Episode 33 Homes Under the Hammer

Hello, and welcome to the show.

Now, investing in bricks and mortar

has long been considered a wise move.

Even in these difficult times.

And that's because, over the years, as long as you buy sensibly,

property has usually shown rock solid returns.

So, where can you find some of these potential nest eggs?

Well, at an auction, of course!

Whether you're buying property as an investment

or because you just want to live in it,

you still want somewhere that represents a good deal.

So, did the buyers on today's show manage that?

Well, here's what they bought.

In Nottinghamshire, this may look like an ordinary house

but how about if I could show you a way of getting a house

for virtually free?

Whereas in Penge, southeast London,

is there no end to the delights of this four-bedroom property?

This place goes on for ever!

And in Newcastle-under-Lyme, in Staffordshire,

there's more mess than stress with this house.

I'm not seeing anything that's worrying me so far.

All of these properties went to auction.

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

when they went under the hammer.

This is Mansfield, the largest town in Nottinghamshire

and centre of the historic Sherwood Forest.

The property I'm going to see

is under ten minutes' drive from the centre of town.

Don't let this busy street put you off

because there is a hidden gem behind these trees.

Well, this is generally regarded as the most desirable part of town

and you can see why - big, tree-lined street.

The fact that I'm not walking along a road,

I'm walking along a driveway to the property

should give you a clue that this ain't no ordinary house.

In fact, it's a four-bedroom detached property

at a guide price which seems pretty low, considering what it is.

225,000 quid -

so I'm really excited to look inside!

Walking up to the front door

you start to get a glimpse of what else this place has to offer.

Outside space and a great deal of it!

Not only do you get a driveway and a double garage,

but there are plenty of outbuildings and a shed.

So far I'm very impressed.

Very, very exciting indeed, is this!

What are we going to find? It's gorgeous outside. Inside?

Well, yeah, nice enough entrance.

In fact, I'm already getting the feeling this is one of those houses

that harks back, in some ways, to the grand days of property

where you had big entrances for the sake of it, to create a statement.

And off it, slightly smaller rooms, I have to say.

There's a front sitting room there

and a smaller, sort of, dining room area, there,

and then through into a second front sitting room.

Now, I love the fact you've got these two big bay windows,

you've got a nice fireplace

and some original features, which is good to have,

but why do you need two sitting rooms?

Could be trying to be a little bit grander than there's room for.

# Too many rooms

# Big, old, empty eyes... #

Still, these two front living rooms have some nice features.

The house also has central heating

and most of the windows are double glazed.

Moving towards the back of the ground floor

there is a small WC under the stairs.

Then you go past the dining room, which is next to the kitchen.

So, through to the kitchen

and the only real disappointment, for me, in this property.

As you can see, it's fairly dark, it's not exactly big

and it's just isn't what it should be,

which is, if you like, the heart of the house.

And it just compounds this whole thing of lots of little rooms, which just isn't working.

So, is there a solution? Well, I think there is.

Now, it's a fairly messy solution, but I think it's worth it

because, really, if you take out this wall,

which divides the kitchen here with that little dining room to the side,

you've suddenly created one big open plan kitchen/dining area

but you've also given the house that, sort of, central heart,

which it's missing.

In order to take this out,

one thing you don't do is start hitting it with a sledgehammer

cos it's pivotal to the support of the whole house.

You are going to have to get a builder to look at putting RSJ supporting beams across the top.

So it's going to be messy, it's probably going to be quite expensive,

but I think it is the one thing you should be doing with this property.

That would be a great improvement to the ground floor,

and the good news is that there isn't a massive amount of work to do elsewhere down here.

That continues upstairs on a split-level landing,

with two fair-size double bedrooms,

a slightly smaller third bedroom,

and a single fourth bedroom.

There's also a box room that could be used as a study.

The bathroom is actually in quite good condition, but,

like the rest of the house, could go from just useable to beautiful,

with a bit of time and money spent on it.

Well, one of the really nice things about the property is it comes with

this really good-size mature garden, with all these lovely trees,

But how about if I could show you a way of getting the house for virtually free?

Have you noticed next door there is already a new build?

So how about turning this into a building plot?

A five-bedroom detached house in this area can fetch £450,000

so, keeping that figure in mind, let's do the sums.

Say you bought the existing house and land for around the guide price of 225,000

and spent about 150,000 building a five-bed house on the garden plot.

That's a total of around £375,000.

If you sold the new build alone for 450,000 - bada-boom! -

you've made your bill and purchase costs back.

So, effectively, you'd get the old house for free,

plus you'd have money left over to renovate it from your profit.

And don't forget that there's potential to extend, too.

Of course, it's vital to factor in the risk of

whether you would get planning permission.

Time to find out what a local estate agent thinks.

I particularly like the plot and the location,

it's very private here, and there is potential for further development,

subject to planning requirements.

Just need to be mindful of how much the house could ultimately be worth,

once it has been extended, though.

What about the house itself?

How much could it be worth after it was fully renovated?

