems.'

-Tom, lovely to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

-Tell me why you want to buy this place.

-Basically, to add to my portfolio

in respect of my pension.

I retired earlier in the year

-and I thought this would be a good venture.

-So why property?

I've experience of property.

I've refurbished homes here and in France.

I've been in the building-services industry for 37 years,

So I'm aware of mainly commercial buildings

-and I'm a consultant now in my spare time.

-Right.

-So what was it about this place particularly that you liked?

-The price.

-Just that?

-Fundamentally.

'Price is definitely key here as Tom had earmarked'

a number of potential purchases at the auction.

It was only this one that hit the mark for him.

But, as usual, you only get what you pay for.

This house isn't without its problems.

But it sounds like he might have the experience to tackle them.

Tell me what you will do with it.

The staircase we've got here is pretty open plan

and so I thought it would be a good idea to make it to the side of that room

as opposed to sitting in the middle.

I'm going to level the floor out and upstairs, in the bathroom,

I'd like to maybe raise the floor and have a corridor upstairs.

So you'd create a corridor.

And moving the staircase will allow you to do that.

That's what I'm thinking.

What about the kitchen and bathroom?

I've had already a problem in the kitchen insomuch as I was informed

by someone that possibly structurally something needed to be dealt with, which I got on with.

-Which was?

-Putting some gallows brackets in

to support a chimney breast that had been knocked out from below,

without having been supported. I thought it might be prudent to get that sorted out.

-All the bricks and everything?

-They were sitting there so I dealt with that straight away.

So Tom has already started to rescue this house from potential disaster.

Let's hope there aren't more problems lurking unseen.

-Who is doing the work?

-Mainly myself.

I'll call in specialists for areas where

expertise regarding Gas Safe and electrical aspects,

but I'll do most of the work myself.

-What kind of budget have you got?

-My budget is a minimum spend 5,800.

-That's very specific.

-Well, I've costed it out.

I've been shopping for prices and I know where I'll buy materials,

of which about £800 is for specialists,

the other 5,000 is going to be for materials.

On the downside, if I found something that was really dire,

I'd budget in the region of 9,800, but that's as far as it's going.

The property's not, in the market place, worth putting any more into it

and I don't think it needs it.

-What kind of timescale?

-Originally, I was guessing three months.

-Now I think more six months or more.

-What's made you double it?

Having investigated under the floor, I've got to make a decision.

Do I raise the floor in certain areas to balance it,

or do I cut it out and put concrete throughout?

I'm trying to keep within the budget

and at the same time do a really nice job, so when I walk away from it,

the house is going to stand and be there for a long time.

-Great. Congratulations. Good luck with it.

-Thank you.

-We look forward to coming back and seeing how you get on.

-Super.

# Save me Save me... #

Well, with 37 years' experience, if anyone can save this house, Tom can.

# Save me

# Yeah Save me... #

But as he's already discovered, this place has hidden problems.

That floor that's not level, the chimney that wasn't supported.

How many other things is he going to discover

once he starts trying to get it back into its former glory?

You can find out later in the show.

Doing up a property can be time-consuming and expensive.

So have our buyers managed to keep to their budgets and timescales?

Let's find out.

Back to Newthorpe in Nottinghamshire,

where local man Paul bought this two-bed mid-terrace

at auction for 54,000.

His background is in accountancy.

# If you need someone to count on

# Count me in... #

With the budget including all his costs and fees of 11,000,

Paul planned to do most of the work himself

and to make this renovation the first step on the ladder

to a lucrative career in property development.

I've put myself a plan together of 14 houses in five years.

-Wow.

-To make hopefully half a million on the properties.

-You've set the bar.

-Yeah, that's the bar.

-You know exactly where you're going.

Just hope this will work out. This is the first one, so this is the worrying one, really.

Five and half months after our first visit,

we're back to see if this accountant has excelled

or failed at figuring out the formula for success here.

# You can count on me

# Like 1, 2, 3

# I'll be there

# And I know when I need it

# I can count on you

# Like 4, 3, 2

# And you'll be there

# Cos that's what friends

# Are supposed to do Oh, yeah

# Ooh, ooh, ooh, ooh-ooooh... #

Well, it would seem Paul's hard work has paid dividends.

