Episode 40 Homes Under the Hammer

-Welcome!

-Lucy and I both love to dabble in the property market,

and are always looking to grab a bargain along the way.

But in today's very competitive market, that's not always easy.

But one way you can stack the odds in your favour

is by visiting your local auction.

Now, buying at auction is becoming increasingly popular these days.

That's because there is no messing about.

When the hammer falls, you've exchanged contracts.

So let's take a look at the three properties

that were sold at auction on today's show.

Cooking up a development dish won't be easy in these two Fife cottages.

-HE LAUGHS

-Yeah, not exactly MasterChef, is it?

In London, you can forget sleeping as you work at this house.

Let's have a little lay down and see.

So...ahhh, I'm going to stretch in the middle of the night... Clonk!

HE LAUGHS

And this two-bed flat in Tyne & Wear might make you jump for joy,

but it's not all good news.

One thing that isn't so nice is that.

All of these properties went to auction.

And we find out who bought them,

and what they paid when they went under the hammer.

Sold!

Today, I'm 35 miles north of Edinburgh,

about an hour's drive away.

I'm in Leven in Fife, in Scotland.

This beach here has actually been awarded

the coveted Blue Flag status.

It basically means the water here and the beach itself

meets strict environmental guidelines.

As you can see, it's a lovely spot.

It's popular with families and commuters alike.

You've got the Firth of Forth there, and in the distance, St Andrews.

A nice spot indeed.

As well as the fine beaches,

the area is famous for its golf courses.

Leven has its own, with others,

including St Andrews and Ely just a few miles away.

Well, just two miles from the sea,

you find yourself in the little town of Windygates.

And you also find this rather derelict and muddy plot.

And situated in the middle of it,

well, basically, two rather rundown and derelict properties.

Semi-detached, single-storey,

look to be in a right old state,

but here's something interesting straight away.

Look at that. The lintel across the window there.

It's actually called a marriage lintel.

If you look at the date, it says 1723 and two initials.

AW and ES. They had that carved

to commemorate their marriage.

How lovely! Let's hope this property in Windygates blows me away.

# Let's get married

# I love you and I want to stay with you

# Let's get married

# Have kids... #

The old marriage lintel shows the cottages have a long history.

But from outside, it looks as though

the union of these two cottages might have had its day.

Maybe it's a happier story inside.

It's not looking good!

# Our D-I-V-O-R-C-E

# Becomes final today... #

Well, if first impressions count,

in this case, I don't think the counting would get any further

than, well, basically, zero.

It is, in a nutshell, derelict.

And just one tip, when you are looking round properties like this,

be very careful, because you can't guarantee that the floorboards

are going to take your weight.

So, gingerly moving on, what have we got here?

Well, this is one of the semi-detached properties.

It's not a bad size. If you can see through this mess,

you've got bedrooms that way, a bathroom,

this living room area here, and then through into the kitchen.

But as you can see,

it's more than a weekend's work.

# We're having a wild weekend We're having a wild weekend... #

The kitchen leaves a lot to be desired,

with a particularly worrying water feature overhead

and units falling off the walls.

It really does look as though it's all in a rather fragile state.

With a property in such a state is this,

your mind has to pretty quickly start drifting towards asking

whether or not it's worth putting the money into either restoring it,

or possibly, in this case, just knocking the whole place down.

The amount of damage that's been done, basically,

by rain, water, whatever, over the years...

you know, to put that right, I don't know.

Need to give that some serious consideration.

Everything needs attention.

The windows, walls,

the damp emanating from every corner,

leaks galore, dry rot, and a gaping roof.

Let's head to its sister cottage to mull things over.

# Just when you're thinking things over... #

Well, was hoping that the second of the properties

was in slightly better condition,

but in fact, it's worse.

More of the floorboards have actually disintegrated,

there's more holes in the ceiling. I mean, this is the living room...

-HE LAUGHS

-It is if you're a rodent, I suppose!

Through to the kitchen.

Yeah, not exactly MasterChef, is it?

Anyway, I'm starting to ignore the building as it is now.

What I'm thinking is, what's the square footage,

how much land have you got, and what could I build here?

And add that to your costs.

You need to factor in planning, demolition, and build expenses.

But before I start plotting any further,

let's check out the plot that the house would go on.

OK, so enough of the negativity.

Let's try and find some positives about this.

Well, the land for one, is fantastic.

A round about an acre, and good news, because it's flat.

That's great.

The fact that there are existing buildings here means that,

basically, if you came to apply for planning permission,

they'd take that into consideration.

So you'd definitely be able to build on the plot.

I reckon you could get maybe two, three, four houses.

The other good news is that because these houses are already here,

there's electricity here,

there's probably going to be good sewerage, and maybe even gas.

So all those things mean that this is a building plot.

Ooh, now it's starting to get exciting!

Remember, the guide price of £60,000.

What does a local estate agent think of the potential here?

Who might take on this kind of building project?

It's not for the inexperienced, certainly.

I think it would be more somebody

who's looked to have done this in the past,

because of the amount of work and the cost involved.

So, if the current cottages were restored

and done up to a high standard, would they be good to let out?