Once renovated,

I could see this property achieving in the region of 400 to £450,000.

Is letting an option here?

There is a strong rental market.

Rental value - I would anticipate £1,500 per calendar month.

Well, the house is undeniably great,

and it would make a superb family home,

but it is the outside space that's got me most excited.

There is literally so much you can do here.

Let's see who was equally enthralled by the possibilities

when it went under the hammer.

Lot 68 -

a very fine and individual four-bedroom detached house.

Start me on this where you will, ladies and gentlemen.

225, then, the guide price? 225? Thank you. 225,000.

227? 227.

227. 229? 229.

229. 230? 230. 231?

232? 233?

234.

235, 236,

237, 238.

239.

240?

239, 240.

241?

241, 42?

243?

243.

44? 244.

245.

245, 246.

247.

248?

248.

249?

249? Try another one - 250?

249 and a half, I'll take it. 250?

At 250, 500 again?

At £250,000 for the first time...

At £250,000 for the second time...

Third and last opportunity... All done with it?

We're selling at 250,000...

Sold at £250,000.

That successful bid of 250,000 was made by IT consultant Alan.

Alan bought the house with his wife Lisa who's originally from Japan

and a full-time mum to their daughter Hannah.

I met them back at their new purchase to hear about the plans.

-Alan, Lisa, lovely to meet you both. Congratulations.

-BOTH: Thank you.

Tell me why you wanted to buy this house.

We're living in a bungalow at the moment

and it's a bit small with Hannah.

So, yeah, just a bit more space, really.

So this is going to be a place for you to live?

-That's right.

-Wow! It'll make a wonderful family home.

Tell me about how you got to know about it

and what you thought when you first saw it.

-We'd been looking for house for nearly one year, don't we?

-Yeah.

Yeah, I saw this was auction. I thought, "I have to have a look."

What did you think when you first saw it?

Well, I thought, "Great!!

Its garden is a good size, house itself is, you know, four bedrooms.

We looked at a lot of new houses and they've all got the small gardens

and, yeah, it was nice to find somewhere a bit different.

And how was the auction?

Well, I didn't go because I have to look after Hannah,

but Alan's mum went and I asked her to control him!

PAUL LAUGHS

Yeah, we don't want to pay too much, so make sure he doesn't overpay.

Right. Well, were you happy when you heard the result?

Oh, yes, absolutely. I was shaking when I received text message.

So, the first time at auction was a great success for Alan.

He and Lisa have picked up a fantastic property

to make into their new family home.

They plan to stay in their current house

until the work here is complete, hopefully in three to four months.

Tell me what you're going to do to it to sort it out.

There's the kitchen and the room next to it - I'm not sure if it's a dining room or what it is, really -

but we thought we'd knock those through into one, needs a lick of paint, obviously,

new carpets, redecorating, probably a few alterations to the bathroom.

Any plans for an extension or a conservatory or anything like that?

I think that would be sort of phase two, but in the short term,

I think just repaint it, really.

As it is, the house is certainly big enough for a family of three.

Despite having enough land to consider developing on,

Alan and Lisa just want to enjoy the garden as a garden

with their daughter Hannah.

# Blowing bubbles, blowing bubbles

# Blowing bubbles Blowing bubbles. #

I'm happy to hear they plan to open up this kitchen

and just hope they've got the budget for such a big job.

In terms of budget for the works you're going to do,

tell me how much you think you might spend.

I hope that we don't spend more than 50,000. Hopefully a lot less.

Well, congratulations anyway and I look forward to seeing how you go and turn it into a family home.

-Great, thanks very much.

-Thank you.

Well, Alan and Lisa are clearly delighted with their new home,

and who can blame them?

They've got a big budget. How are they going to spend it?

You can find out later in the show.

This is Penge in south-east London, an area seven miles from Charing Cross station

and full of attractive Victorian houses.

The property I'm here to see is at the Beckenham end of Penge which,

although further away from central London, well, it's closer to

the more desirable, family-friendly part of the area,

so I'm happy with that.

That's good news, particularly as the property I'm here to see

is a family-sized house which had a guide price of £260,000.

First impressions - well, I really like it.

It obviously needs significant work,

the roof looks like it could do with some attention,

the windows are rotten in places and the render's cracking.

But you can't deny this handsome four-bedroom house has its charms.

Well, it's been so neglected on the outside,

you really hope that there'll be some beautiful,

lovely, old features still intact on the inside.

I'm glad to say there are loads! It's absolutely amazing in here.

It's pretty dark and oppressive.

You've got this very brown wallpaper, although it's beautiful.

Looks like it's 1940s, stunning.

You've got a huge room here, beautiful old windows.

You've got a lovely ceiling, stunning staircase. Look at this -

a nice turn there, lovely old spindles.

So much character. And there is so much you can do with this,

AND this place goes on for ever!

You've got the longest corridor here, a second reception room and a, hm, kitchen.

It's obvious this house needs a complete rejig.

Look at all these beautiful features behind me.

It's really not what I was expecting.

