Episode 19 Homes Under the Hammer

-Welcome to the programme.

-Despite the gloom in the news,

investing property can still be a tempting thing to do.

But it's also important to be cautious, and do your research.

Yes. And one way you can potentially get yourself a bargain

is by buying your next home under the hammer.

If you're looking for variety and good value,

then a property auction may be for you.

So, here's what lured our buyers on today's show.

I'm "floored" by this empty shell, in Greater Manchester.

You don't even have to go up the stairs.

No, just have a look!

In County Durham,

I bust some moves that would work well on the dancefloor.

Very 1980s, big mirrored wardrobes!

This one-bed apartment in central London has so much potential,

it makes your jaw hit the floor.

For a flat in the City, I think it is amazing.

All of these properties have been sold at auction.

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

when they went under the hammer.

-GAVEL BANGS

-It's your property, sir.

I'm in the town of Farnworth,

about three miles outside Bolton,

and nine miles from Manchester.

This is a former coal mining area.

By 1848, there were 20 pits located around here.

One of the earliest paper mills in Lancashire was built in Farnworth.

I'm here to see a property in this rather mixed residential area.

There are houses for first-time buyers,

there are houses for families,

there's even bungalows.

And, of course, we've got our auction property right here.

It's a large detached house, it had a guide price of £75,000.

It does look a little bit tatty on the outside.

But it sits on a generous plot. I'm quite excited.

This imposing four-bed house was described in the auction catalogue

as being in need of complete renovation,

which is always rather worrying when you first step inside.

Ooh!

Goodness gracious!

It's worse inside than the outside suggests.

You know when I said the words "tatty on the outside"? My goodness!

Nothing prepares you for a property like this.

Somebody's started some work.

And, um... If you want to see what the upstairs looks like,

you don't even have to go up the stairs out there.

No, just have a look!

# Uh-oh, uh-oh. #

# Uh-oh, uh-oh. #

So, there are no ceilings. Most of the plaster's off the wall.

There's no electricity.

Much of the wiring's been removed.

There are no doors, it's just a shell.

And it gets no better at the back.

Through here, we've got the second reception room.

I have to walk the board,

because there are so many gaps on the floor where the floorboards have been taken up.

Look at the state of it!

There are bags of rubble everywhere.

I think somebody's started to peel back the years here

and potentially think about renovating this house.

But it's not actually as big on the inside as what it looks outside.

You come up the drive to see this huge house.

And there's only two reception rooms in here.

I can't see into the garden as the windows are boarded up.

-SHE SIGHS

-I think it needs a lot of time and a lot of energy spent on this place.

# There ain't nothing wrong with this old house

# It just needs A little home improvement. #

As well as time and energy, you're going to need

a strong pair of property-developing goggles

to see the benefits of taking on this place.

There are certainly options here.

You could renovate it as a family home.

Let it out as an HMO.

Or even divide it up into flats.

Off the rear reception, there's a narrow little room

which, at a guess, I'd say was the former kitchen.

Although it's hard to tell, with no fixtures or fittings in place.

As it stands,

this property that went to auction at a guide price of £75,000,

isn't habitable.

That means it's not mortgagable.

And upstairs is the same.

The auction catalogue described this as a four-bed house.

But, as so many of the walls have been removed,

it's anyone's guess where one bedroom starts, and another ends.

And I'm assuming that this was once a bathroom.

This property is struggling to offer any plus points.

But, out the back, I've discovered one big bonus.

It's what was described in the auction catalogue

as a former self-contained basement flat.

It's got a separate entrance here.

Unfortunately, I can't get in there today, as it's all blocked up.

But I have been told it's almost the same size,

the same square footage, as up there.

So, I'm thinking,

teenage den, separate granny flat.

Or, if it was my own house,

I would love this as a big family kitchen-diner, with sliding doors

and a big deck area, which opens out onto this big garden.

I think it will be great for entertaining.

And it leaves two reception rooms upstairs.

We invited a local property expert to come and have a look at the place.

What are her recommendations for this renovation project?

Just what are the options here?

Well, obviously, it needs some work doing.

But I think it's got great potential,

either for the buy-to-let market, or a residential home.

You'd either renovate it

and have it as a four-bedroom detached lovely period family home.

Or, obviously with planning permission from the council,

you could possibly convert it into four self-contained flats,

which will give really good rental potential.

Student accommodation, that sort of thing.

What rental income could you achieve here, either as a family home,

or as a house rented out to students?

If this was renovated,

and rented out as family private family residence,

I think you'd probably be looking at about £650-£700 a month.

But, if you went down the planning permission

for the student accommodation,

that could be something like £1,300 a month.

But what about the sale value,

both for a four-bed house,

or for a student house divided into flats?

As a student accommodation, obviously with the full renovation,

You could be looking at about £190,000 to £195,000.

For one family, about £180,000 to £185,000.

Not quite as much.

This is a large project for anybody to take on.

It's practically derelict! And there's so much work to do.

There's quite a few decisions to make here concerning that layout,

especially the basement flat.

So, who wasn't intimidated by the scale of the task ahead?

Let's find out when we head to auction.

We'll move on to lot 118.

Four-bedroom detached house.

It's got a self-contained basement.

It needs some renovation.

Where shall we be on this one? Somebody give me £40,000?

I'll take 30 then?

