Episode 4 Homes Under the Hammer

-Hello and welcome!

-Now we all know that the value of properties

can go down as well as up.

So it pays to buy at the right price in the first place.

Yes and one way you can do that

is by buying your home under the hammer.

If you're sitting at home, thinking you'd like to have a go

at bidding at auction, maybe now is the time to do it.

The market is always changing so you have to judge

when is the right time to buy.

Today's bidders have already put their money on the line.

Here's what they bought.

I'll be discovering that this three-bedroom house in Derby

has a surprise out the back.

You have got space and that is great news.

Talking of surprises, I'm taken aback by the electrics

at this place in Kent.

Look, a lovely old Bakelite switch.

Gosh, these are so old!

And this Cumbrian property is pretty dated from the outside

but is there potential inside?

Phew! All in all,

I think it's great!

All these properties went to auction.

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

-when they went under the hammer.

-Sold!

This is Derby, the city that sits right in the middle

of England on the banks of the River Derwent.

I'm about two miles outside Derby city centre

in an area known as Mackworth.

In the 1950s this estate was built

and it is now one of the biggest in the country.

But it's quite well-designed, there's lots of facilities

for local residents and lots of nice open spaces,

so a good place to live.

This estate has a pleasant feel to it.

It's a very popular area of Derby

with most of the houses being owner-occupied.

One thing you have to be aware of in an estate like this,

is that there's a possibility of the houses being

made of non-standard construction, that's basically concrete blocks.

Intrinsically, not necessarily a problem but the problem occurs

when you come to get a mortgage because a lot of mortgage lenders

will not lend on non-standard construction properties.

The good news is the property that was auctioned on the right here

has had remedial work done -

basically bricks to replace the non-standard construction.

The trouble is, the one attached to it

is still the original non-standard construction.

You can see the concrete blocks.

Not sure if that's an issue or not.

But for now, it's very good news. This one is OK.

# I got some good news and some bad news

# For you today. #

The local authority bricked around the properties as part

of improvement work carried out around the area.

But the house next door was privately owned at the time

so did not benefit from the work, although, of course,

this may not cause any problems.

With a guide price auction of 65,000, I'm keen to see more.

Let's hope the inside

has had its problems sorted out as well.

Through the front door, into a little, sort of, entrance area.

It's quite nice.

You're struck by this amazingly red carpet the moment you walk through

the door but in general it looks to be in pretty good condition.

It doesn't smell damp or anything like that, so that's good.

Fairly standard layout, passageway down through to the kitchen

into a lounge/living room area

that's obviously been knocked through at some point

to create a really nice open space.

The only thing I would want to do is to put some huge great

doors on there, maybe one of those sliding bi-fold door scenarios.

That would be spectacular.

Apart from that, I'm straight away thinking,

"This is a good property!"

# Good news - it'll stay with you All of your days

# Good news - it'll keep you In all of your ways. #

Upstairs there are two decent bedrooms at the back and front

of the property and another much smaller bedroom over the stairs.

The bathroom has been adapted

into an accessible wet room

and other than it being a little on the small side,

the kitchen is usable in its current state.

However, like much of the house,

a bit of money spent upgrading it would make a huge difference.

So, at the rear of the property, and joy of joys,

something which turns this from a fairly nice

but typical three-bedroom semi

into a really lovely family home.

Look at the size of this garden. Absolutely superb.

You've got an aviary if you want to keep birds, little shed.

You've got a pond, more, sort of, sheds at the bottom,

space for growing your own vegetables.

You might want to put this to lawn, knock it down,

get rid of the pond, but either way

you have got space and that is great news!

But the garden's an expected bonus and a real selling point.

Some French doors leading out from the living room would be

a great addition and an improvement I'd certainly want to do.

With an auction guide price of 65,000,

I think this place is potentially great value.

To see if he agreed,

we asked the auctioneer who sold the property for his opinion.

This will be a good buy for somebody.

You'd probably look at refitting

kitchen and bathroom,

you'd look at central heating,

you may have to look at the wiring, you'd look at decorating

and some of the windows.

How much is the house worth in its current state?

I would value this property at £70,000.

And with some work done to bring it up to scratch?

I'd say that once renovated,

it would have a value of probably late 80,000,

maybe 87, £88,000.

What about renting it out after those improvements?

The sort of price you'd achieve

when the work is done, would be in the order of £525 a calendar month.

This is a really great house that just needs a bit of effort to

turn it into a potentially lovely home.

A good price too, in a nice location. What's not to like?

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

60,000 to start.

60. Who's got 58? 58? He has. Thank you.

59 is bid.

At 59. 60,000. At 60.

61, I've got. 61.

62? 62 is bid.

63. 63, 64. 65.

At £65,000, it's in the market, 66...

67, 67, 68. 68?

500? No?

At 68,000 on the right, 500 somewhere else?

It's in the market, we're selling it. The bid is £68,000.

For the first time, for the second time,

third and last opportunity.

Sold at 68,000. Thank you.

It was husband and wife team, Ed and Vicky

who made the successful bid of £68,000.

