Episode 37 Homes Under the Hammer

Hello, there! It's difficult to judge exactly

where the property market is these days

because you can't always trust what you read or hear.

The best way is to find out for yourself.

And one way you can do that is by visiting your local property auction.

Well, a huge range of properties go under the hammer.

So why not pop down to your local auction house and see what's on offer?

You may be pleasantly surprised by some of the prices.

Here's what got our bidders excited on today's show.

Hello, hello, hello! What have we here, then?

An old police station in Kent that's in far from good nick!

It's in a right old state!

I'm a positive kind of guy,

so I'm sure I can say something upbeat to say about this run-down house in Burnley.

Well, maybe not!

And I'm in London. Property prices can swing up and down

but there are always bargains to be bagged at auction.

I like it.

All these properties have been sold at auction,

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

Final time!

I'm in Chartham, Kent. It's about three miles from Canterbury

and 11 miles from Ashford.

With its own train station, Chartham is a thriving village

with local shops and even a paper mill.

# You see, it's all about the paper

# You better go get your son

# Get your son. #

The property I'm here to see is this.

It's a link-detached three-bedroomed house.

Link-detached means it's partially joined to the neighbouring property,

but it's still pretty much detached.

This little bit in the middle is what's making them joined together.

It had a guide price of 180 to £190,000

and it was originally built in the 1950s to house the local policeman.

So, is this old police house a fair cop

or a right stitch-up? Let's take a look inside.

MUSIC: Theme from The Bill

That's funny, I always thought the police lived on "Let's Be Avenue"!

But enough of the puns,

the auction lot consisted of the old police office and the property to the right,

which has been left empty for eight years.

That's a crime in itself!

So let's see what kind of damage those years have done.

Do you know what, it really is airy and spacious inside.

It feels solid, like a big house.

But it's in a right old state. Look at that!

A big gaping hole in the ceiling,

there's sawdust everywhere.

I think somebody started ripping this house apart and hasn't finished.

But look, you've got amazing rooms, a reception room here,

second reception room there.

Nice big kitchen. Loads of light coming in. Big windows.

This feels like a big chunky family house.

And I really like it.

Hmm.

Let's investigate this house further.

It's definitely spacious,

but maybe that's because there's no evidence of a kitchen in the kitchen, not even a sink.

And upstairs in the bathroom, there's no bath, just a toilet.

There are two large bedrooms and a third L-shaped single room.

But I'd say this house is probably unmortgageable.

Hello, hello, hello! What's all this then?

Well, actually,

this part of the building was used as a police office.

You can see the old typewriter to write up the police reports with.

And the police sign here.

Now, this is the link

which joins the house with the neighbouring property,

hence link-detached.

So what could you use this area for?

Well, it would be great if you work from home and need a study.

Or you could incorporate it with the rest of the house.

So lots of options.

But I think it's a real bonus room.

# Cool cops are gonna throw the book at you

# When they get a look at you

# Gonna haul you downtown. #

Before we get hauled away,

have a look at the size of this garden.

It's huge. And there's also a garage.

With so much space, surely there's something to sour this place?

Well, you'd be right. There's an electricity pylon nearby

which could put some buyers off.

As you can see, this house sits on a good plot, 02.8 acres in total.

You could knock this detached garage down and this, and put a two-storey side extension on.

But be cautious. You don't want to make this a massive property

if there isn't the local demand.

You must think about resale value.

Think about what would be acceptable to the planners.

Don't be greedy, and don't be tempted to overdevelop if there isn't the return.

With a guide price of 180 to £190,000,

we asked a local estate agent

to come down to the station for an interview!

You know, to hear his thoughts on this property.

This property is large as usually is the case

with old police houses and also stands on a very impressive plot and garden.

This house does stand close to power lines.

You can see them going over and nearby and that will be a deterrent to some buyers.

So, let's get the facts.

What kind of resale value could this place achieve once refurbished

as a three bed?

It will command a value closer to 240, perhaps £250,000 as a three bedroom.

What about the rental market?

It would probably let for £800 per calendar month.

But with regard to extending and turning this into a four bed,

the estate agent reckons that would add an extra 20 grand to the sale value.

And between 50 and £100 a month onto the rental.

But would he recommend it?

The Police Authority had planning permission refused here in the past.

I think it's best to keep this as a three bed.

If you make it very much larger, it would be out of character with surrounding properties.

Well, this old police house is more beat up than bobby on the beat,

and it's not the prettiest of houses I've ever seen.

But it has potential, there's room to improve, to extend and to add value.

So who had this old police house bang to rights?

Let's find out when we head to auction.

What may I say? 180 to start me?

I don't mind, then. 170.

Here we go.

170 I'm bid. At 170,000... 175 I'm bid.

And 180. 180 I have.

185? 185.

190 I'm bid. 195?

195. 198? 198.

