Episode 48 Homes Under the Hammer

With ups and downs in the property market,

you need to be able to trust your instincts when you're buying.

Nowhere is it more true than in the auction room.

Yes, join us now as we take the lottery out of property.

Buying under the hammer.

Buying at auction doesn't have to be a scary experience.

If you've done your research

and stick to your budget, you can get yourself a bargain.

We'll meet three buyers today, who we hope did just that.

Did they bag a bargain, or did they get more than they bargained for?

Let's take a look at what they bought.

In Gateshead, there's a terrace in need of tarting-up.

I'm not expecting a completely sparkling interior,

but how bad is it?

A flat in Shepherd's Bush, London, that needs hard graft and hard cash.

You've got to be ready with the readies because easy money it is not.

And in Preston, Lancashire, if you're after a two-bed mid-terrace,

this place could make you say bingo to the numbers.

Yep, you heard right, two five, 25.

All these properties were sold at auction.

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

when they went under the hammer.

Sold!

Welcome to North East England.

To be precise, Gateshead, on the banks of the River Tyne.

The town is becoming famous for its iconic architecture,

which reflects its industrial past but also its cultural future.

Today's auction lot is in an area called Felling,

with good transport links to Newcastle city centre and further afield.

Well, just off the main road,

up this little pathway is the property I'm here to see.

So, really nice and secluded, good residential area.

Still close to the shops and you've got good schools close by as well.

The house itself?

Three-bedroomed, end of terrace, had a guide price of 60,000 quid.

Doesn't look like it's been that well looked after

but let's live in hope.

There are cracks around the windows and damage to the roof and guttering, not a great start.

My hopes are fading fast as I enter the lion's den.

Well, clearly I'm not expecting a completely sparkling interior.

But how bad is it?

It definitely needs a coat of paint, new wallpaper,

but a nice-sized room.

This main living room area, really good.

I like the open fireplace that's hidden behind there.

And, yeah, as I said, it definitely needs a bit of tender, loving care for sure.

But the actual layout is good and the room size is really nice.

Come through there into the kitchen here.

And as you can see, enough space for a kitchen table.

I mean, it's a really useful space.

And straight away, yeah,

this is one with a bit of effort, it could be really nice,

cos you've got a fantastic thing to work on.

# You'd be so nice

# To come home to... #

Yes, upgrade this kitchen and it really could be the warm, cosy heart of this home.

Tucked away next to the back door is a WC, always handy for a family.

Let's take a look upstairs.

There are three bedrooms. Two doubles and a single.

And the bathroom, which looks like it comes with a new bathroom suite.

Bonus! The rooms have been stripped back,

which is also a bonus as you can see the condition of the walls more clearly.

And, sure enough, I've spotted some worrying cracks

which could be a sign of subsidence.

At the rear, a green-fingered gardener could make this a lovely little space.

But I spy something which warrants closer inspection.

Now, when it comes to properties, nature has a fantastic way

of giving you clues as to potential problems.

Here I am at the corner of the house. While I'm here,

really nice-sized garden by the way, it is in a bit of a mess.

But at this corner here, you can see loads and loads of this green stuff,

kind of algae or whatever it is.

And that only happens when there's a real issue about damp.

There's lots of water here It doesn't make sense cos we're outside.

So, what is going on? Drainpipe comes down in here and you've got this drain.

Now, if I just root around in here, you can see lots of bits and pieces.

So, my guess is, what's been happening over time,

is when it rains a lot, this...

Yes, this is also a down pipe from the upstairs,

erm, upstairs sink, that's not helping matters.

That fills with water, it's flooding down here,

and my concern is it's getting into the soil

and that could cause real issues with subsidence,

so it really needs to be sorted out urgently.

What you need to do is, for a start, get rid of all the muck that's in here

and, secondly, just run a new bit of underground drainpipe from there

to the manhole cover which, handily, is only about three metres away from here.

Do that, and you could save yourself

a heck of a lot of trouble in the future.

Thank you, Mother Nature.

# God bless Mother Nature

# She's a single woman too... #

So, alarm bells ringing here, but this house has plenty of potential.

It's a good size with a big garden,

and if it was bought around the guide price of £60,000, I'd call it a bargain.

We asked a local estate agent to give us her opinion on this property.

I think this house has vast potential.

Good if you want to extend, good size as it is.

Does need refurbishing,

does need some work to bring it up to standard.

Really good plot.

And in its current condition,

how much does the estate agent believe this property could achieve if sold?

I think this house at this moment in time is worth £70,000.

And once renovated?

If it was renovated, I would bring that price to £95,000.

And rental valuation?

I would expect that this property would rent out

for £550 per calendar month.

Well, a few issues to sort out with this one,

but intrinsically, what you've got here is a really nice-sized house

that would make a good rental opportunity or a family home.

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

Anyone want to start me at 60?

58.

56?

56,000 the bid, left-hand side, 56,000.

I'll take one anywhere else. 56,000 on the left-hand side.

57 anyone else?

Lady at 57. 57 with the lady at 57. 58?

58 bid. 59? 59 bid.

60? 60 bid. 61.

It's against you, it's the gentleman on the left-hand side at 60,000.

I'll take 500 if it helps.

No? I'm selling at £60,000. I'll take 500.