Ed's a self-employed electrician and Vicky helps him

with the running of the business.

This is their first investment property

and I met up with them to find out more about it.

# We'll always be together

# Together in Electric Dreams. #

-Ed, Vicky, lovely to meet you both.

-And you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

We were looking for some rental investments.

We liked the area, so we thought

if it was in our price bracket we'd go for it.

Is this something you've done before?

No, we've not done a rental investment before

so we're new to it.

So what was the driving decision? Why now?

That's down to me really.

My little boy started school in September.

So I was looking for something to occupy my time,

keep me out of trouble and this was it.

-Yeah, it's all down to me!

-Right!

And the idea then, Vicky, tell me more, is what?

You're going to be at work, Ed, and you're doing the project?

Yeah. My background is architectural

so I'm used to houses and property,

so yeah, I'll be doing as much work as I physically can,

keeping me out of trouble, organising, buying things, doing...

yeah, occupying my time that way.

They're taking the plunge into the world of property developing.

As Ed's an electrician they're off to a good start so far.

However, this was a last-minute purchase

as the only decided to go to the auction a few hours before.

-So had you seen it before the auction?

-No.

-No?

-We'd had a drive past.

-We drove past on the Sunday before.

Put the kids in the car, drove past, wound down the window and said,

-"Yeah, that looks good."

-That was the extent of your survey?

-Yeah.

Tsk tsk.

-Had you actually seen inside?

-No.

-Wow!

We drove past another one but that was too much money!

This isn't, sort of, the most thorough thing you could have

done in preparation for buying, is it?

We looked on the internet on Sunday night to see values.

-See what they'd rent for.

-What about the legal pack?

We didn't consider that, really.

No, we didn't read that!

You know this is breaking all the rules, don't you?

But it's more fun that way!

More fun and potentially disastrous!

It could have turned horribly wrong, you could have found there was a covenant on it,

or it was leasehold instead of freehold, all sorts of things.

We took the view there's hundreds of houses very similar in the area

and if it applies to one, it'll apply to them all

and we would have probably heard of any problems.

Without doing the research on this place,

Ed and Vicky could be in a spot of bother,

if they weren't quite so lucky.

So now they've got it, what are they going to do with it?

So, what's the plan for it?

We're in for a look around, probably a bit of a refurb.

The kitchen and bathroom probably need changing.

Obviously a rewire if it needs doing.

It looks like it needs central heating,

perhaps new windows if we can afford it.

Patio doors out to the garden or anything like that?

-Yeah, we had considered putting patio doors in.

-If it's in the budget.

-Yeah.

What about outside? You've got a very large, impressive garden at the back, haven't you?

-If you say so.

-Have you seen the garden yet?

-No.

I'll take you there in a bit. I'll show you the house you bought, shall I?

So, with that new information in mind,

what do you think you might do with the garden?

Clear it and try and make it low maintenance

so if you've got tenants in, then it's not so much work to do.

Just come in and do the basics and rent it straight back out again.

Ed and Vicky intend to spend three months renovating this house before renting it out.

In the future they'd like to do another three properties

that will eventually be their pension plan.

As this is the start of an investment portfolio

I'm glad to hear they've worked out a budget, well, sort of.

-OK, what's the budget?

-Between 8 and 12.

-Right.

Four grand contingency, what's that for?

We haven't actually seen it.

-We don't know what there is to do.

-We don't know what there is to do.

There is always that, yeah!

Once we've decided what there is to do, then we'll have a better idea.

Having seen it now a bit,

where are we in the 8 to 12 range?

I think we'll be able to afford new windows and hopefully get it in at ten grand.

Congratulations, good luck. I'm looking forward to seeing how you get on.

-Thank you.

-Thank you.

Now, look, I know things may have turned out OK for Ed and Vicky in this property,

which not only they didn't see before they bought it, but they didn't read the legal pack.

But for every one person who it turns out OK for,

there are ten people who wish they'd taken the trouble to see the property

and read that all-important legal pack.

Just don't buy a property without doing it, OK?

In the meantime, they'll probably get on quite well sorting this place out.

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

The next place that went under the hammer

is in Kent in the town of Rainham.

Here's today's offering. It's a bay-fronted, 1930s, semi-detached house.

It's got three bedrooms and three reception rooms

and the guide price is 130-135,000.

Not bad from the outside.

If you look closely next door up there on the roof,

you can also see there is the potential to extend upwards.

But will you need to? Let's go inside and find out.

The property is in classic 1930s style,

bay-fronted with a brick bottom, a rendered top half

and wooden window frames that look original.

I really like 1930s houses.

And this one has got so much character.

You can see it hasn't been touched in many years.

Really old-fashioned wallpaper,

but look at these lovely features like this post and this panelling.

And look, a lovely, old Bakelite switch.

Gosh, these are so old.

That tells me this house probably needs completely rewiring,

so money to be spent there.

There's a really cosy sitting room,

a lovely old fireplace that's tiled - not to everybody's case, but I quite like that.

You've got typical of the 30s era that lovely, bay fronted window.

Got another sitting room towards the back of the property.

The good thing about this kitchen is you've got a lovely view of the garden.

