Episode 27 Homes Under the Hammer

The weather is pretty roasting today, but how do you tell the temperature of the property market?

Sometimes it's difficult to tell whether it's blowing hot or cold.

One way to find out is to visit your local auction room.

When you go to an auction, you can tell whether there's confidence in the air

or everybody's playing a cautious game.

It's a very interesting snapshot of the property market.

So let's see how the land lies with the properties that went to auction on today's show.

This Cornish cottage has great floors, a stone pillar,

and to cap it all, this amazing open fireplace.

I'm in love.

In Ashford, Kent, first impressions of this house seemed promising.

Sadly, the inside doesn't match the outside.

And the number could be up for this mid-terraced property

in North Blyth, Northumberland.

OK. Marks out of 10 for the fireplace.

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 going to sell.

Ah, Cornwall! It really is beautiful.

But it's also got some really interestingly named villages,

such as Gweek.

But it's inspired me to write a little ditty. Here goes.

It's been a long week but I'm determined to seek

a property that doesn't reek or that's been the subject to a leak.

By jingo, I think I've done it!

I bring you a property in Gweek.

Gweek has a pub, a post office and shop. It's pretty darned pretty too.

I am sold.

So will the property I'm here to see

live up to the charm of the surroundings.

On paper, it certainly sounds all right, and you know what...

How about that then?

A period stone cottage in a glorious village location.

The auction guide price, £175,000 to £200,000. Tempted?

I know I am.

Wow!

This is fantastic.

Look at all this natural stone on the walls.

And this I presume is some remnant to the old days when this was a mill.

I've seen enough already. I'm going!

Only kidding! It's fan...

Yes, it gets better. Look through here.

Stone stairs up to the bedrooms. This room... I don't know.

There's another backdoor here.

I guess this is where you'd have your boots if you've been out walking.

Nice high ceilings.

Loo and a shower room there and then through to the kitchen.

It's a bit dingy at the moment and cobwebby and stuff, but who cares?

Look at all this stuff! This amazing beam across here.

It's just got so much character! Places you can look through.

There's so much to see. Wherever your eye goes, there's something new to admire.

Beams that you could strip back. I mean, it just goes on.

Yes, it's in need of some money spending on it,

but I would adore spending every single penny.

Back into the lounge here. To cap it all, this amazing open fireplace.

I'm in love.

# I'm all shook up

# Mm, mm, mm

# Mm, mm

-# Yeah, yeah.

-#

Some developers may want to shake things up layout wise,

but I reckon a sympathetic renovation is the way forward here.

Unfortunately, the price you pay for the high ceilings downstairs

is the fact that up here, the absolute opposite is true.

But again, this whole feeling of charm.

It certainly scores extraordinarily well.

Although, if you are tall, it might be a bit of an issue.

You've got four bedrooms at the moment.

One back there along with a bathroom. Another one here.

A tiny box from there and then the fourth bedroom here.

Maybe you could think about reconfiguring this.

Maybe take this one out to create a really nice size third bedroom

And also, I would look at taking out the ceiling.

Taking it right back up to the rafters,

giving upstairs that feeling of openness that it doesn't currently have.

But apart from that...

..the magic continues.

# It's a kind of magic. #

Outside, there's a pretty scruffy looking space behind the property,

which should clear up fine.

But that's not all the outside space you get with this one. No, sirree!

# It's a kind of magic. #

It gets even better because you don't only get the house.

Across this little track is this little bit of garden and then...

I'm starting to be pretty blown away by this whole experience.

Down here a little bit further, there is this two-storey garage.

It's actually upside down, if you like.

On one floor, you've got this garage area and downstairs, another room.

Now, that's great as it is, to have that parking space or that storage space,

but what about thinking about converting that into something?

Speaking to the planners. Could that be an annexe or maybe even a separate property?

A separate property around here like that

is going to get you £200,000 at least.

That would pay for the renovation of the old mill.

Wow! It just gets better and better.

# I'm getting better all the time. #

If you hadn't guessed already, I'm pretty taken with this place.

That guide price of £175,000 to £200,000 certainly works for me.

But what does a local estate agent make of it?

It's lovely. It's got so much potential.

It obviously needs a lot of work doing to it inside

but it's got so much scope to put your own stamp on it.

If the purchaser were to do that work and rent it out,

what kind of rental income might the property fetch?

The rental figure for this property, I would say per calendar month, would be around the £1,000 mark.

What about a resale value?

I think the property, once it's completely done inside to a really high standard throughout,

should reach figures of around the £350,000 mark.

Well, this place, what can I say?

Charming with a capital C. And an H, A, R... The whole thing.

Bells, whistles, I mean I love it.

It's got the additional space in the garage, it's got the bit of land.

You can't wish for a better location. A fantastic one to go for.

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

Right, ladies and gentlemen, lot 18.

Will somebody here start me off on £175,000?

No? I'll go to £170,000.

170, straightaway on the aisle on the left. 170. 175 now?

I've got £170,000 on the left. 175?

Does it help if I take two and a half?

172 and a half. 172 and a half.