30. I'll take it. 35.

It's got one bid at 30 at the minute. Going to say 35 -

Are you giving me 35? You are.

40.

45.

Got it. 50, sir?

55. 60.

65.

At 65, can I say, sir? I can.

70. 75.

No? Split it?

72 and a half. Got it. 75.

73?

74?

Yeah, another one? 75.

76?

No. Are we all finished at £75,000?

First time at 75. Second time at 75,000.

-GAVEL BANGS

-It's yours.

And the number is?

That final successful bid of £75,000,

bang on the guide price, was made by Colin.

He works as an estate agent in the Greater Manchester area.

# He's Mr Know It All. #

I met up with Colin back at the house to find out more.

Colin, lovely to meet you today. I do recognise your face.

I'm sure you've been on the show before.

I have been on the show before.

I'm usually on the other side of the fence,

I'm normally in the estate agency camp.

Hold on, Colin, you're not supposed to be buying the stock up!

No, we're not allowed to buy our own stock.

But we've been running a property business for 30 years.

And, with the recession, estate agency's a bit more difficult these days.

So I'm spending more of my time looking for other opportunities,

and obviously we've bought this from somebody else's auction.

So, is this property predominantly for you,

to go in your portfolio of properties?

Well, this one is to buy and sell.

So, we're going to buy this, renovate it, and then sell it.

So, we're not going to keep it in our portfolio,

this is going to be shifted through.

So, as well as being an estate agent,

Colin is also a partner in the family property business.

They run an auction house,

and also buy, sell and let properties.

This is going to be an easy chat for me.

Basically, through the eyes of an estate agent,

what did you see, what is so great about this place that you wanted to buy it?

It's a large house.

It doesn't look as large inside as it does outside.

It's rather disappointing on the inside.

"Disappointing" isn't the word I'd have used.

It's just slightly deceptive.

But I think that's mainly because it's in such a poor state.

To me, it just looks derelict and almost as if it's going to fall down.

You don't have to go upstairs to look at the bedrooms. Look!

There's one there! There's one there!

I mean, you can see through the floorboards, for goodness sake!

I think they've perhaps taken the refurbishment a little bit far. SHE LAUGHS

Preparing for the electrics and the wiring

by taking all the floors out is extreme.

To most people, they'd come and think it's a derelict wreck.

For me, it's saved a load of money clearing it out.

It's a great, blank canvas.

But it needs completely doing. So, the wiring,

the plumbing, heating, kitchens, bathrooms.

There are some walls that are going to be moved around.

We're going to put a bathroom in where it's just a tiny little hole at the minute.

We're going to make the two bedrooms at the front,

where it's one big bedroom at the minute, and it can afford to be two bedrooms.

The bedroom that's immediately above us doesn't look that big

but actually it's 14x13.

-Hold on a minute.

-HE LAUGHS

Yep, I can go with that!

It's the same size as this room.

-And I can see it!

-So this roughly the size of the room you've got.

So you'll end up with one great master bedroom,

two really good single bedrooms.

And a smaller single bedroom at the back of the house.

It's got the room downstairs,

which means it can still have two great reception rooms.

A great dining kitchen. Where would you find a dining kitchen that size?

-Obviously, I'm thinking this is going to be the kitchen?

-Yes.

We're stood in the kitchen at the minute.

The attraction for me of having two reception rooms on different levels,

if you go into most houses, the reception rooms are next to each other.

If you've got noisy teenagers,

and they want to play their music or have their telly a bit loud.

Or just have some fun.

And you've got Mum and Dad in the next room going,

"Turn it down" Cut the noise!"

They can go downstairs

and have as much noise as they like. Get it well insulated.

The kids can have a great time.

Parents can have a great time, well away from each other,

not causing either of them any trauma.

Clearly, Colin's planning a single residence here as a family home,

rather than a multi-let.

This rear ground floor room will be the dining kitchen.

The front room on this level will be the first reception room.

The basement flat will be the second reception room.

Colin's obviously put a lot of thought into this property.

It's a big project

and he's only just got married and got back from his honeymoon.

Colin, tell me, what does your new wife think about this project?

-Has she seen the state of this property?

-No, no.

She already says I work too hard, too many hours.

And if she saw the time I'm going to have to spend on this.

Ooh...

And this wasn't the only one I bought at that auction, so,

um, yeah, I'm going to be very busy.

How many projects have you got on the go?

At the minute, we've got 30 projects on the go.

So, I am hectically busy at the moment.

The property business is good.

There are buyers out there in the market.

There's good properties to buy.

So, for me it's really healthy at the moment.

And life is very positive, and some really exciting projects.

And your budget?

HE LAUGHS

We're spending £40,000 on it.

-£40,000. How long is it going to take you to do?

-Eight weeks.

-Eight weeks!

-Eight weeks.

-So you've got your team ready, on standby?

-Yes.

-To start the job.

-Yeah.

It won't necessarily be eight weeks from today,

cos we might not start today.

But, from the day we walk into the property,

-to the day he gives me the keys back, it will be eight weeks.

-Will it really?

-Yes.

Colin, I'm so excited for you.

-Good luck, can't wait to see what it looks like.

-Thanks, Lucy.

Colin has just come back from his honeymoon.

He's taken on this large house to redevelop.

And also has another 30 properties on the go.

And that's on top of his estate agency work!

With his years of experience,

a project like this, it doesn't seem to faze him at all.