It's not a bad space, but I wouldn't call the units in here a kitchen.

You've got to think about installing something new.

There are quite a lot of things to think about.

This house reminds me of my childhood home.

I grew up in a house just like this.

It's got quite a nice feeling this place, I like it.

# Yeah, I like it... #

The house had a guide price of 130-135,000.

Whoever bought it will need to budget for a complete refit of the kitchen,

plus a potential rewire and replumb.

There's no central heating either and I'm concerned about some cracks I've noticed downstairs.

The second reception room, next to the kitchen, is well proportioned.

'It looks out onto the garden which, like a lot of 1930s properties,

'is a good size.'

What is on offer on the first floor?

Most people today are making the most of their space

in their houses and one way to do that is by having a loft conversion.

It will certainly add value to your home.

We can see the next-door neighbours have already done that.

Judging by this space up here, I think it would be a good idea.

You have not got the biggest bathroom in the world. Three small bedrooms here.

Do you know what?

Before I start going on about loft conversions, look at this,

1, 2, 3, 4 huge cracks.

Alarm bells are ringing in my head. Dare I say the dreaded S word?

Subsidence.

I would certainly get that looked at. Get a structural survey

done before anything happens.

Outside, there are more worrying signs that there could be

some serious problems here.

'If they are as bad as I suspect, this house may require underpinning.

'That could present big problems as mortgage companies

'are reluctant to lend on properties with a history of subsidence.'

That means this one would only appeal to a cash purchaser.

It is not all bad news.

I found a note which gives an interesting insight into this place.

Walking around this property,

you can tell this house has just frozen in time.

You can feel the history here.

This is the story of the previous owner. Her name was Mary.

This was left here by her granddaughter for the new owner to find.

Mary lived in this house for 56 years

until she passed away at the ripe old age of 106.

It says it all down here.

She remembered the Titanic sinking when she was 10 years old.

When she was a teenager,

she waved the young soldiers off to the Great War.

It says she had seven children, 22 grandchildren,

14 great grandchildren, 2 great-great grandchildren.

That is 101 descendants at the last count. Wow!

Mary was loved and this house was also well loved.

I knew it had that nice happy feeling.

Will this be a happy home for the person who bought it at auction?

We invited a local estate agent to come and have a look

at the house which had an auction guide price of £130-135,000.

What does she make of the place?

The biggest concern is the cracks and there is an awful lot of them.

Whoever decides to buy this really must have a structural survey

and be very careful.

'It looks as though probably the drains have gone

'and it is still moving.'

The size and layout here is typical 1930s

so would an extension or a loft conversion be desirable?

It would be a great idea if you could go into the loft

and give it that bigger bedroom.

And go out to the back to give it a bigger kitchen and maybe conservatory.

Assuming the structural issues were sorted out,

how much could the house be worth after a full refurbishment?

I would look at selling the property

somewhere between £200-220,000 in the current market.

With a bedroom in the loft and the extension on the back,

we could be looking at £250-275,000.

Maybe more as the market improves.

I think this house is lovely.

It has got charm, character features

and loads of extending potential, but it has also got some

subsidence issues which will have serious budget implications.

Who was brave enough to tackle this cracking property?

Let's find out in the auction room.

The last lot of the day is a bay-fronted semi.

120 to start me. At 120, I'm on the way. 120, thank you. 125 now.

125 at the back. Thank you. 130, on the left.

135? 132, I've got sitting.

It's clearly a popular lot with a lot of interest in the auction room.

We rejoin the bidding at £160,000.

£160,000 with the gentleman with the dark checked jumper on.

161. I've got him first at 162.

I'll take 163 from you.

164, 164 I've got. 165 I've got. 166. 167.

If you want to bid again, it is still there. 168.

168, he does. 170, what does that mean?

168 then again sitting, for the first time.

Half?! 168,500.

170? 170. £170,000, it will be sold to the gentleman.

For the first time, second time, if you're sure you're all done,

Third and final time, no other chances to buy it.

It is yours for £170,000. Well done.

After that lengthy auction, the final successful bid of 170,000

came from Paul who currently lives in Gillingham with his wife Bev.

It was Paul and his son Gavin who I met at the house.

# Get your motor running... #

Paul is a Hells Angel who used to have a small building company

but he now spends his time representing his motorcycle club

at rallies all over Europe.

-Congratulations, guys.

-Thank you.

-Paul, you were at the auction.

-Yes, I was.

-Why did you want to buy this on auction day?

-I got married last year to Bev

and we wanted to buy a place for our own home together.

For both of us, it is the third time getting married.

We preferred to buy somewhere that didn't need any work

doing on it, just move in, but because this one has got a lot

more potential, for the money, it was a better buy in the end.

-Gavin, you weren't there, were you?

-No, I wasn't.

Are you going to be helping your dad out with all the renovations here?

I'm going to be helping people do bits wherever I can for experience when I'm going to college.

What are you going to college to do?

I'm going to train in carpentry.

I used to work in carpentry before I built summerhouses and log cabins.

I've got some experience.

