Episode 5 Homes Under the Hammer

-Hello!

-They say that every house tells a story, and over the years,

Lucy and I have certainly found that to be true.

That's right. There are tales to tell and secrets to uncover,

when you buy your home under the hammer.

Well, properties at auction are bought on a "buyer beware" basis.

Yes, it's up to you to check out everything before you place your bid.

Or you could be in for some nasty surprises.

Let's see if our buyers got lucky with their purchases.

This plot of land in South Wales meant an early finish to my day.

Right, that's the end of the feature!

In Gainsborough, Lincolnshire,

someone has been extremely inventive with space.

This area is a real bonus, an addition I like.

And in Plymouth, it's time to face up to potential problems.

So there's an issue with negotiating

and talking to whoever owns it to sort it out.

Either way, it's got to be done.

All these properties were sold at auction. We'll find out who bought them and how much they paid for them

when they went under the hammer.

Sold!

This is Penarth on the north shore of the Severn estuary.

It was once a busy working docks,

but Penarth is now a popular Welsh seaside town

with its own marina and some rather grand Victorian residences.

The auction property I'm here to see is just one mile from the town centre.

Well, this isn't quite Penarth. This is Cogan.

But hopefully it will benefit from the proximity.

What am I here to see? Some Victorian pile, maybe a seaside cottage?

Not quite. It is actually...

this bit of land.

Let me take you on a guided tour.

Well, it goes over there, it has that wall,

it has this other wall and then the railings.

12 metres square in total.

Right, that's the end of the feature!

WIND HOWLS

Actually, only kidding. There is a little bit more to say.

Let's analyse it as a building plot.

First of all, it's flat, which is good news.

There is electricity very close by.

That telegraph post has an electric cable on the top of it.

So that is good news. It's got a lowered kerb just outside there so vehicle access is good.

Don't know about sewerage, don't know about water, don't know about gas.

But hopefully, they are in the vicinity.

But the best thing - it has got planning permission

for the construction of either a house or two flats.

It is only outline planning permission at this stage,

but at least they have agreed in principle that something can be built here.

# High Street heaven

# High Street sweet heaven

# High Street heaven... #

With an auction guide price of 35,000,

I'd say there could be money to be made here.

Outline planning permission means there are still a few hoops

to jump through, and nothing is a foregone conclusion

when it comes to planning.

We invited a local estate agent along to hear

his views on the best use of this plot.

The plot is quite small, but it is unusual,

because in this village, most of these houses are mid-terraced

and this is a stand-alone detached plot, which is quite unique.

So it does present quite a good opportunity for a developer.

I believe that you would be able to build two two-bedroom flats,

or a three-bed detached house.

It does depend on the circumstances of the developer.

If it were a developer looking to buy and sell on, I would recommend that the house is built

because of being a detached house in this area.

However, were it a long-term investor,

I would recommend that the two flats were built for income purposes.

So, if we look at this as a long-term investment,

what sort of rental income could you achieve?

This is a very desirable area to rent

both for apartments and for family houses.

A three-bedroom detached property would achieve a rental income

of between £700 and £750 a month.

A two-bedroom apartment would achieve a rental income of between £500 and £550 a month.

What about potential sell-on values?

If the apartments were built to a very high standard,

you would achieve a price of between £95,000 and £110,000 for the apartments.

If a three-bedroom house, detached property was built here,

I would suggest in the region of probably £165,000, £170,000.

So it would appear that building two flats could be the most lucrative option.

That makes that £35,000 guide price sound all the more attractive.

So will it be flats or a house that is eventually built on this little plot of land?

Well, I guess that is down to the owner who bought it when it went to auction.

Good spot there, level site, ladies and gentlemen,

amidst retail and residential properties.

Approximately a mile to the east of Penarth town centre.

We have a proxy bid on this particular lot, ladies and gentlemen.

So I'm going to start with the proxy bid on my reserve,

selling all the time then, at £38,000.

I have a bid of 38,000, I'm selling all the time at 38,000.

I will take a half if you like. At £38,000. A half?

Thank you. 39 from my proxy.

39,500 can I for you, sir? 39,500.

My proxy bid is in at 40,000. Half if you like, sir.

At £40,000, my proxy bidder, I'm selling all the time. Half?

40,500.

My proxy bidder is finished and out. I'm selling, and it is your bid, sir.

At £40,500.

At £40,500, have you all done? There is the bid.

Shout if I'm missing you.

Have you all done, then? At £40,500.

Yours, sir. Thank you very much. Your number, please?

That successful bid of 40,500 was made by 26-year-old plumber Matt,

who was at the auction with his builder dad, Phil.

He has five other investment properties.

I met up with the father and son duo at Matt's home

ten minutes' drive away from their purchase.

-Good to meet you both.

-And you.

Congratulations! You've got yourselves a plot of land.

Explain to me why we met here.

We built this house a few years ago - me and my dad.

We're deciding to... With the new plot of land we've just bought now,

keep it in a similar setup to this kind of thing.

-So, you actually built this from...

-From nothing, yeah.

