Episode 50 Homes Under the Hammer

Hello, welcome to the show.

Have you fancied buying a property at auction,

but just don't know where to start?

Perhaps we can show you some tricks of the trade.

Yes, join us now as we follow brave buyers

buying their Homes Under The Hammer.

Auction houses aren't intimidating places, ANYONE can buy there,

all you need is the money to be available.

Today we talk to intrepid buyers who've taken the plunge,

will they sink or swim? Here's what they bought.

In Manchester, there are worrying signs in this semi.

Looks like this whole thing is actually giving way,

hence that diagonal fracture.

There's also cause for concern at this unusual lot in London.

The bad news is, no matter how hard I try, I can't get into this garage!

And the traditional kitchen/bathroom layout

in this Plymouth terrace is hardly desirable.

So, this is where you're going to have to focus your effort.

All these properties went to auction,

we'll find out who bought them

and what they paid when they went under the hammer.

It's yours.

For the first property sold under the hammer, I've come to Blackley,

just three miles north of Manchester.

Well, I'm just about four miles north of Manchester city centre.

The property I'm here to see sounds pretty good -

three-bedroom semi-detached with a garage

and a guide price of 60,000 quid.

It's got a garden at the front, it's looking all right from the front,

let's see what it's like inside.

It has an elevated location, a garage and a parking space, too.

The outside looks OK, although there are signs

of potential structural problems

with the gable end that will need to be looked at.

Well, nice little double-glazed sort of porch there,

but after that, I'm afraid, it starts to go a bit downhill.

Into the front sitting room, as you can see,

I don't think it's been decorated for a while. Lots of light coming in

through the windows, which is nice.

Obviously, it's been knocked through...

I love the fact you've got these angled sides, sort of very Aztec.

I'm seeing some things, which I haven't seen before,

I mean, look at this.

This is, I guess, original from the 1960s, 1950s,

whenever it was this house was built.

Um...a divider in between this room here, your living room,

or rear living-room and the kitchen. I don't know, I know it looks shabby

I know it's probably going to be taken away, but I like it,

I think modernised or putting back something like that,

would be a really good design idea. Note that one, it's quite good.

The other thing I would do in here clearly is put a set of patio doors

going out onto the garden and then you've got a really, really,

lovely style to the property. But it does need work.

# I've seen everything I've seen everything... #

Just when I thought I'd seen all types of unusual construction over many years

on this programme, along comes this house...

# I've seen everything... #

I wonder what other surprises it may have to reveal?

Upstairs, in this three-bedroom house

that went to auction guided at £60,000,

the bathroom's not huge and needs a new suite and retiling.

# I've seen everything... #

The back bedroom's big enough, but what's going on under that window?

So, good-sized double bedroom at the back, bit of a boxroom there,

and then through into a reasonable-sized double...

..at the front.

That's not good, is it?

That's very interesting, because that...

is an internal wall.

If there was subsidence in the property,

I would not expect to see that on an internal wall

and yet it looks like this whole thing is actually giving way

and hence that diagonal, well, fracture, as you can see.

I don't remember seeing a supporting wall underneath here downstairs.

If that's the case, this whole wall isn't supported

and if there was a piece of wood supposed to be holding this up.

which has rotted over time...

this thing could actually collapse. At any minute.

# Lights go out Walls come tumbling down

# Yes, they do Yes, they do... #

Of course, you mustn't ignore something as potentially

serious as this.

No need to panic, but do get experts in.

A structural engineer's report will help you work out how bad

the damage is, how to rectify it and, of course,

how much that will impact on your budget.

Time to check out what is going on downstairs

with that supporting wall. Or rather the lack of it.

Yes, pretty much as I anticipated.

A few clues on the floor here.

You can see a differentiation in colour in the floorboards

and some markings on the ceiling, which mean there was probably a wall

here at some stage in the past.

That has been taken away without proper support put in its place

and, as a result, that wall has given way.

It's not that big an issue to sort it out.

Basically, put some proper support in and replace that wall,

but it's a nasty expense if you're not expecting it.

This is also a very good example of why Lucy and I often warn against

knocking down walls without checking whether they are supporting first.

So, there are a few issues to sort out throughout this house.

I wonder how it looks out at the back.

Well, at the rear of the property, a really huge garden,

which is great to have.

It also gives you the scope for potentially an extension.

There's a garage and the extension that is there at the moment,

as you can see, it really is a complete bodge job.

So, that needs to be replaced. At the same time,

yes, think about something a bit more substantial, perhaps.

But at least having the space here,

you've got some options to do whatever you want.

We asked a local estate agent

to come and have a look

at the property and give his opinion on it.

Obviously,

the property needs a lot of work doing to it.

My biggest concern would be the structural elements of it,

from possible underpinning, wall ties

and there is some quite hefty bulges to the side gable.

But, obviously,

if they're going to do any extensions,

which there is a physical potential for doing that,

then that would be cured at the same time.

What income does he think could be generated here

if it was let the tenants?

Rental, without the extensions,

would probably be in the region of about £500 per calendar month.

If they added a further bedroom to make it to four bedrooms,

then it would probably go up to about £650 per calendar month.

What about a resale valuation for this house after

a refurbishment from top to bottom?

I would say this property fully modernised

would be in the region of £115,000 and £120,000.