I'm going to go to college so I can get the qualifications I need

so I can hopefully start my own business

and take after my dad owning my own business.

Paul, when you walked in here for the first time and you viewed it,

what did you think?

I was a bit stunned when I first walked in. It's like a time capsule.

It's like a museum because of the age and style of everything.

When I found out the history, it was great. That explains a lot of it.

It's a touching story and it's beautiful that the granddaughter

wanted whoever took on this property to know all about her grandmother.

What I find amazing is that it is in such good condition

apart from the cracks.

What do you know about the cracks in this property?

The cracks, when I came to see what the problem was,

I looked in the drain and saw it was broken.

I will fix the drains, but, as far as the subsidence goes,

I will underpin the corner.

I'd like to put an extension out the back.

When we put the concrete in the foundations, we would be underpinning the back half as well.

Paul will have to get the work inspected and certified

to satisfy any mortgage lender that it has been carried out.

He has funded this purchase with some inheritance money.

To do all those cracks, it is about two or three days.

He plans to install underfloor heating in the new extension

and throughout the ground floor.

Outside, he is going to reduce the front garden by half to

provide some off-road parking.

At the back, Bev is planning a vegetable plot and pond.

What else are you going to be doing to this property?

An extension out the back as we have said.

I want to extend the roof

because I want to put a loft conversion into a room up there.

Are you going to be doing a lot of this work yourself?

Some of the work myself.

Most of the time, I'll be overseeing the work that is done.

How much do you think all this work is going to cost you?

That is a fair bit of work to be getting on with.

It will cost round about... 25,000, maybe 30,000.

There will be other bits to be put on because you want a nice bathroom and kitchen.

That will put another 10 or 15 on it.

Paul will have to await planning permission for the extension,

but he intends to start the other work straight away.

When do you guys see yourselves moving in?

I would think, if we get stuck into the work,

I think it is going to take four or five months.

Guys, good luck with this project.

-Thank you.

-You've got a lot of hard work ahead of you.

-I think it's going to be great. Well done.

-Thank you.

-Good to meet you.

Paul and Gavin have got their hands full with this house.

Every single room needs renovating,

there is structural work that needs doing.

I think he is underestimating that subsidence problem.

The budget, what is it? 25, 30, 50,000?

I think it could go even higher.

Find out later in the programme what is really behind those cracks.

Coming up, has this Cumbrian house got any nasty surprises for me?

I'm not seeing anything I don't like so far. In fact, it's pretty good.

Let's hope it carries on.

Back in Kent, there have been problems with the renovation.

We had already done the underpinning by the time

we put the extension out the back.

Otherwise, we would not have bothered.

In Derby, an unexpectedly keen tenant slashed the deadline.

We had to get the whole thing done and completed within four weeks.

Back to the Mackworth area of Derby where electrician Ed and wife Vicky

purchased this three-bedroom semi at auction for 68,000.

In that line of work, Ed may be used to the odd shock,

but he certainly gave me one

when I discovered they had not viewed the house prior to buying it.

You've got a very large and impressive garden at the back, haven't you?

-If you say so.

-What do you mean? Have you seen the garden yet?

-No.

-I'll take you there in a bit and show you the house you bought.

That would be nice.

# Ah, it's shocking it's electric...#

Once we have finally had a look around,

they were pleased to find there was nothing more suspect than

dated decor and a kitchen and toilet crying out to be brought up to date.

Two months later, we returned to the house to find out if, by buying it,

Ed and Vicky were two bright sparks or did they have a few loose wires?

I am pleased to say it is the former.

We have done quite a lot to the house.

It has been rewired, central heating, plumbing. Most major things.

One of the biggest changes is the new modernised kitchen which

is a much more open and bright space.

We have done a lot of work in the kitchen.

We took out the cupboard with the water cylinder in.

That has made some fridge freezer space.

We have put new units throughout.

We have a new cooker and hob, new tiling and new floor.

I am really pleased with it.

I think it has come together really well in here.

I think she can safely say that about the new bathroom upstairs as well.

We did the bathroom.

We took out the disabled suite and it's completely retiled,

put in a new bathroom suite and that all looks very smart now.

The bedrooms, it was cosmetic. We took out the old gas heaters.

The central heating has gone in.

We decorated it in magnolia and the tenant has made it lovely.

She has put her own stamp on it and made it her own.

It looks really great.

You did hear Vicky right. A tenant has already moved in.

How did that come about so quickly?

It was the day we got the keys.

Her father came across, knocked on the door and asked

if we wanted to let it. I said we did.

They came back round the next day and said they would have it there

and then so that was great.

We had to get the whole thing done, completed within four weeks.

We did it in three and a half weeks.

We had the carpets laid

and left a day or two for the tenant to start moving in.

Opportunity really did come knocking for Ed and Vicky.

Securing a tenant so quickly was ideal,

but bringing the schedule forward did have an impact on the budget.

We wanted to do it for closer to eight, but because it was

on such a tight timescale, we had to have extra people in to help.

The extra cost was down to labour. We have come in just under 10,000.

We are pleased with that.

Has the work been worthwhile?