And 200? 200 I'm bid. And 202?

202.

And 205?

205. 208 do I see?

208 in a fresh place. 210?

209, if it helps. Another £1,000. You're going to miss it!

209 is bid. And 210?

210 I have.

At £210,000 at the back of the room for the first time.

211. I think that was a begging one, that one.

211 I'm bid. 212?

212 I'm bid.

That was a definite no, that, wasn't it? Both unanimous at the same time.

At £212,000 I'm bid, then.

For the first time at 212,000. For the second time. You've had seconds to decide.

212,000. Third and final time at 212.

It was Michelle who made the successful bid of 212,000.

She purchased the property with her husband Charlie

who was so nervous, he had to wait outside!

Michelle is a statistician and Charlie is a helicopter engineer.

I met them both back at the property for a debrief.

Guys, congratulations. This is really good news for you.

Tell me about the auction. How were you feeling, Charlie, on auction day?

I was pretty petrified, to be absolutely honest with you.

I'd worked myself up to the day.

Never done an auction before.

But having watched Homes Under The Hammer for many years,

I thought, "I've got the game plan, I know what to do."

But when it came to it, I thought, "No. I'll let the wife do it!" I stitched her up a little bit!

So it was Charlie who set Michelle up to take the fall if it all went pear-shaped!

But interestingly, they have a bit of history with this place.

Five years ago, this police house was up for grabs.

But before they had a chance to hammer home a deal,

it was taken off the market.

This time, the couple pounced with sirens blazing

when it popped back up for sale.

What did you offer five years ago?

-250,000 it was on the market for then.

-About that.

Wow! That's incredible!

We're really pleased.

Charlie has a new-found passion for property and hopes this will be the start of a new career.

In the long term, he'd like to build up a portfolio of properties

and retire at the comfortable age of 55.

What plans have they got in store for this place?

I think we can beautify the front somewhat,

take off the old concrete roof at the front door.

We could put a pitched roof in, some landscaping as well.

Possibly knock down this joining wall and have a kitchen diner

so it would have access out into the back.

We'd also like to knock down the garage and replace it with a new one

and extend it out the back for a little workshop area.

Somewhere to keep my motorbike.

Guys have got to have toys, haven't they?

And the reason Charlie is so keen on a workshop for his big boys' toys?

The couple are planning on living here for a year or two before they sell it on.

They're also considering adding a two-storey extension to make it a five bedroomed house.

Remember, this was meant to be an investment property.

So these ambitious ideas are making me think they're keener to settle in than sell on.

This is a commercial project for us, so we have to be very mindful of costs

and not get too personal about what the house deserves, so to speak.

So we have to be very mindful.

Michelle and Charlie think the timescale will be around four to six months.

What kind of budget have they got in place?

If we were to keep the house as it is now,

possibly around the 30 to £35,000 mark.

And what if you do get permission to extend?

I can only speculate on what an extension would cost.

It would probably be in the region of 50 to £60,000 for what we'd like.

There's no stopping Charlie!

We couldn't finish filming before he got stuck in!

Bonus points for enthusiasm!

Charlie, you do seem excited about the prospect of doing this house up.

I can see a little twinkle in your eye.

Yeah, I'm a sucker for punishment.

Every time I do a project in the past, renovating properties we live in,

afterwards I always say, "Never again! That absolutely broke me that one."

Then a year later I get bored and I want to get busy with my hands again.

Charlie, good luck. I know you're excited to get cracking on it.

I can't wait to see what you do when you finish.

Lovely to meet you. Thank you very much. Thank you, Michelle.

So Michelle and Charlie have decided to put their pounds into property.

A wise decision. But there's a lot of work ahead for them.

Will they be doing that extension? And, more to the point,

will they get permission?

And will they have moved in by the time we come back?

Find out what happens later in the programme.

For the next property that went under the hammer, I'm in Lancashire.

This is Burnley.

After the collapse of the heavy industries, this has increasingly become a dormitory town

for nearby Manchester, Leeds, and properties along the M65 corridor.

With great road and rail links

and within easy reach of four international airports,

this is certainly a well-connected place to live.

That's not all. It's also a popular location for TV and film crews.

As well as Homes Under The Hammer, of course, it's been the backdrop for documentaries and films

including The King's Speech.

Queen Street mill on the outskirts of town had a starring role in the film.

Built in 1894, this building has certainly stood the test of time.

I just hope this house on the other side of town can do the same.

The property I'm here to see is about a mile south-west of the town centre.

The guide price was ten to £15,000.

That's 15, not 50!

So what exactly is going on?

You don't have to look very far to see the potential issues with the property.

This is it, a two-bed mid-terrace. As you can probably see,

the whole of this front wall, like many other properties in this street,

seems to be bowing out.

That's not a good start, really, is it?

Let's hope it gets better inside!

The years have not been kind to this house

and its kerb appeal leaves a lot to be desired.