And if we had the extension, we have an internal garage and, obviously,

a fourth bedroom above the garage,

it would be approximately £135,000, £140,000.

Well, this is a classic example of why you must always look

at auction properties before you buy them, because from the outside,

from the picture in the auction catalogue, it looks OK.

But the inside tells a different story.

Still, it is a solid house.

So, let's see who fancied the challenge of sorting it out

when it went under the hammer.

OK, lot 30.

Vacant, three-bedroom, semi-detached house.

What is it worth? Who is going to give me 50?

50,000. 40? I will take 40. £40,000.

Bid £40,000. Any advance on 40? 45 anywhere?

45 bid. Thank you, then. 45,000 I have. Do I see 50?

It's 50,000 I'm looking for. Bid £50,000. 51?

51. 51 I have. 52?

At 52,000. 53 now.

At £53,000. Do I see 54?

54. 55 now. At 55.

55,000. 56.

At 56. 56.5.

56.5, 57 will do.

57. 57.5. 58.

58, 58.5. 59. 59.5.

60. At £60,000.

60.5. I want to sell at 60,000.

60.5. Good grief, you've got to be quick. 61.

61. 61.5.

62. 62.5. 63.

63. 63.5. 64.

64. 64.5.

64,500. Do you want to round it up? 65.

65.5. 66? No.

At 65.5 then for the first time.

At 65.5 for the second and final time. Are we all done at 65,500?

There we go.

'That final bid of £65,500 came from Eddie.

'He lives locally in Greater Manchester

'and runs his own plastering company with his two sons.

'But it was Eddie and his hairdresser daughter, Sam, I met

'back at the property to hear about their plans.'

-Eddie, Sam, lovely to meet you both.

-Pleased to meet you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

Well, we seen it in the auction. We got the booklet.

And I come and had a look at it, viewed it,

and I fell in love with the place.

I thought there was a lot of potential in it, you know,

to do it up. I know there's a lot needed doing to it,

but I know I can do it because I've done it before.

-So, what about you, Sam? What do you think of it?

-I really like it.

I think there is a lot of potential in here.

-It's got scope, hasn't it?

-Yeah.

-It's big.

-I do like it.

-So, why have you bought it?

Well, we bought it cos...

I've done three houses up before this, this is my fourth one.

It is for me and my wife Liz

-to move into.

-Great.

You know, we'll see how we go on, but we will do it up

and we'll probably live in it anyway rather than sell it. Depending,

-you know, see what profits are at the end of it.

-Right.

-You'll make the decision at that time.

-Absolutely, yeah.

'Eddie's plastering skills will come in handy for this place.

'He does a lot of work for the local council with his two sons, Jed

'and David.

'And this is the fourth property they will be helping out on.

'But it is not just the boys who'll be lending a hand

'on this renovation project.'

So, what is your involvement in it going to be, Sam?

Well, more like the decor and things like that, design.

Painting, fittings and fixtures, you know, things like that.

-And have you done any of this kind of stuff before?

-Yeah,

and I did my own house, which was the last house my dad bought.

What did you think about the interesting design features here

when you saw them? For instance, this amazing thing in the kitchen.

Yeah, I did like this, cos it's very retro.

But then again my dad wasn't really liking it cos it's a bit old

and looks like it's going to fall down or something.

-I think it is holding the ceiling up.

-I do like it.

Yeah, it's pretty funky.

It's something different.

It'll be funky in the skip when they get the skip.

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

I'm going to strip it all down, back to the bare brick.

I'm going to make sure all the joists

and the soffits and the beams are all in their right places,

they're holding everything up. Then get it rewired, replastered.

Obviously, the plumbing needs done. A new kitchen.

We'll put an extension on the back,

wrap it round the back, maybe to the side.

So, make it a bit wider here so we can push the kitchen further back.

Is that a two-storey extension you are thinking about putting up?

No, just a single storey.

We've got enough upstairs - three bedrooms and a bathroom.

'It all sounds really exciting. Eddie's plans seem sensible, too.

'I get the impression he is already on to this structural issues,

'but what about that crack upstairs?'

That is basically rested on the joist.

The first thing that'll happen

is we'll back up the joist upstairs for the loft.

-Support it.

-Support it, yeah.

I'll take that down and we'll put

a steady wall up that sticks all the way

up to the joist between the floors.

It's quite a big programme. Any idea how much it will cost to do that?

Well, I've got a budget of between 20 and 30 grand.

I would have thought it'd be at the top end of that.

And the timescale for sorting that?

Six months, maybe. Six to eight months, you know.

-I say eight at the tops.

-At what point do you get involved, Sam?

Well, straightaway, really. Colour-wise and things like that.

I suppose shopping around for wallpapers, light fittings,

things like that.

-Are your sons going to get involved, as well?

-Definitely, yeah.

They'll be stripping it down, getting it to the brickwork,

filling all the skips up, getting everything ready for all

the different trades that are going to come in and do what needs doing.

Well, congratulations. Good luck.

We look forward to seeing how you both transform it.

Well, Sam and Eddie certainly have got their work cut out to sort

this place out, but they have got the experience

to make a success of it.

One thing, though,

I think this beautiful little feature

may well be destined for the skip.

You can find out later in the show.

Today, I am in the residential area of Harringay, in North East London.