We asked two local property experts to give us

their thoughts on the work and the new value of the place.

I particularly like the fact that the kitchen and bathroom have been

replaced with something modern, clean and easy to use.

This was a fairly straightforward renovation

project in terms of improving what was here already.

A fairly quick job but it seems to be a good standard.

The contemporary neutral look is what tenants and buyers both want

so they can move in and bring in whatever soft furnishings

they have to make the property their own.

The couple's work has already attracted a tenant,

but are they charging the right amount of rent?

What do the experts think?

I would say this property has got a rental value

of around 575-595 per calendar month.

Rental value, I would estimate at up to £500 per calendar month.

At the moment, our tenant pays 500.

I originally thought 525 and accept around the 500 mark.

The higher one seemed a little bit high,

but, yes, we are pleased with what we're getting.

I think it's a good price.

They're happy with the figure they are charging,

but what will they make of the resale value of the property?

Remember, they purchased the house at auction for 68,000

and spent around £10,000 renovating it.

That makes a total outlay of around £78,000.

If the owners opt to sell the property, I would imagine they would

be looking in the region of putting it on the market at around £90,000.

Sale value, as it stands, it would be about £85,000.

Your asking price would be a bit more than that.

-That's not too bad at all.

-It's more or less what we expected.

-For the current market, I think that's fine.

-Yes.

That's a potential pre-tax profit of between 7-12,000 before the usual selling expenses of course.

Does that change their plans here?

I think we would rent it again,

although we might get some valuations just out of interest,

but yes, the plan is to keep it long-term.

Ed and Vicky already worked closely on Ed's electrical business.

How did they get on with property managing on top of that?

We are a good team and it was nice to spend a bit of time together.

It was so much fun, I don't think I've ever had so much fun, to be honest.

With this property brought up to date and filled with a happy tenant,

will Ed and Vicky be looking to buy more properties?

At the moment, we can't afford it financially.

If I won the lottery, I would do it all the time.

Yeah, we've definitely got the bug and would like to go again.

This is the small Cumbrian town of Frizington,

the main road between Cockermouth and Sellafield.

The town consists of one main street,

originally built to house coal and iron industry workers and,

more recently, Sellafield employees.

The one main street is made up of terraced houses.

The property that was up for auction has something to celebrate.

It was 100 years old just a few weeks ago.

Guide price was £25-35,000

for a two bed mid-terrace.

Let's hope the years have been kind to her.

# Happy birthday to ya

# Happy birthday... #

All these little houses look fairly sturdy, but on closer inspection,

you can see a bit of wear and tear, especially round the windows.

The paintwork needs some attention, too.

Nice double-glazed front door which is a good start.

The porch keeps the draughts and the noise from the road out.

Front sitting room doesn't look to be in too bad condition.

You've got an open fire which is lovely.

Stairs up to your bedroom then through to the rear sitting room.

I'm not seeing anything I don't like so far. In fact, it's pretty good.

Let's hope it carries on.

This is looking promising with both sitting rooms a good size, too.

Will the kitchen continue the trend?

The kitchen where you have a door to the back garden there

and then through to this long and narrow space.

It is not in too bad condition.

You might want to change the doors and the work surfaces. It is perfectly serviceable.

One thing I would do is take these walls out.

You have a utility area here.

This would have been put in because the building regulations

used to state you had to have two doors

in between the kitchen and bathroom.

That changed a few years ago so you now only need one door.

Take this all out and expand the kitchen.

I think that would be a big improvement.

The bathroom is a bit disappointing. The units are very tired and dated.

This needs to be improved. Would you move it upstairs?

For this style of property, I don't think it is worth it.

All in all, I think it is great.

But do great things await me on the first floor?

Upstairs, there are two fairly decent sized

bedrooms in need of some stripping back and redecorating.

The one thing that is lacking in this property

is central heating which I would definitely install.

The view from the back bedroom looks out over the Lake District,

which is quite stunning.

DOOR SQUEAKS LOUDLY

Ooh, squeaky door! But at the rear of the property,

this really interesting little sort of porch/lean-to area,

which leads into a courtyard, and out here,

the extension, which houses the kitchen and the bathroom.

Now, if you notice, that's got a flat roof.

Notoriously bad for leaks, so, if I was having this place surveyed,

or at least if I was looking round, I'd be up

on the ladders checking what kind of condition that is in,

because you don't want leaks in that.

All in all, I'm not seeing much evidence of

anything going particularly wrong with this place.

That long passageway to the back gives a real sense of space,

for what looks like a smallish property from the outside.

Well, from the front of the property, or when you're inside,

sometimes you forget quite where you are located in the country.

Literally step out the back gate here, down that lane

and you are into the most beautiful lakeland scenery.

So, in a small village on the edge of the Lake District,

a two-bedroom property with that very tempting guide price

of £25,000-£35,000. Was it a good one to go for?

We asked the auctioneer who sold it what he thought.

Yeah, I think it's typical of all the surrounding properties in this town.

It's slightly dated,

it needs a programme of modernisation to bring it up to today's standards,

but it's a good-sized property.

What sort of rental figure could this property earn?