But will he really finish this big house in just eight weeks?

Stay with us. You can find out what happens later on in the programme.

I've come to County Durham's breathtaking coastline

to visit Seaham, a former mining town

just a few miles south of Sunderland.

It's big claim to fame is that it was used as a location for the film, Billy Elliot.

# They say that we love to boogie

# We love to boogie

# Have to boogie

# The jitterbug boogie

# We love to boogie On a Saturday night. #

So, is the property I'm here to see going to have me dancing for joy?

Well, from the outside, it actually looks pretty good.

£39,950 was the guide price.

Two-bedroom bungalow.

Now, these things are a bit interesting

because they're sort of back-to-front in this little estate.

This is actually the rear of the property,

but it's probably the entrance most people use.

So, why be different?

# Back to front, front to back Will you come backwards with me?

# Backwards with me? #

A quick pirouette to the front of the house,

and you can see what I mean.

So, I suppose, strictly speaking, this is the back door.

It leads straight into the kitchen.

Not surprisingly, I guess.

And, not a bad kitchen it is.

It's kind of in that era where it just about needs to be replaced.

Probably about 20 years old.

But you might want to consider just putting a new work surface,

or maybe cupboard and drawer fronts.

That could definitely give it a bit of a lease of life.

And maybe change the tiles, which are a bit dated.

But, the whole house, is just that little bit...

It's not bad. In fact, it's actually quite good. But it just needs updating.

In here, main living room area. You've got a gas fire.

Again, a little bit dated, you probably want to replace that.

Some of this stuff on the walls could come off,

and just make it nice and plain and simple. It's not a bad-sized space.

Through to your main sleeping accommodation.

You've got your bathroom and toilet there.

First bedroom there. That's a bit worrying on that wall.

You could be forgiven for thinking

that someone's tried to doodle a map of the world here.

But this is actually an enormous damp patch. Not good!

This is the second bedroom.

-HE LAUGHS

-Again, very 1980s. Big mirrored wardrobes!

But, as I keep on saying, whenever I visit properties,

you must always look inside cupboards and things

because it can reveal a multitude of problems.

And, in fact, there it is.

It wasn't just confined to that bedroom.

There, the damp, which I saw, is in this room as well.

It's a bit more of a serious problem than I had initially thought.

And also, this wardrobe.

I think it shrinks the room a bit too much. So, get rid of that.

And, more importantly, try and figure out what's going on with that damp.

More often than not, there's no great mystery

when it comes to a wet, wet, wet patch like this!

So, it's straight out to the front garden

to see if anything obvious is amiss.

HE LAUGHS

Well, you know, it's a bit strange,

because this is definitely the front of the property,

because you've got the front doors, the numbers, names of the houses.

But, instead of having a road there, you've just got this little walkway.

But, given that the main garden of the property is out here

at the front, back, whatever you want to call it,

I actually think it works quite well because, if you have children,

no danger of them running out onto the road.

So it's also quite quiet.

While I'm out here, one thing I do notice, up on the roof there,

if you notice where the roof of our property joins the next one,

there's a bit of concrete just missing there, a little fillet.

I reckon that is where the water's getting in

and causing the damp below.

Not too expensive to fix that.

And, in terms of downstairs,

a bit of replastering and repainting required.

All in all, and in spite of the damp issues,

I'm really quite taken with this little bungalow.

It went to auction with a guide price just shy of £40,000.

We asked along a local estate agent to get his thoughts on the property.

There are a few positives to the property.

It doesn't need a great deal of work doing to the place.

It won't need a great deal of money spending on it,

other than whatever happens with the damp.

Once done up, what might it sell for?

Once fully renovated, in the current market,

it will probably fetch between £75,000 and £80,000.

Wow, that's almost twice the guide price.

What about renting out the bungalow?

Rental-wise, in the current market, once fully renovated,

you're probably looking between £450 and £475 per calendar month.

Well, I don't know about you, but I think this one's a bit of a find.

Yes, a little bit of a damp problem to sort out,

but that's not going to cost much.

Easy to rent, easy to maintain,

an ideal purchase to live in or rent out.

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

So we're going to lot number 44.

We've got this with a price guide of 39,950 plus.

I'll ask 40,000 to start.

40,000 anywhere?

39?

39,000 bid. We've got the one bid.

We're off and going at 40,000.

40,000 bid.

41. 42. 43.

44.

43,000, this gentleman sitting down.

44 bid.

45. 46.

It's the gentleman sitting down, at £45,000.

I am going to sell. I'll take 500.

I'm selling, once, at 45.

You're going to miss out.

I'm selling for the second time, at 45,000.

On the front row, 45 and a half. 46.

46 and a half.

47. And a half.

48.

And a half. 49.

And a half.

50,000. And a half.

50,000. The gentleman sitting in the third row at £50,000.

No? Sticking to your guns.

I'm selling, once, at 50,000.

I'm selling for the second time, at £50,000.

-GAVEL BANGS

-Sold to the gentleman in the third row.

That successful bid of £50,000 was placed by Graham,

who attended the auction with his wife, Tracey.

She's a nurse, and Graham works at a local car plant.

# Who's gonna drive you home tonight? #

I caught up with them back at the property,

to see this one would be a slick change or a kangaroo start.

-Graham, Tracey, lovely to meet you both.

-Hello.

-Hello.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this little place?

-We're buying it for rental.