I think if you do them up to a very good standard

and you were to rent them, location-wise,

I think you're going to be looking at around £550 per calendar month.

Not a bad income.

But if you demolished the two derelict cottages

and built just one house from scratch,

what could that be worth if sold on?

If it was a four-bedroomed detached villa, double garage,

You can buy for somewhere around about the 250, 300 in this area.

So I think you're going to be looking at that kind of level.

Unless they do something to a particularly high standard.

So some challenges ahead for whoever took this place on.

As a restoration project, I think it really is an no-hoper.

But for development potential...

well, let's see what happened when it went to the auction.

Quite a bit of history with this property, as suggested

by the carved marriage lintel in the property dating from 1723.

What are we going to say for that?

50? Get me started, ladies and gentlemen.

£50,000. Sitting on the aisle.

Thank you, sir. £50,000.

52, 54, 56.

58? 58.

60. 62?

62.

64. 66?

66.

68. 70.

72.

74.

76? Shaking his head.

I'll take 1... 75, if it helps you. 75.

76, 77.

He's shaking his head again. 76.

Gentleman who got me started at 76.

I'm going to sell at 76,000.

It's still cheap. I thought that would produce a hand or two!

We'll go up in the ones,

since I got down to that. So that's a 77 from you, sir.

78. 79.

80, 81, 82, 83.

4, 5, 6...

Shaking his head.

Are we all done at £85,000? New bidder.

86, right at the back.

86, 87, 88, 89.

90, 91, 92.

93, 94, 95, 96.

He's shaking his head.

95, gentleman sitting on the aisle. At £95,000, going once...

twice, third and final time.

£95,000. HE BANGS GAVEL

Gentleman on the aisle in the white shirt.

After some keen bidding, the property sold for £95,000,

£35,000 over the guide price.

The successful bidders were husband and wife, Julie and Ian.

Ian runs his own mechanical engineering company,

where Julie also works, doing the admin.

I met them back at Windygates to find out their plans.

Julie, Ian, congratulations!

So, tell me, why did you buy this?

Erm, I think it's something we've been looking at for a lot of years.

The time came up. I spied this on a driving-around mission,

visiting farms and different big houses

to see if there's any land for sale.

And convinced Julie to go to the auction only,

not with the proviso of buying,

but to go to the auction.

And then I bought it! HE LAUGHS

Ian didn't hang around, then, and no wonder.

They've got plenty of land to pursue their dream here

and that's to build a new home for themselves.

So, Julie, why build a house rather than buy one?

I'm a woman - maybe fussy!

Has to have a large kitchen,

cos I kind of live in the kitchen-cum-family-area.

I have three grandchildren that I really adore,

and I really want to have time with them,

as well as being in the kitchen

and still doing the usual women's chores.

And you can't really do that in most of the new builds.

So, have you got any experience of this kind of thing?

Our last three houses we have built and designed ourselves.

So Julie and Ian have lots of previous experience

of building new homes. But what are their plans for this place?

Do they intend to renovate

or do as they have in the past and build anew?

We've done the costings to try and build onto it, and build anew,

and the economics knock it kicking.

There's too much damage with vandalism, dry rot, dampness.

So it makes economic sense to actually knock it down.

So, talk me through the costings.

Initial demolition costs, we're looking at about £12,000.

And that basically gives us a blank canvas.

And from the blank canvas,

we're looking at about a £335,000 budget

to rebuild the house of our choice.

-So when will it actually start?

-About half past two!

So the demolition will start today, in about four hours' time?

BOTH: Yes!

-Can I stay and watch?

-You're welcome!

-You're certainly welcome!

-THEY LAUGH

So with demolition imminent, what about that historic lintel of 1723?

The lintel, we haven't found the actual history on it yet.

But as a keepsake, we'd like to integrate it to a part of the house.

Either over a doorway or a small window.

What a lovely plan!

After much research and meetings with their architect,

the couple have settled on the final design,

bringing together all their ideas.

They want four bedrooms, a triple garage,

a playroom for the grandchildren,

and space for Ian's mum, who lives with them.

It sounds like an amazing family home,

planning permitting, but how long will it all take?

What's the timescale for the project, then?

We think we can complete it within 12 months.

Well, listen, congratulations. And good luck with the demolition!

-Thank you very much!

-Yes, thank you!

-Appreciate it!

Well, Ian and Julie have certainly got a few challenges ahead

before the project's finished.

But I think they're definitely making the right decision

to demolish this place. And that demolition starts right now.

Off you go!

# Demolition, Demolition

Well, a smashing time was had by all in Fife.

And you can see if there IS a new house later in the show.

Hunkered down next to Greenwich in south-east London,

New Cross was long overlooked.

But with good transport links and an uber-trendy art college,

New Cross is fast becoming something of a London hotspot.

There's a mix of old and new here for sure.

Today's lot leans towards the newer end of the scale.

There is no denying this is the less trendy part of New Cross,

but you're only a ten-minute walk from the train stations

and, for the guide price of 150 grand,

in the more fashionable part of town

you'd be looking at a one-bedroom flat.