I'm going to sell, at 60,000. I'm selling it once at 60.

I'm selling for the second time at £60,000.

The hammer fell on a bid of £60,000,

bang on the guide price. And the successful bidder was Andy.

He has purchased the property to be his and his wife, Emma's, new home.

They have a one-year-old son and are in need of extra space.

Andy works as an arborist

and, so you're up to speed for your next pub quiz,

that means he's a tree surgeon.

# I talk to the trees

# But they don't listen to me... #

-Andy, good to meet you. Congratulations.

-You, too.

-Tell me why you wanted to buy the house.

-We've just had our first child, and so,

at the minute we're living in a flat that me and my wife have been living in for the last five years.

And really now we need to find ourselves a larger property just for,

obviously, for our child to have a run about.

What was it that you and your wife liked about it so much?

We've had a look at a couple of properties

and, really, it's the space in the living room itself

and the space in the gardens.

We like to be outdoors as much as possible,

so to be able to let our child go outside and play is fantastic for us.

From that point of view then, the fact that there's not a road leading to it,

there's just this, sort of, pathway, must be ideal?

Obviously, when you come into the property, as you can see, it's...

You just walk down. It's quiet, there's not many people around this area.

What was the auction like?

My wife, what we did was, she didn't want to put her hand up,

and I said, "Well, but, when do you want me to put my hand up?"

She said, "I'll nod, you put your hand up". I said, "Right, OK".

So, she gave me the nod, I put my hand up, and we just kept going from there

until, luckily, it went at 60, which was, kind of, as far as we were going to go.

And we managed to keep it there, so.

Wow, so you got it for your last bid

That was our last bid, yeah. If it had gone any higher, if it had gone to 61 or anything.

I was praying that the auctioneer, cos he kept going, "I'll take 100".

No, don't take 100 on it, that's enough. Please stop.

But it was enjoyable to be there.

It wasn't as bad as I thought it was going to be, it wasn't too much pressure or anything,

I was just standing at the back, it was OK.

I get the impression Andy is a take it in his stride kind of guy.

And, certainly, this little house will provide his little lad, Logan,

with plenty of room to run around in.

And I'm sure Emma, his wife, is equally happy with their new home.

So, how long have you two been together?

Seven years together. We've been married for,

it's a hard question ,isn't it? I think we've been married now for five years,

coming up to six this year.

So, but yeah, it's been fantastic, really been enjoying it.

-Got married in Vegas by Elvis.

-You got married in Vegas by Elvis?

Had all the family there as well. If you're going to do it, you may as well do it right,

so went across, had a great time. Really good place.

# I'm in love, I'm all shook up... #

Viva Las Gateshead doesn't have quite the same ring

but I'm sure Andy will not be getting all shook up with the challenges of this renovation.

He has a £4,000 budget to make it homely enough

for his family to move into in three months.

So who's going to be doing the work here?

Mainly it's going to be myself and my father-in-law.

And any friends that we can get to come along and help, kind of thing.

If we can get it done with just ourselves, all the better.

Now, a couple of structural things,

the stuff above the windows upstairs,

the brickwork is all cracked, that doesn't look too good. Any idea what's going on there?

Not too sure, no. So we are going to have to get some structural engineers in,

I think, to have a look at that. It is worrying but, for the price of the property,

we thought it was a risk we were willing to take really on it.

And the only other thing is the bit of drainage round the corner of the property at the back.

We need to see what damage is actually done there,

whether it is just superficial on the outside of it,

and then get someone in, see what they say.

-Well listen, congratulations. Good luck in your new family home.

-Thank you very much.

-I look forward to seeing how you get on sorting it out.

-Yes.

# I'm all shook up... #

Well, that's great, this really is a perfect property

for Andy and his family.

How will they get on sorting it out? Well, something tells me,

when we return, for sure these trees will be gone,

but what else will we find?

You can find out later in the show.

If location is the key factor for a property,

then the lot I've come to see in Shepherd's Bush, West London,

should attract a lot of interest.

If every property description could start with

"Leafy tree-lined road and well-kept period property,"

then estate agents would be in seventh heaven.

Because, in London, roads like this are what people are really after.

And they continue to sell very well,

which is good news, because this is the lot I'm here to see.

Sadly not the whole house, just the first floor,

which had a guide price of £225,000.

So, the location's good. And the flat?

Well, the outside could do with some tidying up, and it's single-glazed,

but it's nothing that couldn't be easily sorted out.

There is a covenant attached to the sale by the local borough,

who are the vendors, and that states

that they can't sell to anyone who intends to live here.

So, investors only, please.

What a lovely, light and airy space. So nice to walk into.

You've got a skylight here, letting all this gorgeous daylight through.

I'm not even going to look at the woodchip,

I'm not going to mention it, because you know how I feel about that.

But it's almost like there's too much space on this landing.

What's in here? Got a loo, a bathroom,

not a bad-sized kitchen there,

but I'm just wondering, I mean, look, stud partitioning everywhere.

I'm just wondering whether or not it might be worth thinking about

knocking a few walls down to make that kitchen bigger.

That would really work. You could then have a nice table and chairs in there,

so you could eat in that space.

How about taking this wall down, bringing it out to here?