-Wow!

You've done a fantastic job of making it look very similar

to the neighbouring properties.

We tried to keep it to the same standard as was here before,

so, obviously, we pebble-dashed it the same as next door.

The same type of roof and just took it from there.

You did a fabulous job! Obviously, father and son.

Tell me about the relationship - the working relationship.

I was a builder. I've been a builder for 30 years.

And I could never get a plumber,

so I made my son go into the plumbing game.

Straight from school, I did an apprenticeship and that was it. Yeah.

-You couldn't get one, so you bred your own.

-I did - two.

-You've got another son?

-I have, yeah.

-And he's a plumber as well?

-He's a plumber.

Is the property development side of things a sideline

or is it something you're moving more and more into?

I've been in it for quite a while.

It's new to obviously Matthew.

Now he's standing on his own feet without me.

# Walking in your footsteps... #

Matt has followed in his father's footsteps

into the property business.

He has a portfolio of five investment properties under his belt

already, so it's clearly not been too bad a path to follow.

So, let's talk about the plot you bought then.

Why that particular plot?

It's an area I know. I went to school, I've got friends down there.

It's an area I do know. I seen the plot of land come up,

I noticed it and thought I'd have a go and see if I could get it.

I got it at the right price.

So, tell me what you're helping to build?

It's got outline planning for a house or flat.

We're looking to build a two-bedroom flat on it.

Obviously, we're just waiting now for drawings to be done.

If it's feasible to build two two-bedrooms, that's what we'll do.

Talk me through the numbers, then. You got it for 40,500.

-That's right.

-How much do you think it will cost to build what you need?

I've budgeted for round about 50,000 to build two flats.

25 grand a flat?

That's quite a tight budget, then.

We built this one for 40,000.

We're looking keep within this budget here.

What kind of costs do you think they will have at the end of the day -

the resale value - if that's what you're planning to do?

We were told the flat would sell for about £100,000, £110,000 each.

Fantastic! 220, you've got about 100-ish in it.

-So, right! Result!

-Not too bad, yeah.

-You'll sell and not rent?

-I haven't thought about that.

The rental would cover and I'd still have money left over

so I'm still 50/50 on whether I'm going to sell or rent at the moment.

Presumably the draw of having 110,000 quid in the bank is quite...

My dad has mentioned something like that to me as well.

In the end, the temptation to sell might be too great.

But how easy that may or may not be

will depend on the market at the time they finish the project.

So, what kind of timescales have you got for this whole thing?

We're looking at starting in about a month-and-a-half's time.

We're looking at a timescale of round about seven to nine months.

-To finish the building, yeah.

-Right.

Is that doing a lot of work yourself?

-Yeah.

-I'll be the donkey.

-Will you?

So, you'll be involved in the whole thing, will you?

You'll be overseeing the project, won't you?

Is he going to pay you?

-Well...

-This is great!

He'll have something at the end of it, I think!

Matt, between you and me, when your dad's not listening, will you pay him?

-I'll look after him.

-That's fantastic!

-Having your dad on hand...

-Definitely.

He done well on this project as well, so, yeah.

-I can trust him, so...

-He didn't pay me on this one.

-He didn't pay you?

-I guess it's a great thing to be able to do to help him, isn't it? In all honesty.

-I'm OK.

I don't really depend on the building, so, it's not too bad.

Listen, congratulations! Good luck.

I look forward to seeing how you both get on.

Well, Matthew and Phil have clearly got the experience

to make a success of this project.

Remember, the site only currently has outline planning permission

and to get full planning permission, they may have to jump through hoops.

When we return, will it be a wasteland or will there be two flats there?

You can find out later in the show.

This is Gainsborough -

a small market town on the River Trent in Lincolnshire.

In recent years, the riverside has undergone a £20 million programme

to build new flood defences and a riverside walk.

In addition, a £39 million shopping centre was built in 2007.

As I always say, it's wise to buy in an area,

which is undergoing regeneration,

and it's not just in the town centre where things are being improved.

The property we're here to see is literally a bus ride away

from the town centre.

It's a mid-terraced Victorian that we're here to see

and it's on this quiet little road.

What I've noticed is, there's a lot of building work going on,

which means houses are being upgraded.

Always a good sign in my book.

This property had a guide price of 26,000 to £29,000.

Yes, you heard me right. £26,000 to £29,000.

Who said property wasn't affordable these days? I'm going in.

# This time I'm going in

# With my eyes open... #

The exterior of this three-storey house

could do with a bit of smartening up

but it appears structurally sound.

If my eyes don't deceive me, it looks as if there's double glazing.

Always a bonus when it comes to an auction property.

Well, these little terraced houses trick you.

When you step inside, they're enormous.

This is a great room. You've got a big bay window there,

letting in lots of light.

You could put a nice period fireplace there.

You could really build the character in this room.

So far, I really like it.

You know, I still can't get over this space available

in this property. Second reception room, fantastic!

Good size, you've got the kitchen here at the back of the property.

Little door leading out to the garden.