Will it improve once I'm through the front door?

Nope, it's not good, is it?

Great big hole in the floor the moment you come in.

Front door obviously not in a very good state.

And worse than that,

look at that wall in the corner!

You can really see the bowing here.

I was hoping maybe the internal wall would be OK,

in which case you could do some remedial work to pull the exterior in.

But it looks like the interior wall is bowing out as well.

So that is basically curtains to that front wall. There's nothing you can do about that.

In terms of the room, it's not a bad size.

It's not often that I'm lost for words,

but that front wall really is a concern.

It would be the first thing I'd get checked out before I did anything else.

If you can see past the mess in here,

there's a decent-sized living room.

That leads directly into the kitchen at the back of the house

which clearly needs replacing!

From here, there's access to a back yard and also the stairs to the bedrooms and bathroom.

I'm not sure I'll venture that far!

Well, I am so excited to explore more of this darling property.

However, I have been told that upstairs it gets really bad.

Yes, worse than this!

All the pipes have been taken, a lot floorboards are up

and there are things up there that you would not want to step on.

So I'm not going upstairs.

And a really important health and safety note here.

If you are looking round properties that are in this kind of state,

make sure you wear good footwear, and please, be careful!

Well, our camera operator did indeed have sturdy boots

and she was brave enough to venture upstairs.

And what was up there? More mess, more holes

and, worryingly, quite a lot of cracks,

possibly caused by that front wall.

The bedroom at the front is the larger of the two

and I'm sure it will feel even bigger once it's cleared of all this stuff.

Bedroom two at the back of the property is much smaller.

And, like the rest of the house, has had floorboards taken up.

The bathroom is a good size,

but needs to be ripped out and replaced.

So, a lot of work to be done.

But with a guide price of ten to £15,000 is it worth it?

We asked a local property expert for his opinion.

First impressions of the property, obviously,

it needs a lot of work. There's structural movement to the front of the property

and some neighbouring properties.

So whoever takes it on has got some work to do to it.

Once those works are completed,

how much could this place achieve if let?

From a rental point of view, we're looking somewhere in the region of

£400 per calendar month.

And if the buyers decided to do it up and sell it on, how much could it achieve?

The property as it stands is probably worth somewhere in the region of £10,000.

Once it's renovated, what we're seeing at the moment

is that the values are stalling at around 25,000.

So probably no more than that. There's not a great profit in it.

I think that's why it would work as a rental, rather than a resale.

There's an expression round these parts,

"You don't get owt for nowt."

And although ten to £15,000 sounds like such a low guide price,

I think whoever bought this bought themselves a whole heap of trouble.

Let's find out who that was when it went under the hammer.

This lot came up for auction later in the day,

but interest was still high.

A mid-terraced house in need of refurbishment and I'll start at three.

Three I've got. Four?

£4,000. Four I've got here. Five. Got it.

Six. Seven.

Eight.

Nine. Ten. Eleven?

Go on. I'll take it. Ten and a half.

Eleven. And a half.

12.

12 I've got. And a half? No.

With you, sir, at £12,000.

All finished at 12?

First time at £12,000.

Second time at £12,000. All finished at 12?

We are. Sold to you, sir. Well done.

That successful bid of £12,000

was made by Damien.

He's been a builder for 18 years

and is hoping that this purchase will be the start of a healthy investment portfolio.

I met him at the house to find out how he plans to tackle that front wall.

-Damien, lovely to meet you.

-And you.

-Congratulations.

-Thank you.

-You got a house for not very much money!

-I know!

Tell me why you wanted to buy it.

As an investment. Make some money, hopefully.

What was the decision-making process you went through to decide that now is the time?

My back going, two years ago.

-Back?

-I ruptured two discs in my back.

-Ow!

-I spent nine months off work.

-Do you work for yourself?

-Yeah.

-That's not good news, then.

-Not at all. I had no money coming in for nine months.

-Oh.

-And my mother's ISAs were coming up. So I had a chat and a business proposal

and worked it from there.

So, with his mum on board, Damien's preparing to launch into property developing.

But what was it about this place that turned his head?

What did you think of it when you saw it?

All right. It weren't too bad, bar the wall outside,

it looked pretty sturdy and pretty all right, to be honest.

-When did you see it?

-I came up last week and had a look round outside.

I only got the keys yesterday afternoon at three o'clock.

-You didn't see it before you bought it?

-No.

-Oh!

And your reasoning there was?

I just didn't have time to come and do a viewing.

I'd been up and looked at the outside before I bought,

but not on this one. It was on the next street.

-Right.

-Just to look at the outside. Inside doesn't worry me.

It could need a full everything on the inside and it wouldn't bother me.

It's the outside that concerns. If that's not solid and stood up, it's more of a cost.

-Well, it isn't solid and stood up, is it?

-No, not going off the front wall, no!