Running through its centre is Green Lanes,

one of the longest streets in London.

The seven-and-a-half mile stretch is a lively and cosmopolitan area,

known for its community spirit, shops and restaurants -

all just a hop, skip and a jump from today's auction lot.

This is definitely an area that people go for

if they are not flush enough yet to purchase in the slightly more

desirable Harringay Ladder area, which is just up the road.

It is also a great place to live despite not having

its own tube station.

And in some ways, well, that makes it stand out from the other

more anonymous parts of London.

So, how could there possibly be any sort of property on a street

like this for a guide price of, wait for it, £40,000?

Well, you guessed it, this is it.

It is just a garage squashed in between these two houses.

I want to see what's out back, but with no access I can find

and no neighbours at home to let me sneak a peek,

I'll have to attack from the front.

However...

# I've been locked out I've been locked in

# But I always seem to come back again

# The bad news... #

The bad news is, no matter how hard I try,

I can't get into this garage. But the good news is,

the Planning Commission has been granted for the demolition

of this old garage and the building of one two-storey, two-bedroom house.

Now, given that people around here don't want to change

the overall look of this rather distinctive area

and have put a pot of pressure on the council,

this is very good news for whoever purchases this

because they can start work without delay.

So, for that £40,000 guide price,

you are not just getting the site, but also the often tricky task

of getting planning permission has been done for you.

And you get to build a two-storey house on this lovely, quiet street.

# It's oh-so-quiet... #

Well, it's quiet now, anyway.

You'd never have thought that this street was once a busy,

bumper-to-bumper bypass from Tottenham to Finsbury Park.

However, since these little chaps here have been installed

by the council, it is estimated that prices on this street

have increased by 25% in value.

Talking of which, the plans for the new build

include a small front and rear garden.

But ironically, considering this is a garage site,

it is firmly stipulated that the new owner

would not be eligible for residential parking permit.

And commuter territory or not,

that would definitely put some people off.

So, what does the local estate agent think you could get

for the cost of the garage?

The great thing about this particular property

is it comes with full planning permission,

so it's possible to build a two-bedroom house in there.

A lot of the properties of already been converted years ago

and the council put a stop on converting,

giving planning permission to properties that had a percentage

of flats already.

So, it's quite difficult and it's quite an achievement to get that.

Speaking of achievements,

once a two-bedroom house has been built here,

what could it sell on for?

I think £275,000 would be achievable.

And it's the price that a very, very good two-bedroom garden flat

would go for in the Harringay Ladder, for example.

And the potential rental returns?

It is a strong rental market round here

and I think £1,200 per calendar month would be achievable.

For a guide of £40,000 with planning permission to build

a house here, how can you go wrong?

Who saw its potential on auction day? Let's find out.

So, who would like to get me started on this? Lot 113.

40 I've got.

41. 42. 43.

44. 45. 46.

47. 48. 49.

50,000.

51. 52.

53. 54.

55. 56. 57.

There was a surprising amount of interest in this garage

on auction day, so we rejoined the bidding a little later.

82, new place. 83.

82.5. 83. And 500?

No? All right.

Anybody else for Lot 113?

If not, 83 for the first,

83 for the second,

83 for the third and final time.

All done? Sold, 83, well bought.

That successful bid of 83,000, more than twice the guide price,

was made by Eugene.

Originally from Russia,

he is a construction project manager.

So, he may know his tiling from his timber,

but this is the first time he has purchased something

to develop himself.

I've met him outside, obviously, to get the gossip on this garage.

# Hey, Eugene

# Do you remember me? #

Eugene, this is an interesting auction lot, isn't it?

It is a very interesting lot.

I mean, you wouldn't think there would be a garage situated there.

Absolutely. As you can see, it's just a row of terrace houses.

So, how did you stumble across this and what made you want to buy it?

What made me buy it is the guide price.

As you know, it was just 40,000,

but I paid double, unfortunately.

I didn't thought I going to stretch that far.

So, come on, tell me the truth,

-how much were you going to spend on auction day?

-60.

-60 and you spent 80?

-83.

-83,000!

-Yes.

Thinking about it now, I think I've done quite well, actually.

Taking in consideration prices and the local neighbourhood,

I think I got a bargain.

'And what really helps make this place a bargain is that crucial

'planning permission.

'Having that in place, will save Eugene a lot of time

'and energy, and means he can get cracking right away.

'However, since he has been involved in so many builds in the past,

'did the plans for this place meet his expectations?'

# The garage, the garage-rage The garage, the garage-rage. #

So, did you look at the planning and look at the actual plans

and think that is the exact house I would like to build there?

Exactly, yeah.

When I looked at the plans, I saw how fantastically it's been done,

because the architect squeezed two-bedrooms

into this tiny, little garage.

I mean, it's incredible, it is just a garage.

It's going to be a very slight house, isn't it?

It's going to be a very slim house.

Yet I think it's going to be a beautiful house.

Any chance you may live in the house yourself?

Actually, that was the plan,

but I'm not entirely sure now because

on the planning, it says no parking.

I'm not allowed to have a parking permit.

As you can see, it is all permitted parking.

So, I've got vehicles

and I'm not sure I'm going to keep this property now.

But I haven't decided yet.

'Mm, it seems as if Eugene didn't do his detailed

'pre-auction research as he should have.