Once this property's been refurbished,

it would achieve a rent of £350 per calendar month.

What does he think it could achieve if sold on?

Once refurbished, this property would sell for between £45,000-£50,000.

Well, for a guide price of £25,000-£35,000,

you might not have expected much, but you know what,

I reckon this place stacks up pretty well.

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

£30,000 for this.

25?

25, I've got, stood to the rear. At £25,000, we're away.

I'll take it in ones, if I may. £25,000, I'm bid.

At 26, anyone? 26, I've got. 27. 28. 29.

And 30?

Thinking about it at 30? £29,000 to the rear.

At 29,000, are we done?

£29,000, then, first time.

At £29,000, second time. Third and final time, then.

All out? All done?

With his successful bid of £29,000,

it was a rather anxious-looking Nick who became the new owner.

# So anxious! It makes me anxious... #

He's a self-employed computer engineer who lives in London.

'I met up with him at the property to find out what prompted him

'to buy a terraced house in Cumbria.'

-Congratulations.

-Thank you.

-You got quite a lot of house for quite a little money.

Yeah. I was... I didn't actually come in beforehand

and I've been pleased to see what I got there.

-You didn't come in beforehand?

-I didn't, no, I wasn't all that well organised, to be honest.

-Right.

But in the end of the day, it seems to have worked out all right.

-Hmm?

-Mm-hm.

-You know that's naughty, don't you?

-I do.

I'm very naughty. LAUGHTER

-Cos it could've been a complete disaster!

-Well, when I bid on it,

I was imagining it being in quite a state, with blown plasterwork

and rotten floors and probably needing a new kitchen and bathroom.

As it stands, it's not too bad, it's not any worse than I'd have imagined,

but that's really luck, I think. I had a look through the window, looked from the outside,

so I had some sort of idea, but I hadn't been inside.

How was the auction?

I'd never actually been to a house auction before.

Er, it was rather nerve-wracking. Afterwards,

I had to fill out these forms when my hands were just shaking so much,

I'm sure that nobody could understand what I'd written.

-Partly because you didn't really expect that you were going to be buying anything?

-I didn't, no.

I went up to the auction with the intention

of not buying anything, so I just felt that urge to buy it.

# I got the urge... Woo!

# ..to love you! #

'So Nick just went for it, but he didn't follow one of my golden rules.'

-You'd read the legal pack, of course?

-Oh, yes, yes.

-Really?

-I did.

-Really?

-Just before the auction, I did, yes.

-For how long?

-Five minutes.

-Oh, right. OK, then.

-LAUGHTER

-That'll be all right, then.

-You know you've been a little bit rash, don't you?

-I do. I do. Just a little bit.

Tell me more about you. What do you do when you're not doing this?

I'm a computer engineer. Some time ago,

I was into plumbing and heating, I was a plumber,

-but then I moved into computers about 20-25 years ago.

-Wow!

I've been into that, you know, and I've been enjoying

that sort of work, with computers, um, but I just thought that

I'd like to really, you know, have a property up here and rent it out.

I thought that might be a nice little investment.

# Computer world... #

Plumber-turned-computer expert Nick lives in London,

but has friends in the area who he visits regularly.

When he saw that the property prices locally were within his budget,

he chose this facility for his first development project.

'There are a few things to be sorted out to turn this place around.

'They include the obviously needed redecoration

'and updating of the facilities, including installing central heating.'

So all that work's going to be done by you?

Yeah, the house I have in London,

I've pretty much done all the work in there.

When I was involved in plumbing, say 25-30 years ago,

I also had done some building with my brother's building company,

so I've had some experience there too.

In terms of the budget for all the work?

I'm estimating it up to £5,000.

That's with heating, possibly replacing the bathroom,

smartening the kitchen up.

-Not replacing the kitchen? Just smartening it?

-I'll see how it goes.

I'm in two minds about that, so I might replace it,

I might smarten it, I'll see how well it freshens up

once it's cleaned and scrubbed.

If it looks good, then I'll probably keep that

-and maybe move the units slightly, otherwise I'll replace it.

-Right.

'Nick plans to come up and do the work in three two-week stints,

'spread over a few months.

'However, that might change depending on factors

'such as whether he needs to replace the kitchen.'

-That'll obviously affect the budget and the timescales.

-It does, yes.

But hopefully not too greatly.

If I'm starting at eight o'clock in the morning and work around into,

you know, mid-evening, then I can get a good number of hours in a day

and get the work done in reasonable time.

Talk me through the numbers in terms of what you're hoping it might achieve when you rent it out.

Houses in this area generally £300-£350 per calendar month.

That is a sort of reasonable estimate from other houses that I've seen.

So that's...the sort of target I'm looking for.

'So rental seems the best way to go, but there's a fair amount

'of work to do, which will require Nick to juggle his schedule.'

-But carrying on your day job all this time?

-I will be, yes.

I've been arranging things.

I can bring a computer up with me, I can work from around here

and just keep things ticking over whilst doing some work here.

It gives me a change of scenery, a change of environment, you know,

I'll get to see my friends who are around here

and then go to London, so I'll get a sort of change.