No. It's not falling down, but it's not exactly straight.

-You're going to have to knock down the front wall.

-Yep.

-And rebuild it.

That's a massive job.

These are party walls, so Damien has to give notice of his intentions

To the owners of the other houses.

Not an impossible task, but a difficult and potentially lengthy one.

Does he still think he's got a bargain?

Is that why it was so cheap, do you think?

I think that's why no-one started bidding on it, cos they'd seen the walls.

But saying that, they'd bidden on the street next

and the walls look the same.

But to me, 12 grand is a buy it.

I'm not going to spend, even if I have to do the wall at the front,

ten, 12 grand max.

-Including doing the wall?

-Yes.

-To do it up?

-Yeah.

-New kitchen, new bathroom, central heating?

-Yep.

-New floors?

-Yep.

-Skimming ceilings, all that?

-Yeah.

-Really?

£12,000 is an ambitious budget for the amount of work needed.

As is his eight-week schedule.

And he's planning to do the majority of the work himself.

How much involvement is your mum going to have?

-Uh, none.

-Does she know what you've bought with her money?

Yes, she's already cried!

-Why do I not think you're joking?

-I'm not joking. She has cried.

-She cried?

-She's been in tears.

-What?

She's, um... She doesn't know anything about building or anything like that.

So she's just seen the outside and that made her cry.

-No.

-She'll be all right when it's finished and she comes in. She'll be fine.

-So you brought your mum here she cried...

-She's not been inside.

-We've only been outside.

-Fine(!) Bring her inside and she'll feel much better(!)

No, I can't bring her inside. I definitely cannot bring her inside.

If I brought her inside, then she would be devastated.

Listen, a bit of weight on your shoulders, I feel!

-But good luck with it.

-Thank you.

-I look forward to seeing how you get on.

-Thank you.

Well, let's hope his mum will be smiling and not in tears

when we return to find out what happens, later in the show.

Coming up, I'm in London and there are two essential items required to renovate this flat.

A bucket of hot water and some sponges and you're away.

Find out how Damien got on with the crumbling exterior

of this property in Burnley.

The wall cost me a lot more than I expected it to cost me, but it was worth it in the end.

But first, in Kent. Are the experts impressed with Michelle and Charlie's renovation?

This property is completely transformed.

It's a very top-end specification.

This link-detached house in Canterbury, Kent,

was built to house police officers,

but had become derelict and was in dire need of an emergency service!

Rushing to the rescue came Michelle and her husband, Charlie.

They purchased it at auction for 212,000.

Charlie is a helicopter engineer.

But with this purchase was pondering becoming a property developer.

However, I began to suspect, during their interrogation,

that Charlie may be tempted to make this investment his new home.

We'd like to knock down the garage and replace it with a new one

and extend it out the back for a little workshop area.

Somewhere to keep my motorbike.

Guys have got to have toys, haven't they? But, um...

Charlie, you do seem quite excited about the prospect of doing this up.

I can definitely see a little twinkle in your eye!

Somewhere to store the motorbike and big boys' toys is not usually so high on a developer's priority list.

So we're back after a whopping one year and nine months

to find out if Charlie is guilty as charged!

Yes, that is the same house!

Now there's a garage and just cop a load of that!

A two-storey extension has been added as well. Let's look inside.

Wow!

What a wonderful transformation!

There's no need for sirens to make this property stand out!

We can see all the evidence.

The cost of the construction work, and the high spec, high scale finish

is above and beyond what a developer would dare to invest in this property.

Come on, Charlie, the game's up. 'Fess up!

In the beginning, it was going to be a development property,

but a few months later on, we decided that it would be a house that we'd like to live in.

-So we're looking at living here for at least 15 to 20 years.

-Mm.

-Yeah.

We decided that it could be potentially a lovely house

and that we'd prefer to make this our home

and rent our property down the road that we were going to originally stay in.

This house is unrecognisable. It has a fabulous and funky style.

Charlie gave up his job to work on this renovation full time.

He stripped all the walls back to the brick,

replaced the plumbing and commissioned this beautiful staircase.

I love the idea of having a bespoke house,

having lights where you like, fittings, everything.

Because it's difficult to fit to a home and it's nice to have a home that fits to you.

Planning permission was granted to build the two-storey extension.

On the ground floor, there's a guest bedroom with en-suite bathroom.

To the rear, situated just off the kitchen,

is the living room with fantastic floor to ceiling windows and patio doors.

With extensive remodelling work done to the exterior

and even solar panels fitted,

would it not have been easier for them to build a new house?

The cost of demolishing and removing the material is very expensive.

So it was cheaper working with the existing property.

But I was tempted!

In the extension upstairs, there's a new master bedroom...

..with an en-suite shower room.

The main bathroom is also in the extension, finished to a high specification

with fabulous features that add star quality.

In the original body of the property,

there were three bedrooms and a bathroom upstairs.