-Rental?

-Yes.

-You sound like, "That's it, that's what we're doing."

-Yeah.

-Simple as that.

THEY LAUGH

-Is this something you've done before?

-Yes, it's our third property.

What started you out in the whole buying properties

to rent rather than live in?

We bought a property, helped our daughter on the property ladder a few years ago,

and I did the house for her.

And I thought I could do one myself.

-And we're doing it for a pension fund really, for later in life.

-Right.

So, why this particular property?

We just rented our last property out,

and we were inundated with people asking us for properties.

Inundated, how inundated?

-We must have 10 or 15 people actually interested in wanting properties from us.

-Wow.

So, obviously, you're going to get 15 more properties then!

-One every year, for ten years, that was the plan.

-Really ?

-But we've actually done three in...

-Two years now.

-The income from the others will pay to do this one.

-Right.

You use the money generated from the rental on the other properties.

We don't take anything out of it,

we just plough it back into the properties,

keep improving the properties we've got.

But all the time building a portfolio that's getting better and better,

-bigger and bigger.

-Just adding to the ones that we've got

doing a little bit extra to them here and there.

Well, considering you're not property experts,

-you're certainly showing people how it should be done, aren't you?!

-Yep.

These two certainly seem to be motoring

towards a good, solid portfolio of properties.

# Life in the fast lane

# Everything, all the time

# Life in the fast lane, a-ha. #

They're well prepared for this one, having checked the costs

for the major jobs before they even bought it.

They were quoted £1,200 by a builder to sort out the damp problems,

and another £1,200 if they needed to replace the combi boiler.

And their total budget, £5,000.

So tell me what you're going to do to sort it out?

We've got the dampness to do first.

And then we'll get a health check done on the heating system.

If we need to change into a combi boiler,

there'll be a new combi boiler goes in.

Probably in the loft, it's the easiest place for it to go.

We've got a lot of the tiles to take off in the kitchen because of dampness.

New worktops in the kitchen. And a new bathroom suite.

-Right, you're just replacing the worktops in the kitchen?

-Yes.

Possibly, it's not too bad. Maybe use the doors.

We won't know till we get stuck in.

But the actual cabinets are all fine?

Everything looks pretty sound.

-The main problem in the property is the dampness.

-Right.

That's the main issue.

-And who does the work?

-Me.

-And myself.

-Tracey does a lot of work as well.

-She tends to be my skivvy.

-Labourer!

-Labourer.

What kind of bits and pieces will you actually do, then?

Everything, apart from gas and electricity.

Plastering?

I've got a plasterer who comes in, but I do help him.

So I mix all the plaster, and stuff like that.

I can do all the woodwork. I do everything, basically.

# Why don't you do it yourself?

# D-I-Y, baby, do it yourself. #

Graham and Tracey's DIY and skivvying skills are going to come in really handy here.

As they've got a tenant lined up to move in,

the couple are planning to have the house ready in 10 to 12 weeks.

But, for the first week of that,

they'll be putting their feet up on holiday in Tenerife.

Not a bad way to start a refurbishment!

While we're away, hopefully we can have a builder in to do all the damp proofing.

-So when they get back, it'll be done.

-It'll be ready for us.

-That's the plan.

-You can get stuck in. You're doing it evenings and weekends, presumably?

-Yes.

I work shifts, so when I'm on a late shift, when I start at five o'clock at night,

I come down during the day

and work until about one, and then go home.

Right. Gosh.

You can't get much sleep then.

Par for the course, I think.

Listen, congratulations. And well done in what you're doing.

It seems like you're doing it in exactly the right way.

-I look forward to seeing how you transform the place.

-Thank you.

-Thank you. Thanks.

Well, they haven't been at it for long,

but Graham and Tracey can almost run a masterclass in property investment.

They've chosen a good house here.

They've already got a tenant lined up,

and they're very strict in terms of their budget.

You can find out how they get on,

something tells me it'll be just fine...but you never know...

later in the show.

Coming up,

the yield on this one bed central London flat is potentially sky high.

Wow, the numbers really do stack up for me.

In Seaham, County Durham, Graham and Tracey's renovation

was beset with disaster.

After we decorated the two bedrooms, we had water come in,

so we had to redecorate them again.

But first, in Greater Manchester,

Colin's team has been hard at work and he is chuffed with the results.

We've come out with a terrific finished article.

Back in Outer Farnworth, Greater Manchester,

to check on progress at this empty shell of a four-bed, detached house.

Local estate agent and experienced property developer Colin

had bought it at auction for 75,000.

There was plenty to do to knock this one into shape, including

the lower ground floor/basement that we weren't able to look into before.

But Colin was quite clear what it would take to sort the place out.

Spending £40,000 on it.

£40,000. How long is it going to take you to do?

From the day we walk into the property to the day

he gives me the keys back,

-it will be eight weeks.

-Will it really?

-Yes.

Eight months rather than eight weeks after our first visit, we're back

to see how things have gone for Colin

and this rather unloved property.

# Hey, show some love

# You ain't so tough

# Come fill my little world

# Right up, right up

# Some day you are going to realise

# I want to

# To fill my little world right up

# Right up, right up. #

Hooray!

With internal walls in place and kitchen and bathrooms fitted,

it is much easier to make sense of the layout of this four-bed home.

And it all looks spick-and-span, too.