'The lack of parking has impacted on his idea of living

'on the former garage site himself. Because it is such a small space,

'he hopes to keep his bill costs to a relatively low 40 to 60,000.

'And completed within five months.

'So, I think the numbers should still stack up.

'And of course, there is the exciting challenge of the build ahead.'

What is it going to be like inside?

How would you describe what it's going to be like?

It sounds ridiculous - I'll try and make it as roomy as possible.

It will be quite a unique property.

It will be the only thing of its kind down this road, won't it?

Yes, absolutely.

Completely different look compared to houses next door to it.

Yes.

It's not going to have that classic Victorian bay window, is it?

It will be very modern.

'A brand-new property sandwiched in-between Victorian terraces may be

'a little unusual, but it is certainly going to be a vast

'improvement on an old garage plonked in the middle of this lovely road.'

Now, what do you know about this road, as well?

Because chatting to some of the local residents, apparently,

since the bollards have gone up, it has become much quieter,

a more residential street.

Was it? I don't know. It is the first time in my life I'm on this street.

So, why did you take such a massive gamble on auction day?

I don't think it was a gamble.

Because as I said, I've seen the planning application,

I've seen the drawings, I've seen the pictures,

and it was no reason

to come here and waste my time, because it's a garage is, isn't it?

It is going to be very, very exciting seeing a house go up

in a garage's place. Good luck.

-Thank you very much.

-Thank you.

Eugene took a huge risk.

He bought this garage without seeing it first.

And has later find out, ironically, there is no parking with his garage.

So, he can't live here because of his work vehicles.

You see, you cannot underestimate the power of good,

thorough research.

Now, he spent more than anticipated on auction day, so let's hope

he sticks to his budget and still walks away with a profit.

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

Coming up in Plymouth, remember that although problems

in some houses are easily spotted,

other times you've got to be a bit of a super sleuth.

Back in London, Eugene is now designing his outside space.

I'm planning to have a bit of...an English garden.

But first, we return to Manchester,

where there's good news.

It is absolutely stunning.

I can't believe somebody has done such an impressive job.

'Back now to Blackley, Manchester, where earlier in the programme,

'Eddie, who lives locally, bought this semi for £65,500.

'His daughter, Sam, was going to help, and Eddie,

'who owns a plastering company with his two sons,

'planned a single-storey extension at the rear and a major refurbishment

'before moving in with his wife, Liz.

'The house had some serious structural issues to address,

'but Eddie had fallen in love with it and reckoned it was a good buy.'

Tell me why you wanted to buy this place.

Well, a lot of potential in it. You know, to do it up.

I know there's a lot that needs doing to it,

but I know I can do it because I've done it before.

'Eddie set a timescale of six to eight months.

'Well, it's now 15 months later and we're back.'

Wow!

The semi has been completely transformed,

with a stunning double-storey extension to the side

and a single-storey extension at the rear.

It looks like Eddie has had a major change of plan.

I can't wait to see inside.

A fantastic living area stretches from front to back.

And just take a look at that kitchen.

It is the family's pride and joy, as Sam explains.

Well, the kitchen is my most favourite part of the house.

We have got more of a fashionable feel in here.

3-D effects with the black cupboards, the white walls

and the light, nice granite worktop,

and it is my most favouritist part of the house.

The house now flows beautifully from the kitchen to the conservatory

and back round to the living room.

Upstairs, turn left into the two-storey side extension

and this lovely

master bedroom has been created for Eddie and his wife, Liz...

..with its own en suite.

This is the en suite bathroom that is connected to the new bedroom

on the new extension.

So, this is our own personal space, which basically Sam designed.

We've got the walk-in shower, we've got the sink,

we've got the toilet, the warm colour scheme that Sam picked out.

And we're very happy with it.

The original three bedrooms in the house

have been completely refurbished.

Steel supports were added to fix those structural issues.

The wall under the bay window has been rebuilt and Eddie

and his sons have replastered the whole house.

And it is a quality job, boys.

Eddie has changed the bathroom and Sam chose the colour scheme.

It looks very smart.

Eddie had a delay at the start,

when he decided to go large on his new home.

He ended up submitting planning applications three times

while he waited for the revised building regulations

and planning permission.

So, once work began, did he do as much as he'd planned?

Yeah, I was here every day.

I was here from seven to, say, eight or nine o'clock at night most nights.

Joiners and bricklayers and plumbers and electricians in.

But all of the rest of the work, I've done it myself.

'Well, I've got to hand it to you, Eddie, you've done an awesome job,

'and daughter Sam has been involved in the interior design.'

We've gone for more of a fashionable feel in there

over the rest of the house. We have also, in the bathroom,

gone for that funky sort of look.

But, obviously, you've got other parts of the house

that are quite neutral and quite mild and chilled and calm.

'So, has Eddie remained mild and chilled and calm

'when it came to the costs here?'

Right, the original budget was between 20,000 and 30,000.

Uh...we're nowhere near that. It has just gone way over that one!

We're probably looking at between, probably about...

probably what I paid for the house, about 65 again.

So, it is probably about 130,000.

You know, buying it and doing it up.

And the work is almost finished.

There is just the new garage at the back

that is waiting to be tiled.

At the front of the extension on the ground floor,

there's an office, and Eddie has also put in a downstairs loo.