Progress at the auction was surprisingly slow

and the lot went between a number of interested parties.

We rejoin the bidding at £180,000.

Anyone else want to come in? Now is your opportunity. It's at £180,000.

181. 182.

182. 183?

£182,000.

£182,000 in the front on the left.

Anyone else here for this property?

Now is your opportunity. At 182,000. I'll take a bid at 182,000.

For the first time. For the second time.

Against you and against you. Are you quite sure you're all done?

It's £182,000. That was the first time of calling. I'm going to sell.

The successful bid of £182,000 was made by local man Brian,

who works as an electrician in the nearby Royal Naval Air Station.

In fact, Brian and his wife, Sarah,

have lived next door to the cottage for the past eight years.

# I'm living right next door to an angel

# And I'm going to make that angel mine. #

I caught up with Brian at the property to find out his plans.

-Good to meet you. Congratulations.

-Thank you.

-I'm very jealous.

It's an amazing house. Why did you want to buy it? If it isn't obvious.

-I didn't want to buy it.

-Eh?

-I didn't want to buy it.

-You didn't want to buy it?

-No. I didn't want the house.

I wanted the garage that backs onto our place

because if somebody else bought that,

they would overlook our back garden and it's right for redevelopment.

It came in one lot so I had to buy the lot.

-So it wasn't the charm of this place that made you bid on it?

-No.

-It was the garage?

-Yes.

We really didn't want to be in a position where somebody else

would redevelop the bit that we wanted.

So we didn't have any choice.

I went to the auction, first auction I've ever been to in my life,

and thought, we had already been to see the mortgage company

and they told us what our limit was and we just decided...

..we're going for it.

It may sound extreme, but Brian and his wife were all set to move

if they didn't manage to secure the cottage and garage at the auction.

That gives you an idea of how much value they put

on maintaining their privacy.

So what happens now? What's the plans now?

The initial thought was to just separate the deeds

and sell this as it is.

But now I've had a good look round,

I can see so much potential in this place

that I think it's a case of doing it up.

I don't want a developer to come in and change at all.

I want to keep all the stuff that's in here.

Somebody has taken the time and trouble to make all this stuff.

The kitchen cabinets and stuff were made to fit those areas.

They weren't made to be ripped out.

So I'm going to keep as much as I can,

do it up exactly as it should be,

and then I'll decide after that what we're going to do with it.

A man after my own heart.

It sounds like Brian is going to do the sympathetic renovation

this house is crying out for.

Rewiring and re-plumbing are on the cards. Anything else?

A lot of it in here is cosmetic. It's sound as a house.

We've got one wall I think we need to take out upstairs to make it into a three-bedroom

rather than a four, because one of the bedrooms is really small.

Obviously, we've got all the outside to do and stuff.

What kind of budget have you got for the work?

We're thinking about 20K for in here.

and then 15 to do the garage.

Tell me what you're going to do with the garage.

The top bid is going to remain a garage.

Downstairs, I've managed to persuade my wife that I'm going to have a games room.

Pool table, jukebox, dartboard.

And any more aspirations for property purchasing?

If this makes you loads of money, would you think,

that was quite a good thing to do?

It's funny. I was so nervous in that auction.

After I bought it, I was nearly crying. I just couldn't believe it.

But then you walk out and you think, that was really good fun.

-So never say never.

-It's a lovely end to the story. Good luck.

-Nice to meet you.

-You too.

-Cheers.

Well, what a turn up for the books.

It wasn't the charm of the cottage that attracted a bidder after all,

but Brian's desire to protect his privacy

and give himself some extra space with that garage and games room.

How is he going to get on restoring the old mill house?

I can't wait to see. You can find out later in the show.

Just a couple of miles just outside Ashford in Kent,

with its brand spanking new railway station and high-speed rail to London and Paris,

is the ancient village of Great Chart.

What a contrast.

The old part is set on this main road and it's lined with stunning houses.

Some with Dutch gables, some half tiled,

some made of Kent ragstone, and all utterly charming.

Many of the properties in Great Chart are listed and you can see why,

because the village street, which itself is a conservation area,

has many interesting architectural styles.

I think there must have been a few competitive Kentish builders a couple of hundred years ago,

all vying to make their house the most unique!

The cottage that went to auction isn't listed

but it is a bit hard to find.

Down this alleyway, between the houses on the road

and then along this path behind the houses.

So it's pedestrian access only. I hope it's worth it.

The property I'm here to see is exactly what I was hoping for

as soon as I set foot in the village.

A period property with character and style and in need of improvement.

I'm not sure you could improve much on the first impressions though.

It is charming.

Redbrick, probably mid-Victorian, and it's got that lovely gabled front porch.

So what have we got?

Well, there's three bedrooms and a guide price of £135,000 to £145,000.

And one very excited property developer!

The access isn't ideal and I'd advise whoever who takes this on

to read the legal pack thoroughly to check what their rights of way are.

This plaque above the door shows that the house was once part of the Toke estate,

named after a noble family who lived locally for generations.

So could the property be just as characterful and historic inside?

Oh.

Sadly, the inside doesn't match the outside.