You'd need to rearrange these units. They're not working for me at the moment.

You've got this wood cladding along the ceiling. Strip lighting!

Uh-uh! That has got to go. There's so much you can do to improve this.

Once all this has come away, and you have central heating installed,

you will have a fairly decent kitchen.

Now, this is a bit strange. This is the loo.

It's at the back of the property.

It's tiny. It's freezing.

It's just not working.

The reason it's not working is

because this originally would have been the outside wall

and the loo is just single skin brick.

That is why it's so cold.

So, whoever takes this on needs to sort that out.

You might even be able to have a bit of a bigger WC

at the end of the property, or even a bathroom. That could work.

But that all depends on what's happening upstairs,

so I'm going to check it out.

Just before I venture upstairs,

a quick peek out the back reveals a small yard,

entirely concreted over.

OK, it's not the prettiest of outdoor spaces and could do

with some tidying up to make it more attractive, but at least

there's room to extend the bathroom a little, if that proves necessary.

So upstairs we've got two bedrooms on this level.

You could easily call this a double, but what is in here?

A little cupboard? No! # Da-dah! #

A pink bathroom!

In all the years I've worked on this programme,

I've never, ever seen these little cupboards used for this.

You can see they've taken a little bit of the next-door cupboard

to join this space up.

Sadly, this little bathroom doesn't have a loo and that is probably

because it'll be hard to get a soil pipe running through

the centre of this house.

I would definitely keep that there,

even have a modern shower room installed, because

although I now think you definitely need a family bathroom downstairs,

this area is a real bonus - an addition I like and would keep.

I'm not normally a fan of downstairs bathrooms,

but I think adding one here is a necessity,

especially since you can only access this one through a bedroom - not great for privacy.

But a bathroom in a cupboard is not the only surprise in store.

This not-so-little terrace has yet another floor!

So up here on the top floor,

it appears that there is a third bedroom, which is brilliant.

But the auction catalogue described it as just an attic room,

which set alarm bells ringing.

Now, it may well be that this conversion was done

without building regulation approval.

These days, you don't often need planning permission for a loft conversion,

but you still need to comply to building regulations.

These cover things like access to the stairs, fire regulations,

adequate head height, additional floor joists -

even these spindles here will probably be a problem.

It could be that before you can call this officially a bedroom,

you may have to do some work here to make it compliant.

We invited a local estate agent along to get his views on what work

needs to be done to bring this mid-terrace house -

with a guide price of 26 to 29,000 - up to scratch.

I would recommend the extension or alteration of the ground floor area

to the rear aspect

to include a shower room or bathroom,

as the main bathroom is situated off the bedroom on the first floor.

Once refurbished as a three-bedroom house,

and the attic converted properly, what could the rental value be?

I believe the property would rent very well once refurbished

and renovated, and as a three-bedroom house,

I expect it would achieve around £400-£450 per calendar month.

And what could it sell for?

As a three-bedroom property,

I would expect in the region of £55-£60,000 on the open market.

Well, there is work to do here, that's for sure.

It just needs a complete renovation.

My priorities would be to sort out that downstairs bathroom

and make sure the attic room is building regs compliant.

Do all that and you could end up with a really nice three-bedroom house.

So, who was prepared to take on this task?

Let's find out when we head to auction.

And we have lot number 11, two bedrooms upstairs

and a bathroom with a third bedroom in the attic.

Guided at 26 to 29,000.

Who's in, then? 26 to 29. Start me at 25,000.

25, is it? 20 then.

18,000. 18, 19, 20,000. At £20,000, I'm bid.

At 20,000, 21, 22,

23 for you? 23, 24.

At £24,000, I'm bid. 24,000, and 500?

At 24,500, 25,000 now.

Have you done then at 24,000...? 25. 500 again.

26 for you, sir? 26. And 500?

The bid's on the third row.

£26,000 is it? 500 anywhere?

It's in the market, going to be sold at £26,000 for the first time,

for the second. Don't let me miss you. For the third and last time

at £26,000, any more bids?

Well done, sir - you've had a go at one or two.

The successful bid of 26,000 was made by local builder Chris.

He's a born-and-bred Gainsborough man,

so should have local knowledge on his side.

He purchased the house along with his friend David

as their first business venture together.

I met up with them to find out more.

-Guys, it's lovely to meet you, congratulations.

-Thank you.

Tell me what it was like on auction day for you, Chris.

It felt exciting. I haven't been to an auction

for many, many years and Dave was on holiday, actually.

I had his cheque-book, so... We was all right!

I actually bidded on four or five, knowing I wasn't going to get

four or five, of course, but we got a couple, so we was well pleased.

Dave was pleased with the price as well.

Dave works in the electronics industry in Gainsborough

and Chris has been a builder all his life.

They originally met because they share an accountant.

This is their first official business venture together.

They bought two homes at the same auction, but the other property

is tenanted and only needs minimal work - unlike this one.

So when you found out this was the one that Chris had

put your money on, how did you feel?

I was very pleased that we'd at least secured one,

because hopefully this is going to be part of an ongoing project.