In through the front door and on the ground floor,

there is a good-sized dining kitchen and lounge.

Down the stairs, Colin has had the basement tanked to keep

the damp out and turn it into a really useful space.

There's a utility room and a loo down there to boot.

Colin sees this as a second lounge or playroom for kids.

And with the double doors out onto a good-sized garden,

I can see that working pretty well.

The first floor was an unholy mess,

but now there are four bedrooms, two singles and two doubles,

one of which is an en suite, as well as a good-sized family bathroom.

There is no denying that Colin

and his team of builders have transformed the place.

But he was pretty adamant it would only take eight weeks.

So, why the delay?

It probably has taken us about 10 to 12 weeks to do the work.

So, it did take a little longer.

We ended up taking walls down that we weren't anticipating having to

take down.

Doing the cellar took a little bit longer than we anticipated,

so we've ended up with an extra three or four weeks run on

from the original time scale.

So, it's not been too bad. We just delayed starting it.

And that is why it has taken longer than we anticipated.

OK, we'll let you off this time, Colin,

since you did have about 30 other projects on the go at the same time,

but what about the budget?

The original budget was 40,000, we've ended up spending 50,000.

So, we spent £10,000 more.

The bulk of that went into rebuilding walls,

walls that when we took the plaster off and the staircase out,

they were not really good enough to put back.

So we had to take them down, rebuild them. And the tanking of the cellar.

We spent more money tanking the cellar than anticipated.

So those were the two areas of the budget that got blown a little bit.

So, that's how we ended up at 50.

I thought Colin might move the kitchen down into the basement,

but to his credit,

having it on the ground floor wasn't such a bad move after all.

Keeping the kitchen upstairs was a real discussion point.

We decided that it was the centrepiece of the house,

you know, it was where the family can come together.

It's a great entertaining space.

We've got the lounges downstairs and upstairs.

So, we felt for the family and for it to be a great entertaining area,

the kitchen was best-placed here.

So with his purchase price of 75,000 and his renovation costs coming in at 50 grand,

Colin's total outlay on the project is 125,000.

We asked two local estate agents to cast their eyes

over this local estate agent's work.

It's a lovely big property. I'm quite surprised by the size of it

when I came round.

The owner has, obviously, done a lot of work to the property

and done a good job. It's a good finish

to the property.

Yeah, first impressions.

Contemporary, four-bedroom, detached house.

Great presentation, nice finish

and perfect for young families in the area.

What could the property rent out for?

I think I'd be able to rent the property at between £650

and £675 per month.

I would be able to rent this property for £695 per calendar month.

On the rental side... I'm not looking to rent it,

so it doesn't really make a great deal of difference to me.

If someone said to me they give me 675, I'd say no.

Well, if Colin was offered £675 a month,

he'd be turning his nose up at a yield of 6.5%,

something tells me he's pretty confident resale

is the better option here.

Remember, his total spend is 125,000.

I would put this property on the market

for offers over £165,000.

I'd be comfortable to put the property on the market

for between £165,000 and £175,000.

I think you'd get quite a lot of interest at that price.

I'm very happy with 165, that's where I would put the price myself.

We're going to offer a part exchange with it, so somebody

has a house that they can't sell or they don't want to put on the market,

they just want to move,

then we can offer to buy their house at the same time.

Colin is no stranger to developing property in the area,

but how has he found this particular project?

It's been very challenging.

It was a large house, requiring a lot more TLC than even I anticipated.

So, it's been a real challenge, lots of hurdles along the way.

But I think we've come out with a terrific finished article.

Today, I am in the beating heart of the City of London.

# Hot town, summer in the city

# Back of my neck Getting dirty and gritty

# Been down, isn't it a pity

# Doesn't seem to be a shadow In the city. #

If you were walking down this London street in the 1600s

and happened to glance skywards,

you would've seen the heads of convicts on spikes

of the city gates,

which served as a warning to other undesirables.

Fast-forward 400 years and that very same skyline

is dominated by the tall buildings of the city's financial district,

where property has always been a valuable commodity.

# Cos when a long-legged lovely walks by

# Yeah, you can see the look in her eye

# And you know that it's hot in the city

# Hot in the city tonight. #

There's hustle and bustle aplenty around here, but I'm hoping

the flat I'm here to see will be an oasis of calm.

So, fight through the crowds and you'll get to this building,

where above me is lot 147.

It is a fourth floor, one-bedroom flat.

The guide price, 225,000 to 250,000.

This is a positive start,

you've got that electronic entry system and a working lift.

# You've raised me up

# To more than I can be. #

The ground floor of the building is a shop with offices above,

then flats above them.

This kind of mixed usage in a building can sometimes make it

trickier to get a mortgage, but if you shop around,

you should find something that suits.

I'm quite excited to have a look around this one-bedroom flat.

You would never know it was here.

So, there's the kitchen to the left, in really good condition.

It's got a contemporary feel to it.

Some slate flooring down there.

Although I would change the worktops.

Got the entry phone system here.

And this lovely, light and open dining area.

This to me is a real bonus.

You could even get a table and chairs seating six people here.

But if you like your privacy,

you might think about putting some blinds up there,

because you are overlooked by all the office buildings.

But it does let in an enormous amount of light.

It's got a lovely flow that goes right the way through

into the lounge.

Now, the good thing is, because the furniture has all been left here,

you can see by the configuration of these sofas

how it is going to be.