But the good news is, I cannot smell damp.

Although, there is a little worrying sign over here.

It's a little bit wet to the touch and some wallpaper is peeling off,

so I would certainly get that look that.

But something else that really excites me,

if I can get my strength up!

Down here, there are some absolutely beautiful, fat, wooden floorboards.

Imagine those beauties once you've sanded them,

got some nice dark stain on.

It's such a shame because if you look under here,

there are some beautiful period feature windows,

but absolutely covered in condensation.

So whoever takes this on is going to have to think about replacing all of these windows.

You have got stonking views out there, which is a real bonus.

You may want to get rid of this because it doesn't match the period of the cottage.

So, to sum up, the inside is not as cute and as cottagey as I'd have hoped,

but hey, I like the project.

I just hope that whoever bought this cottage shares my enthusiasm

because there's lots to tackle here.

The kitchen is perfectly serviceable but has none of the cottage character

I'd like to reintroduce here.

Up the winding stairs and there's a lovely find on the tiny landing.

I wonder if there are even more of these beams to discover?

The cottage has three bedrooms, but I suspect there were originally two and one has been divided.

The bedrooms do have nice doors and skirting boards

and I think I'd want to make more of those.

The bathroom, like the kitchen, is serviceable,

but again, has no real character.

Outside, access is the real problem with this cottage

that went to auction guided at £135,000 £145,000.

There are some great views from the side across open fields,

but there's only a tiny garden

with a gate leading onto a driveway for neighbouring properties.

But there's a question mark over vehicle access for the cottage.

There's lots to think about with this one.

I reckon a good mix of passion and know-how is needed to get the best out of it.

Does a local estate agent agree?

Let's find out what he thinks the pros and cons are.

First impressions of the property is it needs a considerable amount of work.

The access to the property isn't going to appeal to everybody.

You have to come up a narrow alleyway

and pass several other properties.

It almost feels like you're walking across their front garden to get your own property.

So from a resale point of view, I think that's going to be an issue.

How do the numbers stack up here?

What's the potential value now and after a refurbishment?

The property today, I would expect to resale for around £140,000.

Once the property has been fully refurbished,

I'd imagine the property going for somewhere in the region of £190,000.

So some money could be made here on the resale market

and if the parking and access are sorted,

that would increase its value too.

But perhaps the cottage could also make a good buy to let investment.

If the property were to be rented out,

I'd expect it to achieve around £850 per month.

This is a rare chance to buy a potentially gorgeous cottage

in a pretty and practical location.

I'm sold. Let's see who bought it at the auction.

Lot 11, we go to now,

which is a charming three-bedroom cottage for improvement.

What are we going to say on this one? A super little cottage.

Loads of people been over it. Can I see 135,000 for it?

Give me 130 then. Get us on the way. 130 bid, I have. 130, I have.

132, if you like? It's with you at 130.

And two, do I see? 132, do I see?

Are we all done at 130? 132, I'm obliged. And five now, may I see?

134. 134. 136, if you like?

At £134,000, I have. 136, I'm looking for.

Are we all done at £134,000? It doesn't seem a lot of money.

Great Chart, lovely little village. All done, with you at £134,000.

Done at 134?

Not enough money I'm afraid, so I won't be able to sell that one.

Well, the cottage failed to meet its reserve at the auction.

But straight afterwards, husband and wife, David and Elaine,

put in an offer of £140,000 which was accepted.

David's a chartered surveyor who works for the local authority

and Elaine runs their guesthouse in Canterbury.

They don't have far to go, since they're currently renovating their own home in the same village.

I met up with them at the house to discover

why they wanted to take on another place in the village and do it all again.

Elaine and David, congratulations. Are you completely thrilled with this purchase?

-Yes. Completely thrilled.

-I think we are very pleased indeed, yes.

-Who was it who wanted it? Who spotted it?

-It just came about.

We were in the auction trying to sell some public toilets and we just happened to see this one.

What? Wait a minute! You were selling off some toilets?

-That's part of my day job.

-What? Selling toilets?

-Yes. I work for the local authority.

We had some public conveniences that were surplus

and I just happened to be at the auction, seeing how those went.

-And?

-This came up a few items later.

We had pressed our nose to the window,

bearing in mind we have a house just down the road from here.

We had seen it, went to the auction room, it didn't go at the auction,

so I looked at Elaine and said, how about it?

So how much time in between seeing it,

pressing your noses up against the window, to buying it did you have?

About five minutes.

Because he's very sneaky and brought me here and said,

"There's a little cottage at the auction."

Knowing full well he was going to the auction.

He said, "You can have a sneaky day off and come to the auction."

And it didn't sell and he said, "Shall we buy it?"

And I went... And he'd gone!

-Hold on a minute. So it didn't sell and so you made a private bid for this?

-That's right.

It didn't sell in the room so I nipped straight out after the lot

and spoke to the auction negotiator.

I had a quick look at the legal pack just to make sure I thought I knew what I knew.

Looked at that, confirmed, went to the negotiator and put an offer in.