I still hadn't seen it until today.

-In fact, I still haven't completely looked around it yet.

-Really?

-Absolutely.

-Have you been upstairs?

-Yeah, briefly.

-Have you seen little bathroom in the cupboard?

-I have, yes.

So what do you think about that? What are your plans?

I suspect we'll be putting the bathroom back

at the rear of the property, next to the kitchen.

But what about just having a really nice shower room?

A good, walk-in shower?

OK, no WC, no loo, but you've still got facilities to wash your hair,

-clean your teeth, still having a wet room or something?

-We spoke about that this morning.

'We'll probably just cap the pipes off and leave it so that

'while we're renting it out, it'll probably just be a walk-in wardrobe,

'but when we do go to sell it,

'we could reinstate it as a shower room or something.'

So how far are you going to take this?

Well, it's going to want damp course,

it hasn't got a central heating system, which we'll have to do,

the electrics need upgrading, a fair amount of plasterworks, of course,

a new kitchen, new bathroom, externals want squaring up a bit...

-Redecorate.

-So will you physically be involved in this property?

-I will.

My sons run a business, a building company,

so I shall use them for the trade elements of the work,

but the girlfriend and I will be jumping into the labouring

and the decorating and the like, just to keep the cost down a bit.

And how hands-on will you be with this project?

Well, I'm not from the building trade at all,

but I'm quite handy with a paint roller, so that's me.

So what sort of budget have you got to spend?

I think between 15 and 17. Around about that mark should sort it out.

So how long do you think this is going to take, this project,

-to get in, get out and get it rented?

-Six weeks.

-Six weeks?!

-Yeah.

-You're very confident.

-Yeah.

-How much rent do you think you'll get?

-450.

Well, these two seem to have done the sums

and have set themselves a reasonable budget.

But that's a tight timescale -

just six weeks to refurb the whole house

AND create a downstairs bathroom?

Is this something that you're quite excited about?

Oh, yes, I've always enjoyed property and refurbing

and that sort of thing - I get a buzz out of it.

-I'm looking forward to it.

-Guys, it's almost too good to be true.

I'm very excited to see the outcome. Good luck with this project

-and I hope it goes really well for you both.

-Thanks very much.

-Dave, Chris, thank you.

Well, the boys seem to have bought well.

They're not worried about anything - the predicted yield is great...

Well, it's all roses.

But property developing rarely goes to plan,

so will it be smooth going or a rough ride?

Join us later and you can find out how Chris and Dave get on.

Coming up, things look positive at this one-bedroom flat in Plymouth.

So, all in all, a really good start.

In Gainsborough, we find out

how Chris and Dave managed with their very tight timescale.

-We've been fairly busy and it's been challenging!

-Yes!

But first, in South Wales, we find out if it's all been happy families.

Father and son, you know what it's like - fireworks, sometimes!

Time now to return to the Penarth suburb of Cogan, South Wales,

where plumber Matt bought this plot of land at auction for £40,500.

It had outlined planning permission for either a detached house

or two two-bedroom flats.

The latter was the preferred option for Matt and his builder dad, Phil.

It seemed as though Matt may have had more than a gentle nudge

in the direction of his profession.

I was a builder. I've been a builder for 30 years

and I could never get a plumber,

so I made my son go into the plumbing game.

Straight from school, I done an apprenticeship, didn't I?

That was it, then!

-You couldn't get one, so you bred your own!

-I did - two!

-Two?

-You've got another son?

-I have, yes.

-And he's a plumber as well?

-He's a plumber as well.

So, as Phil's a builder and Matthew's a self-employed plumber

and heating engineer, between them,

they're very well equipped to take on a project like this.

We returned just over two years later to see how they got on.

Well, there's been a slight change of plan.

Instead of two flats, as was the original idea,

Matt has built two semi-detached houses.

They're a mirror image of each other,

making the most of the 12-metre-square site.

Inside the property, Matt has continued to be creative with the limited space.

What we've got here is an open-plan living room,

goes onto the kitchen area. We designed it so it's all open.

We've got wood floor coming through from the living room

through to the kitchen.

With the kitchen area, we've got black gloss units

with a gas combi boiler.

The situation and layout works very well -

I'm happy with the end product.

Along with the open-plan living space,

there's also a downstairs loo hidden under the stairs.

Upstairs, Matt has maximised the original 12-metre-square

plot of land.

The situation upstairs is we've got two double bedrooms,

nice-sized bedrooms, also we've got a bathroom

consisting of a shower, bath,

basin and toilet.

We're very happy with the size of the upstairs.

Done a good job, I think.

So, who is responsible for the clever use of such limited space?

An architect designed the actual build. The internal, I designed.

My girlfriend designed the actual kitchen and bathroom

with the tiles, so I'll let her take the plaudits for that bit!

Who oversaw the work on a day-to-day basis?

I was here as much as I could, but I still have my own heating

engineering company, so obviously that takes priority over this.

That's where my dad came in quite handy, because he kept an eye

on the actual staff, so took a bit of pressure off us.