It's a really, really comfortable space.

For a flat in the city, I think it is amazing.

It would suit a city worker.

I mean, this really is a good start.

The bedroom is a decent size and the bathroom looks the part, too.

Another two ticks.

I'm really not seeing a lot that needs to be done here.

But hold on, there is more.

Wow!

The one huge bonus with any central London pad is having outside space.

Now, I know I go on about this all the time,

but for me it just ticks all the boxes.

Now, I know it's not a massive area out here,

but imagine a few potted plants.

It's just somewhere to get fresh air and call your own.

Imagine what it would be like at night time out here.

A city worker would snap this one up as the perfect crash pad.

Or if you are the kind of person that invests in bricks and mortar

rather than stocks and shares,

I reckon there could be a healthy profit in renting this one out.

Now, this flat's location means that it is a landlord's dream.

You'd have no trouble renting this out for the premium price.

If you got it for anywhere near the top end of the guide price

of 250,000,

spend about £10,000 on it to get it up to standard.

Rent it for 1,300 a month, then that would mean a 6% yield.

Wow, the numbers really do stack up for me.

# Because loving, girl

# Is all I can do. #

We asked a local estate agent for his thoughts on the property,

which went to auction with a guide price

of 225,000 to 250,000.

This unit appears to have been fairly well built and maintained.

There is good security.

There is a video entrance.

It has an almost European feel to it when you come into the property.

There is a lift, which is good. Not all buildings have lifts.

And it's in a good location.

Once renovated, well, a lick of paint and a bit of sprucing up

in the kitchen perhaps, what could the property be worth then?

Renovated to a reasonable standard and put back on the market,

you would hope to achieve somewhere in the region of £275,000.

What about the rental market?

Does he agree there is money to be made there?

Once renovated, this property would rent for between £1,300

and £1,400 per calendar month.

If you can get your head around the constant bustle that comes

with living in a large metropolis and that it will be over a shop,

then this will be a great one to go for.

Apart from its obvious investment potential,

you've got a wonderful space here to do with what you will.

Let's see who went for it at the auction.

Lot 147. Do I have an opening bid for this one?

230?

230?

230, thank you. 35?

35. 240? 240.

45? 45. 50?

46, 47? 48, 49? Do I have 50?

249 then.

First time at 249.

Second time at 249.

250. 51 one of you?

No? At 250 then, lady's bid.

First time. Second time.

Last time at 250, lady here.

All done at 250,000.

Lot 147 sold to you, madam. Well done.

And beaming her way to that successful bid of 250,000

was Shang Ye.

She moved to London from China three years ago

and works as a product consultant for a financial firm in the city.

# Take me down to the paradise city

# Where the grass is green And the girls are pretty

# Oh, won't you please take me home? #

-Shang Ye, congratulations.

-Thank you.

That was a beautiful smile on that auction footage.

You looked so happy.

Yeah, I was so excited after I got this flat.

What was it like for you on auction day, bidding in the auction room?

Actually, it was my first time to go to the auction. I never did before.

So, I watched some video on the internet.

Of course, I watched Homes Under The Hammer then.

I practised how to raise the hand.

To know the general idea about what auction is

and what I need to do in auction.

-So, our programme helped you and inspired you, didn't it?

-Yeah.

Actually, my colleague recommended it to me.

I watched it in the iPlayer.

-And here you are now, appearing on Homes Under The Hammer.

-Yeah!

-It's surprising.

-It's weird how it's all turned out for you, isn't it?

Yeah, it is.

So, is this your first ever property purchase?

Yes, it is.

Shang Ye got a great price for her new pad and hopes to move in

pretty much straight away.

In fact, there is history between her and this flat.

It was on the open market before going to auction

and she tried to buy it then.

So, you paid £250,000 at auction.

Did you make an offer prior to the auction?

Yes, actually, I did bargain a little bit before the auction.

Because this flat was asking for 320K

before it went to the auction.

Then I bargained for 270K.

Then we don't agree with the money, so...

So you offered 270,000, you wanted it that much.

-Yep.

-They didn't agree to that.

-Yep.

-So it went to auction and you got it for 250!

-Yeah, right!

-That is a great deal, isn't it?

-Thank you.

You are obviously thrilled to bits that you got this for 250,000.

Yep, that's right. I am so happy about that.

And she has every right to be happy

because not only has she saved £20,000 on the purchase price,

but has also made a big saving on stamp duty, too.

But, as with so many central London flats, there may be a pretty high service charge

for Shang Ye to factor into her budget.

Is there a service charge attached to this property?

Yes. Actually, I pay about 2,400 service charge fee for a year.

-Woo!

-Yeah, it's a little bit expensive,

but everything included in it -

the lift, maintenance and also insurance as well.

That is a lot of money, isn't it? 2,400 a year, and it can go up.

Yeah, it is a little bit high for me,

but I still want to do it because, yeah, this place is lovely.

-So, Shang Ye, are you planning on doing much work to this flat?

-Yes.

Actually, I'm planning to change the floor

and also I will change the bathroom

-and also change the kitchen worktop.

-Yeah.

It's getting a little bit old. Yep, that's what I want to do.

Are you going to change the whole bathroom

or just the tiles in the bathroom?

I want to change the basin and the bathtub and also the toilet.

Really? So you're going to get a complete new bathroom suite?