Although there are fabulous views across open countryside at the side of the house,

the lack of parking and difficult access might have deterred some buyers at the auction.

But David, who's a surveyor, and has experience of similar situations,

thinks a solicitor could resolve the issues.

So is that what made him confident enough to buy?

I think my comfort came from having a very good solicitor

and a chap that could organise a mortgage within two weeks of the auction date

because I had no funding sorted out, I had made no arrangements.

-So it was very much...

-I'm not listening to this! Wait a minute! You have thrown me into a spin.

-You had no funding, you weren't prepared.

-No.

-Elaine, it's a miracle this has even worked out.

-I know.

# I don't want to hear

# I don't want to know

# Please don't say forgive me

# I've seen it all before

# And I can't take it any more. #

Oh yes, I've heard this so many times before

but it's such a risky way to operate.

Not being properly prepared to buy at auction

could get you into all sorts of legal and financial problems.

Hopefully, David won't get into hot water sorting out any subsequent issues from this purchase.

The couple were pleasantly surprised by the condition of the house

once they did finally get in to view it.

That's just as well because they'll be doing most of the work themselves

and have potential tenants lined up to move in.

-So how much time do you think you are going to spend here?

-Not a lot. It's going to be done on-the-fly.

We'll do it properly but with a full-time job...

-Most of it's cosmetic.

-..and running a business.

We're going to put a new kitchen and we're going to tile floors.

We thought it was going to be really bad but it isn't.

So I think within the next couple of months, we'll be able to do it.

Are you going to be taking all the wallpaper off, stripping it back, lots of woodchip everywhere?

How far are you going to go with this project?

I think a lot of the decor will take a longer time to do.

There's no need to do it now.

It's liveable in for the tenants and we can come back and do the woodchip at a later date.

David and Elaine are also restoring their own house, so they're going to be busy.

They paid 140,000 for the cottage and once the refurbishment has been done, they plan to rent it out.

How much do they think it will cost to do the work?

We won't be spending a lot here. Our money is committed to another building project

So it'll be very much what we can do.

-So what do you think? £10,000?

-Maximum.

-A maximum of 10, I think.

Well, congratulations. It's a lovely cottage.

It's adorable and with all the right features, it will look stunning.

Thank you so much for coming along today. Good luck with this.

-Thank you.

-Lovely to meet you.

-Thank you.

So, from selling loos to buying a little cottage with legal issues

with no money in place, it's just a day's work for David!

Not so sure about Elaine!

But both of them are excited about this project and quite rightly.

It's a gorgeous house, but will they find the time and uncover the character?

You can find out later in the show.

Coming up: There are several layout options in this Northumberland terrace.

Somewhere for a range cooker perhaps. Clearly, a kitchen that needs a bit of thinking about.

We return to Kent, where it's been safety first with this cottage.

We haven't skimped on the rewire. We rewired the whole house, which includes smoke alarms.

But first, back in Cornwall, Brian's had only one thing on his mind since we met.

All our energy and money has gone into doing this place.

Earlier in the programme in the Cornish village of Gweek,

local electrician Brian paid £182,000

for this period four-bedroom stone cottage.

But for Brian and his wife, Sarah, who live next door,

the attraction was the garage and land that bordered their house.

They were desperate to stop any development spoiling their outlook.

So what happens now? What are the plans now?

The initial thought was to just separate the deeds and sell this as it is.

But now I've had a good look round,

I can see so much potential in this place.

I think it's a case of doing it up.

So I'm going to keep as much as I can,

do it up exactly as it should be and then I'll decide after that what we're going to do with it.

10 months later, we met up again with Brian to check on the progress.

Well, the cottage has new windows throughout

and the outside has been painted.

Inside, the kitchen units have been restored,

With new appliances and tiling throughout the kitchen

and utility area, the space looks great.

We tried to retain as much as we could in the kitchen

but it was in a hell of a state.

We had an old range here which has now been put in as a log burner.

The units were all really made to fit this kitchen.

It was a question of taking them all out, redressing them and putting them back.

Re-tiling. Complete rewire. Replumb.

And then we've gone for electric combi heating as opposed to oil.

Next to the utility area, the shower room has been refitted

with a new suite and tiles.

And the rewiring and refurbishment continue in the living area at the front of the cottage.

This is the living room.

Again, we've tried to keep as much character of the old cottage as we could.

The fireplace, we didn't know if it worked or not

so we had to get it swept and checked and tested

and lo and behold, it does work.

And the little bread come pizza oven now.

We've ended up with this little room and I think it looks quite nice.

Upstairs, two of the bedrooms have been combined into one,

so the cottage now has three bedrooms.

I think Brian made the right decision to refurbish the cottage

and he's now let it out to a friend who helped with the work.

I had a word with a local builder

who had done some work on my place previously.

He came up with the idea that if him and his family were to move in,

he'd provide me with a good labour rate to do the place up.

So I thought, all right. We'll go with that.

Sounds like a good deal to me.

Brian also worked on the cottage every evening and weekend

to get it in good enough condition for the tenants to move in.

It took about three months and as well as his builder,

he employed other tradespeople for specific jobs.