Here, however, it's a three-bedroomed house.

OK, so it's 1980s rather than 1880s, and not exactly a looker.

But, boy, is it cheap!

Of course, I mean cheap, good, rather than cheap, bad.

The estate setting might not be to everyone's liking.

But for £150,000,

I'd be tempted to have a flutter on this three-bed house.

Well, what a nice start.

Simple, fresh, clean, and SPACIOUS!

Now, look at that kitchen!

It's bigger than I would've expected,

although I'm not really keen on those stickers that are everywhere.

Even on the fridge door! Now, you could peel those off

and you might find a kitchen that's salvageable.

It depends what you want to do with the place.

Lots of under-stair storage, which I love.

Really nice, bright, spacious lounge.

You could see how it could work.

Couple of sofas here, TV in the corner.

And you know me. What do I really like?

Access straight out to the garden. Love it!

Now, the garden isn't huge and it is overlooked by the flats.

However, it's a decent outside space.

But looking back at the upstairs,

something a bit strange is going on with those windows.

It appears that one of the panes has been blanked out.

None of the neighbouring properties has that

so it's back inside to investigate further.

Upstairs, you get the distinct impression

that someone has monkeyed around with the layout.

They've turned what must have been one enormous room

into a double bedroom, with one half of the window,

and a kind of single in the other.

Even though this bedroom is split, this one is a good-sized double.

The other one, however - hmm, the jury is out. Now, what do you think?

I'm 5ft 5, and I'm just wondering,

would you actually get a bed in here?

Let's have a little lay down and see.

So, ooh, I'm going to stretch in the middle of the night... Clonk!

No. It's not a bad space.

You could think about an office, a nursery, but a bedroom?

I don't think so.

# Lay down, Sally No need to leave so soon

# I've been tryin' all night long just to talk to you... #

Now, before I get accused of sleeping on the job,

there's a further double bedroom up here, and a very blue bathroom.

I'd want to look a bit further into those patches of damp,

but there's some decent space up here

and we mustn't lose sight of that low guide price of 150,000.

Incredibly competitive for London.

We asked a local estate agent for his take on this place.

It's a good-sized property.

The third bedroom is slightly on the small side,

so I would say that wouldn't be a bedroom,

that's more of a study.

But it doesn't need much work doing to it.

What is it worth in its current state and after refurbishment?

I see a value today at about £180-185,000

and, once fully renovated, about the £200-210,000 mark.

With all the arty students close by, what could the house let for?

I believe it could achieve about

£1,150 to about £1,200 per calendar month for the property.

For the money, this little house delivers a good return.

It needs cash spending on it for sure,

but it's a solid box to work with.

Let's see who agreed at the auction.

Lot 142, a mid-terraced three-bedroom house.

Who would like to give me a start on this?

I don't know. 180 anywhere?

What about 150, then?

Thank you. 150 I've got.

151 anywhere?

151, 152.

153. 154. 155.

156.

157.

Having started bang on the £150,000 guide price,

a bidding battle began, and before you knew it, was approaching

the £200,000 mark.

189.

190.

191. 192.

192 coming in? No?

If not, 191 for the first.

191 for the second. 192 - nearly.

193. 194.

195.

196?

195 for the first. 195 for the second.

195 for the third and final time.

Are we all done? Sold! 195.

That successful bid of 195,000 was made by 28-year-old Johnny.

He's recently moved to London to live with his girlfriend

and this is his first renovation project in the capital.

# Johnny come lately

# The new kid in town... #

I met Johnny back at the property to find out his plans.

So, Johnny, what brings you to New Cross?

This wasn't actually the property that I was after in the first place.

-Oh, yeah?

-This was the second. But a very worthy second.

You say this is a second, so you obviously had another in mind,

-which you had researched thoroughly.

-Yep.

What about this one? How much research did you do?

Just as much as the first one. Just as much as the first one.

Two very different properties, the first one was a flat,

leasehold, but beautiful Georgian building, lovely, quite simple job,

whereas this had certain aspects of it which appealed to me

in terms of it was a freehold house. So it was still a good purchase.

But in terms of Georgian architecture, beautiful,

it's not quite that.

-Certainly not, no.

-But it does serve other purposes. Tell me about that.

Well, primarily the figures stack up.

It's a good rental market round here and, as you see,

it's kind of good to go as it is, really.

MUSIC: "Johnny B Goode"

Now, Johnny's been involved with renovations before,

but this is his first solo venture.

And he hopes it will be the start of a career in property developing.

So, Johnny, what did you do before the properties?

Before the properties, I was studying.

I've got a degree in architecture, a Masters in town planning as well,

so really it's all been gearing up to getting into development.

But I had the luxury of working - well, I say working!

Trying to badger my uncle for bits of experience

as he has been renovating a 17th-century farmhouse in Somerset.

So I've been getting in there as much as possible,

kind of learning different things,

kind of looking over a carpenter's shoulder, learning various trades.

But then studying at the same time.

And then deciding to move actually into the practical side

of building a lot more than staying in architecture, because I like

sitting at a drawing board, thrashing out drawings with pencil,

but these days architecture's all computer-based,

which, for me, is not the way.