-Cumbria and London - a nice little contrast.

-Yeah, definitely.

Listen, congratulations. We look forward to seeing how you get on.

Great, thank you.

Well, Nick broke all the rules buying this place.

He didn't look at it beforehand.

I don't really think he read the legal pack.

Still, he was lucky on this occasion

and I think he'll end up making some money here.

You can find out how he gets on later in the show.

They say time is a great healer, but it can also be the enemy

if you're up against a deadline.

So what has happened to those properties?

Ha-ha! The moment of truth! Let's find out.

Back now to Rainham in Kent, where, earlier in the programme,

Paul bought this 1930s semi for 170,000. He's a keen motorcyclist

and Hells Angel who lives nearby in Gillingham.

# Motorcycle emptiness... #

The house had serious subsidence and needed a lot of work.

But with the help of his son, Gavin, Paul was going

to renovate the house and make it home for himself and his wife Bev.

Paul used to run a small building company,

so he's got lots of contacts and he had big plans for the place.

Obviously, I'm going to fix the drains,

but as far as the subsidence goes, I'm going to underpin the corner,

but I'd like to put an extension out the back. When we're out the back and putting the concrete

and foundations in for that, obviously, we'd be underpinning the back half as well.

So when do you guys see yourselves moving in?

If I get stuck right into the work,

I think it's going to take four or five months.

Well, there have been some delays,

because it's now one year and nine months later.

Replacement windows have been installed,

plus a new window up in the loft conversion.

This is where Paul has created their new bedroom.

Complete with en-suite bathroom.

The loft isn't the only addition to the property.

On the ground floor, an extension runs the width of the house,

where a new kitchen is waiting to be installed.

This is the kitchen here, which is in the new extension as such.

Tried to expand it and make it as big a kitchen as we can,

cos that hole into the old kitchen used to be the kitchen window,

but now, that's the big doorway in,

so it's a small part, like a utility room, washing machine, everything.

I think the kitchen'll look very nice when it's done, because we've got

some really nice units all being made, with the oak tops and probably

oak skirting boards and everything like that, so it'll look very nice indeed.

And we've got a breakfast bar being fitted in here,

which has the same oak top on it and everything.

And that big hole there used to be the French windows,

which goes into the old sitting room dining room at the back there,

but we've knocked it through, so it goes right through

into the front room now, so it's a nice, big long room all the way through.

Removing the dividing wall between the two rooms

and creating the through-lounge was straightforward.

The hold-up came when Paul's original plan for an extension

at the side was turned down on several occasions.

So, during the long delays, he underpinned the property,

which cured the subsidence problems.

We were going to do it at the same time as the extension,

because we were going to get a sideways extension,

but that was refused, so because the extension had to go out the back,

we'd already done the underpinning by the time

we put the extension out the back, or we wouldn't have bothered,

because the extension out the back meant underpinning wasn't necessary

and it would've all been done at the same time.

So, time and money

went down the same drain that had caused the subsidence.

Upstairs, work on the three bedrooms is progressing well.

The house now has central heating and has been rewired and replumbed.

To retain some of the character,

Paul's keeping the original doors and some of the fireplaces.

The door from the hallway to the former kitchen has been blocked off

and a new toilet is being installed under the stairs.

Paul's worked on the house almost every day.

He's brought in his building contacts

and passed on tips to his son Gavin.

It's been really good working with Gavin over all this.

Gavin's one of the people doing the underpinning work with me, which is great.

We had to dig down nearly 2 metres and then dig under the house.

Yeah, it was good fun, though,

you know, getting underneath the house, filling it up with concrete.

A lot of hard work, but it was good, good fun.

'We make a good team. We always have a laugh

'and who do I know better than my dad to be working with?

'Yeah, it's brilliant. Hopefully, in the future,

'I can get a place and he can help me do it up.'

Paul has clearly done a lot of work on the house. He purchased it

for 170,000 and estimates renovation costs will be around 70,000,

giving him an overall outlay of £240,000.

We asked two local estate agents for their views on this 1930s semi,

with its new loft conversion and extension.

I like the rear extension, because

the original kitchen is so small, you can't do very much with it.

So now, it's going to be lovely, you've got a lovely

through-lounge dining room and a really nice kitchen

with a utility room, so it's going to be great.

The loft conversion is an excellent touch, adds the extra space.

The master bedroom and en-suite.

I like the standard of work that's been done. Up in the top bedroom,

the tile are lovely in the en-suite. Very, very nice.

The experts reckon it could be let out for between 950

and 1,100 per month, but what do they think about a resale value?

Will it be more than Paul's overall spend of 240,000?

Once fully finished, I would expect to achieve

something in the region of £250,000-£275,000.

I would expect to achieve in the region of £275,000 for the property.

That range of valuations would generate a gross profit

of between 10,000 and 35,000 if Paul was to sell.

-It sounds very good indeed.

-Yeah, excellent.

Considering what I paid for the property and how much I spent on it.

Yeah, I think it'd be a shame to let it go after all the work we've put into it now.

How magnificent it's going to turn out at the very end.