But what about the garage next door to his own home? What's been happening there?

The bit I actually wanted to keep

was the bit I've done the least amount to,

because all our energy and money has gone into doing this place.

It's only now in these last few weeks that we've started

to look at it and decide what we're going to do with it.

Brian's plans for a games room have changed.

He's now thinking of a summer room under the garage.

But he's also got a more interesting project to think about.

The land that's across the path from the cottage.

This was supposed to be the front garden to the cottage

but we've now decided to apply for planning

to put a three-bedroomed split-level house across the back here,

which will have views that down the valley, back down through the boat yard.

So it's going to be a nice little spot.

Because we're on a bit of a slope, it has to be dug into the slope, but it will be looking out that way

so it won't interrupt the views of any of the other cottages here.

And they've got the lovely view down the valley.

Brian has applied for outlined planning permission

and if he's successful, he intends to sell the land with that permission.

He paid £182,000 at the auction.

How much has he had to spend refurbishing the cottage so far?

The house has more or less cost just short of 40k.

The garage, nothing, because I haven't started!

That £40,000 budget includes a whopping £10,000 on the windows alone,

making Brian's total outlay so far £222,000, including the purchase price.

Time to hear what two local estate agents

make of the refurbished cottage and the potential of that building plot.

I think it's gorgeous. I think the owner's done a really good job with it

and shown off the original features to their best.

Certainly getting rid of the fourth bedroom was an improvement

because it didn't really do much before.

Really nice. Lots of original period features,

some nice interesting quirks about it.

It will appeal to a lot of buyers.

Brian has already let the cottage to his builder friend,

but what income could the cottage achieve

if rented on the open market?

I think the achievable rent here would be around £800 per calendar month.

I think we could achieve £900 to £925 per calendar month.

I'm happy with that. It's pretty much what we expected and if you took an average of those two,

then I'm more than happy with that amount per month. That's fine.

Brian has invested £222,000 here so far

and is looking at the best ways of making the most from what he bought at auction.

Although as yet unchanged,

the garage is part of Brian's own garden and deeds now.

The building plot belonging to the cottage will be separated off

if they can get planning permission.

So what's the cottage worth if sold on in its own right?

I think sale value, we're probably looking somewhere around the £300,000 mark.

I would value this at a figure of around £290,000.

So, a gross profit on the cottage of between £68,000 and £78,000.

I've got no plans at all to sell because I'm quite happy with the situation as it is.

But yes, it's just nice to know. That's great.

It's very nice to know.

And of course, to add to the value of the cottage,

he's got a potential return if he can sell the land

with the outlined planning permission.

The land, with planning permission, I think we're looking at at least £150,000,

depending on specification and what plans were passed.

I think the building plot with planning permission

would be worth a figure in the region of £140,000.

Blimey! Brian could be on a bit of a winner here. I bet he's delighted.

I don't really know what sort of figure to put on a plot,

having never done planning before, never gone down that avenue at all.

So anything is a bonus, to be honest.

If I could secure something around that figure, fantastic!

That is the River Blyth in Northumberland.

Over there is the town of Blyth.

But I'm here to see a property in North Blyth, which is there.

The port of Blyth is still going strong.

It handles 1.5 million tonnes of cargo year, ranging from metals to paper.

The chances are that your daily newspapers printed on paper

that comes from here.

# Get your paper

# Get your paper. #

But back across the river, North Blyth is not the sort of place to make headlines.

To be honest, there's not a lot here.

A club and these rows of former miners cottages.

It's also not brilliant for transport links

with just a few buses a day and no amenities.

So it's one place you're definitely going to need a car.

There are just three streets in North Blyth

sandwiched between the estuary and the railway track.

But it does have a beautiful beach,

perfect for long walks on blustery days.

# We need the wild wind. #

The houses are all that remain of a former thriving pit village.

But when the pit closed and subsequently the power station,

many were demolished.

But not the one that I'm here to see.

Well, the outside may have a few issues.

Let's hope the inside is a different story.

Glazed door. Good start.

Stairs up to your bedrooms there and then through into the lounge.

Nice high ceilings, which is a nice surprise.

HE CHUCKLES

OK. Marks out of 10 for the fireplace and feature wall.

OK.

I'm not that sure about it but the actual room itself is quite pleasant

and I love the fact you've got this huge great archway

which leads into a big open plan kitchen area.

It makes this area of the downstairs just feel enormous.

A bit strange without any furniture at the moment.

Somewhere for a range cooker, perhaps.

Clearly a kitchen that needs a bit of thinking about.

But loads of options.

I'm thinking maybe some kind of an island kitchen here or a sofa

to turn it into one of those family kitchen and living areas.

A nice usable space.

At the back, there's a small utility area that seems to have a bit of water damage.

Further down to the rear, there's a bathroom suite

with some rather unusual tiling which may need replacing.

And upstairs? Well, there are three bedrooms. One small and two double.

The rear double has a bit of character, with an original fireplace,

while the front also has character. But it's not Bugs Bunny!

But apart from leading redecoration, the rooms are all in good order.