Charlie and Michelle have remodelled extensively,

knocking down walls and rebuilding rooms to their own requirements.

In total, they now have five bedrooms...

..three with en-suite.

The couple had originally planned to spend up to £60,000,

but I doubt even Michelle, who works from home as a statistician,

could make the original stack up on this renovation!

We are going to be poor for a bit.

No holidays, or beer!

Well, I'll have the beer, but skip the holidays!

Charlie believes they'll have spent £115,000 on the renovation

once completed.

Added to the purchase price of £212,000

that means a total outlay of 327,000.

Certainly a pretty penny!

And a new home isn't the only change in Charlie and Michelle's life.

I'm happy to say Michelle is expecting our first child.

So that will have its own set of challenges.

I think that's going to be harder than doing this build.

So... I'll give it a go!

-It's too late now!

-It is, yeah. Never mind!

# Hey it's a real good day

# Cos baby's on the way. #

Congratulations to mum and dad-to-be.

I'm sure they'll all be very happy in their new home.

We invited two local estate agents

to give us their opinion on it.

What I particularly like about this house

is that it's relatively unassuming from the outside

but you come in, it's light, it's airy,

good use of quality materials,

fixtures and fittings, the handles, the kitchens, bathrooms. It's been done really well.

This property is completely transformed.

It's a very top end specification and a very good standard of finish.

This house was purchased as a financial investment,

but quickly became an investment in Charlie and Michelle's future happiness.

The estate agents believe this property could achieve

£1,250 per calendar month if let,

giving the couple a rental yield of about four to five per cent.

Bearing in mind their total outlay

of 327,000,

what could this place sell for?

We're still in a quite volatile market, so it's difficult to gauge.

I would normally say £450,000.

I think I'd probably come down to about £420,000.

There's landscaping to be finished and final snagging to be done,

but I think this would be about 450 to £475,000.

Those figures would give Charlie and Michelle a pre-tax profit

of between 93 and 148,000,

minus the usual selling expenses.

Michelle and Charlie have worked hard to create a home for them and their soon-to-be-born baby.

Are they pleased to hear that their new home is also a wise investment?

-I'm pleased with that price.

-I'm absolutely over the moon.

But as we're going to be living here for 15 to 20 years,

it's not such a big deal, knowing the value,

-but it's...

-It's still nice!

-It's still nice, yeah!

It's funny how one street can take you on an architectural tour through the ages. Here,

we have examples of Victorian housing.

A sidestep to the left and we are transported into the swinging '60s.

One more turn and look, we're in the '80s.

Whoever said time travel was impossible, they obviously haven't been to Poplar in East London!

But from which era is the property I'm here to visit?

The auction lot I'm here to see is in this block.

It's a one-bedroomed flat and it had a guide price

of £110,000.

Fantastic value for this part of East London.

Thankfully, it's on the ground floor.

One-bedroomed flats in this building sell for around £150,000.

These flats are less than two miles from Canary Wharf,

where a one-bed flat can cost around 250 grand.

So Poplar can be popular for those who work in the financial district

but can't afford to live there.

It's always good to have an intercom system. I like that if you've got a flat,

especially if you're on the ground floor.

And if you look past all the newspapers and letters scattered and a bit of the mess,

you've actually got a really solid flat here.

Paint, new carpet, new curtains,

a bucket of hot water and some sponges and you're away.

So far, so good. This is a really good space. You could have this as a bedroom

or a lounge.

I like it.

At the end of the hall is another good-sized room.

Again, looking past the mess it's in a reasonable state.

All it needs is new flooring and a lick of paint.

The kitchen is perfectly serviceable.

While the units and worktops would not win any style awards,

they are in good order.

It also needs new flooring, but this flat is a perfect example of a fast in-and-out job.

If a developer picked this up for around the guide price,

got started quickly, did it up and let it out,

there is money to be made here. And that's the name of the game in property development.

But there are other expenses to take into consideration.

This flat comes with a really long lease.

There's 121 years left, so that's fantastic news.

However, the bad news is, this flat has a very high service charge.

It's £1,100 per year

and there's also a £250 ground rent which is payable each year.

This will undoubtedly put some people off,

so when you buy a leasehold property,

make sure you're aware of all the additional costs before you buy.

At the rear, there's parking, always a bonus in London.

And a kids' play park.

As we all know, property prices can swing up and down.

The recent economic climate

has seen prices slide, but the market is slowly beginning to pick up.

And Poplar has an advantage when it comes to property sales shining bright.

This flat is located in a part of London

which has been designated as a disadvantaged and regeneration area.

This means the stamp duty threshold

doesn't kick in until £150,000

as opposed to the usual £125,000 mark.

This encourages investment in the area

and it's an incentive to tempt first-time buyers onto the market.

It's also incredible news for new owners.