It really doesn't mirror the image of the exterior.

Nice big reception room at the back. Here's the light.

There's a garden there.

I think what you'd have to do would be think about potentially

taking this wall down, opening up the space, a lovely big kitchen,

you can have a dining area over here,

doors leading out to the garden.

It's great! I can't wait to explore further.

The garden isn't huge and, from here,

you can see that extensive work is needed at the back -

new guttering and pipework and yet more windows to replace.

But, sensitively done, I think this house could be a stunner.

Upstairs at the rear is the first of the bedrooms

and, beside it, is a very, very small second bedroom.

Well, that's the smallest bedroom upstairs, but it does have

the only original fireplace in the house and it's beautiful.

Quite a small bathroom there,

you've got a toilet there, but what I'm thinking is,

how about an ensuite bathroom?

That little room is so tiny, it might be worth adding

a really nice ensuite to the bedroom the back,

although whoever takes this property on might want to use it as a nursery,

so it depends how you want to live.

Lovely bedroom there, good-size double but - ha-ha! -

that pales into insignificance when you walk into this room.

Look at it! Absolutely amazing.

Spacious, you've got a lovely open brick fireplace here,

lots of room for storage,

the big double bed could go at the end, and this gorgeous bay window.

You know what?

I've just paid an absolute fortune for original, lovely, ornate handles like this.

They're stunning.

Something that does worry me, though, is THAT - an almighty crack.

Is this bay window area dropping?

I really would get that looked at, because that could be quite a costly exercise.

But, apart from that, this bedroom - what a corker!

This really is a beauty of a bedroom -

spacious and bright, but the bay window could be a bit of a headache.

# I'm just looking out of this old broke window

# And she's taking a turn... #

Now it's time to be less sentimental about this wonderful property

and put my developer's hat on.

This house does need the works - ripping out and starting again.

So, while you've got it back to brick,

how about converting this property into two flats?

There's space, you could probably get two one-beds out of it,

and there are a number of other subdivided properties along this road.

But do your maths. Would it add up? I'm not sure it would.

And, more than that,

wouldn't it be heartbreaking to carve up this lovely old home?

For once, I think sense and sentiment are along the same lines.

Developing is no place to let your heart rule your head, but

thankfully, I think it makes sense to keep this place as one dwelling.

Bearing in mind that guide price of 260,000,

does a local property expert agree?

Well, the house is fantastic. It's got bundles of period features.

Obviously needs updating on the standard things like electric,

plumbings, the bathroom, kitchen.

But, after you've done those things,

there's not a lot more to do except decorate and do cosmetics.

The period features are fantastic, the doors are original,

the architraves, the dadoes, the ceilings. It's fantastic.

So, if this was refurbished from top to bottom as a family home,

what sale price could it achieve?

I think once the property's fully renovated,

it would achieve somewhere between 350,000 and 375,000.

What could it hope to earn as a rental?

Looking at the property as one family dwelling,

I believe it would rent around the £1,800 per calendar month mark.

It's lots like this that remind me why I just love the auction room.

A house that's been trapped in time,

just waiting for a new owner to raise their hand

and transform it into somewhere that you can enjoy once more.

Romantic? Well, maybe, but this house has got so much more to give.

I wonder who agreed at the auction.

Good-sized four-bed mid-terraced house.

Who'd like to kick off on this?

250? Not going to go below 250.

250 standing up. 250?

255? 255. 255.

260? 265?

SHE MOUTHS

262. 265?

266?

267. 268? 268.

269. 270?

270. 275, yes? Just a nod. 275.

2...76?

277. 280?

Another five? 280.

281?

-SHE MOUTHS

-Yeah? 282?

283?

Yeah? 284?

New spot, 284. 285?

-SHE MOUTHS

-Yeah? 285.

286?

285, looking for 286.

If not, 285, first time...

Second time...

Third and last time... Have you all done?

You owe me a bottle of champagne. 285.

And that slightly unsure-looking final bid of 285,000

was placed by Gertie.

She's spent the last 20 years bringing up her children

and being a lady who lunches.

A year ago, she started her own property-developing business

and I met her back at this Penge palace to hear what she had in store for it.

Gertie, it's so nice to meet you. What a surprise this house is!

You just don't think it's going to look or feel like this

when you first open the front door.

Yes, it looks awful from the outside, but it is a wonderful, big house when you go in there.

So tell me, what are you doing?

Well, I'm turning this house into a house of multiple occupancy.

I will rent this out, high standard of accommodation,

all-inclusive, and I will let it out to young professionals.

How many rooms are you going to be letting?

I will be getting four double ensuites and two single ensuites.

And how much do you let them for? What sort of price tag do you put on them?

Well, the average double ensuite, I usually get £150 a week.

-Wow!

-A single ensuite is £130 a week.

So if I was letting this probably as a single unit,

I probably would get probably 1,600 rent,

but as a per-room, it's so much more.

Gertie hasn't let her heart rule her head here.