So it's shaping up nicely.

But let's stop rabbiting on here and see what's out the back.

At the rear of the property, a useful little yard area,

currently filled with rubbish.

A downside to the area in general though

is that there is no mains gas supply,

so when it comes to heating your house, you have to be creative, which is exactly what this is.

It's an air source heat pump which uses something called vapour compression refrigeration,

to turn heat from the air into hot water to go into the radiators.

Very clever. It works almost like a fridge in reverse.

I'm not sure how efficient it is but it's a pretty impressive bit of kit.

It's a clever solution,

but would this please make a clever investment?

After all, for a three-bed house guided at £25,000,

there's not a lot wrong here.

There doesn't appear to be any major structural damage

and the whole place just needs updating.

For a second opinion, we asked along the local estate agent

to see what she thought of the place.

A really good size mid-terraced property. It has double glazing.

It's got heating. But it needs pretty much a good refurbish.

Once done up, what could it achieve on the resale market?

Once renovated, it's a good-sized property

and I would probably suggest an asking price of around £45,000.

And for a buy to let investor, what income could it generate?

On the valuation, good-sized property at the end of the day.

I would say between £300 and £400 per calendar month.

So let's find out who felt this three-bedroom terrace

in pretty reasonable condition was worth its £25,000 guide price

when it went under the hammer.

Up to Northumberland now. Lot number eight in Blyth. Can I ask for 25?

I'll take 15 to get me going. I need 15.

Thank you. 15,000. 16,000, elsewhere?

16,000, standing. 17,000. 18,000. 19.

20. 21.

I'll take 500. 20,500.

21,000.

21, bid. 21,500. 22.

22,500.

23? No. I'm selling once at 22,500.

I'm selling for the second time at £22,500.

Sold to the gentleman in the blue shirt.

That successful bid of 22,500,

2,500 under the guide price, was made by Ian.

He describes himself as a property investor and tax strategist.

A chartered accountant by trade, he bought his first development property

six years ago and now develops property virtually full-time.

I met him in North Blyth to hear what he has in store for his latest purchase.

Ian, great to meet you. Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this place.

Why did I want to buy this place? It was a keen price, a very good price.

Always keen to buy where there is some profit in the deal before you start.

It will rent out quickly,

so the yield will be between 10% and 12%, so that's good.

So a nice one to add to our portfolio.

-Obviously, you've done this sort of thing before.

-Yes.

-How many times?

A reasonable number. We've done it for ourselves and also for other investors.

People down in London who haven't got the time.

We've got the time and the effort up here, so we put the effort in and they provide the cash.

And why this area? Was it just this house that was here?

Or do you know this area particularly?

We've bought a number of properties in Blythe to good effect.

You can tell from the accent, I'm not from the north-east.

But my wife is and we moved up here about three years ago.

This is a good area to invest, property wise.

It's an unusual spot, isn't it?

Sort of sandwiched in between heavy industry and the old docks and the active docks.

Yes. It's good in some ways

because it's out of downtown Blythe, which is nice.

So it's relatively peaceful and quiet. I think that's good.

You're close to the beach, which is good.

The downside is obviously that you are fairly close to some fairly heavy industrial engineering.

But you can't hear it where we are now,

so if you can put that out of your mind, it's a nice place to be.

Ian's done his research into the area -

very important when making this kind of investment.

His background in accountancy and property developing means

he knows exactly what this house needs. Pretty much everything!

You've been around the property and you've seen it needs, in certain places, more than TLC.

The bathroom is a bit of a mess. That needs completely redoing.

The kitchen and fireplace area needs more than TLC.

A nice new kitchen to go in there I think could make it more homely.

Upstairs, we'll keep the fireplaces. We can make a feature of the original fireplaces.

And just sort of generally make it 2012, not 1812.

Any plans to change the layout? How are you going to divide it up?

We're going to keep the layout roughly as it is.

The floor here, we're going to sand and strip back to bare timber.

So that will blend in with the oak feature

we are putting into the kitchen.

We are going to get rid of the hearth behind us

and just make this into a modern kitchen/diner and living room area.

-The bathroom and toilet stays out the back?

-Yes.

There's a bit of water coming in through the ceiling

so we're going to sort the roof out over the extension and get that tidied up.

Then we'll put a new bathroom suite in. There's a shower going in there as well.

A washing machine in the utility area.

So quite a bit of work ahead, but Ian reckons on a £7,500 budget

to see it through, with contractors doing it in just three weeks.

-What about future plans for you?

-Continue going, I think.

It's a nice area to buy in. The yields are good.

Like most parts of the UK at the moment, it has suffered.

But it's still a good time to buy property.

Congratulations and good luck with it.

-We'll look forward to seeing how you get on.

-Great stuff. Look forward to it. Cheers.

Ian certainly seems to know his onions.

He's got himself a good little property.

He's going to keep to a very tight budget

and end up with something which is delivering him very desirable yields.

How will he get on sorting it out? You can find out later in the show.

It's time now to go back to those properties

and see how the owners have got on.

Have they managed to stick to their timescales and budgets?