Good old dad. How was working together on a project such as this for family harmony?

It can be difficult sometimes, but I overrule him sometimes

and he overrules me sometimes. So...

We just take it father and son, you know what it's like -

fireworks, sometimes!

Initially, Matt's plan was to build two flats,

but after further research into the practicalities,

he opted to build two identical two-bedroom semis.

He had hoped to complete the project in seven to nine months,

but a combination of problems with utilities

and his other work commitments meant the work took almost two years.

Has that delay had an impact on the budget?

I spent 40,500 buying the actual land and to complete the two,

it was 55,000 per house, so 110,000 to complete.

Matt's overall spend, including the original purchase is 150,500 -

£60,000 over his original budget.

However, given that he's built two houses instead of two flats,

this could work out well.

To find out if that is the case,

we invited along two local estate agents.

Both properties have been finished to a high standard

with neutral colours and a contemporary finish.

That's exactly what people are looking for.

It's been finished very well.

I like the fact that it's open-plan downstairs.

The kitchen units match really nicely into the rest of the downstairs.

Upstairs, they've done very well with the shape that they've had to

work with and the bathroom has been finished nicely as well.

What could the properties potentially make,

were they to be sold on?

I believe the guideline on this one

is between £125,000-£130,000.

I would value each property at £130,000.

If the properties were to sell at the top end of these prices,

for £130,000, that could generate a pre-tax profit

of around 109,500, minus the usual selling expenses.

I think it's a little bit under what we were expecting.

I think we were expecting 140, 145 maybe.

But obviously it's a bad market at the moment,

so this is the reason why we decided to rent, hoping that

in the future, the market will pick up and we'll get a bit more for it.

So what could the rental income be for the two properties?

The rental market is very buoyant at the moment.

I'd be happy to put them on the market to achieve £550

per calendar month.

They should rent for between £550-£575 per calendar month.

We've agreed with the tenants 575, we know the market around here,

so we knew it was going to be roughly round there, so we're happy.

If both properties were to be rented out at £575 per month,

that's a joint income of £1,150, so a yield of around 9%.

What are their thoughts, now that the project is finally complete?

I'm really happy with the end result.

Considering where we were a couple of years ago, at the auction,

what it was to what it is now is very satisfying, yes.

It is very nice.

I'm in Plymouth, Devon, known as the Waterfront City and situated

near the Tamar Valley - an area of outstanding natural beauty.

Put simply, Plymouth is lovely.

Well, I am very excited

because there is a flat up for sale on this street for £115,000.

On the same street is the property that was up for auction.

IT had a guide price of just £35-£45,000. It's also a flat.

Let's find out what it's like.

From outside, things look OK.

There are signs of wear and tear,

but nothing a skilled carpenter can't fix.

The flat is on the ground floor and whilst the communal entrance

is quite tight, it all appears to be in good order.

So what does this particular one-bedroom flat have to offer,

because they can vary quite enormously?

Straight into a really nice-sized living room,

so that's a great start.

It's obviously in need of some updating,

but it's fantastic to see that some of the original features

are still here - look at these shuttered windows.

Get a carpenter to take those off, have them dip-stripped

and have them put back - it would be a major feature in this room.

Absolutely beautiful.

Fireplace is quite nice too, so all in all, a really good start.

There's a good-sized double bedroom at the back of the flat and a bathroom.

Although that perhaps requires a bit of updating, I think you would

have a great little flat on your hands here with just some refurbishment.

So through to the kitchen and it's a sort of long, galley-style kitchen.

Not massive, but lots of light pouring in through the window, so we like that.

You obviously need to spend some money sorting this out,

but for the size of the flat, it's a good-sized space.

The only big issue in here is what is causing that problem?

It's obviously water coming in from above - I don't know what's above, but is probably not yours,

so there's an issue with negotiating with whoever owns it to sort it out.

Either way, it's got to be done.

You can see from the facia boards that they're suffering

from wear and tear.

My guess is that a couple of hundred quid will sort this

and at the same time, sort the watery issue in the kitchen.

If that wasn't enough, this flat also benefits from

some outside space.

Well, something often missing from flats is outside space,

but the good news is that this flat has a bit of a garden.

The only slight thing I'm not sure about is which bit of garden the flat owns.

That's why it's really important that before you buy,

you get your solicitor - or you, if you've got some experience - to look at the legal packs.

The plans will be on there and will say who owns which bit of ground.

Either way, it's nice to have that space.

Well, someone seems to have made themselves at home already,

and doesn't really care who owns which bit of garden.

But will a local estate agent think this ground-floor flat

with an auction guide price of £35-£45,000 is purr-fect

or cat-astrophic?

For a one-bedroom property, I think it's got very good size.

A nice size lounge, which could easily fit a dining table,

a galley kitchen, but that's probably appropriate for the size of the property,

and a good-sized double bedroom, so overall I think it's certainly what you'd expect.

Let's talk figures, then.

Rentals-wise for this property, we'd be looking at between £400 and £450 a month.

That'd achieve a good yield on the property, probably about 8.5%,

so we'd be looking at a good return for an investor for it.