The lower stamp duty could have capped the price here

and now it's been upped, hopefully the sales price will go in the same direction.

Result!

We invited a local estate agent to give us his opinion

on this property, which had a guide price of 110,000.

The property itself is very spacious

and it does have some modern cons.

However, it will require quite a bit of aesthetics work to put back together.

How much could this place achieve on the rental market once renovated?

If the property was to be refurbished and done to a reasonable standard and furnished,

I imagine it would rent for between 900 and £1,000 per calendar month.

Wow. That is a very impressive rental valuation

which could result in an excellent yield.

What if it was sold on?

Once the property has had some renovation work done,

I would imagine it would sell for £150,000.

This really is a fantastic one to go for, in my opinion.

And with such a high yield, I know what I would do.

Lightly renovate the place and get it on the rental market.

There's also some money to be made if you wanted to sell this on.

But I would be inclined to take the long-term view with this property

especially as there's so many signs of regeneration going on in the area.

Let's see who went for this as we go to auction.

Start at 100.

I'm not going below 100. 100 on my right, sitting here. 100,000.

102.

104. 106.

108.

110.

112.

114.

115. 116.

With you. 116. 117?

116. First time.

117 with you.

Saw you first. 118?

119.

120.

121?

120 with you. 121? Someone else coming in?

If not, 120.

First time. Second time.

Third and last time. Have you all done?

Sold 120.

And it was Shafi who made the successful bid

of £120,000.

Shafi works in IT support for a large department store.

But property is where his passion lies and he currently has a small portfolio of buy-to-lets.

Shafi, great to meet you. So how was the auction?

The auction was great, actually.

Early morning. That was the only part that I had to wake up early to go there!

I'm used to auctions. I go quite regularly to auctions.

-I was waiting for the hammer to go down.

-You wanted this, did you?

I was expecting a bit higher than what I got it, actually.

But I'm lucky to get it on this price, I think.

So you paid £120,000. The hammer went down.

-How much did you expect to pay realistically?

-130.

I would go up to 130.

-So you're ten grand in.

-Ten grand in. That's a good start.

-Good start to your very early morning!

-It was worth me getting up from bed!

The early riser has reaped his reward.

Shafi's already ten grand under budget.

Will he invest that saving by renovating this place to a higher standard

than he originally planned?

What are you going to do to upgrade it?

I'm going to make it a bit more fancy to the flat.

Maybe change the floorings, a bit more cosmetic work, painting.

There isn't much more to do. Reorganise the kitchen,

try to put a dining table there, so if somebody wants to use it as two-room, they can,

because of shortage of properties.

So you'll try to convert it to a two-bed flat?

Not convert, but just give the option to people

if two friends want two separate rooms, they've got that option.

Rather than using the living room.

If they've got a dining space they can use in the kitchen, that's great,

so they can use it as two rooms.

Do you do this full time?

I do part and part. I work in the computer field as well,

looking after computers.

So I do half and half. I'll work three days at the other place and then here.

-So it's IT and property.

-Property.

-You prefer?

-I prefer property!

-You make more money from?

It's not more money, it's what I enjoy.

'I'm happy to hear Shafi's property development puts a smile on his face.

'But will his budget put a smile on mine?'

What's your budget for the work?

When I actually saw it, I had a very low budget.

But when I saw the heating system, I'm not sure if the boiler's working

and there's a lot of piping needing to be done.

So I would say between five and £7,000 maximum I would spend to make it up and running.

Five to £7,000.

-I'm presuming you're not going to be changing the bathroom suite.

-Maybe flooring.

How quickly will you be able to turn this place around?

Refurbish I would say is a weekend job.

-So I'm hoping by...

-What?! Whoa, whoa, whoa!

-A weekend job?

-Yes, that's what I'm expecting.

-You can turn this place round in a weekend?

-Hopefully.

-Well, that's mighty ambitious, I have to say!

-Thank you.

What has encouraged you to be so motivated?

It actually was Homes Under The Hammer.

That's why. That's the only programme maybe I watch on telly!

-Yes!

-In my busy life.

-Really?

-Yes.

-What is it about Homes Under The Hammer?

It's all about people's passion, people creating new things

and when they see the difference, they enjoy looking at that

and most people I see are happy so I thought, "Let me get in there. I'll be happy."

-Shafi, I'm really excited for you. Congratulations. Well done.

-Thank you very much.

That is the quickest turnaround I have ever heard of.

Especially if Shafi wants to sell this on.

I don't think a weekend will be enough and he certainly won't achieve the top price that way.

What will he decide to do? Rent or sell?

You can find out which way he goes later in the programme.

Now, the seasons have changed,

but have the properties changed as well?

Or have they stayed exactly the same?

It's the moment of truth. Let's go back and find out.

Let's make our way back to Burnley where I viewed this two-bed terrace

which had a guide price of between ten and £15,000.

And what a state it was in.