Because the mid-terrace's affairs now look to be in pretty good order.

# Oh, yeah Ooh-ooh.... #

Since you were last here, I had a structural guy in

to look at the damp situation,

so that was one thing that had to be remedied.

I was aware at the time that the whole house needed rewiring.

It would also need re-plastering to get a good finish.

So it's really had a full make-over top to bottom.

Paul really has been watching the pennies,

because he's managed to buy several items for the renovation through an auction website.

Fire surround, bath, even the kitchen sink.

# And it all ends up As stuff that you can buy #

When I first bought the house,

the kitchen didn't have any units in it at all.

I think one cabinet here and one cabinet where the sink was.

But I acquired this kitchen on an auction website.

It was £400 for all the units, the sink, the double oven -

just had to go and pick it up, basically.

I did acquire a new induction hob, which was necessary.

It's had a new gas boiler put in.

It's a combination boiler. So yeah,

I think it's a nice clean-lines kitchen for a new family.

Upstairs, Paul has had the woodworm treated

and the floorboards replaced for good measure.

The bathroom lay out now works much better

with the hot water tank removed. Out back,

he still has to tackle the garden, but around the front it's very smart,

with a fresh coat of - you guessed it - buttermilk paint.

# Will you be mellow and bright tonight?

# Buttermilk sky... #

He's still got bucketloads of that paint left!

I did ask him to put 15 coats on, but he said it doesn't need it(!)

So I've still got the paint

and I'll still be using it on another property, definitely.

As he's an accountant,

Paul must have had plenty of tools on hand to keep track of his budget.

# We can work it out

# We're gonna work it out, baby... #

I had several spreadsheets for this house, yes.

I also have a folder

full of every single receipt that I've spent on the house.

I even opened a separate bank account

to make sure that I monitored every single penny spent on it.

OK, time to spill the beans. What's the bottom line here?

Remembering the original budget was 11,000,

including legal fees and costs.

My final figure is in terms of how much the whole process will cost,

including legal fees, selling costs and the renovation,

is coming in at about 15,000.

The actual renovation was around 11,500.

Paul's a few grand over budget and a few months over schedule,

but he's not overly concerned.

There was more to do here than he first thought

and he had to take time off to look after his mother, who wasn't well.

His total outlay, including the £54,000 purchase price,

is around 69,000.

Do two local estate agents think he spend his money wisely?

With this property they've done a lovely job of it.

They re-plastered, rewired, new kitchen and bathroom,

new boiler, damp course.

So they've done a very nice job and it's a very modern house.

It's been done to a really good standard

and I think would easily sale or let out.

Paul's initial plan was to sell the property.

But what might it fetch on the rental market?

If I had to put it up for rent,

I'd expect to achieve around £450 per calendar month.

If I put this property on the market for rent,

I'd put it up from £450-£475 per calendar month.

That is really impressive.

If I could achieve that, it would probably alter my thought process

on what I physically do with the house.

So that is... I'm really chuffed with that, really pleased with it.

Those valuations would give a yield around the 8% mark,

which is really pretty good.

How does that compare with selling it instead?

If I had to put it for sale, I'd put it up for £84,950.

If I put this property on the market, I'd expect around £85,000.

It works out from a profit perspective, absolutely.

I should make about 15% profit if I sold it,

so I'm quite... That's a good return for me.

I'm not quite sure how he gets that figure, but he's the accountant.

In my books, Paul could get a pre-tax profit of 16,000

if he sells for £85,000.

But how long before he makes that cool half a million he was aiming for?

It was going to be five years. I don't think it'll be quite five years.

You're always at the mercy of the housing market, but, we'll see.

I'll get the Aston Martin eventually, so yeah!

Back now to Dover,

where this two-bed end-terrace sold at auction for 74,000.

Inside, things weren't looking so bright with a wonky floor,

a strangely positioned staircase and that old favourite,

the bathroom reached only through the rear bedroom.

Taking this one on was Tom,

who has almost 40 years' experience in building maintenance.

He likes everything worked out to the last detail.

-What kind of budget have you got?

-My budget is a minimum of 5,800.

That's very specific.

Well, I've costed it out. I've been shopping for the various prices.

I know where I'll buy the materials,

of which about £800 is for specialists.

The other 5,000 is for materials.