We'd place this one onto the market for around 60,000, £70,000,

and look to achieve that relatively quickly.

I think there are a lot of positives for this property -

good location, and I think if you are looking to buy

to either rent or sell on, you're going to do well.

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

This is a one-bedroom, ground-floor flat in need of refurbishment.

Guiding £35-£45,000. You can start me at 20.

£20,000 at the back, 22.

22, then, at 22. And 24.

24,000. 26.

28 at the back. 28,000.

I'll take one if it helps. Looking for 29 now.

£30,000.

30. £30,000 with you now.

At £30,000, I'll take 32 from you at the back now,

the lady on the wall. 34, may I say? 34, and six? 36?

35 then, 36? 36.

37?

Thinking about it. 36-and-a-half? 36-and-a-half. 37. 37.

£37,000 then, with you at £37,000. That was the first time of calling.

£37,000 seated, second time of calling.

£37,000, third and final time of calling -

are you sure you're all done? It's sold, at £37,000.

Giving this place the thumbs-up with his successful bid

of £37,000 was Andy, with his wife Amy.

They've just returned from six months in Australia

where Amy's originally from.

They've decided to give property development a go

with this as their first venture in the UK.

I met up with them to find out more.

-Amy, Andy, lovely to meet you both. Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

Well, we're looking for an investment flat to rent out

and hopefully start buying a few more of them and see how it goes.

-Right, and this seemed to fit the bill?

-Yes.

-Yes, it was cheap.

-Ah!

Apart from cheapness...

Was that the main reason why you wanted to buy it?

It was going to be a good yield.

The rental market down here is quite strong.

So do you know this area at all?

We've got friends who know it very well and we're getting to know it.

Right, so whereabouts do you live?

We've just bought a property about 500 metres from here.

-500 metres away?

-Yes!

-Right!

-Keeping it close.

That we're going to be living in,

-and then this'll be our investment property.

-OK, so when did you buy that?

The house that we're moving into, we bought about six weeks ago.

-Wow, it's all change then.

-Yes.

-Where were you before?

-Australia.

-Wow! Whereabouts?

-In Sydney.

-Gosh, doing what?

Renovating the flat that we owned there.

We did that up over six months and then moved back here.

So how did the project in Sydney go?

It went really well, so it probably gave us a false sense of confidence!

We'll see how it goes with this one.

Before Australia, Amy and Andy both worked in London -

Andy as a financial forecaster

and Amy on the editorial side of a bridal magazine.

Although used to hard work, they've taken on a lot

with their purchase of their new home

at the same time as this investment property.

-So how was the auction for you?

-It was good.

We had just come from clearing our house, so I was in quite a state.

A bit dusty?

Yeah - plaster in my hair and bits of wallpaper sticking to my trousers.

It was interesting, but then we got into it and got the house,

so it worked well.

And the flat? There must've been some things about it that you liked.

We liked that there's a separate kitchen and the size and location.

It's a great area.

It's got a few features we like, with the shutters

and the high ceilings and picture rails, so hopefully

we can make those look a little better than they do at the moment.

And it's got its own outdoor space, a private garden for the flat,

so that's quite unusual.

Are you clear on which bit of outdoor space you own?

Relatively clear, but we want to be certain,

so I'm actually picking up tomorrow the red outline,

to be able to check off exactly which part is ours.

I'm glad they're checking out which bit of garden they own,

as any uncertainty over shared areas can cause problems with the neighbours.

As they plan to rent the flat out,

the outside space is a real attraction for prospective tenants.

So tell me what you're going to do then, to sort it out.

We're going to gut it, first of all,

then it will all need replastering, rewiring, new kitchen, new bathroom.

And... Hopefully, that should do it.

And the budget for what you've got to do?

10,000, including contingency.

-Who's doing the work?

-Andy.

I'll be doing the majority of it and we've got a few different

tradespeople who will obviously be doing the parts I can't do.

Then, in terms of what you might get for the rent... Any ideas?

We've done our numbers on 400 a month, um,

and depending on how good a job we do, we might be able to get

a little bit more, but I think that's the ceiling round here.

But in terms of return on the investment?

It's about 8%, I think.

A great return on investment.

So how quickly can Andy and Amy renovate

and start to earn some of that rental income?

We're flat out on our own place at the moment,

so this place will play second fiddle initially,

-but we're hoping to have it done in three months.

-Right. And your own place?

-Yes.

Shouldn't this take priority, cos it'll make you money?

-At the moment, we're staying in a friend's spare room, so...

-One room?

-Yes, out of a suitcase.

-Oh, no!

-But taking quite a lot on at the same time.

-We don't do things

by halves - once we've made a decision, we tend to plough into it.

And then the plan moving forward is what?

Hopefully to buy further one-bedroom flats and rent them out in Plymouth,

-and see how we go.

-Fantastic. Well, listen, congratulations.

-Thanks very much.

-Good luck.

-Cheers.

-We look forward to seeing how you get on.