The exterior wall looked as though a mild sneeze might blow it over

and bless me, the interior was just as bad.

So who was up for tackling the unenviable task of this renovation?

Well, the man for the job was builder Damien.

He hadn't viewed the exterior or the interior before the auction.

But even once he had, Damien was still hopeful this purchase

would be the beginning of his property developing career.

With financial help from his mum, he paid £12,000 at auction for this terraced house.

What did his mum make of that?

How much involvement is your mum going to have?

-None.

-Does she know what you've bought with her money?

Yes, she's already cried.

-Why do I not think you're joking?

-I'm not joking. She has already cried.

Oh, poor Mum!

So, have her tears of sorrow been replaced by tears of joy?

Eleven months later, we're back to find out.

-#

-So mama don't cry cos I know

-#

-I'm gonna make your bitter turn sweet

-#

-Mama don't cry no more

-#

-Oh, better days are there for sure

-#

-Mama don't cry...

-#

Fantastic!

I think Damien will have made his mother very proud

with this terrific transformation.

He has rebuilt the front wall from the ground up.

It must have been a monumental task.

If you can remember before, the floor was all rotten,

there was no vestibule. So I put a solid concrete floor in

and a vestibule so you don't lose any heat.

He has certainly not cut any corners.

If you can remember, this wall was totally bellied out, unsafe.

So I rebuilt the whole wall, reinsulated it all,

so it's all solid and totally insulated now.

The wall cost me a lot more than I expected it to cost,

but it was worth it in the end.

I know it's solid now for at least 25 years

and it'll not be going anywhere! So I'm happy with it.

And so he should be.

Let's take a look upstairs,

which was, to put it simply, a great big mess.

As you might expect, Damien has continued his good work.

Just like downstairs, all the walls have been repaired and replastered.

The floorboards have been fixed and new carpets fitted

as well as skirting and architraves.

He has also replaced the windows when beyond repair.

This house has been renovated top to bottom with all new electrics and plumbing.

Damien has even been busy in the back yard.

We had to dig up the drains. The drains had been smashed.

As regards the roof, we've re-done the chimney, re-done the lead round the chimney

and repaired any broken slates.

So that's all sorted now.

My goodness, I'm exhausted at even contemplating all this effort.

Damien still has a few finishing touches to do,

but he's waiting till the property is occupied before fitting the boiler and radiators

to ensure their safe-keeping.

He had hoped to have his house ready to let in eight weeks.

But it's taken him 22 weeks in total,

fitting the renovation in around other building work.

So, over-schedule. But what about his 12 grand budget?

Budget-wise, it's gone well over. The wall cost more to build.

The concrete floor cost more than I expected.

As you're ripping things out, you find more things to do.

So the budget never sticks to, really, but it was OK.

David has, in fact, spent £22,000 on the renovation.

Adding that to the £12,000 purchase price

means he's spent £34,000.

There is a ceiling price in this area,

so let's hope he hasn't exceeded it.

We invited two local estate agents to give us their opinion.

'The market is for rental at the moment.'

So a good, clean, straightforward property, no frills, it'll rent out all day long.

The features I'm most impressed by is that it's a nice clean and tidy finish that's been done here.

The kitchen and bathroom are nice and modern.

So it will look very appealing to someone who comes in and wants to live here.

The estate agents believe this to be a prime rental property.

How much do they think it could achieve?

I think the rental value will be in the region of £300 per calendar month.

It will rent quite readily at 375 to £400 per calendar month, tops.

I think that's OK. I was expecting 350 a month.

So it lands slap bang in the middle. I'm fine with that.

Those figures give Damien a yield of between 10.5 and 14.5 per cent.

Even at the lower end, that's a fantastic return.

Bearing in mind his total outlay of £34,000,

how much might it achieve if sold?

The property isn't in the highest value area.

I'd expect to be asking, if he goes in the current market, £30,000.

I would think you'd be looking somewhere in the region of £30,000.

Ooh.

That is a definite shocker.

A definite shocker.

That was a lot less, a lot less than I was hoping for.

In order to get a buy-to-let mortgage on this place

which would have allowed him to pay back his mother's investment

and provide working capital for his fledgling property development business,

Damien really needed a higher valuation.

To continue the business any further,

it needed to be valued at more than that.

I've put far too much money into this house.

Far too much.

This property has been reborn because of Damien's hard graft

and that is an achievement to be proud of.

He has learned a hard lesson on his first project.

A developer needs to know the current market values and spend accordingly.

But this house will do well on the rental market

and make someone a very comfortable home.

So what's next for Damien?

Plan in the future is to keep my building business going.

Make some more money

and recoup what I can through rent and so forth.

Hopefully the climate will change, the banks will get better

and the housing valuations will go up.

Let's pop back to Poplar in East London

where part-time property developer Shafi purchased at auction this one-bedroomed flat

for £120,000.