So, adding the extensions has certainly generated lots

of accommodation for Eddie and his expanding family.

We have done the en suite bedroom and the bathroom.

That is mine and Liz's, we're going to live there.

The three bedrooms in the original part -

the grandkids and my daughter can stay.

You know, there's plenty room for anybody.

With the barbecue ready, there's no shortage

of takers from Eddie's family.

Time to see if he has invested

his £130,000 wisely.

What do two local estate agents make of this skilful renovation?

It is absolutely stunning.

I can't believe somebody has done such an impressive job.

They have put a lot of hard work,

and a lot of vision has gone into this.

It is spectacular now.

The property is absolutely immaculate.

It has been extended, enlarged.

It has been re-fitted,

new kitchen, new bathrooms. A few bits

and pieces left to finish off, but it's a lovely house.

'Eddie plans to move in.

'But if he were to let it,

'he could make between £650 and £700 per calendar month,

'a potential yield of six to almost 6.5%. So, that's another option.'

-That's all right.

-That's good.

-I'm happy with that.

-Definitely.

What could this place be worth if sold now that it's finished?

More than the £130,000 Eddie reckons he spent here?

The property needs a bit of finishing off,

but if it's all finished, I would expect

to put it on the market at about £135,000.

I would put it now in the value of at least £150,000.

'Those valuations would make a gross profit

'of between £5,000 and £20,000 before expenses and costs.'

-Woo!

-That's all right, yeah.

-Well done!

'So, a very impressive result.

'Eddie was brave enough to take on a really tricky property,

'but with a fabulous new extension, he's created a lovely family home.'

What next?

I've got the house of my dreams now

-and I think we've done it the way we want to do it.

-That's it.

I want to move in and I'm going to chill out and enjoy it.

Yeah.

Well, today I am here to see a property in Stoke,

but not Stoke-on-Trent, Staffordshire,

that's around 240 miles away.

Because I am actually in Stoke, Plymouth, Devon.

However, there is a link with the potteries,

because when I saw the auction catalogue for this one,

my eyes definitely didn't glaze over.

In fact, I got into a bit of a spin.

Let's hope it has got me all fired up when I see inside.

# Take me into the fight

# And I am an easy brother. #

Just over two miles from Plymouth,

the suburb of Stoke is a residential area with lots of hills.

Judging by the local terrain, you're going to need a lot of puff.

And here it is - a two-bedroomed, mid-terrace.

Now, a similar property to this is currently on sale

in this street for £119,000.

This one went to the auction with a guide price of just £65,000.

Oh, tempting!

# Temptation!

# Keep climbing higher and higher

# Temptation! #

OK, so there is some remedial work

to be getting on with outside,

but that shouldn't cost too much to put right.

The roof looks in good order and the windows are double-glazed.

Will the inside be as tempting?

So, what layout is in store behind the door?

Well, the corridor down here, fairly standard.

Front sitting room there.

Nice to see you've got a nice, open fire. Obviously,

it needs a bit of sorting out.

Stairs in a very sensible place, there,

up to your two bedrooms and through to a rear living room area.

Again, nice to see an open fire.

It doesn't look very good now, but open that up and it will be lovely.

And then it is one of THOSE kind of houses, you know the ones.

You come all the way through to the back, this is where your kitchen is,

the worst part of the house for sure,

and, even worse, I suppose,

at the end there, that's your bathroom. It isn't big enough

for a bath, only got a shower.

So, this is where you're going to have to focus your efforts.

# All I want

# From you

# Is some effort. #

'To get the most out of this property that went to auction guided

'at 65,000, I reckon a layout change is worth considering.

'What about moving the kitchen into the second reception room

'to create a small kitchen/diner?

'You could then increase the size of the shower room

'to incorporate a bath.

'What's left of the former kitchen could be made into a utility room.

'Upstairs, there are two bedrooms.

'They're not huge, but have their own fireplaces

'and quite a bit of character.

'And hidden away, there may be period features.

'Outside, there is a paved area,

'not to the most inspiring of gardens,

'but if you wanted to let the house,

'the important thing is that it is low maintenance.

'Back inside, I've made an unwelcome discovery.'

Now, sometimes we look round houses,

things stare out at you and they are very obvious,

other times you have got to be a bit of a super sleuth.

For instance, here in the front room,

quick glance, everything's fine.

And yet, well, what is that in the corner? Hm, don't know.

Just get down on your hands and knees and have a closer look.

Pull back carpets and,

look at that, we have got something really horrible going on here.

My guess is, outside there is probably a problem

with the drains or something like that

and the result is that it's actually come into here.

As you can see, that is quite nasty.

Lots and lots of crumbling wood. Yuck!

And who knows what has happened to the floorboards, the joists, etc.

That needs to be investigated. And as I said,

you could easily have missed that if you weren't on your guard.

Finding dry rot is never a good sign, but it is fixable...

at a cost.

'To find out more

'about the potential for this place, we invited

'a local estate agent to come and have a look around.

'What does he think of it?'

I think it's a nice property, actually.

I believe that, two bedrooms,

it's exactly the sort of property that people want in this area.

It is of a good size and still got a lot of character.

The layout is far from ideal, but if you move the kitchen,

as I suggested, that would help.

But what about the bathroom having to remain on the ground floor?