Doing the maths, she could get nearly £3,500 a month letting it out to six professionals,

if she manages to fill the rooms.

Gertie only started out in property one year ago,

so what was it that gave her the insight into the earning potential of properties?

It was through a property franchise that I learned all about this model.

I learned everything from the buying to the developing.

You sort of signed up for a five-year programme and they basically

teach you everything and give you a lot of support at all times.

And you have to pay for that?

Yes, we do. We pay to join the franchise.

-Do they invest in the house?

-No, no. The house is mine. I own the house.

They get a share of some of our income as part of the ongoing support that they give us.

Interesting. Though it's perhaps not a model to suit everyone.

For some, five years might seem a long time to be locked into such a deal,

where 5% of the profit is paid to the property company.

But for the more nervous investor, looking for advice and contacts in the business,

I can see the appeal.

And what about her budget?

I would expect to spend about £80,000 to get this up and running.

So how long is it going to take you to get your rooms sorted?

I would say between six and seven months.

Gertie, do you like the direction your life has now gone in?

Are you happy being property developer extraordinaire?

Yes, it's been a great journey for me and I still have loads to learn,

but I know it's the right thing for me at this time in my life.

I have exactly a purpose now.

Gertie, I'm so excited for you. I can't wait see the outcome. Congratulations.

-Thank you very much.

-Thank you.

So, Gertie is clearly not going to get emotional about the property

and start mourning the cornicing.

Sorry, old house,

your time has come to enter the 21st century in a big way.

But her investment model is interesting

and I'm so keen to see how she gets on.

You can find out how it all goes later in the programme.

Coming up, in Staffordshire, the inside of this house is fine,

but is there anything to worry about outside?

Nope. Another added bonus.

Back in Penge, south-east London,

Gertie's definitely got that property-developing bug.

I never thought I would say this but actually I'm now looking for something similar.

But first, how did Alan and Lisa get on turning this house into their home?

It's been a bit stressful at times, but then at the end, it's worth it.

Earlier in the programme, we were in Mansfield, Nottinghamshire,

where this imposing four-bedroom detached property was bought for £250,000 by Alan and his wife Lisa.

IT consultant Alan was born and bred in Mansfield,

and Lisa is from Japan.

The couple plan to move in and make it a home for them

and their daughter Hannah.

The house had taken some time to find.

-We'd been looking for house for nearly one year, don't we?

-Yeah.

What did you think when you first saw it?

Well, I thought, "Great!" Its garden is a good size.

We looked at a lot of new houses and they've all got the small gardens,

and, yeah, it was nice to find somewhere a bit different, really.

So when we returned eight months later,

had they changed it into their home?

Well, the outside now has solar panels

and French doors leading out onto that fantastic garden.

And inside, one of the living rooms

has been turned into a playroom for Hannah. Much more fun!

With the carpet removed,

the old parquet flooring has been given a new lease of life,

while the other living room has more of a grown-up feel about it,

and still retains a number of original features.

But what about that rather sorry kitchen area?

Well, it's now a great open plan kitchen/diner for all the family.

So here we had a supporting wall between the kitchen and what's now the dining room,

so we had to obviously take the brickwork out,

there was a chimney breast that had to come out.

There was a lot of work to knock the two rooms together, but I think

it's worth it because it just makes a nice sort of family space.

And the family is set to grow as Lisa is expecting their second child.

There's certainly plenty of room in this house for one more.

The four bedrooms upstairs have all been decorated

and some of the original wardrobes have been retained.

And there's a useful office in the fourth bedroom.

In Hannah's room, everything looks new

and Alan's been busy lending a hand.

We had people do most of the work for us

but I did some little bits, like Hannah's floor, putting up the blinds.

Although other people do most of the work,

you've still got to do the sort of management of it,

so it could take up a lot of time and be a bit stressful at times,

but then at the end, it's worth it.

They had hoped to leave the original bathroom suite

and just change the shower,

but they discovered the bath had been painted and was peeling,

so they have a new bath on order.

And, of course, there's another new arrival pending.

Yeah, three weeks' time, the baby's coming.

I don't know which one, boy or girl, but, yeah, it's coming,

so we can play all in the garden together, and can use the slide.

She's got bikes and scooters.

Come on, pedal, pedal!

Alan and Lisa decided against extending at present.

That's for the future, maybe.

And, thinking of all our futures, Alan's gone green.

We went for the solar panels because energy prices are very expensive and, you know,

we need to save energy, try and get the carbon footprint down a bit,

so we thought they were a good investment and sort of good, green thing to do, really.

They stuck with their decision not to sell the garden plot

as there's no need to extend at the moment.

So, how did they get on with their £50,000 budget?

We added up all the major items we could think of

and we came to a bit under 50,000, so quite pleased with that.

With a £250,000 purchase price,

that takes their total outlay to around £300,000.

We invited two local estate agents to come and give their opinions.

'Some very good improvement work, particularly the kitchen.'

It's a very light and spacious house.

I know they've done considerable work on the electrics, plumbing, etc.