-You can't keep up with the toys.

-No. Absolutely not.

In terms of...

-You're a pencil man.

-Absolutely.

-I'll be fine when technology fails, I'll be fine.

-I'm exactly the same!

So, Johnny is a practical, hands-on kind of guy.

# Put your hands on put your hands on

# Put your hands on put your hands on... #

But what's in store for this particular renovation?

How much work you think you need to do on this property

-to bring it up to standard?

-Well, there's two scenarios.

If I were to purely rent it out, it's pretty much fine as it is.

The previous owners have been quite sticker-happy

with their declaration. The kitchen fronts, there's stickers everywhere.

So if I was to rent it, then it would just be to remove the stickers

and paint the place.

But the second scenario being that I rent it out for six months

and then sell it on, and in that case,

which at the moment I think is going to be the most likely scenario,

is to put a new kitchen, new bathroom and new paint job as well.

What about that little cheeky extra bedroom upstairs?

I actually really like it and I think it's a worthy space

and I would leave it there.

Originally a two-bed, it would have been two very generous bedrooms

but as a three-bed I think it works quite well.

You'd be hard pushed to actually squeeze a bed in there

but for a young family with maybe a baby in a cot,

it's be absolutely fine.

It's an ideal study room or office. I think that would work really well.

The good thing is, Goldsmiths College is a stone's throw away.

Absolutely. If I was inclined to go for a student let,

I think it would be absolutely ideal.

In this case, I don't think that's quite what I'll be doing.

So renting it for 6 to 12 months

and then selling it on is really the ultimate goal.

I think the rent-and-sell approach could work out pretty well here.

He's bringing in a plumber and an electrician,

but plans to do the rest himself.

One last question for Johnny. Cash?

So, Johnny, what sort of money have you got to spend on this

if you go the whole hog and you really turn it around?

I think, whole hog - we would be talking in the region of £5,000.

That would be new kitchen, new bathroom, painting throughout,

maybe carpets up the stairs into the bedrooms.

And if you don't go the whole hog and you keep what's there

and you can live with that kitchen and bathroom?

Well, I think, all in all, maybe £1,000, 1,200 max.

I'm just wondering if you might be able to tweak the kitchen,

new worktops, new doors.

Absolutely. The only thing is, once you get behind the doors,

the actual units are really in bad condition.

-I think you're going to be spending five grand.

-Potentially.

I'm really excited to find out which scenario you go with - A or B.

Good luck with this project. How long do you think it will take you?

In six weeks, I will have it all finished.

How long it's actually going to take me - four weeks.

I've got other commitments over the next couple of weeks, so in six weeks, it'll be finished.

OK, good luck. We look forward to seeing the result. Thank you.

-Thank you.

-Well done, Johnny.

So, this isn't quite a 17th-century farmhouse

but it is a fantastic rental,

which is why I hope Johnny goes down that route long-term.

I really think that's the way to go here.

You can find out what happens to him later in the programme.

Coming up in this Tyne & Wear flat,

you'll want to change the kitchen, bathroom...

And wow, that is yellow!

Back in London, Johnny had a date with development destiny.

Water came pouring down through the wall

and out through the socket on Friday the 13th.

But first, we're back in Fife, where Julie is delighted

with their new home.

When you think about it, all our needs will be taken care of here.

We return now to the village of Windygates in Fife,

a couple of miles inland from the coast.

Earlier in the programme, husband and wife Julie and Ian

had paid £95,000

for these two derelict cottages on a plot of about an acre.

Ian owns an engineering company and Julie does the paperwork.

They've been looking for a plot of land to build themselves a new home.

They had investigated converting the two cottages,

but that just wasn't viable.

We've done the costings to try and build onto it and build anew,

and the economics are not good.

There's too much damage with vandalism, dry rot, dampness.

So it makes economic sense to actually knock it down.

And that's exactly what they did.

But one year and eight months later, we're back -

and just look at what's here now.

The two cottages have gone,

replaced with this four-bedroom mansion.

The house is massive and there's a detached triple garage with accommodation above.

Inside, on the back right-hand corner of the house,

a fantastic kitchen has been built, with stylish, contemporary units.

And, as Julie had planned, she can now enjoy watching her grandchildren

play in the adjacent open-plan dining area, with a gallery above.

On the other rear corner is the formal dining room,

which leads through to the main living room.

The rooms all radiate from the spacious hall.

Ian's mum has her own living room and en-suite,

which has been built with mobility in mind, as Julie explains.

This en-suite bathroom's really been designed around Mum's needs.

We've made it that the door's quite wide,

it's got the widest possible door in

so we can get wheelchair access in here.

It's got an area here for Mum if she ever did need a wheelchair.

We've got a nice shower behind.

We've also thought about maybe Ian and I's old age,

that if we can maybe not manage the stairs or can't go up the stairs,

we could move down eventually. And really, when you think about it,

all our needs are going to be taken care of here.

Upstairs, Julie and Ian's master bedroom runs the width of the house.

It has its own sizeable en-suite, with two entrances

and some very smart fixtures.