Then, make the bathroom a little smaller,

but if you then knocked this stud partition through to here

and had one toilet and bathroom,

knock them together, you'd have a bit of space.

Corridor here, door into the kitchen.

I think that would work, and really add a bit of value to this property.

# Come on, pretty baby # Let's move it and groove it... #

Kitchens increasingly are the key rooms in a property

and anything that can enhance this space would be a bonus.

With parts of the flat adapted to make it more accessible,

the bathroom space will need some changes anyway.

The layout of the rest of the flat is fine,

with a decent double bedroom and a good size lounge.

But I think I've found something that could completely transform the space here.

When you're viewing property and you're on the first floor, look up,

and see if you can spot an opportunity.

Because roof space equals potential loft conversion.

Which means extra bedroom and extra profit. Bingo!

But hold your horses.

Now, just because you own the first floor of a property, well,

it doesn't mean you own the bricks and tiles above it.

In this case, the freeholder has retained ownership of the roof space and, to buy that off them,

well, it could cost you thousands. A lot of thousands.

In fact, a similar case recently not far away from here, just up the road,

it cost them around £25,000.

Now, that expenditure could easily bring you more profit in return,

but you've got to be ready with the readies

if you plan to go down this route,

because easy money it is not.

That £25,000 was just to own the loft space.

It could cost the same again to convert it

and there's planning to go through, too.

So, for the best chance of making sure bigger is better,

keep a very keen eye on your budget.

OK, let's get a second opinion.

What does the local estate agent make of the potential

of this one-bed flat guided at 225,000?

First impressions of this flat, nice, light, good-sized rooms.

Needs a little bit of modernisation but it's a good space

and the location is pretty near spot on.

So, just a little bit of tenderness and you've got a very nice flat here.

So, as it stands, it's fine.

But what would be the best way to enhance what's already here?

The biggest opportunity to make money in this flat would be to access the roof space.

So, if you can have access to that, you can put another

very good sized bedroom in

and the flat will increase in value significantly.

Very good news, but how significantly?

What's the difference between the values refurbished as it is,

and with an extra bedroom in the loft?

If you were to refurbish,

285 I think would be the top in its present format.

I would value the property with a second bedroom

in the region of £325,000.

So, that's a price hike of around 40 grand,

which certainly gives you something to think about.

It could cost as much to do

but how much would the loft conversion affect the rental values?

As a one bedroom flat, I would suggest it would rent for

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

As a two bedroom, as much as £1,450 per calendar month.

This is an extremely popular area,

a lovely road, and a potentially gorgeous period property.

Although, do the flat up well,

and I don't think there's a huge profit in it.

But it would rent out or sell in a flash.

So, it's the low-risk, reasonable return approach on this one.

Let's see who that appealed to at the auction.

Lot three now.

A one-bedroom, first floor flat, 200, 200 sitting down.

205.

205. 210.

215. 220.

225. 230.

230 in the front. 235.

240. 245.

250. 255.

260. 265. 265. Anyone else?

266. New spot 267. 268.

269.

270. 271.

272. 273.

Have a think. 272, back to you.

273. 273 back in. 274.

Where am I? 273 with you, sir, standing up.

First time, second time.

Third and last time, have we all done?

Sold, well bid, well done, you got there. Sold 273.

And for 273,000, nearly 50 grand over the guide price,

the new owner is Pierre.

Pierre works now in PR

but previously worked as an estate agent in this part of London.

So, he's hoping that that experience

will stand him in good stead with his property purchase.

-Pierre, congratulations.

-Thank you, thank you.

-Lovely to meet you today.

What's all the story behind you wanting to buy this flat at auction?

Well, I think I've tried to cover all bases.

I really concentrated primarily on...

Do I know the area? Yes, I do.

Is it a good spot, is it a good location? Yes it is, it's West London,

it's reasonably central, it's a Victorian terrace,

and it doesn't need all that much work, which I'm quite pleased about.

All the property-speak, all the agent talk's coming back. How does it feel?

-Well, it feels quite natural, really.

-Does it really? So, what do you do now?

Well, I work in PR, but I've always been in the construction and housing sector.

So, yeah, I suppose I should be considered an expert in it,

but sometimes when you make these sort of decisions

and the hammer comes down, you start wondering if you are an expert.

But I'm still fairly happy with it.

Yes, and it's one thing being an expert in assessing properties

and another when it's your own project

and you've actually got to do the work.

And this is quite an incredible flat because you could put tenants in tomorrow,

or you can take it a stage further and you can start doing a bit of work,

knocking a few walls down, et cetera.

What route are you going to take here?

Well, I think what I'm going to do first of all is just freshen it up a bit.

And that's what I'm going to do initially, I'll let it for the first six months,

and I'll just get a flavour of then what to do with it.

# Just you wait and see... #

And, for his wait-and-see approach,

Pierre has earmarked a budget of around 3,000,

while he decides whether he'll make any more significant changes.

So, do you have any ideas of how you could improve it?

Well, what I'd like ultimately is to have a kitchen which you can eat in.

I'll probably have to move the whole wall of the kitchen further into the hallway.

But I need more time to think on that one.

-But what about the freeholder?

-The freehold is the council,

Hammersmith and Fulham Homes, and the good thing is that

the downstairs tenant also has a very long lease,

and that means that we've got a right to buy the freehold.