A downstairs shower room here is very common for the area.

A lot of people do sometimes move them upstairs, however,

I do think that it's not a problem

whether you'll sell or rent the property.

A downstairs shower room should be fine.

That's encouraging news,

but how much could someone achieve with this as a rental?

If he were to rent this property, I believe he'd be love to achieve

between £550 per calendar month and £600 per calendar month.

So, what could it sell for after a full refurbishment?

When renovated, I feel this property would achieve

between £105,000 and £115,000.

Well, don't let the modest exterior of this place fool you.

It does actually pack a financial punch.

Whether you would want to do it up

and sell it on or possibly keep it and rent it out, it works both ways.

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

Lot 239, ladies and gentlemen.

This is a mid-terrace, two-bed house

in need of complete modernisation.

Guided here at £65,000.

Would somebody like to start at £65,000?

£65,000 on the phone then. 70.

Or two. Yeah? 67?

67. 70 now.

70 here. 72?

72. 75?

75. OK, thank you, sir. 75.

Sorry? 76. 76.

77 now. 77 there.

78? 80? 80,000 there.

82? No? 80,000, OK.

I think you're out. Anyone else want to come in here?

A half? £500?

80,500.

Can we say 82?

No. I'll take the gentleman here who is in, sorry, with 81.

It is £81,000 on the curtain, then.

Yeah, sorry, hello?

81.5 I'll take.

82? 82 with the tube. 83?

83. 84?

84 here. 85? No? No?

84 here.

Thank you very much.

85 now. 85. 86?

86. 87? No?

OK, it's with you, £86,000. That is the first.

Second. Third. Last time.

It's yours. £86,000.

'It was Nick who made that final successful bid of £86,000.

'He is originally from Plymouth and moved back from London

'a couple of years ago to retire along with his family.

'Over the last 20 years, he has built up a portfolio of buy-to-lets.

'I met up with him at the property to find out his plans for this house.'

Nick, congratulations.

-Thank you.

-Well done. Tell me why you wanted to buy this place.

This is a property to do up. And hopefully, move on.

I normally do rentals, this is a departure for me.

So, I deliberately picked a fairly smallish project just really

-to kick myself off into this world.

-Right.

What has prompted the move from renting out to doing up to sell on?

Um... I've got quite an extensive portfolio of rental properties

and I decided that really, sort of, when the family moved down here,

that it was time to just diversify for a little bit.

And try this as another venture to keep myself busy in retirement.

So, why this little house?

I just viewed that it was something that didn't need a huge amount

of work doing to it to make it look nice and a good presentable property.

'Nick has a team of builders who he knows standing by

'and has already had them round for a quote.

'But his proposed refurbishment costs have had to increase

'from £8,000-£10,000 up to £10,000-£12,000,

'as the cost of moving the bathroom

'and the local labour rates were more than he had anticipated.

'So, just what exactly has he got planned here?'

This room here,

I see this becoming a kitchen.

I'm not moving the bathroom from out the back,

but I do plan to extend that and put a bath with a shower in,

because I view that if a young family is coming in here,

possibly with the prospect of a baby.

So, building an extension, then?

No, I'm just going to come further into this area.

-Oh, the existing kitchen.

-Yeah. And then plumb for a small utility there.

-OK.

-Front room will be general decoration,

probably put some nice oak flooring down.

I like, sort of, wood floors and things like that.

And then upstairs, I did look at whether to put in en suite upstairs.

Both myself and my plumber

decided that really it would take too much away and we thought

people would refer probably two good-sized double bedrooms.

-Now, what about the dry rot?

-Yes, I am aware of that.

I've got someone coming in this afternoon...

-Oh, wow.

-..to look at that.

I am hoping it is not too extensive.

So, that is one thing I haven't factored into the budget.

'That is something that catches many people out.

'It is why a survey is so important,

'because it helps you calculate a realistic budget and timescale.

'Normally, Nick would strip the house out himself,

'but as he and the family are heading off to Bangkok for a month's

'holiday, he has got a team coming in to do the work.

'He reckons the place should be ready to sell about six weeks after

'they return from their holiday.

Who has moved down with you? Has the whole family come?

-My wife and two children.

-Right.

And how old are the lads?

-Ten and seven.

-Are they going to get involved in the renovations?

-My 10-year-old already has.

-Has he?

-Yeah.

He has got an eye for a deal.

-You know?

-An eye for a deal?

-Oh, yeah, everything is a deal with my son.

-Really?

-Oh, yeah.

Pocket money?

Yeah, yeah. The first day,

he asked me how much for a day's labour.

I said, "Well, how much do you want?" He said, "A pound." I said, "Done."

And he came back at me and said, "I came in too low, didn't I?"

And I went, "Yeah, you did really."

He said, "Will you pay me more?" I said, "No. A deal is a deal."

'Well, a good lesson to learn for Nick's son, Henry.

'Watch the money and don't undersell yourself,

'whatever age you start property developing.

'Nick has moved down to Plymouth to retire,

'but it sounds like he has not ready to hang his hat up quite yet.'

I'm hoping that if I can do two or three a year, maybe,

it will keep me busy

without putting me under too much pressure. I don't want

to be under pressure, I just want to enjoy my retirement

and have something to keep me occupied.

-Good luck with it. Congratulations.