At the other side of the house, bedroom two and the third bedroom,

which is for their grandchildren to use, can both access a shared

Jack-and-Jill-style bathroom through a door in each of the rooms.

So, effectively, each has its own en-suite.

Back on the ground floor, there's a WC off the hall

and a smaller living room at the front, overlooking the drive.

And above the garage, Ian has HIS favourite room.

I've always been lucky enough to have a boys' room in my main house,

but this is the ultimate boys' room,

where I have the combination of TV, seating area,

built piped-in music, snooker table and I've got a lovely bar area.

Their initial planning application was to have the garage

at the front, but that was rejected.

Ideally, the garage would have been better, for our needs,

on the side of the house, but we now have a courtyard at the back

and it gives the little ones a wee play area for the football.

My grandson can play football there.

Well, I hope the windows are tougher than glass!

They've got two more grandchildren now, so the total is up to five.

They had hoped to integrate the marriage lintel into their new home,

but despite removing it very carefully,

it was so fragile that it later got damaged beyond repair.

So, Ian had a stainless steel replica made for good luck.

They certainly needed some after the problems they hit with the build.

One of the main obstacles we had, or delays,

was we went through a major telecoms cable.

The cable fed the main hospital so it had to be rerouted, obviously.

It became our problem, not the hospital's problem,

so it became my cost.

It was an added £19,000 they hadn't budgeted for.

They also had two break-ins

when electrical cables and power tools were stolen.

What effect has it all had on their outlay?

The budget, we set aside about £500,000

for the whole project, acquiring the land and building the house,

and I would say about £5,000, £5,600 just now.

So, including the £95,000 original purchase price for the cottages

and land, has it been £556,000 well spent?

Time to get the opinion of two local property experts.

How will they rate

this impressive four-bedroom new build?

The most unusual aspect is that they managed to keep the room sizes

as generous as they have

and they've not tried to cram in as many rooms as they possibly could.

It's got a very impressive front elevation.

It's been individually designed

and has very spacious family accommodation

with very good-sized rooms.

They've done a high finish throughout -

the bespoke kitchen, the treble-detached garage,

so they've done a wonderful job, I have to say.

How much do the experts think the house is now worth?

More than the £556,000 that the couple have invested here?

It's obviously a very unique property,

so difficult to give a specific value,

but I would expect it to be somewhere between £460,000 to £500,000.

This is a unique property, it's designer built.

The re-sale value we'd be expecting would be £460,000 to £480,000.

Those valuation ranges of between £460,000 and £500,000

means if they were to take the unlikely decision to sell, they'd make a loss

of between £56,000 and £96,000 in the current climate.

-I'm happy enough with that.

-That's a fair price.

It's not done as an investment,

it's done as a family home long-term.

Ian's absolutely right.

They've created a fantastic bespoke family home

that suits them perfectly right down to the ground.

Four generations of the family are going to enjoy living

and staying here, and that's something you can't put a price on.

We've got our dream home.

It's a good location for us, it's nice and private and quiet

and it's fun for the grandchildren when they come down to stay.

I'd just love to sit back at the end of the day and think we managed it.

With the help of a lot of people, but we managed. We got there.

I'm in Hebburn,

a small town less than 20 minutes' drive from Newcastle.

It's on the Metro system that links this town with South Shields nearby

and Gateshead further afield.

Even better than that, I'm heading to a property just round the corner

from shops, bus stops and the Metro station.

So, good transport links and a nice residential area.

The property I'm here to see, bit misleading from the outside.

Looks like a terraced house

but it's in fact a purpose-built two-bedroomed flat.

At a guide price of 24,950 quid,

we're expecting a very interesting investment opportunity.

I'm sure the property was originally a two-up, two-down terraced house,

but it's now divided into a ground floor and first floor self-contained flat.

The ground-floor flat has this big bay window

and its own front door, so things are looking promising.

Sometimes with flats, you'd have an exterior door, then a corridor,

and then separate doors leading out into the flat itself,

so that is a really positive thing to have.

It gives it a really nice feel. High ceilings, which bodes well,

and through into the first of your bedrooms - and wow!

A really nice size.

Far too big for just a single bed.

High ceilings, a bit of coving up there, so a really nice touch.

Erm...

Oh.

One thing that isn't so nice is that.

There's a dip in the floor there, and as you can see,

something's gone horribly wrong.

It's not so bad over here. Just in the middle there.

Something's happened to the floor.

It could be dry rot, wet rot,

one of the joists perhaps has been eaten through by a mouse.

A bit random, that one, but you never know!

Until you take up the floorboards, you won't know.

It could be serious or it could be fixed

by a few bricks in the right place.

But once the floor is sorted and the room's been decorated,

it'll make a lovely bedroom.

Further down the corridor is the second bedroom,

which is smaller and needs cosmetic attention. But a boiler in the bedroom?

I'm never keen on that, so I'd suggest relocating it.

What about the living area?

Into the lounge.

And wow, that is yellow.

My word. If your lounge is this colour, then great.

It wouldn't necessarily suit everyone's tastes,

as indeed wouldn't the fireplace.