And I've spoken to him and he wants to go ahead.

I'm not particularly interested in dealing with the roof at the moment

but I do want the freehold, so we'll go down that route,

and we'll have to see what the council says about the roof.

So how much time have you got to invest in the renovation of this property?

Quite a lot really. I've got, well, I'll spend all my weekends on it,

it will keep me out of the pub.

I always like a project, I think most people do.

And it's a project that I think

is within my capabilities, if you like,

so, I'm eager to crack on.

Pierre, good luck. I am really looking forward to seeing this flat without the woodchip.

-OK.

-Well done, congratulations. Thank you.

-Thanks, thanks.

So, expert or not, Pierre has got a great flat here,

and I think he's right to hold off from the loft conversion

for the time being, considering what he paid for this.

But I would love to see the layout changed and that kitchen extended.

Find out what Pierre's perfect pad looks like later on in the show.

Coming up. The stairs of this Preston property give me altitude sickness.

PANTING

I need oxygen.

In Shepherd's Bush, London, it's decisions, decisions for Pierre.

I think what's important is to get the work done,

and then I'll be able to decide what to do with it.

But first, in Gateshead, did Andy make a cracking job

of turning this place into a family home?

It's just happy times.

It's time to return to Gateshead in County Durham,

where I viewed this three-bedroom end-of-terrace

which had a lovely big garden,

but I was concerned about the cracks on the outside and the inside.

I feared that the broken drainpipes in the garden

had possibly caused subsidence.

The property was purchased at an auction for £60,000,

bang on the guide price, by tree surgeon, Andy.

He planned to renovate this house

as a new home for himself, his wife, Emma,

and their one-year-old lucky lad, Logan.

Tell me why you wanted to buy the house.

We've just had our first child and, so,

to be able to let our child go outside and play is fantastic for us.

So, let's find out if Andy has made this house their home sweet home.

Six months later, we're back.

# Oh, baby, it's home sweet home... #

# Home sweet home... #

Well, there's certainly loads of room for Logan to run around in.

And that, it would appear, is exactly what he's been up to.

Shhh, don't wake baby.

# Don't wake me up... #

Andy and his wife, Emma, moved into the house before their renovation began.

So, top of the to-do list was a bedroom for Logan.

This was one of the first rooms that we had to do when we moved into the property.

Logan, obviously, was our main priority,

so we decided that we would get his room set up

so that even if nothing else, he had somewhere to sleep.

And we could sleep on the floor, which we did end up doing.

But, obviously, we needed somewhere that Logan could just have himself

a little room to enjoy himself, have a run around.

And to see Logan's face when he first came into his bedroom.

He'd been living in such a small, little room,

and then here he came running in, he could roll around on the floor,

he'll just crawl onto his bed, jump off his bed,

which we'd never had the chance for him to do before.

And that just made it worthwhile,

all the time and effort that we'd put into it.

Just, it was great seeing

your first child running around, having a great time.

Their renovation was carried out by Andy and Emma and both their dads,

while little Logan was looked after by the grans.

Everyone working together to ensure that this building was transformed

from a cold and grumbling house

into a warm and welcoming family home.

It's really nice now that we actually have the house.

It's possible to have everybody round, all together, the family's together.

Before when we lived in the flat, that wasn't really possible.

But now it's possible to have everyone in the house.

But, hopefully, with the summer coming,

we're going to have ourselves some barbecues outside.

Really looking forward to the families getting together.

Outside, Andy has fixed the drainpipes,

but you can still see cracks above the windows.

We decided to get some engineers just to come out and have a quick look at it for us

and they said that there's no subsidence in the building,

that it seems to have settled whatever had happened.

So, what they recommended was just getting the cracks filled in.

We haven't actually done that yet, but it's something we'll look at over the summer.

Andy has begun landscaping the garden

and, for this, his job as a tree surgeon came in handy.

Well, in the garden, we decided that we wanted to try to get a place,

a nice, safe place for Logan to play as quickly as we possibly could.

So one of the guys at work recommended to me

a local turf company that could supply the turf.

And then all that was required was for us to dig up all of the lawn.

And then we laid all this down, nice and straightforward really.

We've got a bit of woodchip down. We've got so much woodchip in my job,

may as well get rid of it any way we can.

There is still work to be done inside, too.

The kitchen remains the same.

Andy and Emma are working with a tight budget.

And they will be carrying out further works as and when finances allow.

So far, they've spent just under £5,000, including fees and expenses,

which gives them a total spend of nearly 65,000.

We haven't spent a huge amount of money on the house,

but I think that's been an important bit for us, buying a house at auction.

Able to buy ourselves a nice house

and then we didn't have to get into loans and get into lots of debt

to try and make it look beautiful. It's just how we want it.

Andy can be proud that he and Emma, with the help of their parents,

have created a lovely home for their family,

and look who's finally up an at 'em.

# I wanna play with you

# I wanna swing in the swing

# Run in the park Play in the sand... #

We invited two local estate agents

to give us their opinion on this property.

The thing for me is the actual location.

The garden's going to be a particular feature, without a shadow of a doubt.

The opportunity to have a fully enclosed garden

where your kids can just run and play in safety,

nowhere near a main road,

I think, is going to be a particular feature.