The improvements carried out by the current owners have been done

to a very good standard and they've made the best use of space.

It's nice that the parquet flooring in the sitting room has been retained

and they've made a very good job of restoring it and bringing it back to its former glory.

Alan and Lisa have no intention of letting this.

It's their family home. But what income could the property generate?

With regard to the rental value, I could see it achieving

in the region of 1,000 to £1,200 per calendar month.

I would expect a monthly rent somewhere in the region of

£1,500 per calendar month.

Sounds like a lot. We're not going to rent it, so...

But, yeah, it's interesting, yeah.

What about the sale value of the house?

Is it worth more than the £300,000 they've invested here?

In the current market, I would look to offer it for sale

somewhere in the region of 350 to £370,000.

In its current condition,

I think the property's worth in the region of 350 to £375,000.

So, there's a potential gross profit of 50 to £75,000

before the usual expenses.

I don't mind too much what it's worth because, you know,

we're not planning to move any time soon,

but it's nice to know that the money's well spent

and we've not been wasting our time, so, yeah, that's nice.

Both estate agents agree the value could increase to 425,000

if an extension was added.

So, that's something to think about in the years ahead.

But in the short term, what's next on the agenda for the couple?

Well, most immediately - little brother or sister for Hannah,

and, beyond that...

-Well, I don't know. We expect to be here a long time, I think.

-Yeah.

Oh, there she is!

Today, I'm in Clayton, a suburb of Newcastle-under-Lyme in Staffordshire.

Well, one famous resident here was Clarice Cliff,

the famous potter and ceramic artist,

and she used to live in this cottage at the top of this lane here.

# Just tea for two and two for tea... #

I love pottering around, but there's no time for tea today.

I need to get to the property I've come to visit.

Well, not far from Northwood Lane

and its historic cottages is the property I'm here to see today.

Towards the lower end of the average price for properties around here,

it was guided at £60,000 plus.

It's an ex-local authority mid-terrace.

Let's take a look inside.

Well, the outside, either front or back,

isn't going to win any beauty contests,

but new windows and doors would certainly help.

So, two bedrooms and what else? Let's find out.

Straight through the front door and how strange is that?

You're facing a room which I can't quite figure out what it is.

In the distance, the kitchen, but there's this kind of middle room!

Definitely do something with that. Into this lounge...

I really like that it's a double aspect. Basically, you've got front and back,

lots of light flooding through.

It's the full depth of the property. That's really nice to see.

One thing which isn't nice to see is the windows.

They're called Crittall windows. They're metal.

Somebody's put this secondary double-glazing on the top of it,

but these things are notoriously draughty, cold, whatever.

Need to be replaced. You can't even paint them very easily

cos they're actually made of galvanised metal.

You need special paint. So forget that.

While you're at it, you need to replace this horrible old gas fire.

But, as I said, I love the size of the room and it feels solid.

In fact, the whole house feels really solid. That's the kitchen.

Again, needs a complete refurbishment but, you know what?

I'm not seeing anything that's worrying me so far.

# Don't worry about a thing

# Cos every little thing is gonna be all right... #

Cosmetically, this house looks a mess and I've seen a spot of damp.

But there's nothing that looks too hard to tackle.

When it comes to renovations, you'd expect to put in a new kitchen and bathroom,

and redecorate anyway, and perhaps replace both windows and doors.

But tick off these basics

and this house looks as sound as a pound to me, from inside, at least.

# Don't worry about a thing... #

Well, at the rear of the property there's no doubt that it does look a bit shoddy.

But is it anything to worry about?

Let's look for anything that causes us concern.

Any structural issues, any cracks that are obvious? No.

Look around the windows. Anything cracking underneath those or at the sides? No.

What about the roof? It's got lots of moss on it which means it's fairly old,

but I can't see any tiles have slipped.

I do notice that one of the ridge tiles could do with a bit of re-pointing,

so a bit of preventative care there would be money well spent.

But in terms of structure? No, that's fine.

You're going to replace the windows anyway, maybe repaint the outside.

Nothing to worry about. In terms of the garden, a real nice surprise.

It's big, obviously a bit overgrown, but you've got lots of places

to put things like kids' stuff, maybe a shed here,

whatever you like.

So, all in all, nope. Another added bonus.

# Don't judge a book by its cover

# Oh, yeah! #

I am really encouraged by this cosmetically-challenged two-bed.

I can see this as a very rewarding project in terms of a refurbishment

but could it also be a financially-rewarding one?

What does a local estate agent think?

Positives of this property are that it's a very good area,

it's a cul-de-sac location.

It's nice and quiet, there's a garden,

and there's a lot here for somebody to get their teeth stuck into.

This is certainly a property that could be greatly improved.

But, bearing in mind that £60,000 guide price,

would it be worth putting in the effort?

Once renovated, we would suggest an asking price of £99,950.

For the rental market,

you would be looking at around about £450 per calendar month.

Not only am I encouraged by the potential of the house,

it seems the figures are encouraging as well.