Well, Andy and Amy clearly knew exactly what they were looking for

when they bought this place, but I am a little bit concerned

that they've got two projects on the go at the same time.

When it comes to doing up a rental property like this, time is money.

Find out how they get on later in the show.

Well, transforming a property from a worn-out shell

to a home can be very rewarding and profitable.

So did everything go well for our buyers today?

Let's find out how it turned out for them.

Back now to Gainsborough in Lincolnshire, where friends

Chris and Dave bought this mid-terrace house for 26,000 at auction.

It was to be their first business venture together.

Chris has been a builder all his life and with the help

of his two builder sons, was to undertake the majority of the work on the project.

Dave, who works in the electronics industry, was also going to help out

wherever possible, although he left the auction bidding to Chris.

It was very exciting, I haven't been to an auction for many years.

Dave was on holiday, actually. I had his cheque-book, so...

We was all right!

The property had accommodation over three floors,

but was only listed as having two bedrooms.

This was because although there were rooms in the loft space, they didn't meet building regulations

and therefore could not be classed as a third bedroom.

And who could forget the bathroom, which was housed in what can

only be described as a cupboard in the bedroom?!

We returned just six weeks later to see what the boys have achieved.

Outside, the house has benefited from a lick of paint

and new gutterings.

Inside has been redecorated throughout in modern,

neutral colours.

The fireplace and electric heaters have been replaced

with a new heating system, which will be much more efficient in performance

and cheaper to run.

The electrics have been rewired and doors replaced.

In the kitchen, not only are there new units and appliances,

but space has been made to accommodate a brand-new bathroom,

adding to the WC which was already there.

So the bathroom has moved from the cupboard on the first floor to the ground floor.

Well, of course, the bathroom was originally upstairs,

between the two bedrooms, which didn't really work

in terms of you accessed it either side of the bedroom.

The WC was actually in this room, just a closet in the corner,

so we decided to move this wall back into the kitchen a little bit,

new roof, a new skin, so it's nice and cosy now, it's warm.

And a new bathroom suite, decorated -

we're really pleased with the space, to be honest. It's worked out quite well.

What became of the previous cupboard bathroom?

We've changed the existing bathroom into two wardrobes,

accessing from either bedroom.

It's quite a nice detail. It's turned out quite well, really.

The original plan was to leave the plumbing there

so we can make it an en-suite in the future if we ever chose to sell it.

In fact, when we ripped everything out,

we realised that all the old plumbing was lead,

so it had to go, so there isn't that facility any more.

So no en-suite, which is a bit of a shame, but the two

first-floor bedrooms have been spruced up and are looking great.

Previously, the loft space could not be used as a bedroom,

cos the rooms didn't meet building regulations,

but it's now an open plan and far more versatile space.

What was involved in the change?

We had to completely gut this room, because the plasterboard was so old and tired,

it really had come out completely.

Of course that brought all sorts of dirt,

because there's so much accumulated soot between the roof tiles and plasterboard.

We had to completely re-line it, put new balustrading in,

because the old stuff didn't meet regulation.

New skirting board, new carpet, redecorated - it looks great.

How much of this handiwork was completed by the boys themselves?

And did they stick to their ambitious six-week schedule?

Dave and I have worked every evening and weekend really,

so we've been fairly busy and it's been challenging!

Six weeks is a fairly tight programme for anybody,

but we were determined to stick to that and we pretty much have done.

We're delighted with it, really - it came out really well, really.

So, they managed to finish within their forecasted timescale,

but did they achieve the same with their budget?

I think we had 15 to 17,000 in for a budget, and we haven't totted

the final figures up, but I'm sure they are thereabouts.

So the boys did complete the project both on time and on budget.

We asked two local property experts

to take a look around and give us their thoughts on it.

My first impression is that it's been

a generally good refurbishment project throughout.

There's three spacious bedrooms to the first and second floor,

and the benefits of a new kitchen and bathroom.

The quality of finish is in keeping with a general refurbishment programme of this type

and everything is very neutral

and modern on the eye - I don't think any buyer

would have a problem with what they see.

I think he's done a nice job - it's a lot better than it was

when he bought it.

Nice scheme of modernisation throughout.

They bought the property at auction for 26,000

and spent a further 15 to 17,000 on renovation,

making a total outlay of between about 41 and 43,000.

So what would be the value of the place in its current state

if it were to be put on the open market?

In my opinion, I would expect this property to achieve £55,000.

My opinion of the sales value is somewhere in the region of £55-£58,000.

-That's low.

-Yeah.

-A little low.

So whilst they seem a little disappointed with these values,

that would still represent a potential pre-tax profit

of between 12 and 15,000.

The plan was always to rent it out,

so what sort of rental income should they be looking for?

I think this property could achieve £350 per calendar month.

My opinion on the rental values

would be around £425-£450 per calendar month.

Spot-on. That's where we'd have put it.

That's where we are with it - we've got a tenant moving in on Saturday.

So we're all right with that one.

The tenant is actually paying them £450 per calendar month,

which represents an impressive annual yield of approximately 13%.