Let's find out.

Back now to the beautiful Kent village of Great Chart.

And this three-bed cottage, hidden away behind the neighbouring properties with limited access.

It was bought for £140,000 by David, a chartered surveyor

who works for the local authority, and his wife, Elaine,

who runs their guesthouse in Canterbury.

It had failed to reach its reserve at the auction and was withdrawn.

But David's subsequent offer of £140,000 was accepted.

They planned to refurbish and then rent it out.

Although David hadn't viewed inside the cottage before buying it,

he had taken Elaine to see the outside.

He's very sneaky. He brought me here and said, "There's a little cottage at the auction."

Knowing full well he was going to the auction.

He said, "You can have a sneaky day off and come to the auction."

It didn't sell and he said, "Shall we buy it?"

I went... And he'd gone!

It's now just over three months later.

The living room has been decorated in neutral tones.

There are new carpets and curtains

and the cottage has been let out to a young family.

The fireplace has been retained and the room now feels very homely.

But it's the kitchen that has seen the majority of the work.

It's been re-tiled, new appliances have been installed

and now feels much more like a cottage kitchen.

Elaine was not able to meet us as she was unwell.

So it was up to David to explain the work that's taken place here.

In the kitchen, my wife and I have re-tiled the floor.

We've had a kitchen fitter in to put the wall and floor units in,

put the work surfaces in.

We've had the wall splashbacks tiled. There's new lighting. There are still a few bits to do.

There's a canopy to go above the cooker.

That will come next week or the week after.

The last thing we want to do but it's not there yet,

is put a new log burner in to leave the place looking comfortable and warm and cosy.

We think it has scrubbed up really well

and we're pleased because we think it's important.

We want the tenant to enjoy their stay here and feel comfortable and hopefully they'll stay a long time.

Upstairs, the three bedrooms have been nicely decorated

with more of those muted and subtle colours.

It looks like the young family have made it home.

I'm pleased so many original features remain

and the walls have been replastered where the new wiring was installed.

But David decided not to make a feature of the floorboards.

He's carpeted most of the house at the request of the tenant.

The bathroom was already in decent order,

but changing the colour scheme was a good call

and obviously appealed to the new occupants.

I'm very pleased that we did get a tenant in fairly quickly.

There is a demand for rented properties around this area,

so I think there would have been plenty of choice.

But it's important to get a good tenant and one you're happy with.

Outside, they had intended to replace the windows

but decided to postpone that until the summer so they can change the guttering at the same time.

They'd set a budget of £10,000. So how has that held out?

I think we stuck fairly closely to the originally estimated budget.

We haven't skimped on the rewire.

We rewired the whole house, which includes smoke alarms live wired.

Health and safety is important.

We want our tenants to feel safe and comfortable in the house.

Why skimp when you could have a long-term tenant that's happy to stay here?

David paid £140,000 at the auction and his spend so far is £10,000.

However, that will increase with the extra work in the kitchen,

plus the windows and guttering.

Thankfully, the concerns about access have been resolved.

But the parking issue is still being looked at.

Although the cottage hasn't needed any major work,

David did take a risk by not viewing it beforehand.

As a chartered surveyor, I think I've probably done things

that I wouldn't advise any of my clients to do.

One of which is certainly not to buy at auction without seeing the property.

I'd always advise my clients not to do as I have done

but to take advice and inspect your properties before you buy them.

Very good advice, David.

With an outlay so far of around £10,000,

added to the £140,000 purchase price,

the couple's total investment here at the moment is around 150 grand.

Time to hear what two local estate agents think of the cottage.

It's certainly a marked improvement on how it was before.

There's a little bit more work to do.

I would look into changing the windows,

finishing off the kitchen and doing the rest of the decorating.

My first impression is that it has been done to a good order. A few things still to do.

I would recommend touching up outside on the brickwork.

Also, just completely finish refurbishing the kitchen.

David and Elaine already have tenants in the property,

but are they getting the right rental income in its current condition?

I would expect an income of around about £795 per calendar month.

If the property were to go onto the rental market,

it would achieve between £725 to £750 per calendar month.

In fact, they're getting £700 a month from their long-term tenants,

which works out at a decent yield of around 5.5%.

That's very encouraging.

We've let it below the market slightly, but I was happy to do that to keep a good tenant happy

and keep ourselves happy and keep the continuity.

So far, David has got £150,000 invested here.

How much is the cottage now worth in its current condition?

If we were to market this property in its current condition,

I would set a marketing price of £175,000.

The property in its current condition,

I feel we would put it on the market for £180,000.

So a potential growth profit of £25,000 to £30,000

once the rest of the work is completed.

How much could the place be worth then?

Once the work has been finished to the kitchen and also the windows replaced,

I believe the property would be worth £185,000.

Once the refurbishment has been finished,

I would expect the property to go to market at £180,000.

That's not bad. It probably covers the costs of doing the improvements.

It may not make much more than that but that's fair enough.

That means valuations could be even higher once the parking is sorted.

Is David pleased with those figures?

I am, but I'm not really looking to sell. This is a long-term hold.