The project's taken Paul over a year and a half

and is still ongoing, so has it all been worth it?

-I think so, yes. It's been very good.

-Yeah, definitely.

As long as my dad's happy, that's all that matters.

Back now to Frizington in Cumbria,

where this two-bedroomed mid-terrace property

sold for £29,000 at auction.

It was snapped up by computer engineer Nick.

# Till I find the righteous one!

# Computer blue! #

He lives in London,

but wanted to invest in cheaper property outside the city.

I've been enjoying that sort of work with computers, um,

but I just thought that I'd like to, really,

you know, have a property up here and rent it out.

I thought that might be a nice little investment.

This property was a great opportunity for Nick.

Inside, the place desperately needed modernising,

but there were no nasty surprises for him

when he eventually did see inside the property.

But did the renovation work go just as smoothly?

We caught up with him six months later to find out.

Well, it certainly looks like he's given the place an overhaul.

Every room has been redecorated and freshened up.

New carpets and replastering have really brightened this property up.

But he hasn't stopped there. He's completely renovated the kitchen

and installed brand-new fixtures and fittings.

The bathroom's had a complete overhaul as well.

I've ripped the kitchen out, ripped the bathroom out.

It freshens it up, makes it look more modern,

so it brings it up to date and makes it liveable by modern standards.

And Nick's taken my advice and got rid of that wasted space

between the kitchen and the bathroom.

# When the walls came tumbling down

# When the walls came tumbling down... #

So what made him do all this extra work?

Originally, I was thinking of just not doing very much in the house.

I suppose, as I got into the job, I decided just to do

that bit more and that bit more and replaced the kitchen and bathroom

and I thought it'd be nice to have a bigger kitchen and I think that's really important in a house

and, if I'm going to put in the shower and a boiler in the bathroom,

then I thought I might as well go ahead and replace that too.

But the renovation wasn't all plain sailing.

There was plumbing of a different kind to sort out in the living room.

The living room here was rather damp. There was a certain amount of water

coming up through the carpet from the flagstone flooring underneath.

So the subsoil here has been

saturated by a hole from the drain coming through.

The drain itself has been blocked, so any rainwater has been

forming a pool and running from the hole into the subsoil of the house.

Now that's been fixed, it's had a chance to dry off

and it's now a clean and fresh and dry house.

With all the extra work in the living room, kitchen and bathroom,

surely that must have drastically affected Nick's original budget?

My initial budget was £5,000, which I considered on the generous side.

I think the amount I spent is around £7,000,

which I think is pretty good going,

given that it's got a new kitchen and bathroom as well.

So that over-estimated original budget cushioned the blow,

but what about the timescale?

Probably spent about one day in three to one day in four

actually working on the property. I've been up here for six months,

so it's a bit like putting

probably a month and a half's full work into the property.

Over the last six months, Nick's been living between here

and London, working on the property in stints between his computing job

and, as if that didn't keep him busy enough, he's also picked up

two more Cumbrian properties while he's been there,

so what's his next step?

I may either let it out or sell it,

depending on what the rental or sale relative value is.

Let's find out what those values could be.

We've asked along two local property experts

to hear their thoughts.

'I think it's been done to a good standard generally speaking and it's'

quite tidy and neutral. The kitchen and the bathroom have been replaced,

which is a good thing and it benefits from lovely views

of the Western Lake District Fells, which is also a bonus.

I think the house is done up to a very high standard.

It has a good kitchen and bathroom and is a good first-time buyer home

and he's done it up properly throughout.

I think that the bathroom is particularly good in terms of size

and, from the kitchen's point of view,

it's got plenty of space for all relevant appliances.

So the work seems to be getting the thumbs up.

In its current condition, what could it rent for,

should Nick decide to let it out?

If I was to rent the property out today,

I would expect to achieve £350 per calendar month.

I think, in the current rental market, the property could achieve £350 per calendar month.

That would be a nice income and, for the investment that I've made

in terms of the money refurbishing the house

and the original purchase of the house,

that is a good rate of return, so I'm happy with that.

Nick bought it for £29,000 and has spent £7,000 or more on it,

so will its estimated resale value now be more than

his total outlay of around £36,000?

The property could go on the residential sales market for £60,000.

On the resale market today, I would expect to achieve £60,000.

Wow! That's a surprise. That's, er... That's a nice surprise.

Um, so that would be, what, 23...

£24,000 on top of the money spent,

so yeah, that's brilliant. HE LAUGHS

# I'm over the moon!

# Doing my thing Doing my thing... #

That IS brilliant.

A potential pre-tax profit of £24,000

before the usual selling expenses in just six months

is not too shabby at all.

But will this news affect his plans here?

At £60,000, I'd be tempted to sell and buy another one.

# I'm over the moon... #

Another one?! So would he ever consider concentrating on his Cumbrian portfolio full time?

Moving up here from London is something that I had thought about

from time to time and friends have regularly brought this up

and presumed that I would be, I believe,

but I haven't made a decision to do that, although it's a possibility.

Well, that's it for today. We'll be back with more action

from auction rooms all over the country next time.

-So join us then for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

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