Probably a bit of re-working required in here,

but it's, again, a nice size and it leads onto the kitchen,

a room which certainly would benefit from just a few thousand pounds.

Some nice units in here.

A bit of thought about the decor, the lighting,

and you would transform this flat.

Paint required. Paint, paint, paint, paint.

So, new decor, new kitchen, fireplace,

carpets and possibly floorboards, but don't let that list fool you.

You haven't seen the bathroom.

It's off the kitchen with a corner shower and a not-so-peachy suite.

It's desperate for an upgrade, not to mention a bath.

There's some Artex on the ceiling, which could contain asbestos

given the property's age, so that needs professional advice and removal.

Outside, there's a backyard that needs a tidy up,

but a messy backyard is better than no backyard in my book.

Another thing that needs sorting is the lease,

which has just 66 years left.

That could affect getting a mortgage

and extending it needs to be factored into your budget.

Apart from all that, it's great.

The to-do list does seem pretty long,

but in essence, this is a flat with good potential.

Can a local estate agent find something to love here?

I think it's very evident that it does need some improvements,

but I think what is also very evident is it's lovely and spacious

and it certainly has the potential to be a lovely home

for either first-time buyers or people downsizing.

What work needs to be done here?

Potentially, new central heating, that is always important,

certainly if it's going to be let.

New kitchen, new bathroom, I think it's important to reinstate the bath

in the bathroom because that does tends to appeal to a wider audience.

After it's had a fresh lick of paint and then refurbished,

how much could it be worth?

Once it's renovated, I would put a value of £70,000.

And for a buy-to-let investor,

how much rental income could the flat generate?

I would expect this to rent for £425 per calendar month.

Well, it's a good little flat,

especially if you like the colour bright yellow.

Did it make the other bidders in the auction green with envy?

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

Two-bed ground-floor flat,

ideally placed for taking advantage of the town centre.

Your details are there.

We've got this in the catalogue with a price guide of £24,950 plus.

Can I ask for 25,000 anywhere to start?

Front row, 23,000.

24 anywhere else? I've got the one bid on the front row, 23,000.

24 bid.

25, 26,

27, 28, 29...

30. 31, 32.

32 bid. 33? 34.

Lady on the front row, 33,000. 34,000, a new bidder. 35. 36.

Anybody else? 36, 37, 38?

39, 40.

41, 42.

42 bid.

43, 44.

45. 46.

At 45,000 to the lady on the front row. I'll take 500.

45,500 bid. 46.

46,500.

47.

47,500.

48.

You've tried from the beginning. You may as well keep going.

That was 48. 48,500. No?

I'm selling it once at 48, for the second time at £48,000.

Sold to the lady on the front row.

There, from the first to the last bid and getting the flat

for £48,000 was Stacy, who bought it with her brother, Matt.

Stacy was a personnel manager for 16 years, but recently

she's changed the direction of her career into property developing.

# Don't know about you but I'm on my way

# You're holding me back Had to leave someday. #

I met her back at the flat to find out more.

Stacy, lovely to meet you.

-And you.

-Congratulations.

-Thanks very much.

-You glance up at the fireplace.

-Yes, it's lovely!

We'll come onto the decorations in a second,

but tell me why you want to buy the flat.

Well, I live quite local and I have another property

a couple of streets away which I'm busy doing out.

It's similar to this one, and they seem to be good sellers as well

and they don't take too long to turn around.

Tell me what the plan is. You bought it to do it up to sell it on?

We bought it to do it and sell it.

We were going to start renting some out

-but I think for this one we'll be selling it on.

-And "we" is who?

Myself and my brother. My brother does all of the work.

He project manages it all.

Stacy's brother Matt is a plumber and this is their second project together.

Although Stacy is quite new to property investing,

she knows her way around a renovation,

having done up all nine of her previous homes.

This is more than just a project on the side.

-Is this your full-time job, then?

-It is now, yes.

I was made redundant not so long ago

and I had some money going spare so I thought it's better than sitting in the bank

so I'll buy some properties and spend the money wisely.

Moving forward, how many properties would you try and do a year?

Think if we could aim for about six properties this year,

and once we've completed them,

hopefully from next year we can look at renting some out.

We're trying to be mortgage-free completely, so... That's the idea.

Stacy is onto a good thing if they can stay mortgage-free.

It sounds like they're building towards a solid portfolio.

But she's got some work to do here before adding this to her empire.

Tell me what you're going to do.

First of all, we're going to get some people in

and completely strip the whole flat,

so say goodbye to the fireplace

and take off all of the skirting boards because they're all odd.

Obviously strip the walls

and the Artex ceilings have to go as well.

So basically, gut the whole flat.

I think in a few places the floor was quite unsafe,

so I've got some joists to repair there.

We'll have the electrics checked. New radiators and bathroom suite.

And in terms of the budget?

Think we're looking at about £7,500 to £8,000.

We spent roughly that on the other property that we've done up.

It's the mirror image of this property, so it will be the same.

-And the timescale?

-We will be looking at about 12, 13 weeks.

One of the issues with the property is it is leasehold and the lease isn't...