Looking past the rubbish-strewn floor,

I thought Shafi had made a wise investment.

Poplar is a prime rental area

where one-bedroomed properties can rent out for as much as £1,000 a month.

And this flat was in good order.

With a lick of paint and new flooring,

it could be ready to let or sell in double-quick time.

But I was surprised by Shafi's super-speedy schedule.

How quickly will you be able to turn it around?

-Refurbish I would say is a weekend job. So I'm hoping...

-What?! Whoa, whoa, whoa!

-A weekend job?

-Yes, that's what I'm expecting.

-You think you can turn this place around in a weekend?

-Hopefully.

-That's mighty ambitious!

-Thank you.

A mere 17 days after we last saw Shafi, we're back.

While I admire his ambition to renovate this property in a weekend,

I'm going weak-kneed at the thought!

# Can't you see

# All I need

# Is that 48 hours with you

-# Over the weekend

-Over the weekend

# Can't you see it's all I need? #

It did finish by a weekend. Monday it was finished.

So Friday, Saturday, Sunday and Monday, all was done.

Hmm. Sounds like a long weekend to me!

But I've got to hand it to him and his team of trades people.

That's impressive.

It's ready to rock'n'roll and Shafi can start reaping the rewards.

I've done all the flooring, revamped the walls,

done a lot of tidying on the floors, the bathroom, changed all the radiators

and getting everything in good order.

In the kitchen, Shafi has saved time and money

by keeping the serviceable units and worktops

but has laid new flooring.

He removed a corner unit to allow space for a table

so the property could be rented out as a two-bedroom with a dining kitchen.

Let's see what Shafi has done with the bathroom.

I've done a little bit of rearrangement on the bathroom.

I've moved the sink away to give a bit more space.

In a bathroom, people like to have a bit of space.

And I've put a heating system so it stays warm,

or if someone wants to dry something, they can do it.

And the main thing I can see people need is a shower. Every day people are in a rush,

so I've installed an electric shower and tenants will be pleased with that.

And cleaned and repainted the whole place to make it a better bathroom.

Shafi has a regular team of tradesmen he employs on his projects.

Despite the tight timescale on this renovation, was it trouble-free?

The biggest job was, actually, to get the central heating.

I didn't like them going round the walls.

I wanted them underfloor because I didn't want to see any pipes exposed in a flat.

So they had to dig the floor up.

When they started digging, there was a lot of original pipe being exposed,

so they had to change the direction a few times.

So that was, when I saw it, hard work for them.

But this is what I wanted and that's what they did.

So that's how the flat looks much nicer.

Budget-wise, did Shafi spend more than he planned?

My budget, I thought it was going to be between five and seven thousand.

The reason being the boiler had to be changed.

But actually, I ended up below 2,000 because the boiler was working.

I had to re-service the boiler. The electricity was fine.

I got the electrical certificate.

So that's why my budget was under 2,000.

I'm pleased with it.

And he has every right to be.

That puts Shafi's total outlay on this property at below £122,000.

Now all he has to do is let it or sell up.

The good news is I've got a buyer and I've got a rent, a tenant as well.

So I just need to make my mind up which direction I should go.

Let's see if two local property experts

can help Shafi make up his mind.

I believe the property does present itself to the rentals market.

Whilst that will allow the owner to rent the property easily,

I think it will have an adverse effect when he comes to sell it.

There are many properties like this one on the market

and there is nothing here to have this one stick in your mind.

I'd say that the finish is of an average condition, really.

Ideal for the rental market.

The market is really buoyant at the moment

so I don't see any problem finding people quite quickly.

The estate agents appear to regard rental as the best option.

How much do they believe this property could be let for?

The property would very likely rent between 900 and £1,000 per calendar month.

In my opinion, the property should be marketed for rental at £900 per calendar month.

Those figures would give Shafi a yield between nine and ten per cent.

Bearing in mind his investment of just under 122,000,

what do the estate agents believe this property could sell for?

We would put the property on the market for £150,000

and we would look to invite offers of around that figure.

In my opinion, the property should be marketed

at £150,000

and we'd look to achieve in excess of 140.

Shafi has a firm offer on the flat of £150,000.

That would give him a pre-tax profit of around 28 grand,

minus the usual selling expenses, of course.

So, has that helped him reach a decision?

I just need to think about it, because the rental income is great as well.

But it will take me six or seven years to pay off the whole amount,

and the rest is the only profit.

So that's the only thing putting me off not selling it.

Since filming, Shafi has accepted the £150,000 offer

to purchase the property.

The deal will be finalised in three months,

and so Shafi, ever the entrepreneur,

has arranged a short let meanwhile

to cover that period.

Well done indeed!

Well, that's it for today's show.

We'll have more news from the auction rooms around the country for you next time.

-Yes. Make sure you join us then. Goodbye!

-Goodbye!

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