I think that this property has been made into a lovely family home.

Lovely colour schemes, really good.

Kitchen still needs a bit of work, obviously,

but it's absolutely fantastic, I love it.

Both estate agents believe that the property could achieve

£550 per calendar month on the rental market,

which would give Andy and Emma a potential yield of just over 10%.

Remember, this property is not a financial investment per se,

but an investment in the family's future happiness.

But how much do the estate agents believe this property could achieve if sold,

bearing in mind Andy and Emma's total spend so far of almost 65,000?

I think, if I was putting this property on the market in its current condition,

I would perhaps market it between 75,000 up to £80,000.

If the kitchen was put in and redone and the gardens were remodelled,

then I would push that up to maybe £85,000 as an asking price, maybe a little bit more.

I think if I was putting it on the market, I would certainly be asking a price of around about £70,000.

And I think if they carry on, it has the potential to be worth around £80,000.

Even unfinished, the couple have potentially added between

5 and £15,000 to the value of this bright and beautiful family home.

And it's all thanks to the combined efforts

of Andy, Emma and their parents.

It's been hard work but, now that we've finally got here,

it's just happy times.

And I'm happy to see this family enjoying their new home.

# Baby, happy times

# Are here to stay... #

Are you ready for your close-up now, Logan?

# Shine, shine, shine on

# Yes

# Won't you shine, shine on... #

This is Preston in Lancashire.

It's not the industrial view perhaps you'd be expecting,

but a forward-looking, well-located university town

that seems to offer more for your money than you might think.

Well, the property I'm here to see has one of those guide prices

that still take your breath away.

£25,000. Yep, you heard right,

two five, 25,

for a two-bedroomed mid-terrace.

# Take a look, take a look

# Want to take a look, take a look... #

Well, it might have no garden to speak of, only a yard,

but a two-bedroomed house for £25,000, close to the university,

well it's got to be worth looking at, hasn't it?

Nice little porch, always like to see that,

keeps the cold and the noise out.

And then through into your front lounge,

fairly standard layout as you might have expected.

But it doesn't smell damp, which is always good.

Nice, high ceilings, it's a bit dated,

but pretty much as you, as I said, would have expected.

Through to the kitchen and not a bad sized space, slightly old units,

but maybe serviceable perhaps.

What on Earth is going on with these stairs?

They are the steepest you could possibly imagine.

Luckily I brought my ropes and my karabiners,

so I'm off to the first floor,

or shall we call it the Eiger?

# Ain't no mountain high enough

# Ain't no valley low enough

# Ain't no river wide enough

# To keep me from you... #

I need oxygen.

Once you make it upstairs though,

what do you find? Well, joy of joys,

a flag at the top saying, "Well done to the summit".

No, you actually get yourself a bathroom, which is great.

It's obviously been moved upstairs

from what would traditionally be the location downstairs.

Probably at the expense of a bedroom, though, because it's just left two bedrooms.

But two really nice-sized bedrooms,

which is good, and I think is a very sensible way to go,

makes it a very liveable-in kind of house.

And not too much structural work to do, apart from up those stairs.

Having said that, there is a slight angle to this floor, which I think needs investigating though,

I do understand a bit of history of subsidence in the area.

Hopefully, though, nothing too dramatic.

All in all, once you do make it up here, it's good news.

Generally, it is all positive with reasonable-sized rooms

that really just need refurbishment.

There is double glazing, but I think it will need new central heating.

But, apart from those stairs,

which you might want to make more user-friendly,

there's nothing so steep here

that's going to make the costs rise dramatically.

Now, you may well be thinking this is all pretty easy-peasy, isn't it?

Simple two up, two down terrace.

Buy it, do it up, sell it on for a profit.

Well, unfortunately, it's not quite that simple

because there is a clause in the legal pack which says

that whoever buys this has to either be an owner-occupier

or an accredited landlord with Preston County Council.

The idea is to stop people buying it, doing it up

and doing exactly as I said before, selling it on for a profit.

And, at the same time, improving the area

by encouraging people to live here,

or making sure that landlords who rent these kind of properties out

do adhere to certain standards.

Either way, it's improving the area, and that can only be a good thing.

# Good thing... #

The clause is well meaning

but it does emphasise the importance of reading the legal pack

before buying a property at auction.

Because, if you didn't, and bought this to do up and sell on quickly,

then you'd be scuppered from the off.

But what does a local estate agent think of the property's potential?

The property's a fairly typical Victorian street-fronted terrace.

It has the usual arrangement of rooms and overall is in fair condition.

It's a little bit small for the normal student accommodation,

but certainly it is a property,

because of the proximity to the university, that would suit students.

Student lets would have the advantage of room-by-room lets,

but, with this relatively small house,

would that actually generate a larger rental income?

This property, as it has two bedrooms,

would normally achieve approximately £50 per week per room.

As a whole property we would expect, per calendar month, this property

to achieve somewhere in the region of £450.

So, rental-wise, a similar income whatever approach you take.

But, either way, it's a good yield, maybe up to 20% on a house

that was guided at 25,000.

I think this sort of property in this condition, we'd expect it to achieve

somewhere in the region of 50 to £55,000.