It's long but it's not as long as some mortgage companies like.

Yeah, that's it. It's currently 66 years.

We saw that in the legal pack before the auction happened

and the solicitor is looking at extending that.

It's in our best interests.

Has he given you an indication of the cost to get it extended?

He's hoping it will be under £1,000.

Congratulations. Good luck with it.

-Thanks very much.

-I'm looking forward to see how you get on.

-Thanks.

Well, it looks like the fireplace

and the yellow paint job are destined to be history.

Phew.

But what's more serious is that lease.

66 years really could be a problem

when it comes to getting mortgage finance for any future buyers.

How will Stacy get on getting it extended?

You can find out later in the show.

It's been a while now since we last saw those properties.

There should've been all sorts of work carried out,

but as we know from bitter experience, that's not always the case.

All sorts of problems can arise.

What have our buyers had to cope with? Let's find out.

Time now to cross back over to New Cross in London

and this three-bed mid-terrace,

which wannabe full-time property developer Johnny

bought at auction for £195,000.

He did have his sights set on a period property,

but missed out on that at auction,

but as a second choice, this one didn't seem so bad.

In terms of Georgian architecture, beautiful - it's not quite that.

-Certainly not, no.

-But it does serve other purposes. Tell me about that.

Primarily, the figures stack up and it's a good rental market round here,

and as you see, it's kind of good to go as it is.

Johnny was unsure whether to do just the very minimum here

and peel off the stickers in the kitchen, or to go the whole hog

and spend six weeks and five grand dragging the flat

kicking and screaming out of the 1980s.

Well, five weeks after our first visit,

we're are back to see what's been going down at the mid-terrace.

# Trying to make some sense of it all

# But I can see it makes no sense at all

# Is it cool to go to sleep on the floor?

# Cos I don't think that I can take any more

# Clowns to the left of me Jokers to the right

# Here I am Stuck in the middle with you. #

And Johnny's done good.

There's still a bit to do after a nasty leak,

but I'm delighted to see

he's gone further than peeling off those stickers. A lot further.

Since you were last here,

we've replaced the kitchen, which has come out fantastically,

the bathroom has been replaced and is in the process of being finished off.

It's not quite there due to some unforeseen problems that we had.

It's been painted throughout, completely freshened up.

The floors have been slightly reconditioned

and there's been a radiator put in the second bedroom

as it didn't have one previously.

The new kitchen really is fabulous,

a big improvement on what was here before.

If you remember, last time you were here, the kitchen was tired.

All the units had stickers on the front of them,

so we've ripped out all the old units.

We've kept a similar layout apart from the washing machine.

New worktops, new tiles,

new kitchen units just to try and freshen up the area.

Tiles were probably slightly more expensive than I'd buy normally

but I think it really sets the kitchen off.

Overall, very happy with that. Very happy with it.

Anything left to sort out here?

One thing I still have to do is put the door handles on.

# Pretty little thing Let me light your candle

# Cos mama, I'm sure hard to handle now, gets around. #

Well, don't let us get in the way, Johnny.

The bathroom also needs finishing off, so hands-on Johnny

had better press on, because he's got a deadline to meet.

The property is going to be rented out for six months.

I've got people moving in in a couple of days,

so still lots to do before they move in,

and then after they've moved out in six months' time,

the plan is to sell the property.

Johnny did think he was home and dry and then disaster struck.

It seemed the radiator in the little room upstairs

hadn't been connected properly by a previous owner,

so when Johnny fired up the central heating...

Water came pouring down through the wall and out through the socket,

which was a surprise on Friday the 13th,

but luckily, I had a plumber here that day,

so we kind of remedied the problem, connected it back into the loop.

The first thing we had to do was put a hammer through the ceiling

to release all the water, which has its plus points also,

because with the exposed pipes we could put a radiator

in the second headroom without too much hassle.

So, small saving graces.

Of course, he made sure that the electrics were professionally checked and certified.

So, it's back to those drawer handles, Johnny.

The leak will push him just over his six-week schedule,

but what about his five-grand budget?

Has that been blown out of the water?

Taking into consideration the problems we've had,

I'm about £300 over budget, so about £5,300.

With his purchase price of £195,000,

Johnny's total outlay here is just a smidge over £200,000.

We asked along two local state agents

to see what they make of the mid-terrace.

The property has been vastly improved from previously,

really modernised, brand-new bathroom,

fantastic new kitchen, very modern feel for a property.

Once people come in, this property will stand out usually.

He's used very dramatic colours,

which some people won't like, but I think in a property like this,

which could be quite bland as it's very boxy, it works.

It just gives the right balance.

What do they reckon the property could fetch if let out?

If I had to put it up for rent,

I believe it would achieve £1,000 per calendar month

to £1,100 per calendar month.

If I put the property up for rent,

I'd put it between £1,300 to £1,550 per calendar month.

£1,350, I think sounds slightly hopeful.

My estimates would be more in the £1,200 area.

The estate agents' rental valuations would mean

a yield of between 6% and 8%, which isn't bad at all.

But longer term, Johnny plans to sell the property on,

so what kind of resale value would the experts put on the mid-terrace?