With that in mind, how have they found their first foray into property auctions?

-It's gone really well, hasn't it?

-We've enjoyed it.

-We'll certainly do another, won't we?

-Oh, for sure.

Back now to Plymouth in Devon, where husband-and-wife team Andy

and Amy bought this one-bedroom ground-floor flat at auction for £37,000.

They'd recently moved back from Australia,

where they'd successfully renovated and sold a property.

This flat was in need of updating, but did boast some lovely

original features and benefited from some outside space.

As well as buying this place, Andy

and Amy were also in the midst of renovating their newly-bought home,

so they certainly had a lot on their plate.

But they clearly weren't the type of people to let the grass grow under their feet.

We want to make sure that our plan works in terms of being able

to buy the investment property and do it up, rent it and create

an income stream from that and a viable business,

so we need to get started.

We returned 5½ months later to find out how Andy

and Amy had got on.

Well, from the outside, there's no change,

but inside, it's been transformed.

Gone are the dark wall coverings and carpets,

replaced by bright colours and wooden floors.

The kitchen has new worktops and a gas hob has been installed.

In the bathroom, the dated pink suite is no more

and is replaced by a modern, contemporary version.

We've plastered most of the walls

because once we stripped back a few layers of wallpaper,

I don't think the walls had been touched quite a while.

Fresh paint, new floor - done nearly everything, I think.

Not doing things by halves,

Andy and Amy were in the middle of renovating their own home just down

the road when they were successful at auction with this property.

So they had two renovation projects on the go at the same time.

They've clearly made significant efforts to bring this flat up-to-date.

We used to have gas-fires here and an immersion heater. Instead,

we decided to do the gas central heating, cos we thought it'd be

more appealing for tenants and people buying it if we do sell it.

This property has the benefit of outside space,

with a garden to the rear,

but there was a question as to which piece of land belonged to the flat.

Our part of the garden is the smallest part, and unfortunately

it still looks the same as when we bought it, pretty much.

Hopefully, when spring comes, we'll get in there and just deck it, add some flowerbeds

and make it a nice place to be.

Andy and Amy seem to have made a great team on this project,

so what's their secret to a harmonious working relationship?

Amy and I tend to take on separate projects -

she's also project manager, essentially, makes sure we've got all the supplies we need,

makes sure there's a good timetable that we can stick to,

so that we don't end up spending too long on the wrong thing.

So, Amy takes charge and Andy does the graft -

sounds like a match made in heaven.

But was that the case for the budget?

The original budget was 10,000 and so far, we've spent 8,500,

with a few more things left to do.

The couple hoped to complete the flat as well as the renovation

of their own home in three months.

Were they able to stick to that ambitious timescale?

We ended up living on-site in the first house,

which is why it took a bit longer than we thought -

ended up taking four months instead of three,

which meant that we didn't start on this one until four weeks ago.

When we eventually got on site, it's been four weeks so far.

Which has been solid, but it's been good to get done

and the transformation is really enjoyable.

So an overrun of a month, but within budget.

Not bad when you consider that the two projects were running at once.

What's been the most satisfying aspect of working here?

I think seeing it done is the nicest part, just knowing that you've been

able to create it from practically nothing, create a home for someone.

Probably us!

Andy and Amy had originally planned to rent this flat out,

but given the success of both this project

and the renovation of their home, there's been a change of heart.

Our plan is to sell our house and if that sells quickly,

we'll move into this one and look for our next project to do.

They paid £37,000 at auction for the flat

and have spent around £8,500 on the renovation,

giving them an overall outlay of around £45,500.

We asked them two local property experts for their opinions

on this Plymouth pad.

I think it's great. They've really done a good job, actually.

Compared to how it was previously, they've really turned it around.

Nice and fresh, modern -

really would be perfect for what buyers are looking for.

First impressions, very impressed.

Cosmetically extremely nice, there are certain works externally

and to common areas that I would look at,

but they've done a really good job in a fairly short space of time.

What would be the value of the property in its new state

if it were put up for sale?

Anything from 58 to £59,000 for a fairly prompt sale,

through to as high as £65,000, depending on how quick or not they want it to go.

I'd look to place this onto the market at between 60 and £65,000.

We'd certainly see a return at that level.

Those valuations would give Andy and Amy a pre-tax profit

of between £12,500-£19,5000,

before the usual selling expenses.

What could the flat achieve as a rental?

Per calendar month, we'd be looking at a comfortable rent of 425,

rising possibly as high as £450.

I'd rent this out at between 400 and £450 per calendar month,

and we've certainly got tenants looking for this sort of property.

That's good.

Yeah, we had a reasonable idea of what the rental was,

going into it, and the sales figure is nice to know.

So, at the end of this successful project,

do Andy and Amy have any advice for others thinking of buying at auction?

To go for it, but that it is hard work.

If it's the sort of work you enjoy doing, then it's great.

Well, whether you're a seasoned property professional or a property novice,

there are always lessons to be learned about buying property.

So join us next time for some more auction action...

-On Homes Under The Hammer.

-See you then.

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