-Yeah, that's right.

-What's wrong with that one? It's fine.

Yeah, it looks new and it's OK, but I just want my own stuff there.

So, what's your budget for the work here?

I actually don't know my budget yet,

I'm still looking for builders to get a quote to re-do my flat.

But give me a ballpark, what are you looking at?

20,000? 10,000? How much do you think?

Oh, below 10,000. Definitely below it.

Are you going to be getting the builders in?

Yeah, I'm looking for builders now, right.

That's going to be quite a tall order because a lot of builders

will probably turn this job down because of the access, won't they?

Oh, yeah, actually,

I got several cancel calls for when I made appointment with them.

They said it's hard for them to get in

and it's hard to find a parking area,

so they're not going to do it.

But I am still looking for builders.

I thought that might be a problem,

and another reason why I'd just keep the bathroom.

Shang Ye hopes to have this feeling like home in less than two months,

but there is one crucial question remaining.

Are you going to have a housewarming party?

Yeah, definitely. After I redo it, yeah.

I will invite my friends to come over to have a housewarming party.

-It has been lovely to meet you today. Good luck.

-Thank you.

It will be fantastic to see what you do with this place,

not that it needs that much work.

-Good luck with that, Shang Ye.

-Thank you, Lucy.

-Thank you very much.

Shang Ye's story proves it does pay to go to auction.

Look how much she saved.

She's got a great place here to live in and it is just so central.

Although that service charge is very high.

But city life doesn't come cheap.

Let's just hope her building quotes do.

You can find out how she gets on later in the programme.

Well, time has simply flown by.

So, have our new purchases made good progress

or has the ticking clock been their enemy?

Let's go back and find out what's happened.

Back now to Seaham, in County Durham,

to check on progress at this two-bedroom mid-terrace bungalow,

which Graham and Tracey bought at auction for £50,000.

They had a budget of just five grand

and 10 to 12 weeks to complete the work,

including addressing the rather alarming damp patches on the walls.

But these budding property tycoons already had a queue of people

waiting to rent the bungalow.

We just rented our last property out

and we are inundated with people asking us for properties.

-How inundated?

-I must have 10 or 15 people interested

-in one property from us.

-Wow.

So, you're going to get 15 more properties then.

-One every year for ten years, that was the plan.

-Really?

-But we've actually done three in two.

-Two year now.

Three months after our first visit, we're back to see if Tracey,

who's a nurse, and Graham, who works at the local car plant,

have had their foot to the floor or whether the renovation

has run out of gas.

# Get out of my dreams

# Get in the back seat, baby

# Get into my car

# Beep, beep, yeah!

# Get out of my mind

# Get out of my mind

# Get into my life

# Oh, oh, oh, oh!

# Oh, I said "Hey..." Hey!

"..you..." You!

# Get into my car. #

Well, they've reached their final destination,

but it hasn't been a completely smooth drive.

The damp problem turned out to be even worse than they thought.

There was more dampness in more areas than was initially visible.

It ended up being extra work for their builder who had to prevent

the water coming in, but with that out of the way,

Graham and Tracey could get on with the renovation proper.

As you can see, the biggest change is putting in the bathroom.

We removed the old bathroom suite,

re-plumbed it from the stop tap through to the tank.

The tiles were re-tiled.

The walls were plastered and it has come up

very well the way it is at the moment.

The damp had also affected the kitchen,

so that has had a major overhaul, too.

We have put in some new kitchen units,

revamped the old ones,

new appliances, re-plastered some of the walls

where the tiles had to come off to have the dampness sorted

and used the tiles to revamp this side of the kitchen.

The existing floor was fine, so we didn't have to change that at all.

Everything was going swimmingly in their newly damp-free bungalow.

The roof was repaired and bedrooms redecorated.

But then the weather played a rather cruel trick.

When everything was OK, we had some high winds and it took tiles off.

After we decorated the two-bedrooms, we had water come in.

So we had to redecorate them again and get the roof repaired.

There was a bit of re-plumbing to do, but the existing boiler checked out OK,

so Graham and Tracey saved on the cost of replacing that.

So, what with the extra work to fix the damp problem,

where does that leave them on the budget front?

Our original budget was between £4,000 and £5,000

and we are well under that.

That's including everything.

I just finished the accounts off yesterday.

No wonder Graham is smiling because,

including the £50,000 purchase price,

that makes a total outlay of under 55,000

on this two-bedroom bungalow.

Where did they make the savings?

A lot of the work was done by ourselves.

At the time, we got a very good deal on the kitchen.

There was a special offer on,

so we got a very good deal on the kitchen and the bathroom.

Yeah, got an excellent deal.

That's where most of the savings has been.

That explains it then.

But just how much work did Graham put in

on top of his full-time job working nights at the car plant?

The only day I have off is Thursday, that's my planned day off.

But most of the days I do it before I go to work

or when I come in from work.

It's normally 10, 12 hour shift on Saturdays and Sundays

when I come.

Well, that's dedication for you.

We asked two local estate agents

for their take on this renovated bungalow.

The first impressions of the property are very good.

On the initial visit

to the property, there was some damp work that needed to be done.

That has been done.

As well as that, we recommended a decorative overhaul.

That's all been done, as well.

I think it's a very smart property.

I think it has been improved quite tastefully.

And it's ready for someone to move into.

And you should have no problem getting a potential buyer or renter.

Both estate agents agree that the property would sell

for £70,000.

That's a bit lower than Graham and Tracey hoped for, but could

still mean a gross profit before fees and expenses of around 15,000.

But the couple already have a tenant lined up,

so what do the estate agents think is a reasonable rental valuation?

I think a potential tenant would pay anywhere between £400 to £425

per calendar month.

In the rental market, I'd recommend a rental valuation

of £425 to £450 per calendar month.

The tenant that's moving in is paying 450 a month.

That is what we were expecting right from the beginning.

We thought sale wise it might have been slightly more.

Graham and Tracey are in line for a yield of around the 10% mark.

But they are not taking their foot off the pedal.

They hope to tackle two more properties in the year ahead.

What advice do they have for would-be auction goers?

-Go for it.

-It's not a problem. If you're thinking about it, try it.

It's not as hard as people make it out to be.

We should have started ten year ago.

Back in London to check on progress at this one-bed flat,

which Shang Ye bought at auction for 250,000.

It was on the open market before the auction for 320,000.

Shang Ye did put in a cheeky offer at that stage.

This flat was asking for 320K

before it went to the auction.

Then I bargained for 270K.

Then we don't agree with the money.

So you offered 270,000, you wanted it that much?

-Yeah.

-They didn't agree to that.

-Yeah.

-So it went to auction

-and you got it for 250!

-Yeah, right!

-That is a great deal.

-Thank you.

Nothing much needed doing to the flat,

but Shang Ye had plans to replace the flooring,

redecorate,

put in new kitchen worktops and fit a new bathroom suite.

Shang Ye has been a busy lady working in the city

and more than two and a half years after our first visit,

we're back to see what she has done with the flat.

# Little things that you do

# Make me glad

# I'm in love with you. Little things...

Well, there is no denying that Shang Ye has made the flat her own.

The flooring has been replaced

and the yellow paint job is a thing of the past.

But is it just me or is the kitchen exactly the same as before?

Actually, I wanted to change the worktop,

but it's too much work and the decorator told me,

"It's fine. It's good quality, it's just not very good-looking."

So I decided, "Well, it's fine."

I don't cook much, so it's fine for me.

I didn't do anything to the kitchen, to be honest.

And the bathroom looks pretty similar, too.

I changed the toilet and changed some taps

and also I put some sticker paper in the window

to cover the sides.

Shang Ye had the work done on the flat pretty soon after

moving in, but how much did she spend on updating the place?

5,000? Maybe? I'm not very sure, it's a long time ago.

Yeah. Maybe 5,000, I don't remember.

Shang Ye discovered that while she has access

to the balcony from her flat, according to the terms

of her leasehold, she doesn't actually own it.

That was a great disappointment.

But she has made a very comfortable home for herself here,

with work just a ten-minute walk away.

You might think she was all settled,

but, actually, despite the convenience,

she's considering a different way of life,

away from the city's beating heart, if she can find her dream property.

Actually, I want a house, like, in the countryside.

Have a garden, and near a river, lots of sun, lots of windows,

then I can get sunshine, natural light.

Sounds like this city girl is ready for some country living,

but perhaps it will come to light sooner than she thinks.

I think Shang Ye has been very clever indeed here.

She snapped the flat up at auction for 250,000,

spent five grand sprucing it up,

making her total outlay 255,000.

We asked along two local estate agents

to see what they think of this city centre flat now.

The location would sell this property.

Certainly.

It would not be difficult

to find a buyer for a property.

It's in a very good location.

It's very well placed for the Tube and for work in the city,

and I think there'll be a demand for it.

OK, so if selling should be straightforward,

what about renting the flat out?

It would rent quicker than it would sell, just due to the process

and the supply and demand.

Renting would be extremely easy.

For rentals, I think a bit more smarting up might be required.

But I don't think you need to do too much to it

because of its location, mainly.

Shang Ye bought the flat for 250,000 and spent about five grand

doing cosmetic changes, making her total outlay 255,000.

So, what resell value would they give the property now?

If we were to market this property for sale,

we would expect to be putting it on in the region of £365,000,

just over 350, somewhere in that range.

If this property were to be sold at the moment,

I would put it on the market at 350,000 or perhaps a touch more.

Oh, great! It is much higher than the price I bought two years ago.

Yep.

A sale at £350,000 or even £365,000

would give Shang Ye a pre-tax profit

of between 95,000 and 110,000, which is just amazing!

What about putting the flat on the rental market?

If we were to put the property up for rent,

it would achieve in the region of £1,600 per calendar month.

I imagine this property would achieve rent per calendar month

in the origin of £1,800.

Wow.

That's really high.

Is it because the location is good?

Absolutely. Location here is key.

And that is why Shang Ye could be looking at a yield

of between 7.5 and 8.5% before fees and expenses.

So, do those figures bring her dream of a bright and airy house

in the country any closer?

For now, I want to stay here cos it's really convenient.

It's a good flat to live.

Maybe in the future, if I find a nice house

outside of London, I would consider to rent this flat out.

Because it is a convenient place for the people who work in the City

to stay. Yep, it would be good.

# Every little thing she does is magic

# Now I know my love for her goes on. #

Whether it is a bungalow, a house or a mansion, we will be there

to see what happens to it next time on Homes Under The Hammer.

-So make sure you join us soon. Goodbye.

-Goodbye.

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