And, once the work's been done,

it's probably going to be somewhere in the region of £75,000.

Well, quite a potential profit to be made on this one,

but not that you can get your hands on it that quickly, due to that special clause.

But, for a landlord looking for a great buy to let investment,

or for somebody looking for a nice home

it's a great one to go for. Let's see who agreed.

This lot came up towards the end of the day at the auction,

but it didn't stop a bidding battle.

Moving onto the Preston lot, can anyone give me 25?

25 straight away. 26?

26 in the aisle.

27? 28.

29. 30. 31. 32.

33. 34. 35. 36. 37.

38. 39. 40. 41.

41. 42. 43.

44. 45?

45. 46. 47? 47.

48. 49.

48,000, been there all along, the lady at the back.

48,000. Going once,

going twice, going three times.

Sold to the lady in the aisle at the back. Good buy, that.

And that final bid of £48,000 came from Janet and her son, Alex.

Alex is being helped by Mum and Dad with the purchase of the mid-terrace,

but he is the new owner.

This 22-year-old is a heating engineer,

working in the family plumbing and heating business,

and I met him back at the property.

-Alex, great to meet you. Congratulations.

-Thank you very much.

Tell me why you wanted to buy this place.

Decided to invest my money into property.

A year ago, me and my friend bought a house together.

We fully renovated it and sold it on, made a good sum of money.

-Oh, great.

-And he's moved on and bought a house with his girlfriend,

so I thought I'd go and buy a house of my own.

-Wow.

-So, here we are.

-Everything go OK with that first one?

-Yeah. Well, actually no.

Halfway through I ended up breaking my leg.

-I know, so.

-Nothing to do with the restoration?

No, no, no, it's a sports injury.

-Right.

-I had a bit of a set-back

but recovered and, luckily, we were most of the way through by then.

So, we got a lot of the hard work out of the way.

So, Alex's first break into property developing

might have been a painful but profitable one.

And now he's flying solo and hoping to take the experience learnt

into this two-bed Victorian house.

So, why this particular house, then?

We were looking on websites at auctions, it was my mother that spotted it, actually.

On Sunday night, she was looking at the auctions on the Monday.

Sunday night and then Monday you were down at the auctions?

Yeah. We'd not actually viewed the house.

-So, you didn't come to see it?

-No, no.

But we knew... I've done work in these houses before in this area,

and this isn't actually the house that we were going to bid for.

It was two streets along but this one came up first in the auctions

and we thought no one was bidding on it

so, we thought, we knew our reserve,

so we thought we'd bid on it and luckily it came in.

What did you think when you saw it inside for the first time, having bought it?

Walked through the doors with my fingers crossed,

thinking, "What have we done? We've not seen it",

and, luckily, I think it's paid off so far.

We won't know fully until we start going to renovate it,

but there's not much to do, I don't think.

-Right.

-On first inspection so, thankfully, I think we've got a good buy there.

Yes, it does look like they've bought a good buy,

although it's never great to buy site unseen.

But they did read the legal pack and were aware of the clause

about the buyer being an owner-occupier

or an accredited landlord.

So, the plan is for Alex to be an owner-occupier at first

and then get accreditation at a later date.

It might have been a rush buy, but it's certainly not a rash one.

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

New central heating system.

New front door, new back door. Full decoration.

I'm hoping to implement solar thermal.

Basically, it's solar panels on your roof filled with water,

and it basically heats a cylinder up, which provides your hot water.

-So, who's going to do the work?

-Me mostly.

I'll do most of the graft and, obviously, I'll be putting the central heating system in.

We're in the trade, so I know the builders

and plasterers and things like that, so it's all quite handy, really.

Completely. So, what have you set aside to do the work?

£7,000, that's what we've set aside, so, hopefully...

-And what kind of timescale?

-I'm thinking two months,

obviously, because I'm full-time working myself.

So, most of the work by me is going to have to be done at weekends

and week nights and things,

so bearing that in mind it's two months, I think.

So then, on the rental market or on a resale?

-As soon as I'm accredited, rental.

-Rental.

-Definitely.

And then what's the plans for the future?

Save up for the next one, I think, so, carry on from there.

Build up a bit of a portfolio.

I enjoy doing it, so, it's bricks and mortar,

I've always been told, put your money on bricks and mortar.

-Congratulations.

-Thank you very much.

-And we look forward to seeing how you get on.

-Excellent. Cheers.

Well, there you go. This property offers Alex

the opportunity to continue with his investment plans

and also turn this terraced house

into a bit of an eco-friendly place, How fascinating.

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

So, time has flown since we last saw our brave buyers.

So, have they been firing on all cylinders,

-or have they run into problems?

-Let's find out.

A major factor in property buying is no doubt the location.

And, earlier, we were in this desirable part of West London, Shepherd's Bush,

where this top-floor, one-bedroom flat was sold at auction

for a whopping 273,000.

It was bought by Pierre, who now works in public relations,

but, in a former life, was an estate agent,

and he obviously saw the potential of this flat

that needed little work to get it returning on his hefty investment.

What route are you going to take here?

Well, I think what I'm going to do first of all is just, basically, do it up,

freshen it up a bit, and then it should really be ready to go.

That's what do, initially. I'll let it for the first six months,

and I'll just get a flavour of then what to do with it.