It may well be that I end up living here.

My wife has told me that if I get old and crotchety,

then I will be living alone and this is where I'll be going!

So perhaps it's worthwhile hanging onto for a while longer!

It's back now to the beautiful beaches of Northumberland

and the small village of North Blyth.

It was here that I met Ian who was hoping to reap a healthy little profit

from this three-bedroom terraced house that he bought for £22,500.

Although his background is as a chartered accountant,

Ian now spends most of his time developing properties.

This is the latest addition to his portfolio based in the north-east.

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

It needs, in certain places, more than TLC.

The bathroom is a bit of a mess. That needs redoing.

The kitchen and fireplace area needs more than some TLC.

A new kitchen to go in there, I think could make it more homely.

And generally, you know, make it 2012 not 1812.

But before Ian can make any overtures, 1812 or otherwise, with this one on the property market,

I reckoned it wasn't so much TLC it needed but more like all-out war.

OK. Maybe that's a bit too dramatic.

But four weeks later, we returned to see if Ian had got this place into the 21st century.

Well, it's looking pretty good.

The living room has been redecorated and re-carpeted.

Over now to Ian to tell us about the kitchen.

As you can see, we've completely transformed the kitchen area.

We've ripped out the old sink, put in new units. Made it much brighter and lighter.

Over here, we've ripped out that dingy kitchen area

and put in nice white tiles, brand-new units.

It looks much lighter and brighter and generally, we're pleased with it.

It's amazing what a bit of redecoration and lighting can do.

And upstairs, it's the same story.

In the front bedroom, the bow-tied bunny has hopped off

and the rooms have been redecorated and re-carpeted.

The original fireplace is revived, and it's the same with the second bedroom.

The box room has been done in the same decor with all traces of damp eliminated.

Back on the ground floor, the bathroom has come up whiter than white.

You'll remember the appalling mural on this wall over here

and how damp it was and how unpleasant

and generally unwelcoming it was.

We've got rid of the mural and put some cladding in.

We've put a new shower in. It's warmer, lighter,

and like the kitchen, it's completely transformed the two key areas

of the house as far as we are concerned.

So overall, this has been a straightforward cosmetic refurbishment

with the addition of rewiring and re-plumbing.

But outside, things changed.

The garden has been tidied up

but the heat exchange unit is still in place.

However, it hasn't all been totally pain-free.

The problem with the roof, we got that sorted fairly quickly and made it watertight.

We then had to do a bit more work in the lobby area

than we had anticipated because of the damage from the damp.

And even though it's overrun its schedule by one week, from three to four weeks,

Ian reckons he's got a good addition to his portfolio.

And credit for that where credit's due.

We've got a great builder we work with and we meet with him at the start

and let him get on with it.

Again, he's done a super job for us.

And more importantly,

got the renovation done under the budget of £7,500, at £7,250.

With the purchase price of £22,500,

Ian has spent just under £30,000 here.

So will he cash in on his latest investment or add it to his portfolio?

I guess it depends what it values at.

I think we'd like to flip if we can.

The market is picking up in the area, which is good.

If there is no interest, then we will let it out.

To help Ian make up his mind,

it's time to hear what two local estate agents make of his handiwork.

Vast improvement. Very attractive.

Modern kitchen has been fit and bathroom. Very tidy throughout.

Property is lovely inside and out. Clean lines right through.

New carpets. New recently refitted kitchen.

How do the figures stack up?

Remember, Ian spent just under £30,000 on the property.

So will selling it on cover his outlay?

Back on the open market,

I would advise an asking price of between £50,000 and £55,000.

I would market this property for around about £44,950.

I would have said between £50,000 and £52,500.

So if they valued it at 55, that is quite good.

There is a spread there

but I think the £44,950 is for a quick sale.

Even a quick sale could earn Ian a pre-tax profit of just over £15,000,

while that upper sales figure of £55,000 could mean a profit

of just over £25,000 minus the usual taxes and expenses.

How do the rental incomes compare?

Generally, for the area,

we'd be looking at about £350 to £400 per calendar month.

We would rent this property out for £400 per calendar month.

That sounds about fair. We were banking on around £375, maybe £395 if we were lucky.

So that's good. I'm happy with that.

I'm not surprised!

A rental income of £400 per calendar month

could mean an excellent annual yield of around 16%.

So sale or rental, both offer a good return.

Has this helped Ian make up his mind?

I think we'll try and sell initially, but equally

we are quite happy to hold it and let it out at that sort of rental.

That's a reasonable return on our investment.

For now then, Ian is keeping his options open.

A sensible approach in an unstable property market.

But he does have one golden rule for investing in property,

which all budding developers should note.

You make your money when you buy, not when you sell.

If you buy at a keen price, that's when you make a profit.

Keep it sensible, keep your budgets realistic.

It's not a house for you to live in, it's a house for you to rent out or sell on.

So don't make it perfect, just get it habitable to sell on.

We'll have plenty more tantalising tales

from the auction rooms for you next time.

So join us then for more highs and lows, buying homes under the hammer.

-Goodbye.

-Goodbye.

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