-Thanks.

-Have a nice holiday,

-we look forward to seeing you when you get back.

-Yes. See you then.

Well, Nick is slightly worried he might have underestimated

his budget. Maybe he anticipated that one pound a day labour charge.

Well, maybe not. No, he seems to know what he is doing

and he has got a good property here.

How will he get on with his first property that he is buying to do up

and sell on?

You can find out later in the show.

Now, Martin, it has been many months since we've last seen

-the properties.

-Yes.

Have those renovations been plain sailing or bumpy rides?

Let's find out.

We head back to Harringay in North East London,

where construction manager Eugene purchased

this disused garage for 83,000.

He paid over double the guide price at auction,

but that is probably because it came with full planning permission

for a two-bed house, enough to convince him to buy it.

So, did you look at the planning and look at the actual plans

and think, "That is the exact house I would like to build there."

Exactly, yeah.

When I looked at the plans, I saw how, um...

fantastically it has been done,

because an architect squeezed two bedrooms into this tiny,

little garage.

I mean, it's incredible, it is just a garage.

It is going to be a very slight house, isn't it?

Is going to be a very slim house.

Yet I think it is going to be a beautiful house.

'Eugene planned to demolish the garage and build a house

'within five months.

'We've come back 20 months after we first met

'to see if he has been able to turn that garage into a great home.

'Well, as far as unrecognisable goes, this certainly fits the bill.

'Because squeezed into the garage's place is a slim fit,

'brand spanking new two-storey house.

'Upstairs, there is a contemporary shower room

'with stylish fixtures and fittings.

'And there are two bedrooms, one single to the rear

'and a double to the front.

'It was always going to be bijou, but Eugene has made it work in

'a way that looks both minimalist and full of character at the same time.

'While downstairs, you walk straight into the living space,

'which leads into the kitchen.'

Well, I've got a very limited space in the kitchen and I tried to squeeze

every single appliance I could to make it as useful as possible.

So, I've got a washing machine, dishwasher...

I went for white, handless units simply because

it is very simple, it is very easy on the eye and very practical.

Unfortunately, you can't see any tiling

because I haven't finished the tiling yet.

'So, there are still a few finishing touches to add, and not just inside.

'It is hard to afford a property in London which offers outside space,

'so the rear garden that extends to these three posts

'is a valuable asset.

'Or will be once it is finished.'

As you can see, we've got a very small space.

It is more a yard rather than a garden.

We've got a small patio here.

Around the patio, I am planning to have...an English garden?

So, I've got nice feel of green grass

in my backyard.

'It's small,

'but Eugene is planning to utilise every single inch of it, especially

'as despite his initial concerns over not being allowed a parking permit,

'he has decided to live here himself.'

Unfortunately, I cannot have parking here.

So, I have to use my bicycle.

But I think it is very good because it moves us to the green mentality.

'Talk about a way to make it easy being green.

'The project has taken much longer than planned, partly due

'to a seven-month delay because of an issue

'with one of the party walls.

'This was resolved by Eugene building a secondary wall

'on the right, against the neighbouring property.

'This made his house even narrower,

'but he's made the best of it, especially on the other side.'

I was trying to combine a modern house

with the all original features

I could save, for example, the brickwork is the next-door exterior wall.

So, yeah...

Basically, two styles together.

'Although he did hire contractors in to do the work,

'he wasn't afraid to take control.'

On a daily basis, I have to be here

and I have to control everything and be heavily involved.

Also, I did a few elements myself, with my own hands.

'His initial estimated budget for the build was up to 60,000,

'but it has, in fact, cost £100,000.

'But going over budget for a house you intend to make your home

'may not be a bad thing.

'Let's see if two local estate agents are impressed.'

My first impressions are that he has done a great job with the property.

It has been renovated very well, bright and airy throughout.

And he has optimised the floor plan depths to make a nice living space

for the property.

It is fantastic to get invited back and see the finished product

because it was very narrow to start with.

It was a garage, but you walk in and it's...

it's ticked all the right boxes. He's done a good job.

'Time to talk cold, hard cash.

'The purchase price was 83,000

'and Eugene spent £100,000 on the build.

'So, with a total outlay of £183,000,

'would he see a healthy rental return?'

For rental,

I'd set a target rent of £1,400 per calendar month.

I would expect to achieve 1,350.

I would be putting it on for around 1,350 per calendar month.

I think it is fantastic, it's great. I wasn't expecting that at all.

Good news.

'With those estimates,

'Eugene will be looking at a rental yield in the region of 9%.

'Impressive stuff!

'He has only moved in a month ago,

'but could the resale valuation be tempting enough to move on?

'Remember, he has invested 183,000 here.'

If I was going to put this on the open market to sell,

I will be looking to put it on at £300,000

to achieve between £290,000 and £295,000.

I'd put this on the market for £299,950.

I think it is a great... Great news, actually.

Yeah, I wasn't expecting that. I think... Yeah, good.

I'm very grate... Very, very, very pleased.

'It is no wonder Eugene is happy,

'his hard work has paid off in more ways than one.

'If he were to sell now,

'he could make a potential pre-tax profit

'of between 107,000 and 117,000,

'minus the usual expenses.

'And his brain is already ticking over on what he might do next.'

As soon as I have opportunity, I'll go and buy something else.