Pierre had a £3,000 budget

and a one-month turnaround plan for the initial cosmetic makeover.

Now, 11 months later,

has it all been as straightforward as he hoped?

It seems not, as Pierre has had a big change of plan,

and we find ourselves in the midst of a full-scale renovation.

In fact, this started after we last met Pierre.

He decided not to rent it out in the end, but to press ahead and start a renovation

while simultaneously trying to purchase the loft space

and the freehold in order to extend upwards.

So, what have we got so far, then?

Well, the living room and bedroom have been stripped back,

replastered and whitewashed.

And, towards the rear, the old toilet and bathroom

have been joined to create a new shower room.

And, though it doesn't look like it at the moment,

those changes have led to an increase in the size of the kitchen as I'd hoped.

What I've done in the hallway and the kitchen is to remove the door

that was originally just here, which made for a small kitchen.

I've removed the doorway. I've moved this wall, it's a stud partition wall,

outwards into the hallway and made it open plan.

I've kept the skylight,

so that the hallway itself will be nice and bright,

albeit slightly smaller than it was.

The idea of that is to have kitchen units running along this wall,

running underneath the window, and here, in this area here,

now that it's bigger, there'll be space for a table with four chairs.

So it will be an eating kitchen, which is very important in a flat of this size.

I'll be putting a doorway just here,

and then we've got the doorway to the shower room, which is a little smaller

because, of course, I've used some of the space for the kitchen,

but at the same time, because I've moved the shower tray

and made it width-wise rather than length-wise,

I've used some of the width of the hallway

and it will still be of a decent size.

In fact, it will be very difficult to tell

that it's actually reduced in size, the shower room, but the kitchen benefits.

Increasing the kitchen size is a wise move for Pierre.

But, after 11 months, why isn't it finished?

Well, the work's all been put on hold

because the purchase of freehold and loft space

still hasn't been signed off.

It's taken a long time, but the loft space is ideal for conversion.

I've had to negotiate with the freeholder

over the purchase of the freehold,

and including the loft space.

Once that's done, we'll need planning permission

to convert the loft space

into a big double bedroom with an en suite.

And that will be the master bedroom.

So it looks like Pierre is taking matters onto another level, literally.

Adding a loft conversion could cost approximately 25,000.

But he's hoping it's a small outlay

compared to the potential returns on the property.

And, if all goes to plan,

it seems that the work already carried out on the first floor

could change dramatically again.

I might well be converting the living room and the existing bedroom

into a big, L-shaped, open-plan kitchen-diner-living.

And then the existing kitchen could be converted into a smaller double bedroom.

But, if that does come off, then this could be an exceptional property.

# You better make your mind up

# You know sometimes you can think too much... #

And one of its big attractions was the long lease of 125 years,

which was a big bonus for Pierre

when it came to paying for this project.

Well, the freehold itself was quite reasonable

because both flats were in very long leases,

the freehold was about 3,500.

But the roof space itself was kept separate in the sale,

and I've had to negotiate on that, and that's come in at about 20,000.

Getting the freehold and roof space is costing Pierre 23,500.

He reckons, once the loft has been converted

and the first floor finished off,

his projected total spend will be 327,000.

But at the moment he is undecided

whether to let or sell the finished product.

So, it's time to find out, from two local estate agents,

their thoughts on this first floor flat in Shepherd's Bush.

My first impression of the flat is it's a work in progress,

I think they're doing a very good job.

I like the layout. It works really well.

Brilliant-sized kitchen-breakfast room, which is highly desirable.

My first impression of the property,

seems as if the work is going very well.

It has a good-sized living room with good, high ceilings

and a good-sized double bedroom.

But should Pierre press ahead with his plans for the loft?

I, without a doubt would, go into the loft space.

It adds huge value to the property

and opens up a completely larger market.

Putting a bedroom in the loft would be an absolutely great idea,

purely because it would bring a lot more rental income

and, of course, when it comes to selling the flat,

it will add value to the flat.

And adding value is the name of the game here.

These two estate agents reckon that renovated as a one-bed,

it would be worth 330 to 360,000.

Bearing in mind Pierre's estimated total spend of 327 grand

for the bigger two-bed flat,

what resale figure could he achieve?

We could be looking to market this, I think, between 450, 475.

As a two-bedroom flat, I would value this at 450 to £460,000.

Well, those valuations could give a possible pre-tax profit

of between 123 to 148,000.

Incredible!

But would Pierre be better off holding on to this property

as a long-term investment?

What sort of rentals could he achieve?

As a two-bedroom property, I would expect to obtain around,

roundabout 1,500 a month, maybe a touch more.

A two-bedroom flat

would achieve anything from 15 to £1,600 a month.

Well, those rental figures could give Pierre an annual rental yield

of between 5 and a half to just under 6%.

So, at the moment, it seems the resale values are the best way forward.

But neither of these sorts of returns will be possible

until the loft conversion is complete.

So has Pierre got any idea what he'll do with the flat

-once the renovation is finished?

-With regards to what I do to it,

whether or not I keep it, live in it, sell it, rent it, they're all very much open.

I think what's important is to get the work done,

have a look at it as a completed project,

and then I'll be able to decide what to do with it.