Well, hopefully you've been listening to what I've been saying over the years on the show

to know whether this is a good property to go for not.

Is it? Is it not?

Come on. Not going to spend too much money sorting it out,

good rental opportunity, solid house - bang!

Let's see who bought it when it went to the auction.

Right - lot 24,

a two-bedroom midtown house in need of modernisation and improvement.

50, can I say to start? 50, you're in at 50.

I'll go in twos, then.

52? 52.

54?

At 54,000... £55,000.

At 55, 56?

57? £58,000.

59?

59.

60? £60,000.

I'll go for your half now, sir. Yep, 60 and a half. 61?

61 and a half. 62.

62 and a half. 63.

63 and a half. 64.

Yep, 64 and a half.

65? 65. 65 and a half?

66? 66 and a half?

67. 67 and a half?

68. 68 and a half?

69. 69 and a half?

70, madam?

Yep, 70. Are you sure?

Still with you, madam. £70,000, your bid, no mistakes.

£70,000, the lady's bid seated.

First time at 70...

Second time at 70...

Third and final time at £70,000..

Are we all done?

Your lot, madam. Well done.

So, for £70,000 - that's £10,000 above the guide price -

the new owners of the two-bed terraced house near Newcastle-under-Lyme

are local couple Margaret and John.

John's a retired chemistry professor,

while Margaret's a retired music teacher

and still teaches the piano on a regular basis.

-John, Margaret, lovely to meet you both.

-Lovely to meet you, too.

Congratulations. Tell me why you wanted to buy this place.

Well, it was flagged up by our daughter-in-law

as being a property that looked as though it was a good price.

Why didn't we go and have a look at it?

I came to look and I thought it's a lovely little street.

All the other houses are well cared for.

I mean, obviously, very, very neglected, but nothing,

I feel, that can't be put right and it's a neat project.

It's not a project that is going to overstretch us too much, I hope.

-Yeah, no major structural issues, stuff like that.

-No, hope not.

Why now, then, John? What's the driving force to do it at this point now?

-Oh, I think it's me.

-You?

LAUGHTER

I think I felt I wanted a little project and... So, yeah, this is it.

# This is it (this is it)

# Oh, this time I know it's the real thing... #

So, this, indeed, is it and it's quite a decent project,

with a fair amount of work.

But, together, I'm sure they're more than capable of sorting most things out.

So, tell me about you two. How long have you been together?

-50 years and a bit.

-That's a good old stint.

-Yes.

-It is these days!

LAUGHTER

We had our golden wedding anniversary last year.

Oh, congratulations!

-And Margaret's wedding dress was in the hall as everybody came in.

-No!

Yes, I thought, "I've kept this wedding dress for 50 years.

"I'm having it in the hall."

# Thank you for the days

# Those endless days, those sacred days you gave me... #

It seems this house hasn't worn quite as well as Margaret's wedding dress

and has definitely seen better days.

So I'm hoping their plans are to bring it a bit more up-to-date.

So tell me what you're going to do to sort the place out.

I think the first thing is get everything out that has to be taken out,

and I'm thinking we probably need the garden...

Everything that needs to come out of the garden

I think has got to come through the house, so that's number one.

We've had our guy Dominic, who's fantastic,

come to look at the kitchen and bathroom,

and he's given me lots of advice about things.

What's he said so far?

His advice is, because of this dampness in this wall,

get everything that's going out, out,

so that you get rid of as much of that smell as possible.

And windows - I've had somebody come and look at the windows.

And also we'd be turning this into a patio door, so we can all sit out there.

-Oh, great!

-Yeah, just open it out into the garden a bit, which,

hopefully, will look a bit greener than does now.

So what's the budget?

Well, I'm thinking 15, if we can keep it to 15.

So how much of the work will other people be doing

and how much will you be getting involved?

Ooh, I think we're very keen to have a go but, you know,

it's how much energy and time have we got?

It strikes me you've got quite a lot of both.

Yes. We're capable of doing quite a bit,

but, when it comes to the crunch,

we might say, "Hmm, might be good to get the decorator in."

Well, listen, congratulations. Lovely to meet you both.

-I look forward to seeing how you get on.

-Thank you very much for your interest.

Well, piano teacher Margaret

and husband John have chosen a fine piece here.

No strings attached, just a bit fine-tuning required.

Will it build to a crescendo or fall flat?

You can find out later in the show.

So, have our buyers lived up to their promises?

Has all the work that was planned been carried out? Let's find out.

If you're looking for decent transport links into the centre of London

and reasonably affordable property prices,

then Penge in the south-east of the city might just fit the bill.

That's what fledgling developer Gertie thought when she bought this four-bed Victorian terraced house

at auction for 285,000.

Although this property was somewhat dilapidated,

it had bags of character, charm and period features.

But, more importantly for Gertie, lots of space.

So, tell me, what are you doing?

Well, I'm turning this house into a house of multiple occupancy.

I will rent this out and I'm going to turn it into six ensuite rooms,

high standard of accommodation, all-inclusive,

and I will let it out to young professionals.