It seems Tom's very meticulous.

He had a turnaround of six months for the job,

but it was a year and a half later

that we returned to see how he got on.

# You're looking good You're looking good

# You're looking good

# To me

# To me... #

Well, no doubt about it now, moving the stairs has opened up

this ground floor and made this a far brighter space.

But, let's face it, shifting the stairs was never really in doubt.

It was right in the middle of the room.

It had no safety rails.

Although it took a lot of structural engineering to make things safe,

at the end of the day, I think the effect is better.

It's definitely improved the flow on the ground floor

where the kitchen is now easily reached.

That's been given a spruce-up

and although the units remain the same,

there's a new cooker, hob and combi boiler.

But those stairs were also a step in the right direction of creating

a new landing, which Tom explains has given upstairs

a new lease of life.

Structurally, there used to be a doorway here

and now, obviously, we've moved it to this position.

You used to walk through this room here into the bathroom,

but the bathroom entrance was here.

So I've structurally built this into this position,

which gives a nice throughput,

and effectively makes a room in itself.

In this area here, this cupboard used to come out to another foot.

Effectively changed it around.

That's going to be an airing cupboard with shelving

and, overall, I'm actually quite happy with the end result.

Tom has installed a new bathroom suite.

While the rear bedroom is smaller,

the front bedroom remains its original size

with the same decoration and flooring throughout upstairs.

Overall, this lay out is 100% more appealing.

# Bend me, shape me

# Anyway you want me

# As long as you love me It's all right... #

The whole house has had new wiring, new electrics

and new plumbing.

And, outside, the garden has been de-shrubbed

and exterior walls given a fresh coat of paint.

So is that it? Well, no,

because there is still one big change to discuss.

The largest job structurally to change the floor downstairs

from being a wooden floor, which was built on a slope, being part of

the nature of the road, and replacing it with concrete, which I did myself.

As with everything else in the property, in fact,

apart from the gas installation.

Tom has a lot to be proud of here,

but he's also been busy with other matters.

He's been doing the school run for his seven-year-old daughter,

writing a book and commuting between North Kent, where he lives, and Dover.

With these commitments,

he was only able to devote three to four hours a day on the project.

No wonder the timescale overran from six months to 18.

So I dread to ask how did his rather tight budget cope.

My original budget was in the band of between 5-6K.

Um, that was if I didn't have to change the boiler.

But I made a choice to take the existing boiler out

and put a combi boiler in in its place.

It gave us more room in the bathroom,

enabled me to have the doorway moved,

and, effectively, make the plan better.

That additional work has taken Tom's spend to £8,000

and, with his £74,000 purchase price, his total outlay is now 82,000.

The plan is now to let the house out

and, hopefully, he won't have to wait long.

So when it comes to describing his feelings about this project,

what word come to mind?

Pride? Satisfaction?

Lonely, because I've been doing it on my own.

Although I've got a lovely family, they steered well clear of this

and I don't blame them.

Let's hope potential buyers or renters don't stay away.

To get an idea of how it would do, we asked two local estate agents

to give us their thoughts on Tom's £82,000 investment.

I think the owner has done a fantastic job to the property,

been very sympathetic to it, made it very liveable

and this has definitely come out nice.

The finish is good, it's very tidy, very uncomplicated, very clean

ready to go.

Configuration has changed, but it's a better lay out now

in that you can get to the bathroom off the landing.

The only disadvantage is you've now got a double and single bedroom.

What sort of rental income could Tom expect?

I think the rental value of this currently

is in the region of £475-£500 per calendar month.

I can certainly achieve £500 per calendar month,

possibly even more, more like 550 per calendar month.

As far as I'm concerned, that is perfect

for what I need to do.

A rental income of between 475 and £550 could give Tom

an annual rental yield of between 7% and 8%.

So rental does look a good option. But if he should decide to sell,

the estate agents value the place at between 90-100,000,

giving Tom a possible pre-tax profit up of between £8,000 and £18,000.

But Tom is already thinking of his next investment,

although this property and its problems have made him

a bit more cautious about his next move.

I would find a property that didn't need so much doing to it

and then, at the end of the day, it gives me more time with my family.

We'll have another selection box of properties for you next time.

So make sure you join us then

-for more Homes Under The Hammer. Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd