Episode 23 Homes Under the Hammer

Hello. Buying property at auction isn't always as easy as it looks.

But there is one element to the process you can eliminate -

missing out the dreaded property chain by buying at auction.

There are all sorts of properties selling at auctions these days.

There certainly are and it's the wide variety that keeps us interested.

Here are the three properties that went under the hammer on today's show.

'You'll need to watch your step in this Cheshire cottage.'

I'm not absolutely sure, but they seem to be at an angle.

'I'm all for open-plan living, but this Gravesend property has taken it a bit far.'

Boy, is it spacious!

'And in Shropshire, you'll be needing rubber gloves in this house.'

That's definitely, uh...

smoke damage.

'All of these properties went to auction.

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

I'm in Cheshire in the rural parish of Cranage.

Well, it's interesting that it's a parish because there's no church, there's no local school.

It's a bit light on all sorts of amenities, so why is it so popular?

Just take a look around - a leafy suburb, easy commuting distance to Manchester, it's about 30 miles.

You've got the M6, the M56.

I mean, a four-bedroomed house here in good condition is going to cost you 600,000 to 700,000 quid.

# This is the life

# Here's where the living is

# This is the life

# Baby, you're there... #

You may think that's a lot of money and you'd be right,

but properties don't often come up for sale around here,

so there would have been some competitive bidding for this lot.

Well, the property that was up for auction was this - a four-bedroomed, detached cottage.

It doesn't look too bad from the outside. It had a guide price of 200,000 quid,

but what's much more exciting is the plot it sits on - almost half an acre.

Hmm, more of that later. For now, let's take a look inside.

The entrance to this property is sort of back to front.

The front garden sits on a very, very busy road,

so the house turns its back on it.

OK, slightly disappointing entrance into this little porch. Very dark and dingy.

The kitchen, if that's what you can call it, virtually non-existent.

Through to a downstairs loo there which is quite nice, then through into a second kind of entrance area.

Again it feels very cramped and dark and horrible

and looking round the property, it's not in that brilliant a state.

Sort of front sitting room there with an open fire.

Wow! That's not good.

We'll investigate that in a minute, but through to the rear sitting room

and you don't have to be a rocket scientist to figure something's not quite right.

There's cracks all over the place, the ceiling's blown.

Damp. It's in such a bad state, it's almost impossible to see it. What a huge disappointment!

Oh, dear. This really is a house of horror.

The truth is, I'm not sure anyone's going to make any money from doing up a place like this.

Now, let's take a good look at those dodgy, dangerous stairs.

I mean, the stairs here, I'm not absolutely sure, but they seem to be at an angle

and I'm getting extremely worried about the structure of this place, never mind just what it looks like.

Let's see what it's like upstairs.

So far, not so good -

cracks, bowed ceilings, peeling wallpaper and possible subsidence issues.

This property has got the lot and it carries on upstairs.

So inside is disappointing, but what about outside?

Every rural house should have a garden and this one could be used for all sorts of purposes.

But for me, the garden isn't just something you'd have as grass or somewhere to grow your vegetables.

This is the key to this property making you loads of money

because I suggest you knock the house down and build something suitably grand in its place.

The good news is that applications have gone in, at least three in recent times in this very street,

for similar kind of plans and they have been viewed reasonably favourably by the planners.

So what do you do? You knock it down,

you maybe spend £200,000, £300,000 building a fantastic house here

and it's in a good street, great location.

We're into making telephone numbers.

So some serious cash to be made here if you get permission to develop the land

or, failing that, if done up with the existing cottage extended.

Let's talk to a local estate agent to find out what he would do.

The potential, it could be twofold.

The cottage here could be modernised and updated from what we see today.

The alternative is the plot does allow, subject to planning,

for the cottage to be re-sited. It cries out to be moved into the centre of the plot,

but alternatively, you could retain and extend what is here today.

If the buyers take the renovation route and extend the cottage, what sort of return could they expect?

If the cottage was renovated and extended to give it four bedrooms, two bathrooms,

you would have a cottage that's worth somewhere in the region of £550,000.

What about a new build?

If you're able to gain planning permission to put a new property here

to give four bedrooms, two, three bathrooms, you could be looking at a figure around £650,000 to £700,000

on this plot.

The rental market is also buoyant in this neighbourhood.

The estate agent thinks the re-developed site could command a rent of £2,500 a month.

Well, there's work to be done, but a nice enough little cottage

that if it was restored, on the open market, would probably fetch double what the guide price was.

Or why don't you make the most of that plot and build something suitably impressive in its place?

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

Lot number 3, ladies and gentlemen, is a detached cottage

on an excellent site of nearly half an acre.

Where are you going to start me on this one? 200 and away?

Come on, you've not just come here to look at me.

150, all right. 150,000 I've got.

And 5. At 155. 155. 160 now.

At 160 I've got. And 5. 165, thank you.

170? 170.

At 170. At 170...

And 5. 175.

180. At 180... And 5.

At 185. At 185,000.

At 190.

At 190,000. 2½? 2½.

At 192,500.

Are we all done? At 195, I've got it.

197½. At 197½.

200 quickly?

At 197½, the bid is on my right.

At 197½...

200. At 200,000. At 200,000.

202½. At 202,500 once...

Twice.

I'm selling to the highest bidder at 202,500.

Yours, sir.

'That final bid was made by Chris on behalf of the actual buyers -

'John, a commercial pilot, and his new wife Cathy, a cabin manager.

'They paid £202,500 for this property and they're on cloud nine.'

# On the wings of love

# Only the two of us together flying high... #

Cathy, John, lovely to meet you both. We didn't see you in the auction. What's going on there?

We were both rostered... We both work for an airline,

so we scratched our heads and tried to think of someone we could send to the auction for us

and came up with a very good friend of ours who very bravely said he would go and bid on our behalf.

-It's not so bad when you're spending somebody else's money.

-We gave him a very strict limit.

-And what was that limit?

-250.

-250?!

-Yeah.

-Yeah.

-So you must have been absolutely thrilled to bits when you heard you got it for what you did.

Well, we were, but I didn't find out until... I was in the air at the time of the auction.

I got on the stand, turned my phone on, absolutely shaking cos I wanted to know if we'd got it.

He said, "Are you sitting down?"

And then I just had a little thought and he said, "You got it. Guess what for?"

And I said, "Oh, 240." He said, "No, 202½."

-Amazing, isn't it?

-Wow!

-I was absolutely amazed.

# Fly me to the moon

# Let me play among the stars... #

'No wonder John and Cathy were over the moon!

'Getting this place for way under their budget is going to be a godsend

'because they've got big plans for a fabulous new home here.'

# Hold my hand... #

We really want to do a fresh build. We didn't want this house at all.

We wanted to start from scratch.

We live in this area anyway, so it's absolutely perfect to stay here.

The house then didn't appeal at all?

We looked at it and decided there was too much work to be done.

We have a very good friend who's our architect.

He's been to see the planners on our behalf before the auction to get an idea of what they would allow

and indeed they said that we could build on this plot on a different footprint

and then demolish this afterwards.

-What do you hope for for the house?

-I'm excited about the bathrooms. I want a big bathroom.

And I've always wanted a dressing room. I'd definitely like one of those and a fabulous kitchen.

I'm just excited about all of it.

-And designing it how you want?

-Absolutely, yes. Definitely.

-I think it's about time. Let's go outside and take a look at the plans.

-OK.

-Thank you.

# When a small slice of heaven's all

# You could ever hope to find... #

'It all sounds grand, ambitious and well worth the trouble and expense for newly weds John and Cathy.

'The proposed house will be their first place together and their dream home for years to come.'

-So you'll come in through a porch and into what we want to make a dining hall.

-That's interesting.

With a galleried landing as well.

-So up from the galleried landing...

-Oh, nice.

-Then this is our area, so to speak.

-Ah!

-Cathy's dressing room.

-And built-in...walk-in wardrobes.

-You'll have one wardrobe and she'll have 15(!)

So when we're working shifts, in the middle of the night, we don't wake each other up.

-So how many square feet in total?

-Around 3,000 square feet.

-So your build cost is about £300,000?

-Yeah.

-£100 a square foot?

-Good quality then?

-Yes.

-Yeah, I'm going to do a lot of the managing of it.

-Right.

Rather than have a contractor in from beginning to end. That's the plan.

-It's also useful to live here while that happens.

-Yeah.

-You'll go through a bit of squalor before you end up at, basically, Dallas?

-Hopefully.

TV THEME MUSIC: "Dallas"

'It's a well thought out layout which caters perfectly for their needs

'and presumably, they've got time on their side too.'

So what's the kind of timescale for sorting this out then?

Right, we reckon planning will take about three months or so to get sorted.

A year from now, we hope to have a house ready to move into.

-So we'd better leave it as long as possible before we come back?

-I think so.

-This will be worth seeing.

-I hope so.

-I'm sure it will.

-Congratulations.

-Thank you.

-I look forward to seeing how you get on.

Well, what an amazing project this could turn out to be -

John and Cathy embarking on building their dream property.

Still, a lot of work to do before they can be sitting in their kitchen sipping their first cappuccino.

Planning regulations? Problems with builders?

All sorts of issues could come up. You never know with building projects.

I think they'll be all right. Still, the only way to find out is to join us later in the show.

Gravesend in Kent records some of the highest temperatures in the UK.

Back in 2003, it hit a record-breaking 38.1 degrees Celsius.

And the properties are hot too because the fastest trains take just 23 minutes

to get to St Pancras International,

making this Kentish outpost very desirable commuter territory.

So a few miles south of the town centre

finds me on a 1970s, ex-local authority estate.

Now, the houses are attractive enough, nice and close to decent road links

and a good bit cheaper than houses closer to town.

But that doesn't quite explain the low guide price for this four-bedroomed end of terrace -

only 115,000 to 125,000.

The catalogue description might, though, with its "in need of refurbishment" warning.

And these boarded-up windows give us a bit more of a clue as to what's in store.

Well, a boarded-up window doesn't necessarily mean a house is in bad condition,

but I think it's safe to assume we're not in for a show-stopping show home.

Oh!

Well, this is a new take on open-plan living.

Oh, hello-o! It's really echoey in here.

And if you want to see how 1970s houses are constructed,

well, this is the house for you, ladies and gentlemen.

Look, it's completely open.

It's as though somebody has started ripping it apart and not quite finished.

It feels a bit like a photo shoot or a film set,

but boy, is it spacious!

You've got a lovely living area here with huge windows ceiling to floor, letting loads of light in,

once those ugly shutters come off.

You've got a dining space here which is fantastic.

A bit of a 1970s serving hatch going through to the kitchen over there,

which, you know, I could take or leave,

but there's loads you could do with this, there's so much floor space.

I would think about turning this around,

perhaps putting a wall across here because it's far too open at the moment

and having an open-plan kitchen/dining area with the doors leading out to the garden.

It's a bit of a state, but it quite excites me seeing a house like this.

For me, creating a kitchen-diner would be the perfect way forward.

The condition of the ground floor already makes it primed for reconfiguring the layout.

# Stripped away, so you can hardly tell

# Leaving nothing but the shell

# Nothing but the shell... #

Although the windows are shuttered, a quick peek over the side wall shows a nice, little space out back

with the added bonus of a garage.

Back inside, there are another couple of boxes ticked with the first, a downstairs loo,

and the second, well, something I didn't expect to see from this angle.

I'm glad to see there's a working boiler upstairs.

You shouldn't really be able to see it from here. Oh, well, you can't have it all.

In contrast to downstairs, upstairs is almost perfect.

There are four bedrooms. Three are a fair size and in good condition,

though one room seems to be going the way of the ground floor.

And there's a family-sized bathroom in need of a new suite.

So the house is bare, basic and far from beautiful, but could it boost your bank balance?

When you're viewing property, you have to put any delicate sensibilities aside.

The lot might be lacking walls and unloved, but that is what could make it a very sensible investment.

It was built in the 1970s, so it's unlikely to have structural issues.

It's square, it's practical, it's easy to see what needs to be done to bring it up to scratch.

At the moment, it's just the bare bones of a home and it's not very pleasant,

but if you're prepared to hold your breath and take the plunge, you could have an instant profit.

So forget the looks. It's really the blank canvas and potential that's on offer here.

But with a guide price of 115,000 to 125,000, is there a good investment to be made here?

I asked along a local estate agent to see what he thought

of this four-bed house in Gravesend.

There's a lot of money to be spent on this, really. We need new walls, new ceilings, new kitchen.

There's quite a lot of work, probably the wrong side of £25,000.

If the property went for that upper guide price of 125,000,

then that renovation could make the potential total outlay here about £150,000.

So could a re-sale recover that cost?

Fully renovated, certainly 185,000.

What sort of rental return could the house expect?

In good condition, you would get in excess of £900 a month for this property.

This is a very reasonably priced, four-bedroomed home in an improving part of Kent.

It needs more than a lick of paint, but at that guide price, there's money to be made for somebody.

Let's see who that was at the auction.

Without any further delay, let's move on to Lot 57.

Start me at 110. I don't mind where we start. £110,000 to get me under way? 110? 110?

On my left at 110,000. Now 115?

115? 115 I have.

120 now, it's against you. 120 I have.

And 5 now. At 125. At 125 sitting in a fresh place.

And 130 now, it's against you on the left-hand side. 130. And 2?

132. And 4?

134. And 6? 136.

And 8 now, it's against you. 138? 138 is with you.

140?

140, standing right at the back. 140.

And 2, it's against you. 142?

141. Nearly had it. 142 straight away. And 3 again?

143. Another bid, 143 now. And 4?

144. 145? 145. And 6?

146 I've got. And 7, it's against you.

No? At £146,000, back to the gentleman on the right-hand side at the back then for the first time...

At £146,000 for the second. Make no mistake, third and final time...

BANGS GAVEL It's yours, sir, for 146,000.

'That successful bidder, who got the lot for 146,000, was Pete.

'He's a Gravesend local. He used to run a pub,

'but since 1990, has been developing properties.

'I met him at the house to find out what he was planning to do with his new brew.'

-Pete, congratulations.

-Thank you.

-What appealed to you about this house in particular?

-The location.

You've got the A2, M2 very close,

so communication-wise, it's ideal for commuters.

You don't buy a four-bedroom in Gravesend this size for that sort of money.

-So how well do you know Gravesend?

-I've lived here all my life. I went to school here.

My dad's got a business here, other properties here.

-So what's your background?

-I was in the pub trade with my father and my brother.

My father used to buy properties at that time.

We renovated the pub, we bought the shop next door to it, turned that into a restaurant.

And what we started doing there, we just leased the pub and the restaurant out

and started taking things easy.

And properties that come up that are worth buying, we just tinker about with them.

-Are you telling me you've been having a bit of a rest of late?

-Yes.

-You've not been having too much on?

-No.

-That is all going to change now.

Well, when I say not too much on, keeping on top of the properties that we have,

keeping them maintained and any little bits and bobs that need doing,

there's always something to do.

'And how better to do a lasting job on this place than with a hands-on approach by Pete himself,

'plus much of the trades work being done by friends and family?

'So what does he intend to do here?'

First of all, to do the electrics.

It needs a new kitchen. All the windows have to be changed, the front door and everything else.

Clean the back garden out, do the bathroom upstairs...

and smarten it up, really.

-Basically, that is everything!

-Yeah, it is everything. The whole house.

-That's one long list.

-It is.

-You have got to start from scratch with this property.

-I have, yes.

What about the fact that it's very open-plan at the moment? It's just one room, isn't it?

I'll probably keep the kitchen doorway. I'll partition that back off.

The French doors in the kitchen have got to go. I'll just have a normal window or a window with a door.

This here, I'll keep as it is.

And I'll have a fair-sized kitchen, a dining area and a living room area.

There's not much to do upstairs apart from the windows and decorating.

As far as the layout goes, I've thought about reinstating the wall

where the French doors are behind you

and taking all of this down and turning it around, so that you've got your kitchen, your dining room,

so all of this area becomes one room with access out to the garden.

How about doing it that way? I think that could work well.

Well, yes, but I think more people like to have a living room area

and a dining room area separate from the kitchen.

Kitchen-diners are going out of fashion now.

No, when you've got kids and family, people like to sit together while people are cooking.

If you've got kids, especially being a four-bedroom house, you don't want the children in the kitchen.

While Mum's cooking, she needs to keep an eye on her kids. I don't know about that.

You can stick the kids over here. It'd be OK.

'I think we'll have to agree to disagree on that.

'But Pete has given himself an ample budget of 20,000 and three months to do the renovation work.

'So with plans to put it on the rental market, what sort of income does he hope to make here?'

Between £1,000 and £1,100. Four-bedroom properties, there's not many on the market.

And, uh...

Even £1,000 to £1,100, you could be pushing that towards the £1,200 mark.

-Pete, good luck with this. It's going to be very interesting, seeing what you do inside.

-OK.

-Thank you.

Thank you.

Pete is right. There is always something to do when you have a property portfolio.

And I think this house will certainly give him a sense of achievement when it's finished.

But will he achieve the rental he wants? I'm not sure he will, no matter how special it is.

You can find out later in the show.

'Coming up, the problems in this Shropshire semi aren't just on the inside.'

You can't get in through the front door which is never a good start.

'We return to Gravesend where new walls were just the beginning.'

Seeing the plaster and paint going on, it was getting better and better.

'But first, we're back to see if the early bird has been busy.'

He worked extremely hard. When he wasn't flying, he was up at six o'clock.

'Earlier in the highly desirable rural parish of Cranage in Cheshire,

'we met commercial pilot John and his new wife Cathy, a cabin manager.

'The high-flying couple purchased this dilapidated cottage at auction for £202,500.

'The condition of the place didn't concern them at all because they planned to demolish it.

'For them, it was all about the potential of the plot

'where they planned to build their dream home from the ground up.'

-A year from now, we hope to have a house ready to move into.

-Right.

-We'd better leave it as long as possible before we come back.

-I think so.

-This will be worth seeing.

-I hope so.

-I'm sure it will.

'So has the wait been worthwhile?

'Not one year, but two years and four months later, we're back

'to see if they've gone from dream designs to dream pad.

'Well, the cottage is still standing, but next to it is something truly impressive.'

An absolutely heavenly, five-bedroomed house.

The view from the garden is just as grand.

And just feast your eyes on the kitchen-dining area.

There's a small, cosy TV viewing area.

But the real job of relaxing is to be done in this marvellous-looking lounge.

The house feels beautifully spacious and light thanks to this splendid staircase...

..that leads to five, great-sized double bedrooms.

Three of them with their own en-suite facilities.

John and Cathy have created a stunning new home

despite a few changes to their plans along the way

as John explains in the annexe.

This was originally designed as a self-contained living area for my mother,

but unfortunately, due to health issues, it doesn't look like she'll be able to come and live with us now.

This was going to be the living area and a kitchen and, in fact, the plumbing is still in the walls.

So now we're going to make this into a dining room

and a self-contained extra bedroom and bathroom.

Ideal for when they invite friends or family around to visit.

The house has 22 rooms in all with an office space for the couple,

somewhere to beat out a steady rhythm

and at the top, two attic rooms yet to be converted.

On the middle floor, something Cathy was dead keen on was her own dressing room,

but when it came to incorporating it,

she had a change of heart.

This room was supposed to be a dressing room,

but it didn't lend itself to that with the position of the window.

We wanted a large bath and a shower,

so the concept was really to make this into a luxurious bathing area

and we're thrilled to bits with it because it's got heaps of light and it's just exactly what we wanted.

I'm not surprised they're thrilled, especially as they've not long moved in following planning delays.

Those meant they've spent the best part of the last two years living in the cottage,

which was the hardest part of the process.

I felt quite tearful at times, particularly when it was very cold.

Now we're actually in here, it's so nice and it was really worth it.

But now they've moved into their new house, the old cottage will be demolished in the next few months.

Then they can make this place complete by landscaping the huge garden.

Despite a busy flying schedule, John project managed this himself.

With his sons Jordan and Chris helping with the loft insulation,

he put some graft in to boot.

I did some...minor works myself.

Yes, I put in a lot of insulation around the place.

I don't think I ever want to see any insulation again.

-When he wasn't flying, he was up at six in the morning. I was very, very proud of you.

-Ahh.

I'm so pleased for John and Cathy. They've put their hearts and souls into making this their ideal home,

which they'd planned on building for £300,000.

And they spent £305,000.

To be that close to budget is impressive. Now that they're nearly done, is it time for a housewarming?

-No.

-No. We thought we might have a house cooling party before we knock the other one down!

No, we've had no party yet, but we will.

We've got lots of friends we owe lots of meals to, who looked after us while we were building.

So yeah, guys, you'll be coming along soon.

So whilst the invites to friends aren't being handed out just yet,

we've handed them out to two local estate agents to see what they make

of John and Cathy's dream home.

The house is absolutely fabulous.

It's a complete transformation. A really good use of the site.

The style, the spec, right the way through, really is first class.

It's a very impressive building.

The grounds, the way they have positioned it, and the style is very attractive.

High praise indeed, but have they paid a high price?

The property and original plot cost John and Cathy £202,500.

They spent £305,000 on the build, including fees.

Both estate agents agree it could rent out for £2,500 per calendar month,

but what we really want to know is how much the property is worth on the re-sale market.

Remember, their total outlay is £507,500.

You'd market it at £795,000 to £799,000.

Under the current market conditions, if I was putting it on the market, I'd be looking to ask £795,000.

-I think that's excellent.

-Yes, I was hoping for...

-around 750 upwards.

-Yeah, I'm very pleased with that.

-That's fantastic.

-Very pleased.

But even with that incredible potential pre-tax profit

of between £287,500 and £291,500,

John and Cathy have no intentions of going anywhere.

Now the bulk of the hard part is over, they know what they want.

-To live in it! And enjoy it.

-And perhaps downsize in several years' time.

-In 10 years' time.

# Up on cloud number nine... #

'I'm in Shropshire on the outskirts of Telford.'

Well, I'm in a place called Leegomery on a fairly attractive little housing estate.

The house I'm here to see - three bedrooms, semi-detached.

Around here, £60,000, which was the guide price, seems terribly cheap.

But as we know, there's usually a reason for that.

Let's find out what it is.

'The house is on an ex-local authority housing estate. and dates from the 1980s,

'so it's a fairly modern build.

'I head straight for the front door, but I think I might have some trouble getting in.'

Well, you can't get in through the front door. Never a good start.

Still, it gives me a chance to see the garden. Not a huge size and slightly overlooked, but it's OK.

One thing that is nice is this conservatory. Let's look inside.

Ah.

It suddenly becomes very clear.

Obviously, there has been some kind of a fire in here

and the property... Yep, he says, glancing into the kitchen, it's terribly smoke-damaged.

So that's not a very good start. Immediately, you are on red alert for problems.

But in terms of the space, you've got this rear living room area here.

Kitchen there. And through to your front living room area here.

And more kind of...

Er, yep.

That's definitely...

smoke damage.

'Thankfully, it was only the property that suffered the physical damage in this accident,

'but removing grimy soot and smoke residue isn't always a straightforward process.

'All the areas have to be scrubbed and often also degreased and sealed with a stain-block paint.'

Well, into the entrance hall and you've got a nice downstairs cloakroom. That's useful.

And space under the stairs. Stairs up to the bedroom,

but what I'm more interested in is here by the front door

because it looks to me like somebody, as I would have done,

has been digging around to see how much damage has been caused.

They've taken off some of the plasterboard from the ceilings

and also taken away some of the wall to reveal the cables. The good news is the cables aren't damaged

and, looking up there, neither are the floorboards or the joists.

But you really do need to get a specialist in to check it out.

'Upstairs, the smoke damage on the stairs and landing is pretty severe,

'but the three main bedrooms and bathroom are not too bad.

'There are two double bedrooms and one single. The bathroom suite might even be salvageable

'with some effort and elbow grease.

'But as with the electrics, get the experts to check the plumbing here.

'What does a local estate agent think of this smoke-damaged semi?

'Is it still a good buy despite its blackened interior?'

It's a good-size, three-bedroom, semi-detached property.

One of the unique selling features would be the driveway to the side.

A lot of properties in the area are general communal parking.

That's definitely a selling feature.

Looks like it's got a bit of smoke damage, but nothing too serious.

Generally, a tidy up, redecoration, new plasterboards, and hopefully it should sell really well.

So if you did this up and let it out, what rental could you achieve?

I'd say you're looking at about £550 per calendar month.

And if sold on?

If this was to go on the open market, I would recommend an asking price of £105,000-£110,00.

Well, the internal state of this one could put some people off,

but the key with fire-damaged properties is to know when it's really serious

as opposed to just superficial. I think this is the latter,

so a potential bargain to be had. Let's find out who spotted it under the hammer.

50 can I say to start?

45, then.

Can we start it at 45? 45 bid. Seated right. At £45,000. 50 can I say now?

50. At £50,000.

55? At £55,000.

60 is it now? Go in ones if it helps. Bid's at 55. Cost you 56 now.

Back in. 56.

57.

You could have 58.

59? 59.

60.

61. 62.

With so much interest in this property and bids rising in £1,000 increments, we rejoin the auction

at £80,000.

80,000.

81.

82.

83.

84. 85?

No. 84. Bid is standing at £84,000.

At 84, I'm selling it first time.

I'm selling it second time. Third and final time... All done at 84, then?

Your lot. Well done.

The final bid of £84,000 was made by Telford-based couple Ben and Emma.

Ben runs an IT software company that Emma helps out with,

as well as looking after their two young daughters.

This was their first auction purchase, but they do have two other buy to lets.

I met them back at Leegomery to find out more.

-Lovely to meet you both.

-Hi.

-Congratulations.

-Thank you.

-Why did you buy this place?

-Well... we just got carried away, really.

We wanted to go to an auction, we like doing up properties.

We set ourselves a budget for this one of about 75,

got carried away, paid 84 for it and here we are.

"Got carried away". Tell me more.

Well, I think we had a number of properties we thought we might buy,

only this one came up first. It was number nine on the auction thing.

-That's quite a significant chunk over your budget. More than 10% over.

-Yes.

-I think there's still a profit here, hopefully. The damage looks pretty light.

-OK.

-I've heard it's harder to clean up soot than you'd think, but... we'll find out.

-Right.

-So what are you going to do to the place?

-Well, we had about a £10,000 budget to do quite a lot.

It transpired we couldn't get a mortgage because of the fire damage, so had to buy it cash, effectively.

-So we've got no money left.

-No money at all?

-Well, odd bits, but we need to get it rented

while spending the minimum possible.

# I ain't got no money But I sure got a whole lotta love... #

'Unfortunately, Ben and Emma only realised at the last minute that they couldn't get a mortgage,

'so it's been very touch and go raising the finances in time.'

At what point did you realise you couldn't get a mortgage on it?

About halfway through... We got through the mortgage stage, then they came out to value it

-and they said, "It's fire-damaged!"

-It was a refurbishment mortgage,

not a standard high street mortgage, but even so they weren't happy.

And the bridging loans didn't work out. The cheapest was about 20%.

-20%?

-Yeah, it was going to cost us £12,000, which seemed ridiculous.

So the last £500 came from a pay day loan, would you believe?

-It's been that close to the wire?

-Until the day we completed, we had no idea if we had every pound.

'That kind of borrowing could be seen as an extremely risky way to finance a house purchase.

'I would certainly advise against it as the interest rates are much higher than other types of loan.

'And it's left Ben and Emma with no money for the renovation. Zero. Zilch. That will be a struggle.'

-So how are you going to do what you need to do?

-Well, a lot of it is going to be done ourselves.

-Get the gloves on and clean it up and see what we're left with, really.

-What's your DIY like?

Patchy at best! I enjoy it, but the results are not pretty.

-Any particular DIY disasters you recollect?

-The one where Ben glued the radiators to the wall.

-He glued them?!

-He glued them.

-Just like normal glue? What happened?

-He just went to a DIY shop and bought some glue.

-He glues the radiators onto the wall...

-They stayed for a while!

-For how long?

-A few months, until we heard a strange noise in the night.

-Then it snapped?

-Absolutely.

-Only the one.

-I learnt from that one.

'Let's hope Ben did learn from that and also from his other previous DIY disasters

'because when it comes to fire damage, you need to do it properly.

'They've been doing up their own Grade 2-listed property for 5 years,

'but with no money to play with I don't think they'll be able to take that long with this one.'

-The timescale?

-3-4 months.

-But basically down to hard graft.

-Absolutely.

-And family favours.

-Friends, painting parties.

-I wish you all the best getting it sorted.

A lot of hard graft ahead. And we look forward to seeing how you get on.

-Hopefully, it's a happy ending.

-Thank you.

I don't think Emma and Ben got a particular bargain with this place

and I'm concerned about their budget or lack of it.

And will Ben's DIY skills or not come to the fore?

You can find out how it all turns out later in the show.

It's been a while now since we last saw those purchases. Have the owners been busy bees?

Or have they been stung and the projects stopped dead? Let's find out.

'It's now back to Gravesend in Kent where property developer Pete bought this four-bed end of terrace house

'for £146,000.

'He used to be a publican, so it's fitting that he wants to raise the spirits of this place

'that's been stripped to the bone, although I think he's missing a trick on the ground floor.'

I think more people like to have a living room area and dining room area separate from the kitchen.

-Kitchen/diners are going out of fashion.

-No, they're not!

-They are.

You've got kids, family, people all sit together...

If you've got kids, you've got them going in and out of the kitchen. You don't want the children in it.

Well, three months later, we met up again with Pete to see if he's made the right decision.

To start with, that boarded up appearance and "Keep Out!" face of the house has been replaced

with something far more welcoming. New cladding, a new front door and new windows

positively invite you in. So we followed Pete to see if he'd brought this house out of its shell.

And what a transformation!

Pete has still gone for separating the dining room and the kitchen

and, surprisingly, it works.

Well, kitchen, we've got rid of the serving hatch that was here.

Partitioned that off. It allows us to have a lot more worktop and cupboard space.

Over here we had sliding doors.

We've bricked the sliding doors up and installed a window,

which gives us a lot more worktop space. It's a lot more cleaner, convenient.

Microwave, all the electrics have been completely renewed.

Retiled the floor. New doors. And tiled it all.

It just looks lovely now. Can't ask more from a kitchen, really. Can't really go wrong, can you?

And there's nothing wrong with the upstairs either.

There's a refreshing new white bathroom suite with tasteful tiles.

And though redecorating this place wasn't exactly rocket science,

Pete has achieved a good standard of finish with the four bedrooms.

Pete has had the whole house replastered, rewired and replumbed,

with new central heating and radiators. It was a big undertaking, with Pete doing most of it himself,

but it's been an experience that he can sum up with one word.

Enjoyable, because you could see the end result.

The state the place was in when we first got here, putting the plasterboard on, then the plaster

and then the paint going on, it was getting better and better.

And what helps this place succeed is the soft colour schemes Pete has gone for.

They're not the usual neutral tones.

I never use magnolia. I always use ivory

and I have always, instead of having curtain rails, have blinds. They're a lot more convenient.

If you want to rent it, you've got blinds here. If you want to sell, they look nice.

Magnolia's a no-no.

# I can't go for that, No, no can do...

# I can't go for that, no... #

Colour choices aside, Pete has also created a larger living room by moving the partition wall

further into the dining area.

OK, so it's at the cost of a smaller dining room, but look out back and the yard we couldn't see before

has been reclaimed and made into a nice little garden, so there's some extra space there.

Pete has done a great job of transforming this place from a soulless shell

into potentially a lovely family home and, ironically, it's his own family that has motivated him.

Well, I've got a partner and a young daughter.

I spend plenty of time with her. She comes up, looks around with her mother.

That's my main priorities there.

At the moment, Pete is undecided about what to do with this,

whether to rent or sell it. He's finished it on his three-month schedule,

but getting it to such a good standard of finish must have pushed his £20,000 budget to the limit.

In the end, we ended up spending £26,000,

but originally I thought I was going to get away with the windows, but I've changed all the windows

and I was thinking of just painting the fascias, the cladding outside.

It was wooden, it was rotten, so I decided to change the whole lot.

And that changed his outlay.

Add that £26,000 to his purchase price of £146,000

and his total spend is now £172,000.

Time to find out what two local estate agents think of his renovation.

Overall standard of work in this property is to a very high standard.

I'm very impressed. Everything has been finished to a T.

He's put a lot of effort into the kitchen and the units look very good, high quality.

The built-in appliances. He's left space for a dishwasher as well as a washing machine,

so I like it. It's good.

'I really like the bathroom. There's a good choice of tiles. Very neutral.'

So what sort of return can Pete expect on his £172,000 investment? First, the resale figures.

If I was to put this property on the market, I would say it would fetch in the region of £220,000-£225,000.

If I was putting this up for sale, I would look for an asking figure of between £195,000 and £200,000.

If I could achieve 210, I'd be happy. But 220, that's good.

Those valuations could give Pete a possible pre-tax profit of £23,000-£53,000,

but would the rental figures be more appealing?

If this property was to be put on the market for rental,

it should fetch in the region of £1,110-£1,200 per calendar month.

If I was putting this up for rent, I'd be looking for a figure of £950 per calendar month.

I was expecting £1,000 to £1,100.

I was thinking £1,200 as the top part of the market, but £1,100 I'd be happy with.

Well, those figures could give Pete a healthy annual rental yield of about 6.5%-8.5%,

so nice figures either way.

With such good returns possible, is Pete tempted to go back into the property market?

If it's a good property and it's reasonable, worth buying and renovating, I'd do it.

Earlier in the programme we were in Leegomery, Shropshire,

where this fire-damaged semi had been bought for £84,000 by Ben and his wife Emma.

It was to add to their other two buy-to-let properties.

Ben has his own IT software business, which Emma helps with while bringing up their two girls.

They've been doing up their own Grade 2-listed home for 5 years.

They plan to refurbish this house and then rent it out.

With no budget to speak of, the couple plan to do most of the work,

but stories of Ben's DIY skills didn't inspire confidence.

Any particular DIY disasters you recollect?

There's the one where Ben glued all the radiators on the wall.

-He glued them?!

-He glued them.

Well, it's now three months later and Emma and Ben have invited us back to see the results.

There's a new front door and canopy to welcome us.

The exterior signs of the fire have gone.

And inside the once smoke-engulfed hall is now shining white and all replastered.

OK, well, this was the main scene of devastation. There was no front door, everything was black,

the floor was burnt, blackness everywhere. So we obviously put a front door in, which is a bonus.

Put a new floor in, got a plasterer in, got a painter in, new floors, and it's looking pretty good now.

The living room was in just as bad a state.

But after much scrubbing, the walls were ready for redecorating.

And now with new carpets down the house is ready to rent out.

The smoke had got everywhere.

The kitchen was particularly bad, but, as Emma explains, in the end a lot was salvaged.

If you remember, this room was completely black. We've freshened it up, new worktops.

Managed to salvage all the cupboards, new handles.

New tiles. I think it's really fresh and clean.

On the stairs, the terrifying effects of fire were all too evident,

but like the hall it's now white and restored.

Upstairs, the cupboards and doors in the three bedrooms have all been saved.

And the rooms have been decorated and carpeted.

Ben and Emma kept the bath, but replaced the loo and basin in the bathroom.

The whole house is now free of the smell and all the evidence of the smoke damage,

but it can't have been easy.

It was really hard getting rid of the smoke damage. There was probably a period of about a week

where it was all trial and error, finding different chemicals.

-But once we figured it out...

-We thought we'd made a huge mistake, but we got there.

Cleaning the whole house took six weeks and a further six to decorate from top to bottom.

One window took Emma more than three hours to clean,

but what about Ben? With his DIY history, was he let loose on anything other than cleaning?

Yes, I was! I did really quite a lot.

And it's all gone fine. A few minor explosions, but nothing life-threatening.

Well, thankfully, he's not joking.

Apart from cleaning the property, Ben didn't do much DIY here at all.

In the end, the couple got contractors in to do most of the work and no wonder

as the little Ben did do in the salvaged kitchen didn't go too well.

Ben decided to get some paint off the worktop using sandpaper.

-So we had to replace the worktops.

-I thought Formica was indestructible.

So another DIY tip that Ben has learnt the hard way.

The garden's not a bad size and makes this three-bed house ideal for families.

As they couldn't get a mortgage because of the fire damage, their finances were tight.

They hadn't even set a budget and had to finance the work on credit.

It's really not advisable to do it that way and not the wisest way to fund a property development.

So what's the damage? How much have they spent here?

We've spent about £12,000

and it's not been particularly tricky, but we haven't looked at the credit card statements yet.

-It may well prove to be tricky.

-That £12,000 spend, plus the £84,000 they paid at auction,

takes their total to £96,000.

Time to hear what a local estate agent will make of the house

now the smoke damage has gone.

I think it's very nice.

The improvements are fantastic. The particular bonus is the bathroom. It really strikes you.

Ben and Emma are looking to rent it out, but could the house attract buyers or tenants?

-What's the best market?

-I think it would appeal to both the rental and sale market, but just rent it.

So how much could it generate?

Rental potential is £575 per calendar month.

That would produce a great rental yield of over 7% for the couple.

-Brilliant, yeah.

-That's really good.

-Perfect.

What's the house now worth if sold?

Sale value, I would estimate £105,000.

So a £9,000 gross profit before expenses.

-Yeah.

-That is more than we paid for it, so we're happy.

-There's a profit.

Taking on any fire-damaged property is not without its problems,

but Ben and Emma prove it can be done.

-So are they pleased they took it on?

-It was definitely worthwhile cos it's a lovely house.

-A good one to have in our portfolio.

-Yeah, educational.

-Join us next time for some more auction action.

-Will the buyers make huge profits or losses?

-Will you be jealous or glad it wasn't you? Find out on Homes Under The Hammer.

-See you then.

-Goodbye.

Subtitles by Red Bee Media Ltd