So this was no simple renovation or "make do and mend" for Gertie.

No, she was really going for it.

Having spent the last 20 years looking after her children,

describing herself as a lady of leisure,

Gertie wasn't exactly an experienced property developer,

so she paid to join a property franchise which offers help, advice and contacts.

Then, armed with an £80,000 budget, she set about the task

of trying to maximise this house's earning potential.

Now, just under seven months later, we're back.

From the front, all the character's been retained

but there are now new windows and a smart front door...

..whereas at the back there's a new conservatory,

so definitely signs of changes.

And inside?

Well, in the hallway, gone is that dark, dated decor

and it leads now not to a back reception room...

..but to a fabulous kitchen.

This was the old dining room, but I thought it was a really good space

for a kitchen, cos it's important in our HMOs to have spacious kitchens.

So it was quite a dark room,

but I tried to make it as light as possible by using lots of creams,

and especially with the tiling, I thought it really brightened the room up.

Then I added a conservatory onto it for some more communal space,

and it also let more light in,

so I think it's a nice, light room now.

Wow, that kitchen space is quite something!

And the conservatory leading out to the garden is inspired.

The rest of the house isn't bad either,

with the front reception room turned into a bedroom,

complete with ensuite shower room.

The middle reception room is a communal lounge.

But with a shower room installed just off it,

Gertie has given herself the option of converting this into a bedroom at a later date.

And upstairs?

There are four gorgeous ensuite bedrooms, one king-size double,

two medium doubles,

and one slightly smaller double.

They're all ready and waiting for the young professional tenants.

So, what have we got here?

Well, I've ended up with five ensuites,

but with the option to move it to six at a later date.

We've done a slightly higher spec so we can get a higher rent for them.

Gertie's aim was to create an upmarket house of multiple occupancy

for young professionals and she's certainly done that.

The work was completed close to her six months timescale

but, with little developing experience to fall back on,

how has she found the project?

I actually did enjoy it.

I really was very nervous when I started the process

cos I did have no background at all with property,

but I was quite surprised at how much I must have learned from my first property.

I never thought I would take on a property like this as my second house.

Gertie joined a property franchise which helped her through the process

in return for a 5% share of the profits for a fixed period,

but it's most definitely HER property.

Her main role was to oversee the work.

So, does it represent her style?

I think it is probably me. It has got my taste on it.

I'm trying to keep it as neutral cos obviously it's got to appeal

to everyone, but it does have quite a bit of my taste in it as well.

But how much did it cost to put her style signature on this place?

Well, we actually came exactly on target at 80,000,

so I was quite pleased.

So Gertie stuck to her £80,000 budget.

She bought the house for 285,000, making her total outlay,

minus costs and fees, £365,000.

So, can this potential rental machine do the business?

First impressions coming back here is they've done an amazing job.

It doesn't feel like the same house. The workmanship is fantastic.

My only disappointment is that some of the period features have gone.

My first impressions when I walked into the property was

the attention to detail and how well the works have been undertaken.

It's similar to walking into a hotel with ensuites on every room,

so it's very impressive.

There's no doubting the quality of this conversion,

but has converting it into a house of multiple occupancy

added value to her £365,000 investment?

In terms of resale, if it was just a residential property,

I believe that she would top out at about 350,000 for the property.

However, as a HMO, if fully tenanted and bringing that income in,

I believe she may be able to push that price up to about £400,000.

I would be putting a marketing price on this property of around 400,000.

Slightly lower because I've had some others which were 45 to 450,

but so long as it's 400, I'm fine with that.

So if it achieved 400,000 on the resale market,

it's not a massive money-spinner for Gertie,

with a potential profit of around £35,000,

before all the tax, fees and expenses are taken off.

But the name of the game is rental,

and all-inclusive room-by-room rental at that.

Looking at the rooms, the smaller rooms I believe you'd achieve £550 per calendar month,

and the bigger rooms 600 per calendar month or maybe just over.

I'd expect the rooms to achieve between 600 and £650 per calendar month per room.

Well, we get a lot higher than that and I'm already renting two rooms for 750,

so I know I can get higher than that.

Gertie's rental rates are of course all-inclusive.

She let the two large double rooms at £750 per calendar month

within two days of putting them on the rental market.

She's hoping to get 715 a month for the slightly smaller doubles,

and £630 a month for the smallest bedroom.

If she manages to fill the rooms all year round,

she'll get a monthly rent of over 3,500.

That's a very impressive yield of between 11 and 12%.

Even though the property company will take 5% of that income,

this has been a very successful development for her.

I never thought I would say this but, actually,

I'm now looking for something similar,

so it has given me a lot of confidence

and I think I've been so pleased

because it all turned out exactly as I wanted it to turn out.

# Everything I wanted

# You're everything I wanted

# You're just another part of me

# You're everything I wanted Everything I wanted... #

Back in the Staffordshire town of Newcastle-under-Lyme,

a two-bed mid-terraced house went up for auction

and was bought for £70,000 by Margaret and John.