I might try a refurbishment.

I think refurbishment is easier for me than new build.

For me, at the end of the day, it is all experience.

And I love what I do, that is why I do it.

It's not for the money. So, I'm on the wrong programme.

Earlier in the programme, we were in Plymouth and met Nick,

who had recently retired there from London with his family.

Over 20 years,

he'd built up a portfolio of buy-to-let properties,

mainly in the Plymouth area.

Although he was retiring from full-time property developing,

he intended to still keep busy buying and selling properties.

This two-bed terrace that he paid £86,000 for

was his first project he had done to sell.

He was organising the builders and his ten-year-old son, Henry,

was keen to get involved.

He asked me how much for a day's labour.

I said, "How much do you want?" He said, "A pound." I said, "Done."

And he came back at me and said, "I came in too low, didn't I?"

And I went, "Yeah, you did really." He said, "Will you pay me more?"

And I said, "No. A deal is a deal."

Nick planned to keep the bathroom downstairs and convert

the second reception room into a kitchen-diner.

Three months have passed and we've returned.

The house now has a new colour scheme and new guttering.

It is a promising start.

Nick and his son, Henry, are here to show us

the rest of the refurbishment.

The conversion of the former dining room at the rear

into the kitchen has worked a treat, as Nick explains.

Well, this used to be the dining room.

What we did was we blocked up part of the window,

it's had a complete new kitchen with some good quality units.

What we also did was, over here, there was originally two doors,

with a cupboard and an understairs cupboard.

We blocked one of those doorways and allowed a nice,

big storage cupboard in there,

allowing space there for a fridge freezer, keeping essentially

this end of the room as the kitchen and this end as the diner.

The former kitchen is slightly smaller and is now a utility room...

..with access out onto the refurbished patio garden.

There is new decking.

And the original paving slabs have cleaned up brilliantly.

Back inside, the former shower and toilet at the back of the house

have been expanded into what was the kitchen.

The resulting bathroom that Nick has created looks excellent

and much better use of the layout in this part of the house.

If you recall, there was a kitchen outside there.

We have extended the wall outwards here, allowing us to put in

a full size bath with shower and a new bathroom suite.

Originally, there were three windows,

but we've enlarged one of the windows

to give the one window and take out the windows at the back.

And that has allowed us both to have a nice sized bathroom for a family

and also it has then allowed us to put in a nice utility room,

allowing for the washing machine and the tumble dry.

The front reception room is just as impressive.

Nick employed damp specialists to treat the rot.

The new flooring and pastel colour works really well.

Upstairs, the pastel shades continue in the two bedrooms.

And I am delighted Nick has kept the two fireplaces.

The house has a charm about it. I really like it.

This is his first investment property to sell on,

but he has used the same trusty team

of builders who has worked with on his buy-to-let portfolio.

And Nick has been busy, too, with his son, Henry,

lending a hand, as well.

What I like doing is cleaning... cleaning the rooms.

What I don't like doing is,

like, putting the rubbish in his van or his trailer

because it is very, like, dirty,

and you don't really want to get your hands dirty.

'But Henry is learning fast about how to clean up financially,

'because he has raised his pound-a-day rate.'

This time it is going to be eight pounds,

cos it depends really what I actually do.

'Good lad.

'And talking of money, Nick had paid £86,000 for the house

'and set a budget of 10,000 to 12,000.

'Has he kept to that?'

I came in over budget.

There were factors that I hadn't put into it,

i.e. the dry rot, I had not encompassed that before.

And there was quite a lot of plastering extra to be done.

It's not fully there, but it's about 13.5, 14, I think.

'A £14,000 spend would take his total investment

'on the house to 100,000.

'Time to find out what two local estate agents think of the house

'and the finish Nick has achieved.'

The property

looks great. It is really well done.

It is really contemporary. Perfect for the first-time buyer.

I love the fact that he has kept the period features -

the picture rails, the fireplaces -

mixed with contemporary features such as the modern kitchen.

I think the idea of bringing the kitchen into the dining room,

making a big space, has really worked wonders.

Nick plans to sell this house, but as he has other buy-to-lets,

I'm sure he'd like to know the rental return.

The rental I think we could achieve here

would be £600 per calendar month.

I think this property would rent for £600 per calendar month.

So, a potential yield of over 7%.

Is that in line with Nick's expectations?

Yeah, if I choose to go down that road,

I think that would be a fair rate, yeah.

Now, for the all important resale figure.

Will the house speed valued higher than the £100,000

that Nick has invested here?

I think this property could sell for £115,000 to £120,000.

I think this property, in its present condition,

would sell for somewhere between £115,000 to £120,000.

So, they agree on a gross profit

of 15,000 to 20,000 before the usual taxes and expenses.

I think the upper end is what I would hope to be achieving.

I'm aware the properties around here are going roundabout that figure,

and some are dearer.

So, I would hope to maybe push that a little bit.

Nick is already on the lookout for his next property to refurbish

and sell. Will his son, Henry, be involved again?

Yes, I think I probably will have a few more with Henry.

I have to up his wages. He is now negotiating

the rates of pasties as well as his money.

So, yeah, he'll probably have to have a couple of wage rises.

Well, that is it for now.

We will be back next time with more thrills and spills

-from the auction rooms.

-On Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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