If I was putting this on the market for sale,

I'd be looking for it to achieve probably around £225,000.

If was to I put the property up for sale,

I'd expect it to achieve between £225,000 to £235,000.

I think £225 is maybe slightly on the shy side.

I've had another estate agent who'd be happy to put it on

for more than that, but it's a figure that I'd probably be happy with.

A sale at £225,000 or £230,000 would give Johnny a pre-tax profit,

before fees and expenses, of between around £25,000 and £30,000,

which isn't bad for a first go at this.

What does the future hold for him?

Ten years' time from now, I'd like to be working on similar things,

but with more people around me to help me do the job,

bigger properties and bigger profit margins.

Back now to Hebburn in Tyne & Wear,

where, earlier in the programme, Stacy had bought

a two-bedroom ground-floor flat in this terrace for £48,000.

She was a personnel manager for 16 years,

but when she was made redundant, decided to start her own property-developing business

with her brother Matt, who is a plumber.

It was their second property,

and Stacy was going to work on it full-time,

with Matt fitting it in around his plumbing jobs.

Tell me what the plan is. You've bought it to do it up and sell?

We've bought it to do it and sell it.

We were going to start renting some out,

but I think, for this one, we'll be selling it on.

-And the timescale?

-We'll be looking at about 12, 13 weeks.

Now, 11 weeks later, we've returned.

And Stacy's keen to show us around.

The kerb appeal has been much improved,

thanks to a new wall and path.

The kitchen has been completely refitted.

There are new appliances and units.

And behind the kitchen, the former wet room now has a bath.

With matching hand basin and loo.

It's bright, white and shiny.

Two important rooms are now ready for rental.

In the kitchen, one of the first jobs we had to do

was to strip out the range of old units that were in here.

We replaced the wood ceiling with plasterboard

and we had the whole kitchen re-skinned.

We then put in some new units and work surfaces

and installed a new oven, hob and extractor fan.

The final job in the kitchen was to relocate the boiler,

which was in the back bedroom, and we put that in the kitchen as well.

Once that boiler had gone from the second bedroom,

it was replastered like the rest of the flat,

and has also been rewired.

But in the lounge, it wasn't just the yellow colour scheme

and fireplace that needed attention.

The living room had quite a big fireplace, a big stone fireplace.

When we took that down, we noticed there was no joists underneath that either,

so he had to lift up the floor, put joists in there.

The ceiling in the sitting room was quite heavily Artexed as well.

We couldn't get it off so we had to pull down the whole ceiling,

re-board that and then re-plaster the whole room.

With new doors, windows and skirting throughout,

Stacy and Matt have refurbished the flat very well inside and out,

and as they've decided to sell rather than let,

they decided to fix anything that could get a prospective buyer jumping up and down.

Remember this?

# Bounce! #

When we purchased the property,

the floor in the bedroom was very springy.

We found that approximately eight of the joists were rotten,

so we replaced all the joists,

got the floor to be nice and level again, then put new floorboards down on top of that.

Who's been involved in the refurbishment?

There was mainly myself and my brother,

but we also had a plasterer, electrician

and we had a young lad come along

and he stripped the whole property out for us within the first week.

My parents have been helping out as well.

My main job, I done the tiling. I helped with the kitchen as well.

Then we decorated each room.

With Matt's mates and other friends and family helping out,

what effect did that have on the budget?

The original budget was, I think we set about £7,000.

We always keep about 10% contingency as well just in case,

and I think we've spent about £8,000 when I totalled it up.

With the £48,000 they paid at auction,

that takes the total outlay to £56,000.

Time to hear what two local estate agents of will think of the flat

and its potential resale value.

It's nice, it's in a good area.

Close to the shops and the local park

-and it's been done to quite a good standard.

-It's very basic, neutral,

but it's clean, simple

and I think it will appeal to a wide variety of people.

Good news, both agents seem impressed.

So how much rental income could the flat achieve?

Rental, I would hope to achieve

£425 to £400 per calendar month.

In my opinion, it would achieve

between £425 to £500 per calendar month.

Impressive yields to be had here, then.

Between 8.5% and nearly 11%.

Is Stacy tempted to let instead of sell?

As much as that? Right.

I think £500 would be fantastic if I was going to rent it out,

but definitely looking just for a straightforward sale.

OK, time for some sale valuations.

Is the flat worth more than the £56,000

that Stacy and Matt have invested?

Sales, again, taking current market conditions into consideration,

I would hope to achieve £75,000.

In my opinion, I'd put this property on the market for £80,000 to achieve

anywhere in the region of £75,000.

Well, if they achieve a sale at £75,000,

that would produce a gross profit of £19,000

before the usual selling expenses.

So, what's next for Stacy and her brother Matt?

Is she pleased with those figures?

Spot on. That's exactly what we were looking for.

The plan is now to put the flat on the market.

Hopefully we'll be able to pick up a few more properties

in the next few weeks and do it all again.

There you go, another group of plucky buyers

experiencing the dizzying highs and worrying lows of buying at auction.

So make sure you join us next time for more Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.

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