John's a retired chemistry professor,

while Margaret's a retired music teacher,

although she still teaches piano from time to time.

The couple have been married for over 50 years, around the same age as this property,

but, unlike their marriage, this was far from golden.

It needed a fair amount of alchemy to turn it around,

but this couple were ready to roll.

Why now, then, John? What was the driving force to do it at this point now?

-Oh, I think it's me.

-You?

LAUGHTER

I think I felt I wanted a little project and, so yeah, this is it.

So, Margaret felt this was the time to try their hand at property developing...

# Time, oh, time... #

..and see if not only could they keep themselves busy,

but hopefully bolster their pension fund, too.

Armed with a £15,000 budget,

they were eager to crack on with the refurbishment.

And now, four months later, we're back.

The outside's looking good.

There's new UPVC double-glazing, a smart front door and,

because of the state of the old tiles, they've opted for a new roof.

I don't remember THAT in their original plan,

but it certainly appears a whole lot better.

Let's take a look inside.

Well, that's pretty impressive, too.

The front lounge is not only fully refurbished,

but there are also now patio doors leading out to the garden.

It's been a very busy one, it seems, but it's been wonderful, really,

to think back to the original house and the state it was in,

and just make it back into a really pleasant family home.

They've certainly done that and more,

tackling the cosmetic state of the house as well as the damp issues.

Once we'd got the gas fire removed,

we could see that the boiler at the back was leaking,

so that's the source of all our worry.

With the damp sorted, they could get on with replacing the fireplace

and tackling that very dilapidated kitchen.

Then there was just one more room to deal with downstairs.

The biggest thing we probably debated most

-was the room between the front door and the kitchen.

-Mm.

-What were we going to do with this space?

-Inner hall, it's called.

Inner hall, yes. I think, though,

it's now quite good, in as much as we've sectioned off...

It's provided some storage area

and somewhere where people can hang their coats.

So, having made the best of an awkward space,

it was onwards and upwards.

The two bedrooms had been fully refurbished with new doors, carpets and paintwork.

In fact, the place is looking as good as new.

The upstairs is topped off with a brand-new freshly-tiled bathroom

and a new suite with a modern shower.

It's all now spic and span,

but I think you've missed a bit there, Margaret!

The house now looks sparkling,

but there was still the small matter of clearing the garden.

Well, the first job was to remove all the rubbish and covering.

Then the next big job was to remove the tree.

And then we removed all the roots, just last week,

and got the turfing people to come and put this turf down,

so the job still to be done is to finish it off.

So, there's a bit to do in the garden,

though, overall, it's practically job done.

Although some of the work was done by tradesmen,

they were both still very much involved in the project.

Well, one of Margaret's strengths is certainly being able to organise

and think ahead and plan.

My main job is when the demand and the money comes,

to find out where we're going to get it from!

-Great partnership!

-What savings are we going to cash?

Having been together for over 50 years,

it's clearly a partnership that works.

But surely there must be some disagreements from time to time?

Do you know, I think we've done remarkably well.

-We haven't fallen out about anything here, have we?

-No.

Probably because you've been really good...

and let me have my way.

Ha! Good tactic, John. Always best to recognise who's boss.

# Paid the cost to be the boss... #

Has Margaret been able to keep their proposed £15,000 budget

under control, too?

Having a new roof obviously put a different level on that.

At the last count, it was 25,000 we'd spent,

but I know I've spent more since then.

So...not brilliant.

Oh, dear.

A budget of £25,000

with more to come

on top of their £70,000 purchase price

will take their total outlay to upwards of 95,000.

Has returning this house to showroom condition been a wise investment?

What do two local estate agents think?

My first impressions of this property now it's been refurbished are that

they've made an excellent job of the property.

Having seen the property before, it's a totally different house.

The standard of refurbishment is quite good.

They've stripped the property to bare brick, replastered

and changed the property so it's nice and modern.

That's all positive, but will it be reflected in potential returns

on both resale and rental values?

If we were looking at the rental market for this property,

I would put a figure of between 475 and £500 per calendar month.

In terms of rental value,

I'd put this property on the market for £495 per calendar month.

That's good news.

-That's about spot-on where we were hoping, wasn't it?

-Mm-hm, yes.

So, despite the overspend, those rental values aren't too shabby,

giving a potential yield of around 6%.

But how might their £95,000-plus investment fare on the resale market?

If we were looking at the sales market,

I would suggest an asking price of £99,950.

I'd put this property on the market for sale for £94,950.

Not so good news when you think about my budget!

Yes! At those resale values,

they may currently be looking at a breakeven point,

or potentially a small loss.

So what's the plan of action now?

-We're much more inclined to rent.

-To rent, yeah.

-And we were probably erring in that direction anyway, weren't we?

-Mm, mm.

There go all my nice projects!

Well, so many experiences of buying properties at auction,

and we'll have lots more for you next time.

-Make sure you join us then.

-See you.

-Bye-bye.

-Bye-bye.

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