In Preston, Lancashire,

a two-bedroomed Victorian house went up for auction

situated close to the university

and in a tired but reasonable condition.

This house seemed an ideal project for someone to come in and refurbish.

However, there was a catch with this house,

as it was part of the Preston Council's Landlord Accreditation Scheme,

which meant it could only be bought by an accredited landlord

or an owner-occupier.

But this didn't put off local heating engineer, Alex,

who bought it with the help of his mum, Janet, for £48,000 at auction.

Sold to the lady in the aisle at the back. Good buy, that.

Tell me why you wanted to buy this place.

I decided to invest my money into property.

A year ago, me and my friend bought a house together.

We fully renovated it and sold it on.

-We made a good sum of money.

-Oh, great.

And he's moved on and bought a house with his girlfriend,

so I thought, I'll go out and buy a house of my own.

-Wow.

-So, here we are.

# All by myself

# All by myself... #

And with this, his first solo project,

Alex not only wanted to refurbish it,

but had some ambitious plans

with hopes to install solar panels on the roof to heat the water.

And he hoped to complete the refurbishment in just three months

on a budget of around £7,000.

Well, just over two months later, we're back.

And along with a new front door,

the hoped-for solar panel is in place.

Inside, the dated decor and the gas fire have been removed,

to be replaced by much simpler lines.

And the kitchen's been spruced up and a new back door installed.

And, as for that Eiger of a staircase, well that's still the same,

but the new white paint gives it a brighter feel.

So, what's it been like for Alex, tackling this project?

A lot of late nights and a lot of weekends taken up.

But well worth it, in the end.

Yes, with a full-time job as a heating engineer in the family firm,

it's always tricky finding the time to do up a property as well.

But now both the bedrooms are completely refurbished.

And there's a great new bathroom suite.

So, in the bathroom, we've completely modernised it.

We've lowered the ceiling and put some new spotlights in.

We've completely changed the layout of the bathroom.

We've moved the bath from this back wall here, there over here.

That was to incorporate the shower.

We've moved the toilet from over there, in the old bath's position,

just to create more space.

I think it looks really well.

And, of course, the hot water for the new shower and bath

will be supplemented by the solar panel,

heated by the balmy Preston sunshine.

# Sun is shining in the sky

# There ain't a cloud in sight

# It's stopped raining Everybody's in a play

# And don't you know

# It's a beautiful new day... #

We're certainly green.

We receive a one-off payment off the government for installing it.

It will contribute massively to the hot water,

and, yeah, more green, basically.

Alex plans this to be a long-term rental property,

so he hopes the solar technology

will eventually pay back the £3,000 he invested in it.

So, he's achieved his goal of putting on a solar panel,

but did he manage the goal of doing most of the work himself?

I obviously put the heating system in,

the bathroom, the solar panels, the boiler.

Didn't really help much with the decoration, cos I didn't have time,

so we had to get a painter in.

That's affected the budget a bit.

I also helped the electrician and in the yard, as well,

I put the shuttering up, the willow shuttering,

and did a bit of work on the ground with the flags

and painted the outside as well.

OK. So, predominantly, the work has been down to him,

but his parents also helped out,

particularly with the administration side of things.

And now the house is finished, what's next?

We're going to get accredited by Preston City Council.

And then we can get it rented out.

But how much has it cost to get this three-bedroomed terraced house up to what he hopes

is the standard necessary to secure accreditation?

I think the budget was about £7,000.

We've gone slightly over with £9,000.

And that was to do with the solar ,really.

But it will pay back in time, so I'm quite happy to do so.

£9,000 budget, on top of a £48,000 purchase price at auction,

would take Alex's total spend to £57,000, without costs and fees.

So, has giving the property a little extra on top

pushed the house above the area ceiling price?

What do two local estate agents think?

I mean overall, the development of the property is very similar

to what we'd expect to see in a terraced house

in this area of Preston.

However, obviously the modern technology of the solar panel

is a little bit unusual, certainly for a property of this size.

I think it's extremely good. It's been done to a very high standard,

nice and neutral throughout.

Nice kitchen, nice bathroom.

Yep, done to a really good standard,

so it should either sell or let really quickly.

Alex isn't looking to sell this house on any time soon,

but how is his 57,000 investment faring in the current resale market?

I think in the current market a property like this would achieve in the region of £85,000.

I believe in the current sales market, the property would be worth

between £85,000 and £95,000.

That's above what we expected, yeah, what we expected.

I expected around 70, 75 at the moment,

so, yeah, I'm pretty chuffed with that.

So a potential pre-tax uplift in value between 28 and £38,000.

But how would it do on the all-important rental market?

This property could achieve £495 per calendar month.

I believe, in the current rental market,

the property should bring between £450 per calendar month

to £500 per calendar month.

I expected 450 to 475, so that's spot on there.

So, once Alex achieves accreditation from Preston City Council,

he could see a very healthy yield of between 9.5-10.5%

certainly making this a good, solid investment,

and a decent start to his solo property developing sideline.

So, would he be tempted to do it again?

Definitely. I would recommend it as well.

It's been a really good project.

Well, that's it for now. Join us next time

as more bold bidders brave the auction rooms here on Homes Under the Hammer.

-See you then.

-Goodbye.

-Goodbye.

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